How to claim for a wrongful dismissal?

What is wrongful dismissal?

If you have been dismissed from work you could be entitled to have a claim for wrongful dismissal at an Employment Tribunal and so to get some compensation. Such a dismissal must however be done in a way which breaches your employment contract and is therefore wrongful. Breach of contract may arise if the employer dismisses you without following the obligation to give you notice or the notice which your employer gave you is improper. This right is also closely connected with your right to ask the employer follow correct procedures defined by the contract before he gives you notice. However note that dismissal which is wrongful does not have to be unfair. There is a difference between claiming for unfair dismissal and wrongful dismissal. You are entitled to bring a claim for wrongful dismissal at an Employment Tribunal for damages up to £25 000, County or High Court for damages over £25 000. Damages are counted on the basis of what you would have been entitled to if your employment contract was not wrongfully terminated. Compensation is therefore for the net loss which the employee suffered.

When can I claim?

In order to be entitled to claim for wrongful dismissal you must have been wrongfully dismissed from work. By ‘dismissed’ it is meant that your contract of employment was terminated by your employer and you did not agree with your employer on such a termination, or you did not voluntarily resign. By ‘wrongfully’ it is meant that this termination was not done in accordance with the terms of the contract. Normally employment contracts contain a clause stating what the notice period is. If there is none stated the statute imposes obligation upon the employer to follow statutory prescribed notice period. Some contracts contain a clause which offers payment to be made to the employee instead of the notice. The employer is not however allowed to make a payment instead of giving notice if an employee’s employment contract does not contain such a clause. In this instance the employer will be in breach of a contract. A payment instead of notice will be subject to taxes. Some employers pay compensation for loss of office. First £30 000 of the payment for loss of office is tax free. You will be required to mitigate your losses, for instance to look for another job. If you do not do this the court may refer to this when deciding on what amount of damages will be awarded to the employee. The judge will then reduce the amount of damages due to the fact that you did not take reasonable steps in order to mitigate your loses. Damages will also be affected if the employee does mitigate losses but it is always up to the court’s discretion to award such an amount as it thinks is fit.

Does the employer have any defence?  

Claim for damages for wrongful dismissal is effectively a claim for a breach of contract. Your employer may decide to attack credibility of contract in order to avoid damages to be paid out. Your employer may decide to claim several defences against the allegation of wrongful dismissal which was made against it. Illegality of actions is one of them. E.g. if the employer and you evade taxes such actions are considered illegal and in this instance no action can be taken upon an illegal contract. Your employer may decide to claim that the contract was invalid; no action can again be taken against an invalid contract. Your employer may have inserted a clause into your contract of employment which excludes his liability for wrongful dismissal. In this case you have the right to argue protection awarded under Unfair Contractual Terms Act 1977 (UCTA).

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For more information on:

  • Remedies
  • Comparison with unfair dismissal