Wrongful Dismissal

• EMPLOYMENT LAW TERMINATION OF THE EMPLOYMENT RELATIONSHIP
• In this Lecture:


  1. We will consider:

  2. Background

  3. What isn't a 'dismissal' – i.e. how could a contract end without there being a (lawful or unlawful) 'dismissal'?

  4. What, in law is a 'dismissal' (including 'constructive dismissal)?

  5. What is a 'wrongful dismissal'?

  6. What is a 'summary' dismissal?

  7. Where should a wrongful dismissal claim be pursued and what are the possible remedies?

  8. How to avoid a wrongful dismissal claim?

  9. A last couple of points
• Wrongful dismissal


  A claim an employee can make if they are dismissed in breach of their employment contract
• How could a contract end without there being a 'dismissal'?

  • Termination by mutual 'agreement'
  • Termination by 'effluxion of time'
  • Termination by 'operation of law'
• Mutual agreement


  If there is genuinely no dismissal then there is no claim. If an employee is faced with 'resign or be sacked' and choses to resign – this is likely to be classed as a 'dismissal'. Very rarely will there be actual 'agreement' between the parties so as to amount to a genuine 'mutual' agreement
• Effluxion of time


  The non-renewal of a fixed term contract is not a breach of contract (therefore not a 'wrongful dismissal'). However, for unfair dismissal purposes, this is classed a 'dismissal'
• Operation of law


  Termination by 'operation of law' – is not 'dismissal'. 'Frustration' of the contract i.e. employment contract becomes impossible to perform as a result of no fault of either party. Difficult to claim
• Dismissal


  For the purposes of statutory claims is defined in the ERA 1996 Sec 95
• Circumstances in which an employee is dismissed

  • The contract under which he is employed is terminated by the employer
  • He is employed under a limited-term contract and that contract terminates without being renewed
  • The employee terminates the contract under which he is employed in circumstances in which he is entitled to terminate it without notice by reason of the employer's conduct
• Terminated by the employer


  Express dismissal – expressed in writing or verbally. Consider the words used – are they ambiguous? What about words spoken in anger?
• Limited-term contract not renewed


  Under strict contract rules, the expiry of a fixed term contract does not give rise to a claim for breach. However, the situation is treated differently for unfair dismissal claims
• Constructive dismissal


  The employee resigns in direct response to the employer's [unreasonable] conduct. Must be a breach of a 'fundamental' term by the employer, such as a breach of the implied term of mutual trust and confidence
• Assessing a 'wrongful dismissal' claim


  1. An employee has been 'dismissed'

  2. The employer dismissed the employee in breach of contract
• Possible 'breaches of contract' that could lead to a wrongful dismissal claim

  • The employer terminates the contract without notice or with less notice than the employee is entitled to receive
  • A fixed term contract is terminated by the employer before the date it was due to expire
  • A contract for a specific task was terminated by the employer before the task is complete
  • The employer terminates the employees employment without adhering to their contractual disciplinary procedure
  • The employer selects the employee for redundancy in breach of their contractual selection procedure
  • The employer wrongfully repudiates the contract
• Repudiatory breach


  Unreasonable behaviour by an employer that amounts to a breach of a fundamental term of the contract
• Examples of repudiatory breaches


  • Swearing at an employee
  • Unreasonably accusing an employee of theft
  • Bullying behaviour – e.g. sexual harassment
• Examples of repudiatory breaches

  • Abolition of a 1% commission (Hill v Mooney 1981)
  • Breach of an implied term (British Aircraft Corp v Austin 1978)
  • Breach of the duty of 'mutual trust and confidence' by the employer (Palmanor v Cedron 1978)
  • Wrongfully accusing an employee of theft and not giving an apology (Robinson v Crompton Parkinson 1978)
  • Manager giving an employee a telling off in front of other staff (Hilton International v Protopapa)
• Repudiatory breach


  The employee must leave because of the breach. The breach need not be the only cause but must be the "effective" cause. The effect need not even be 'intended'
• Mutual trust and confidence


  Sufficient for the employer to "conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence"
• Bournemouth University Higher Education Corp v Buckland [2010] IRLR 445 - a 'constructive' dismissal claim by a BU Professor, considered the requirement for a 'repudiatory' breach of contract by the employer
• Acceptance of the breach

  There has been continuing debate over whether the innocent party (the employee) has to 'accept' the (repudiatory) breach by the other party (the employer)
• Summary dismissal


  A dismissal without notice by an employer that is justified, e.g. for gross misconduct
• Examples of when summary dismissal may be justified

  • Dishonesty (theft, fraud)
  • Disobedience (serious insubordination)
  • Violence (physical violence or bullying)
  • Neglect
  • Causing damage to employer's property
  • Computer misuse
• Examples of when summary dismissal may be justified


  • Manager of a betting shop borrowing £15 from the till and leaving an IOU (Sinclair v Neighbour 1967)
  • Night-watchman discovered to be absent for 2 hours a night from the building he was supposed to be watching (Ross v Aquascutum Ltd 1973)
• Summary dismissal


  Dismissal for cause that requires something extremely serious to have occurred, such as gross misconduct
• Justifications for summary dismissal

  • Dishonesty (theft, fraud)
  • Disobedience (serious insubordination)
  • Violence (physical violence or bullying)
  • Neglect
  • Causing damage to employer's property
  • Computer misuse
• Other examples of justifications for summary dismissal

  • Accessing pornographic websites or other offensive or obscene material
  • Bringing the company into disrepute (whether by actions within or outside of employment)
  • 'Pulling a sickie'
• Wrongful dismissal


  An action for damages in respect of the breach of contract
• Measure of damages


  To put the innocent party back into the position they would have been in had the contractual obligations been performed, as far as this is possible by monetary award
• Losses arising from wrongful dismissal


  Losses arising naturally from the breach or as reasonably within the contemplation of both parties
• Notice period


  The period of notice the employer must give to terminate the contract
• Factors determining notice period

  • As expressed in the (written) contract
  • Implied term as to the period
• Statutory minimum notice periods

  • Not less than one week's continuous notice if employment is less than two years
  • Not less than one week's notice for each year of continuous employment if employment is two years or more but less than twelve years
• Mitigation of losses


  The employee has a duty to mitigate their losses, generally by looking for another job
• There has been an ongoing debate regarding the ability for employees to claim additional damages beyond the notice period, such as for injury to feelings, loss of reputation, or difficulty in finding another job ('stigma')
• Following Edwards v Chesterfield Royal Hospital [2012], any breach of contract which results in dismissal can only reflect the notice period, and 'stigma damages' may only apply where a breach during employment causes the stigma, rather than a breach during the dismissal itself.
• Avoiding wrongful dismissal claims

  Employers should give the employee the requisite notice, or pay wages representing the notice period (using a 'payment in lieu of notice' clause)
• If there is a wrongful dismissal, the employer cannot then rely on any post-termination restrictions, as the contract has been breached.
• Wrongful dismissal is a claim for breach of contract, while unfair dismissal is a separate claim.