# Unfair dismissal: the fairness test

> **Key takeaway:** s.98 reason + reasonableness (band of reasonable responses — Iceland). Misconduct: Burchell-style investigation. Remedies + Polkey + ACAS Code. See qualifying-period companion for eligibility.

- **Jurisdiction:** England & Wales
- **Practice area:** Employment
- **Last reviewed:** 2026-08-04
- **Interactive page:** https://kttclegal.info/library/notes/Employment/unfair-dismissal-fairness-overview
- **Keywords:** unfair dismissal, section 98, band of reasonable responses, Iceland Frozen Foods, Burchell, Polkey, ACAS Code, capability

## What is this about?

Once a claimant is eligible and dismissed, ordinary unfair dismissal turns on whether the employer had a potentially fair reason and acted reasonably in treating it as sufficient to dismiss. Procedure, band of reasonable responses, and Polkey reductions dominate tribunal practice. Qualifying period is covered in a companion note.

## What is the core rule?

Under ERA 1996 s.98, the employer must establish a potentially fair reason (capability, conduct, redundancy, statutory restriction, or some other substantial reason). The tribunal then decides whether dismissal was fair in all the circumstances, applying the band of reasonable responses (Iceland Frozen Foods) — not substituting its own view. ACAS Code compliance can adjust compensation. Automatic unfair reasons (e.g. whistleblowing, certain health-and-safety and pregnancy dismissals) have separate regimes and often no qualifying period.

## What are the elements or test?

1. Eligibility: employee status, qualifying period (unless automatic), EDT, ACAS EC
2. Was there a dismissal (including constructive)?
3. Potentially fair reason established by employer?
4. Reasonable investigation/process (especially misconduct — Burchell themes)?
5. Within band of reasonable responses?
6. Remedy: reinstatement rare; compensation basic + compensatory; Polkey; ACAS uplift/reduction

## Which authorities matter?

- **Employment Rights Act 1996, s.98** — Statutory fairness framework for ordinary unfair dismissal.
- **Iceland Frozen Foods Ltd v Jones [1983] ICR 17** — Band of reasonable responses test.
- **British Home Stores Ltd v Burchell [1980] ICR 303 (as refined)** — Classic misconduct investigation/belief structure still cited with later glosses.
- **Polkey v AE Dayton Services Ltd [1988] AC 344** — House of Lords on reducing compensation where fair dismissal might have occurred later/anyway.

## How does this apply in practice?

Pair with qualifying-period, constructive dismissal, and tribunal procedure notes. Settlement via COT3/settlement agreement is common. Compensatory award: a statutory weekly/annual cap currently applies to ordinary unfair dismissal, but the Employment Rights Act 2025 is expected to remove that cap from 1 January 2027 alongside the six-month qualifying-period change — always check the live figures and commencement position before advising on quantum.

## What are common pitfalls?

- Tribunal substituting its own decision for the employer's within the band
- Skipping investigation steps in misconduct cases
- Missing automatic unfair dismissal labels
- Ignoring Polkey at remedy stage

## When would a practitioner use this?

Employer process design; ET liability and quantum assessments.

## Quick reference

s.98 reason + reasonableness (band of reasonable responses — Iceland). Misconduct: Burchell-style investigation. Remedies + Polkey + ACAS Code. See qualifying-period companion for eligibility.

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*Reference material from [KTTC Legal](https://kttclegal.info/), not legal advice. Work product supports instructing solicitors and barristers under their supervision. England & Wales.*