What is wrongful dismissal?
If you have been dismissed from work in a manner which breaches your employment contract you could have a claim for wrongful dismissal at an employment tribunal or court and be entitled to compensation.
To be entitled to claim for wrongful dismissal, you must have been wrongfully dismissed from work. ‘Dismissed’ means 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. ‘Wrongfully’ means the termination was not done in accordance with the terms of the contract.
Wrongful dismissal may arise if your employer:
- dismisses you without giving you notice;
- dismisses you without following the disciplinary or dismissal procedures defined by your employment contract;
- dismisses you without giving you your statutory or contractual notice pay;
- acts so badly in that you are entitled to resign and claim constructive dismissal because the employment relationship is severely undermined;
- dismisses you for gross misconduct (and therefore is entitled not to give you notice pay), but in fact the dismissal only warranted an ordinary misconduct dismissal and so notice should have been given.
Normally employment contracts contain a clause stating what the notice period is. If there is none stated there is an obligation on the employer to follow a statutorily prescribed notice period. These are:
- at least one week’s notice if you were employed for between one month and two years;
- one week’s notice for each year if employed between two and 12 years;
- 12 weeks’ notice if employed for 12 years or more.
Your employment contract may give you more than the statutory minimum notice, but it cannot give you less.
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 your employment contract does not contain such a clause – this would amount to a breach of a contract. A payment instead of notice will be subject to taxes.
Making a claim
You must submit your claim for wrongful dismissal to an employment tribunal within three months, minus one day, from the date you were dismissed. Before doing this though, you need to make an early conciliation notification to Acas, a publicly funded independent organisation that helps sort out employment disputes. Acas will offer you a chance to try and resolve your problem with your employer and thus avoid the matter having to go to tribunal. If no solution can be found, Acas will issue you with a conciliation certificate and you can proceed to tribunal. The clock stops on your tribunal time limit as soon as you make your notification to Acas. It resumes again when you receive your certificate.
If you miss the tribunal deadline, however, it is open to you to bring your claim in the county court or High Court, which allows you up to six years to make a claim instead of the three months required by the tribunal.
Does the employer have any defence?
A claim for damages for wrongful dismissal is effectively a claim for a breach of contract. Your employer may try to raise several defences against the allegation of wrongful dismissal including:
- invalidity of contract: no action can again be taken against an invalid contract;
- you weren’t constructively dismissed – it was your behavior which caused the problems;
- the contract allowed dismissal without disciplinary procedure, provided notice was given or paid in lieu (Bridgen v American Express Bank Ltd (2000));
- the employer finds after the dismissal that the employee was in such serious breach, that he could have been summarily dismissed for gross misconduct (Boston Deep Sea Fishing and Ice Co Ltd v Ansell (1888)).
Damages claims for up to £25,000 can be heard in the employment tribunal; claims for more than £25,000 should be heard in the county court or High Court. Damages are assessed on the basis of what you would have been entitled to if your employment contract had not been wrongfully terminated.
If you find a new job and start working within the uncompleted notice period, the court will take your new salary into account when calculating your loss. You will also be expected to take reasonable steps to mitigate your losses, ie, look for another job. If you don’t, the court may reduce the amount of damages.
Wrongful or unfair dismissal?
If you have been dismissed without notice and you think the dismissal was also unfair, you can sue for unfair dismissal instead of/as well as wrongful dismissal.
If both unfair and wrongful dismissal is found, the court will set off the damages awarded for wrongful dismissal against the damages awarded for unfair dismissal – you won’t get a double payout.
The circumstances in which an unfair dismissal case can be brought are narrower than for wrongful dismissal in that:
- you must have worked for your employer for a minimum period before you can claim unfair dismissal (one year if you started before 6 April 2012; two years if you started on or after that date); there is no qualifying period when you claim for wrongful dismissal;
- a claim for unfair dismissal can only be made at employment tribunal, whereas claims for wrongful dismissal can also be made at the county court or High Court;
- claims for both must be brought within three months in the employment tribunal, but you have up to six years to bring a wrongful dismissal claim in the county court or High Court;
- damages for unfair dismissal represent the employee’s statutory compensation entitlement; damages for wrongful dismissal represent contractual entitlement for the employee;
- there is a cap on the amount of damages paid for unfair dismissal; there is no cap for wrongful dismissal.