Recently myself and my colleagues have been receiving enquiries about employee’s believing they have been paid incorrectly for their notice payment or not paid at all.
In the circumstances, I considered it would be useful to set out the claim which can be pursued and provide some general tips to employers to avoid having to defend such claims.
Employees who consider they have been paid incorrectly in respect of their notice pay, can pursue a claim for wrongful dismissal in the Employment Tribunal.
Please note, the claim must be lodged with Acas within 3 months less one day of you receiving the incorrect pay. For example, if an employee received their final salary on 31 December, then they would need to lodge their claim by 30 March.
Claims for breach of contract are capped at £25,000 in the Employment Tribunal. However, claims for breach of contract can also be pursued in the County Court and employees have 6 years to pursue a claim. There is no limit on the amount which can be claimed, but an employee will have to pay a court fee which will be based on the amount claimed.
What is Wrongful Dismissal?
This is a claim for breach of contract, as your employer would be in breach if they did not pay you on termination of employment (except where the dismissal is due to gross misconduct).
An employee does not need to have 2 years’ service in order to be able to claim wrongful dismissal, and so employers need to be careful when terminating any employee’s contract and ensure the correct amount of notice is paid.
I recommend that employer’s review the contract before concluding their employment and making the final payments.
Wrongful Dismissal & Gross Misconduct
If an employee has been dismissed for gross misconduct, then their contract will usually allow the employer to dismiss them without notice. This would mean that an employee is unable to pursue a wrongful dismissal claim. However, employers have encountered some issues with this, as dismissed employees have stated that they should not have been dismissed for gross misconduct, and therefore, should receive a notice payment.
If you are considering terminating an employee contract due to gross misconduct, it is important that the employee is aware of the allegations against them and understands that they could be dismissed for gross misconduct. Further, they should be provided with a copy of your disciplinary procedure which will hopefully list examples of what type of conduct will amount to gross misconduct, and whilst this is not an exhaustive list, it is likely the conduct alleged will fall into these rules in some way.
Ensure that you hold a disciplinary meeting with the employee and provide them with the opportunity to respond to the allegations and confirm the outcome in writing setting out clearly why you consider the conduct amounts to gross misconduct. This will show your justification for making the decision, in the event the employee challenges their dismissal.
Top Tips for Employers
- Ensure a process is followed even if the employee has not been employed for 2 years and ensure the employee knows the allegations against them and has been provided with a copy of the disciplinary procedure.
- Check the employee’s contract to ensure you know how much notice they are entitled to.
- Write to the employee following termination to confirm the reason for the dismissal and set out what payments will be made, refer to the employee contract wherever possible.
- Allow the employee the right to appeal even if they do not have 2 years continues employment with you. This will provide you with an opportunity to deal with any issues which arise in respect of pay.
- If the employee does appeal the decision, meet with them to discuss their concerns, and confirm the outcome in writing, setting out clearly that they have been paid correctly, or if an error has been made confirm this will be rectified.
Overall, employers should ensure that a clear record of the events leading up to the dismissal are kept on the employee’s personnel file, to ensure that they can:
- Justify the notice payment if made.
- Justify the reasons for the decision to dismiss (this is in the event the employee tries to pursue other claims).
I also recommend that you review your disciplinary procedure to ensure it is up to date and contains relevant examples of what could constitute gross misconduct in your business or organisation.