Partner Article

What are; wrongful, unfair and constructive dismissals?

Dismissal of an employee occurs when:-

• the employer terminates the contract, either with or without notice
• a fixed term contract ends and is not renewed
• the employee leaves, with or without giving notice, in circumstances they are entitled to do so because of the employers conduct

Types of dismissal:-

Wrongful dismissal

Wrongful dismissal occurs when an employer terminates the contract of employment, and in doing so, breaches the contract. The most common example is terminating the contract without giving the contractual period of notice. The period of notice is a matter of agreement between the employee and the employer. However, it is subject the minimum periods prescribed by law. Wrongful dismissal claims will generally be for the payment and benefits due for the notice period.

Unfair dismissal

Succcessive Governments have given employees additional statutory protection in addition to that given by the law of contract.

The law on unfair dismissal is principally contained in ‘The Employment Rights Act 1996’ as amended by numerous statutes. The basis of unfair dismissal law is that employees have the right to be treated fairly. In making a claim of unfair dismissal the employee is required to demonstrate that they were dismissed, and that the dismissal was not fair for a specific reason.

There are five potentially fair reasons for dismissal. To be fair, a dismissal must be for one of these reasons:-

• capability or qualifications
• conduct
• illegality or contravention of a statutory duty
• redundancy … or
• some other substantial reason {SOSR}

Retirement is no longer a potentially fair reason for dismissal.

The Government is currently changing the rules surrounding discussions which lead to compromise agreements {to become known as ‘settlement agreements’} When fully in force, the new law will prevent discussions about settlement agreements from being used as evidence in unfair dismissal claims, unless the employer or employee has engaged in ‘improper behaviour’.

Constructive dismissal

Constructive dismissal occurs when the employee resigns as a result of the actions of the employer. The employers’ actions must amount to a fundemental breach of the employment contract:-

• The employer breaches the contract of employment.
• The employee resigns in response to the breach.
• The employee must resign in a timely manner and the resignation must be as a consequence of the breach.

Compensation for dismissal

In wrongful dismissal claims, damages are calculated as for any other breach of contract, so an employee will be entitled to their full net salary for the contractual notice period, and compensation for loss of other benefits for that period.

Awards made by the Employment Tribunal in cases of unfair dismissal consist of a basic award to compensate for loss of job security and a compensatory award to reflect the immediate and future, loss of earnings. In rare cases an additional award may be made where an order for reinstatement or re-engagement is made but not complied with.

If you need step by step guidance in following the correct procedure for resolving disciplinary matters, and avoid the pitfalls, please contact me via my profile.

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This was posted in Bdaily's Members' News section by Andrew Dane .