Employees with 2 years’ service cannot be lawfully dismissed unless their employer has a ‘fair’ reason for the dismissal such as misconduct, poor performance, capability, redundancy or ‘some other substantial reason’. The procedure adopted by the employer may also make the dismissal unfair even if it would otherwise have been a lawful dismissal.

An employee can make a claim to an employment tribunal where they believe that their dismissal was unfair. An employment tribunal will listen to the evidence and decide whether the dismissal was actually fair in all of the circumstances of the case.

In certain circumstances employees with less than 2 years’ service may be able to claim that their dismissal was automatically unfair, for example, if an employee has been the victim of unlawful discrimination.

A dismissal could be unfair if an employer does not have a good reason for dismissing the employee or does not follow the company’s formal disciplinary or dismissal process.

If an employee is dismissed in the following situations, it is likely to be unfair:

  • where they asked for flexible working
  • they refused to give up their working time rights, for example, to take rest breaks
  • they joined a trade union
  • they took part in legal industrial action that lasted 12 weeks or less
  • they needed time off for jury service
  • they applied for maternity, paternity and adoption leave
  • they were on any maternity, paternity and adoption leave they were entitled to
  • they tried to enforce their right to receive Working Tax Credits
  • they exposed wrongdoing in the workplace (whistleblowing)
  • they were forced to retire (known as ‘compulsory retirement’) – compulsory retirement is not allowed unless an employer can objectively justify it.

Constructive dismissal is when an employee is forced to leave their job against their will because of their employer’s conduct. The reasons why the employee leaves their job must be serious, for example, they are not paid or suddenly demoted for no reason, they are forced to accept unreasonable changes to how they work – for example, told to work night shifts when their contract is only for day work, they are harassed or bullied by other employees and their employer does nothing to stop it. An employer’s breach of contract may be one serious incident or a series of incidents that are serious when taken together.

An employee should try and sort out any issues by speaking to their employer to solve the dispute, however, if the employee does have a case for constructive dismissal, they should leave the job immediately because an employer can argue that, by staying, they accepted the conduct or treatment.

Wrongful dismissal is a breach of the contract of employment by the employer usually involving notice periods.

An unfair dismissal claim can be made if the dismissal isn’t for potentially fair reasons under the Employment Rights Act 1996. The right to claim wrongful dismissal isn’t included in the Employment Rights Act it is a common law claim based on breach of an employment contract.

An employer has a responsibility to act legally when terminating someone’s employment and give correct notice. Where an employer acts wrongfully the employee can make a claim against them.

There are only two instances where a notice period is not required for termination:

  • if the employee has committed gross misconduct or a serious breach of contract, for example, theft, bullying, or harassment. This is also known as a summary dismissal.
  • if there’s a payment in lieu of notice clause included in the employment contract. A payment in lieu of the notice clause is when both parties agree to a lump sum rather than service of the required notice period.

An employee is well within their rights to claim for being both wrongfully and unfairly dismissed. However, they cannot receive double compensation – but both elements of the claim would be factored into the compensation payment.

When claiming wrongful dismissal an employee can be awarded compensation for what they would have received during their notice period. This is usually made up of basic salary, other benefits, any bonuses or allowances (such as a company car, private health cover and pension entitlement) and contractual benefits. The employee may also claim for any other contractual benefits they feel they’re owed.

The amount of damages awarded can vary depending on the wording of the employment contract.

In the UK, the amount of compensatory award for an employment tribunal is capped at £25,000 – anything higher must be pursued through the county court or high court.

Termination of employment claims can be expensive for employers, especially if they have to pay damages.

Taking the following steps can avoid a breach of contract claim and an employment tribunal:

  • Create effective documentation and ensure the contract of employment clearly states a fair procedure for termination.
  • Follow the terms of the employment contract.
  • Provide training for staff on equality and discrimination in the workplace etc.
  • Provide training for all managers on how to discipline correctly and procedures to be followed.
  • Ensure that staff are provided with sufficient notice at the end of their employment.