Wrongful Dismissal

Understanding employment law on wrongful dismissal in the UK will spare you not only unnecessary headaches, but costly tribunal claims too. Although the maximum wrongful dismissal UK compensation doesn’t go above £25,000 in a tribunal, no employer wants to waste money on avoidable mistakes.

When faced with the unpleasant situation of dismissing an employee, you need to follow due process. This means, among other aspects, paying attention to all contractual obligations you took on yourself as an employer. Trying to skip any of these terms will put you at risk of ending up in an employment tribunal.

Our experienced employment law advisors can help you with any situation you have on your hands. Call us today so we can guide you every step of the way, on 01455 858 132.

In this article, we will discuss what wrongful dismissal is, how to avoid it, and how to deal with a claim.

What is wrongful dismissal?

This happens when an employer breaks the terms stated in the employment contract while dismissing an employee. Usually, the breach of contract has to do with the notice period terms, be they contractual or statutory requirements by UK law.

As an employer, you will benefit from gaining clarity on the termination of employment options you have.  It will help you distinguish between lawful and unlawful approaches, so you stay legally compliant in every situation that arises.

We have seen companies mishandle the process when they had a perfectly valid reason to dismiss a member of staff. So, you need to make sure you cover all grounds for a lawful, fair dismissal.

Some employers also mistakenly consider unfair dismissal the only type of unlawful termination of employment. This misunderstanding can cost them dearly if they end up with a case of wrongful dismissal on their hands.  

Let us see what makes the two types of dismissal different, to make sure you avoid confusion.

Wrongful dismissal versus unfair dismissal

The major difference between the two consists in how they occur. Wrongful dismissal results from a breach of contract, while unfair dismissal arises from an infringement of an employee’s rights.

An employee will be wrongfully dismissed from work if the employer fails to follow their contractual obligations. You must ensure that you give the employee sufficient notice, and follow the steps outlined in their employment contract.

Unfair dismissal occurs when the employee can challenge the reason for their dismissal, based on the Employment Rights Act 1996.

Let’s now look at the other major difference between these two options, linked to the qualifying period of employment.  

With a few exceptions, an employee cannot claim unfair dismissal if they worked for less than two years for the company.  The exceptions have to do with the nine protected characteristics. If they can prove discrimination played a role in the process, they can potentially still claim automatically unfair dismissal.      

There is no wrongful discrimination qualifying period. This means that an employee can claim it at any point of them working for a company.

Employers have previously asked our advisors:

Can a worker claim wrongful dismissal during the probation period?

The answer is clearly yes. If you fail to give them notice or follow the process as per contract, they can make a claim. In other words, you can wrongfully dismiss an employee while on probation, so you need to avoid doing that.

How to avoid wrongfully dismissing an employee

Remember that, even if an employee doesn’t perform while on probation, you cannot fire them on the spot. To avoid wrongful dismissal, the statutory notice period is key. By respecting requirements in this matter, you will make sure you stay legally compliant. It may be beneficial to consider extending probation rather than dismissing - to further assess their capability.  

The statutory notice period requirements are:

• One week for staff whose length of service is between one month and two years
• Two weeks for staff whose length of service is at least two years
• One week for every year of service after the employee’s second year up to a maximum of twelve weeks

With a new employee, you should follow the same process to manage performance concerns. Discuss these issues in a one-to-one meeting and agree on an improvement plan with deadlines. Offer them any training they need to get them up to speed, and monitor progress. If you need to, give them verbal and written warnings.

Once you followed the whole process, remember to offer them notice or pay in lieu.  

One exception where the above doesn’t apply, without making it wrongful dismissal, is gross misconduct. If your employee’s behaviour breaks trust and destroys the working relationship they have with you, you can dismiss them without notice. Hold a disciplinary hearing to clarify the results of your investigation and allow them the chance to explain and defend themselves. You could potentially dismiss them on the spot, but we advise to not rush into things.

If you’re worried about gaps in your contracts or handbooks, talk to our advisors to book a documentation review today.

Examples of wrongful dismissal by UK law

Most wrongful dismissal examples happen when employers rush things and fail to give the required notice period. However, other situations can occur.

If we think of wrongful dismissal as a breach of contract, we can identify other aspects that you need to consider:

• Breaching contractual disciplinary procedures – such as treating a minor performance issue as gross misconduct
• Breaching contractual redundancy procedures
• Treating misconduct as gross misconduct and dismissing the employee without previous warning
• Failing to meet contractual terms for a temporary contract (particularly a temporary-to-permanent contract)

Learning from what you shouldn’t do will also help you keep your termination of employment process clear.

Get clear, hassle-free HR advice

When you are dealing with termination of employment, the last thing you need is to worry about wrongfully dismissing somebody. You can easily run your situation, your reasons, and your decisions past our experienced advisors to ensure you stay legally compliant.

Don’t risk avoidable complications that could cost you up to £25,000 compensation pay in an employment tribunal. Start off the dismissal process on the right footing – it could spare you loss of money and reputation. Call our 24/7 HR advice line today, on 01455 858 132.