6. Unfair dismissal and loss of sponsorship
Unfair dismissal is a statutory claim under the Employment Rights Act 1996. To bring a claim, a worker must be an“ employee”, must have the necessary qualifying service, and show that they were:
• dismissed
• that the dismissal was for a reason that was not fair( as defined in the Act)
• or that the employer failed to follow a fair procedure.
The law recognises certain potentially fair reasons for dismissal( e. g. misconduct, redundancy, capability), but the employer must act reasonably and follow proper disciplinary procedures, such as those outlined in the Acas Code of Practice on disciplinary and grievance procedures. What is‘ reasonable’ depends on the circumstances – and whether a tribunal would consider the process and decision fair.
For a more detailed explanation of fair and unfair dismissal, see LRD’ s Law at Work handbook.
Wrongful vs unfair dismissal
These terms are often confused. Wrongful dismissal is a contractual claim – for example, if a worker is dismissed without being given notice they are entitled to. Unfair dismissal is a statutory claim – based on whether the employer acted fairly and lawfully overall. A dismissal can be wrongful, unfair, or both.
Employment law and the two-year rule
Under current UK law, most workers cannot bring a claim for unfair dismissal unless they have been continuously employed for at least two years.
This rule is particularly damaging for migrant workers, who are often newer in post. It means:
• Dismissals for automatically unfair reasons( e. g. raising concerns, union activity, discrimination) may go unchallenged
• Most sponsored workers fall within this vulnerable two-year window
The government has committed to ending the two-year qualifying period for unfair dismissal in the new Employment Rights Bill. Although the Bill was progressing through Parliament as this guide was published, the government has indicated that the reforms related to unfair dismissal will not take effect before autumn 2027.
Exceptions to the two-year rule: automatic unfair dismissal
Some dismissals are automatically unfair, regardless of how long the worker has been employed. These include being dismissed for:
• trade union membership or activity
• raising health and safety concerns
30 LRD • Supporting migrant workers