What is the difference between unfair dismissal and wrongful dismissal?
Unfair dismissal and wrongful dismissal may be used inter-changeably by the lay person but, they do not mean the same thing! They are two totally different types of claims which may be bought by individuals against their ex-employer. We explain how each claim differs below.
Unfair dismissal
- The right not to be unfairly dismissed is a statutory right conferred by the Employment Rights Act 1996.
- An eligible employee may only enforce their right by bringing a claim in an employment tribunal – claims may now be brought without paying a fee.
- There are certain restrictions on who can bring an unfair dismissal claim.
- You must be an employee i.e. employed under a contract of employment. Other types of workers or consultants cannot bring claims of unfair dismissal.
- An employee may only bring a claim of unfair dismissal if they have been employed for two years or more.
- You must have been dismissed in order to bring a claim of unfair dismissal. This means either that your employer has terminated your employment or, you have resigned in circumstances where your employer has breached your contract (constructive dismissal) or, you have been employed on a fixed-term contract and this has not been renewed.
- You must generally bring your claim of unfair dismissal in the employment tribunal within three months of the date of your dismissal.
- A dismissal will be unfair where an employer cannot show that it had one of five potentially fair reasons for dismissal.
- An employer must follow a fair procedure before dismissing an employee. A tribunal will use the ACAS Code as a benchmark for a fair procedure and can increase any compensation awarded by up to 25% where it considers this was unreasonably not followed.
- A dismissal must also be substantively fair. This means that dismissal was a reasonable response from the employer, in all the circumstances.
Wrongful dismissal
- The right to claim wrongful dismissal is not set out in legislation, it is a common law claim based on breach of contract.
- Wrongful dismissal occurs where an employer terminates employment without giving any (or the correct amount) of notice specified in the contract or, if greater, the statutory minimum notice.
- There are no strict eligibility rules like there are for unfair dismissal, all that is required is a dismissal in breach of contract.
- An individual should be able to claim for the financial losses caused by the employer’s breach of contract, namely salary and contractual benefits which would have been due during the notice period.
- Claims of up to £25,000 only may be brought in an employment tribunal. Claims with a larger value than this must be brought in the ordinary courts where a fee must be paid.
- A claim for wrongful dismissal may be brought regardless of how long someone has been employed.
- A claim of wrongful dismissal can be bought in the ordinary courts up to six years after the dismissal.
- The reason for dismissal is relevant to a claim of wrongful dismissal only where the employer argues the reason for the dismissal was the employee’s gross misconduct.
- Whether or not an employer followed a fair procedure is irrelevant in wrongful dismissal claims.
- Equally, substantively fairness is not relevant to claims of wrongful dismissal.
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