Wrongful Dismissal
Have you been wrongfully dismissed by your employer?
What is Wrongful Dismissal?
Wrongful dismissal is a situation that arises from a breach of employment contract by an employer when dismissing employees.
Common examples of wrongful dismissal are:
- No notice or inadequate notice is given and it is not a case of gross misconduct entitling the employer to dismiss without notice
- Termination of a fixed-term contract before it is due to expire at the end of the term
- Dismissal in breach of contractual disciplinary procedures
- Dismissal in breach of contractual redundancy procedures
If you have been wrongfully dismissed, you could be entitled to compensation.
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Continue reading if you want to find out more about Wrongful Dismissal.
What is the difference between Wrongful Dismissal and Unfair Dismissal
Wrongful dismissal and unfair dismissal are not interchangeable. Wrongful dismissal is a breach of employment contract by the employer.
It also occurs when employment is terminated in breach of the terms of the contract. And unlike unfair dismissal, there is no qualifying period of service needed to bring a wrongful dismissal claim.
To bring an unfair dismissal claim then, you must have worked for your employer for a minimum of two years, minus one week. This type of claim is not about a breach of contract but about your employer having sufficient reason for dismissal from employment.
You will have a claim for unfair dismissal compensation if you’ve been dismissed and your employer doesn’t have one of the potentially fair reasons justifying such dismissal.
Your employer becomes liable for wrongful dismissal damages, which will reflect all losses you have sustained if they have are in breach of the employment contract.
The damages recoverable with be the wages and other benefits (pension entitlement, private health cover, car allowance and bonuses) that would have been earned and accrued during the contractual notice period.
Employees on a high salary might prefer to bring a wrongful dismissal claim rather than an unfair dismissal claim, especially where they have lengthy notice periods.
This is due to the fact they would stand to gain more from damages for breach of the employment contract as opposed to the amount they could potentially receive from unfair dismissal compensation which would be largely governed by their loss of earnings only and also subject to a statutory cap of circa £80,000.
An employer dismissing employees as a result of gross misconduct, ie. theft, who was justified in dismissing them in this way, will mean the employee will have no grounds for a wrongful dismissal claim.
The reason for this is that employee will have been treated as repudiating the implied term of trust and confidence between the two parties which the employer then accepts by the summary dismissal from employment.
Dismissals with pay in lieu of notice
It is common for employers not to enforce an employee’s notice period and pay them in lieu of notice. Such payment in lieu of notice is usually regarded as damages for wrongful dismissal unless otherwise specified in the employee’s contract.
The employer, in these circumstances, would not be in breach of contract by making a payment in lieu and it is therefore unlikely that there could be any wrongful dismissal claim.
If there is no contractual right to terminate by making a payment in lieu of notice, then the making of such a payment may not extinguish the employee’s claim for damages unless, in all respects, the employee is put in the same position as he would have been in if notice had been given.
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Notice Periods
The notice period an employee is entitled to is normally set out in their Contract of Employment.
If there is no Contract of Employment, if the Contract is silent on the point or if the notice in the contract is less than that prescribed by Law then statute imposes the following minimum notice periods:
Statutory Minimum Notice
Working for less than a month – No notice
Working for more than one month up to 2 years – 1 week
Working for two years – 2 weeks
For every year after two years – add 1 additional week up to a maximum of 12 weeks
Common Law Notice (may be greater than statutory notice)
It is possible for an Employment Tribunal to award compensation for a period above the statutory minimum in accordance with Common Law. For example, if a senior employee worked in a trade where three months’ notice was the norm, a Tribunal would award compensation for that three months, even if the statutory minimum was only one month.
Wrongful Dismissal Compensation
Wrongful dismissal compensation and damages is based upon pay and other benefits, such as the use of a company car, which the employee would have received if the employer had complied with their contractual obligations.
An employee may make a claim for other contractual benefits which they will have missed out on, although this claim can be difficult to prove.
If an employee finds a new job within their period of notice, which they would have been entitled to from their previous employer, then they are not entitled to a double recovery. Their new salary must be taken into account in calculating their loss.
It should be remembered that the employee is under duty to take all steps possible to mitigate their loss.
Any damages received by an employee for a wrongful dismissal claim will reduce the amount of compensatory award by the same amount under an unfair dismissal claim.
The maximum amount an employee can claim for wrongful dismissal in the employment tribunal is £25,000. If an employee is seeking more than this for breach of contract than the claim would have to be brought in the courts.
When should an employee make an wrongful dismissal claim?
A wrongful dismissal claim should be made by an employee to the Employment Tribunal within three months from the date their employment was terminated and within six years if the claim is brought through the courts.
Other types of employment dismissal
The Next Step
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