What is the Difference Between Unfair Dismissal and Wrongful Dismissal?

With one of the proposals from the new Government being protection for employees from day one, from unfair dismissal, it is important for both employees and employers to understand what unfair dismissal actually is and useful to know how it differs from ‘wrongful dismissal’.

Unfair Dismissal

Unfair dismissal has its basis is law (Employment Right Act 1996) and a tribunal will uphold this claim where an employer dismisses the employee and cannot satisfy the Tribunal that they have one of five potentially fair reasons for dismissal, contained within the Employment Rights Act, and/or the  tribunal find that the employer acted unreasonably in dismissing the employee for the stated reason.

It is important therefore for employers to 1) follow a fair process in dismissal and 2) have a potentially fair reason for the dismissal.

Currently employees only have the right to claim for ordinary unfair dismissal if they been employed for a minimum of two years, so if the newly proposed legislation is brought into effect, this ‘qualifying period’ could be shortened to just one day.

There are already some exemptions to the two-year period including where the reason for dismissal is linked to  attending Jury service, for health and safety reasons or regarding working time regulations, plus others.

Alison has prepared a full podcast series on Unfair Dismissal which you can find here: Podcast

Wrongful Dismissal

Wrongful dismissal however is much more objective in nature and comes under common law as breach of contract, where one or more of the terms of the contract, either express or implied have been breached by the employer.

The tribunal in these cases is concerned with the conduct and what actually happened, not whether the outcome was fair or not, nor the opinions or intentions of the action and is less open to interpretation.

An example of wrongful dismissal would be where an employee was dismissed for something, with no notice. It would be a fundamental breach of contract as they would be entitled to notice (unless dismissed for gross misconduct – in which case they have no entitlement), be it the legal minimum notice period or the contractual notice as defined in their terms of employment.

Wrongful dismissal can occur from actual or constructive dismissal and if it is proven that the employer breached the contract, the employee will have a claim in damages, whereby the employer would be liable to pay the employee a figure to put them back in the position they would have been in, had the contract been ceased in accordance with its terms. This claim can either be brought forward in the civil courts or in an employment tribunal and is not held to any pre-conditions like with unfair dismissal.