Dismissal Series: Part 2 – What is Wrongful Dismissal?

In part 2 of our Dismissal Series, Laura explains what is meant by a wrongful dismissal.

By Laura Hayden

My first blog in this series talked about unfair dismissal and the five fair reasons for terminating an employee’s contract. It’s a statutory right not to be unfairly dismissed.

But what if the reason is fair but the process followed isn’t as per the employee’s contractual terms?!

Quelle surprise, this is also unacceptable in Employment Law. It is, however, an entirely different concept to unfair dismissal. In these circumstances, the claim would be for ‘wrongful dismissal’.

What is Wrongful Dismissal?

In effect, a wrongful dismissal is a breach of contract and the only thing a tribunal would need to assess is whether the employer has breached their contractual obligations to the employee.

The vast majority of wrongful dismissal claims are where the employer has dismissed the employee without notice or with less than the notice period either stated in their contract or required by law (whichever is higher).

For this type of wrongful dismissal claim to be successful, it must be established that the employee’s dismissal was not serious enough to substantiate summary dismissal (i.e. there was no gross misconduct offence) and that because of the wrongful dismissal, the employee suffered a loss.

A claim for wrongful dismissal could also be made if certain processes are contractual and not followed as a minimum. For example, the company has a contractual disciplinary process that states that they will always hold an investigation hearing with the alleged perpetrator before a disciplinary hearing with them is held and that 72 hours’ advanced notice is always given for formal meetings. If that company skipped the investigation stage and gave less than 72 hours’ notice of the hearing, the employee could have a claim for breach in contract.

Claims for wrongful dismissal must be made within 3 months of the date of dismissal but unlike unfair dismissal claims, there is no qualifying period of service required – i.e. it can be claimed from day one of employment.

Awards for successful claims

Compensation is calculated on the basis of lost earnings as a result of the contractual breach – this could, therefore, be the notice period owed and/or the period of time it would have taken to complete the relevant contractual procedure.The award includes the net value of salary and any other contractual benefits to which the employee may have been due, had they have been allowed to work their notice – e.g. the value of private health insurance or bonus payments.

In an employment tribunal, the maximum award for wrongful dismissal is capped at £25,000.

If you’d like to find out more about wrongful dismissal, just get in touch!