Wrongful Dismissal (What is it?)

Wrongful dismissal from employment occurs when an employer terminates your employment in breach of your employment contract.

You will be able to bring a breach of contract claim against your employer, no matter how long you’ve been employed for.

There are of course lawful ways an employer is permitted to terminate a contract of employment. Wrongful dismissal claims are there to help remedy the situation where the employer has failed to act in a lawful manner.

If you believe you have been wrongfully dismissed, there are certain steps you should take.

Have you been wrongfully dismissed?

If your employer has terminated your employment contract without notice, you may have been wrongfully dismissed.

Example 1

Your employer has dismissed you and told you to the leave the building immediately. Generally speaking, this would be classed as breach of contract, irrespective of the reason for the dismissal.

Even if you did receive the stipulated notice from your employer, you may still have a claim if the notice wasn’t adequate.

Your notice period may be specified in your contract or your staff handbook. If it’s not outlined there, under the Employment Rights Act 1996, your employer must give you a minimum notice period of one week if you have been employed for a period of one month to two years.

Your employer doesn’t need to give you notice if you’ve been working for them for less than a month.

If you have been employed for two years or more, your employer must give you a minimum of one week’s notice for every year of employment, up to a maximum of 12 weeks.

Example 2

You have been employed as an office manager for three years and there is no notice period specified in your contract. Your employer terminates your employment, giving you one weeks’ notice, which is less than the statutory minimum.

If you were working under a fixed term contract that was terminated before the expiry of its term, you may also be entitled to claim wrongful dismissal.

Example 3

You were employed at a firm for a fixed term of 12 months, but your employer has terminated your employment nine months in.

You should speak to a solicitor who can help you determine whether you fall into any of these categories.

What if my employer’s actions forced me to leave?

You may still be able to claim against your employer if they have seriously breached the employment contract and caused you to resign. This is called constructive dismissal.

There are a number of examples of serious breaches of contract, including:

To qualify as a constructive dismissal, you must have resigned from your job as a direct result of the alleged breach, having had no alternative course of action, at the time of the breach. If you don’t leave on or around the time of the breach, it’s likely to be considered that you have ‘affirmed’ your employer’s breach of the contract, and you may lose your ability to make a constructive dismissal claim.

It’s important to consult a lawyer experienced in employment law who can help you determine whether there has been constructive dismissal and when you should leave your employment (if you have not done so already).

When is a claim of wrongful dismissal unavailable?

If you received proper notice from your employer or your employment has come to the end of a fixed term, you are not entitled to claim wrongful dismissal.

In some cases, an employer may have terminated your employment contract because of your actions. This is called summary dismissal.

If you have committed a ‘repudiatory’ breach of the contract, such as assaulting another member of staff or acting dishonestly, your employer is entitled to dismiss you without notice.

The act that causes dismissal can be fairly minor (although not completely trivial), if there is a sufficient series of events leading up to this point (Kearns v Glencore UK, 2013).

A lawyer can help you identify whether you have breached your employment contract and whether these breaches are trivial or repudiatory.

Wrongful dismissal—what should I do?

You may be able to find your company’s policy on dismissal in your company handbook.

If you feel that your relationship with your employer has deteriorated because of your wrongful dismissal, you should contact the Advisory, Conciliation and Arbitration Service (ACAS).

ACAS can provide free and independent advice for employment disputes and can give you advice on the next steps you should take.

It’s also a formal requirement to notify ACAS if you plan to make a claim.

ACAS will offer you the opportunity to use early conciliation, a process through which you and your employer may be able to settle your dispute.

Reaching a settlement agreement through early conciliation can be quicker, cheaper and less stressful for all parties involved.

It’s vital to take legal advice as soon as any issues at work arise. A solicitor specialising in employment law can assess the value of your claim and advise you on the next steps to take.

You should also take affirmative steps to ‘mitigate your loss’ after your dismissal, as a failure to mitigate can be deducted from any compensation you may be entitled to. This doesn’t mean that you should take a much lower-paid job immediately after being dismissed, but you should act reasonably in trying to find new employment and mitigating the loss.

You may be deemed to have failed to mitigate if you’ve been offered your old job back but refuse to take it. Speak to a solicitor who can help you determine whether it is objectively reasonable to take the job.

Pursuing a claim of wrongful dismissal

Instruct a solicitor specialising in employment law, who can assess your case and advise on your next steps.

If you wish to proceed with a legal claim against your employer, be aware that there are strict time limits on this and your claim may not be heard if you do not begin your claim in time.

You must make your application to the Employment Tribunal within three months minus one day of the date you were dismissed. If you want to take your claim to the Civil Court, you need to apply within six years.

By going through early conciliation, you will have stopped the clock on the deadline for applying to the tribunal or court.

The basic principle the tribunal or court follows is that you are placed in the same position as if your employment contract had been properly performed.

This means that the compensation you can claim from wrongful dismissal is limited to your notice period or the period of time defined in your fixed contract.

Damages at the Employment Tribunal are capped at £25,000, while damages at Civil Courts are unlimited.

The tribunal or court will calculate your damages as lost wages (which would have been earned during your notice period) and other contractual benefits, including accrued holiday pay, pension contributions, commission and contractual bonus payments.

Tax and National Insurance Contributions are deducted from this award.

As mentioned above, it’s important to try to mitigate your loss. Under the Trade Union and Labour Relations (Consolidation) Act 1992, the tribunal has discretionary powers to adjust the damages if you have not mitigated.

Costs against the losing party at the Employment Tribunal are unusual, which means you are less at risk of having to pay your employer if you lose the case.

If you lose your case in a Civil Court, you will usually be ordered to pay your own costs and your employer’s costs.

A solicitor can advise you on time limits, any other possible solutions available to you, and the strength of your claim.

You may also be entitled to bring a claim of Unfair Dismissal, which covers the reason why and manner in which you were dismissed, whether or not there was inadequate notice. However, you must have been employed continuously for two years.

Short FAQS

What is wrongful dismissal?

Wrongful dismissal occurs when you are dismissed contrary to your contract of employment. Commonly this occurs when an employer breaches your notice period terms in your contract of employment.

What is the difference between unfair dismissal and wrongful dismissal?

A wrongful dismissal is a dismissal in breach of contract and the only relevant considerations for a tribunal will be the contractual obligations of the employer. Wrongful dismissal occurs commonly where your employer dismisses you without notice or with insufficient notice under your contract of employment. Unfair dismissal is a statutory right not to be dismissed unfairly - an employee must have a minimum of two years' continuous service to qualify for the right to bring a claim of unfair dismissal.

Legal disclaimer

The matters contained in this article are intended to be for general information purposes only. This article does not constitute legal advice, nor is it a complete or authoritative statement of the law, and should not be treated as such. Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.

Wrongful Dismissal (What is it?) 2
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