Wrongful dismissal


Wrongful dismissal is essentially a claim for breach of contract. This situation arises when your employer breaches a term in your employment contract, which results in dismissal or forces you to leave. It is not the same as unfair dismissal. You do not need two years service to claim for wrongful dismissal.

What is wrongful dismissal?

If you are dismissed whilst on probation, this is one of the heads of claim that you can consider. You can also consider whether your dismissal falls under any of the automatically unfair reasons for dismissal or was discriminatory.

If your contract is terminated without the required notice (whether this is the notice period in your employment contract or in ERA 1996) or breaches another term such as failure to follow a contractual disciplinary process, you can sue for wrongful dismissal. The breach can be a breach of a written term of your contract or a breach of an implied term. The right not to be unfairly dismissed is a statutory right under section 94 ERA 1996, whereas wrongful dismissal is a contractual claim.

Dismissal without notice

If your Employer dismisses you without giving the contractually required notice (unless it is a summary dismissal) or does not follow the provisions of your contract relating to dismissal, you can strategically refuse to accept that the dismissal has taken effect.

This is because wrongful dismissal does not terminate your employment contract. It is a repudiatory breach, which terminates the contract when you accept it.

In Société Générale, London Branch v Geys [2012],  the Supreme Court was asked to consider four issues arising from a dispute between Société Générale (the “Bank”) and Mr. Geys (a former employee of the Bank), primarily concerning the date Mr. Geys employment contract was terminated.

The two issues described of general public importance were decided on, with the majority of the Supreme Court ruling that;

  • a repudiatory breach of an employment contract does not operate to terminate the contract automatically –  as with other types of contract, the innocent party (the Employee) is required to accept the repudiation to effect termination;
  • a party seeking to terminate an employment contract is required to notify the other party that it is doing so in clear and unambiguous terms;

This means that you have to accept the termination for it to take effect, and your Employer must clearly inform you that you are dismissed.

If you refuse to accept the termination on the grounds that it is in breach of contract, your Employer will probably then follow the rules correctly and dismiss you. The extra time can be beneficial where you need time for a bonus or to have the requisite service to claim unfair dismissal.

Other points worthy of note are that;

In General Billposting Company Ltd. v Atkinson [1909] A.C. 118 the House of Lords said that such a breach by your Employer discharges you from continuing to work under the employment contract. This includes any post-employment obligations such as restraint of trade and non-solicitation clauses.

In this case, General Billposting dismissed Mr. Atkinson “in deliberate disregard of the terms of the contractin such a way as “to evince an intention no longer to be bound by the contract. Mr. Atkinson successfully sued them for wrongful dismissal and then started his own business.

His original employment contract had a clause restricting his right to trade within a specified area for two years after the end of his employment with General Billposting.

The company sued Mr. Atkins for breach of the restraint of trade provision.

The House of Lords threw out their case because General Billposting had repudiated the contract, and Mr. Atkins “was thereupon justified in rescinding the contract and treating himself as absolved from the further performance of it on his part” and no longer bound by the restrictive trade covenant which General Billposting was trying to enforce.

This applies where your employer has not paid you notice. In some circumstances, the Employment Tribunal can regard payment in lieu of notice (PILON) as sufficient – Abrahams v Performing Rights Society Ltd [1995].

 Compensation

Where your Employer has failed to give you proper notice, or pay you for it, the remedy in the Employment Tribunal would be compensation made up of net loss of earnings (pay including anticipated pay rise and other benefits) which you would have been entitled to in the notice period, subject to mitigation of loss – British Transport Commission v Gourley [1956].  The main remedy in the civil courts is damages.

You can claim for your lost earnings – Addis v Gramophone Co Ltd [1909] and damage to your reputation – Malik v Bank of Credit & Commerce International SA [1997].

Benefits that you can claim include;

  • Commission and bonuses
  • Accrued holiday entitlement
  • Income protection benefit and personal use of company car – Shove v Downs Surgical plc [1984] 1 All ER 7

Injunctions

An injunction is a discretionary power that can be exercised by the County Court under section 38 County Courts Act 1994, or the High Court under section 37(1) of Senior Courts Act 1981. The Employment Tribunal does not have the power to grant injunctions. It is possible to get an injunction to enforce your rights in your employment contract. Even though the Courts have power to grant an injunction, they will rarely do so because compensation is enough of a remedy for wrongful dismissal.

You cannot get an injunction to keep your job going, even in a redundancy situation where the Employer has not used the contractual selection process. The only option you have is to submit a claim to the Employment Tribunal –  Marsh v National Autistic Society [1993] ICR 453

Some of the situations in which an injunction has been granted are;

Failure to provide work

In Besong v Connex Bus (UK) Ltd [2004], the Employment Appeal Tribunal said that if an Employee brings a claim for loss of pay due to the Employer’s failure to provide work, the appropriate claim is for breach of contract rather than unlawful deductions from wages. In that case Mr. Besong was paid hourly and was only entitled to wages for the days on which he worked. His claim was not that he had not been paid for work he did, but that Connex Bus did not make work available to him and that this amounted to a breach of his contract.

Payment of money due

Payment of any money that is due to you under your contract; or payment of an amount of money relating to the terms and conditions or the performance of your contract such as;

Settlement Agreements

The Employment Tribunal can deal with the breach of a settlement agreement which is connected to your employment. In such a case it is a “contract connected with employment”, and therefore falls under the jurisdiction of the Employment Tribunal. In Rock-It Cargo Ltd. v Green [1997], Mrs. Green had a settlement agreement under which her employment would terminate on a specified date and she would receive a sum of money.

Rock-It Cargo said that Mrs. Green had breached a confidentiality clause after her employment terminated, and refused to pay her the agreed sum. Mrs. Green sued them for breach of contract in the Employment Tribunal who agreed with her because the settlement agreement was an agreement about how Mrs. Green’s employment would end.

If the settlement agreement was entered into after the termination of your employment, then it cannot be brought before the Employment Tribunal and must be heard in the county or high court.

In Miller Bros and F P Butler Ltd. v Johnston [2002]  the Employment Appeal Tribunal (Employment Appeal Tribunal) said that the Employment Tribunal had no jurisdiction to hear Mr. Johnston’s breach of settlement agreement claim because it was made after his employment had ended.

In Silvey v Pendragon [2001] IRLR 685 the court said that a wrongfully dismissed employee is entitled to compensation for all the benefits that the employee would have received if he or she had remained employed until the end of the notice period. This includes benefits in kind (fringe benefits), salary and pension contributions, as well as the value of any health and life insurance and company car.


DISCLAIMER

The information and content on this website is provided for general information purposes only and is not intended to constitute legal or other professional advice. Legal information or content on this website relates only to the laws of England and Wales. You should not take any actions based on information found on this website without first seeking appropriate legal advice with respect to your specific matter. No representations or warranties are made about the suitability, currentness, comprehensiveness and/or accuracy of the information and other content contained on this website. It should be noted that legal information and content can rapidly become out of date and we give no undertaking to keep this website up to date. All liability for any loss or damage of any kind which may be suffered as a result of accessing and using the information and/or content of this website is hereby excluded to the full extent permitted by law.