Unfair Dismissal and Breach of Contract

Unfair Dismissal

An employee normally acquires the right not to be dismissed unfairly after completing 12 months service.

Dismissal in this context can either mean express dismissal e.g. "you're fired" or constructive dismissal where the employee resigns in response to a fundamental breach of contract on the part of the employer.

Once a dismissal is proven, under normal circumstances, an employer has to prove that a dismissal was for a permitted 'fair' reason and that it was reasonable to dismiss for that reason.

There are six potentially fair reasons, including conduct, capability, redundancy and retirement. Proving that there are grounds for dismissal is, however, not enough. In addition, a statutory disciplinary and dismissals procedure must be followed and any material failure to do so on the employer's part will render the dismissal automatically unfair.

Special protection against unfair dismissal extends to all employees, irrespective of length of service in certain circumstances, including (among other things) dismissal in connection with a health and safety reason and protected disclosures, otherwise known as "whistleblowing".

Unfair dismissal (above) often provides an inadequate remedy to senior executives because there is a statutory cap on compensation.

For these individuals, breach of contract (sometimes called 'wrongful dismissal'), in the county or High Court may provide a better measure of damages where there is a lengthy contractual notice period (e.g. six to twelve months).

An employee who is summarily dismissed is entitled to claim damages for all financial losses incurred during what would have been the contractual notice period unless the employer can prove gross misconduct on the employee's part.