Malcolm ZoppiMon Jun 10 2024
Difference between unfair dismissal and wrongful dismissal
Unfair dismissal and wrongful termination: two terms often used interchangeably, but are they really the same? If you’ve ever wondered about the distinction between the two, and how it affects your rights as an employee in the United Kingdom, you’re in the right place. Prepare to uncover the nuances, challenge common beliefs, and gain a […]
Unfair dismissal and wrongful termination: two terms often used interchangeably, but are they really the same? If you’ve ever wondered about the distinction between the two, and how it affects your rights as an employee in the United Kingdom, you’re in the right place. Prepare to uncover the nuances, challenge common beliefs, and gain a deeper understanding of the intricacies of UK employment law.
Key Takeaways:
- Unfair dismissal is a statutory right under the UK’s Employment Rights Act 1996, while wrongful dismissal is a contractual right.
- Unfair dismissal claims require two years of continuous service and proof that a fair reason for dismissal was not satisfied, whereas wrongful dismissal focuses on breach of contract.
- Unfair dismissal claims can be pursued before an employment tribunal and may result in compensation, while wrongful dismissal claims can be taken to civil court and involve claims for damages.
Unfair Dismissal
To establish an unfair dismissal claim, you must fulfill the two limbs test. First, the two years of continuous service is required. This means that you need to have worked for the same employer for at least two years before making a claim.
Next, the two limbs test examines the fairness of your dismissal. The first limb focuses on the fair reasons for dismissal outlined in the Employment Rights Act. These reasons include capability, conduct, redundancy, statutory illegality, and some other substantial reason. If you were dismissed for a reason that does not fall under these categories, your dismissal may be deemed unfair.
The second limb assesses the fairness and reasonableness of your employer’s conduct during the dismissal process. It takes into account the size and resources of the employer. If your employer’s actions were not fair and reasonable, your dismissal may be considered unfair.
If you are successful in your unfair dismissal claim, you may be entitled to compensation. This can include both a basic award and a compensatory award.
Basic Award:
The basic award is calculated based on your age, length of service, and weekly pay. The statutory maximum for the basic award is £16,320 (as of 2021/2022).
Compensatory Award:
The compensatory award aims to compensate you for the financial losses you have suffered as a result of your unfair dismissal. It takes into account factors such as your loss of earnings, future loss of earnings, and any expenses you have incurred. The compensatory award is subject to a statutory cap, which is set at £89,493 (as of 2021/2022), or one year’s gross pay, whichever is lower.
In addition to compensation, if you are successful in your unfair dismissal claim, you may also be entitled to reinstatement or re-engagement. Reinstatement means being placed back into your old position as if you had never been dismissed, while re-engagement involves being offered a suitable alternative role within the company. However, these remedies are relatively rare in practice.
Wrongful Dismissal
Wrongful dismissal occurs when there is a breach of contract, such as failing to provide the correct length of contractual or statutory notice. Unlike unfair dismissal, which is governed by statutory law, wrongful dismissal falls under the purview of contract law in the United Kingdom.
One significant difference between unfair dismissal and wrongful dismissal is that there is no requirement for a specific length of continuous service to pursue a wrongful dismissal claim. This means that even employees with relatively short periods of service can seek recourse if their dismissal violates the terms of their employment contract.
When pursuing a wrongful dismissal claim, an employee can choose to bring their case before an employment tribunal within three months less a day from their termination. However, there is also the option to file a claim in the civil courts, which provides a more extended six-year limitation period.
The amount of damages awarded in a wrongful dismissal claim will depend on various factors, including the employee’s pay, benefits, and the length of the notice period provided. It is essential to note that the value of the claim may play a role in determining the appropriate venue. Employment tribunals have a maximum limit for wrongful dismissal claims, while civil courts may be more suitable for high-value cases seeking substantial damages.
FAQ
What is the difference between unfair dismissal and wrongful dismissal?
Unfair dismissal refers to a situation where an employee is dismissed without a fair reason or without following a fair procedure. Wrongful dismissal, on the other hand, typically refers to a situation where an employee’s contract is terminated in breach of the terms of the contract.
How can one distinguish between wrongful and unfair dismissal?
The key difference lies in the reason for the dismissal. Wrongful dismissal usually involves a breach of contract, while unfair dismissal is more about the fairness of the reason and process behind the dismissal.
Can an employee bring a claim for both wrongful and unfair dismissal?
Yes, an employee can potentially bring separate claims for wrongful dismissal due to breach of contract and unfair dismissal due to unjust reasons or unfair procedures.
What is the procedure for claiming wrongful or unfair dismissal?
To make a claim for wrongful or unfair dismissal, it is advisable to seek legal advice from a solicitor who specializes in employment law. They can guide you through the process and represent you in any legal proceedings.
When is a dismissal deemed unfair?
A dismissal will be deemed unfair if it is not for a fair reason, or if the procedure followed by the organization was not fair in the circumstances.
What are some fair reasons for dismissal according to employment laws?
Some fair reasons for dismissal include gross misconduct, incapability to perform the job, redundancy, and a legal requirement preventing the employment from continuing.
What is constructive dismissal?
Constructive dismissal occurs when an employee resigns due to the employer’s behavior breaching the employment contract, essentially forcing the employee to leave their position.
How can an employee determine if their dismissal was fair?
An employee can evaluate the circumstances of their dismissal based on whether the organization followed a fair procedure and provided a legitimate reason for the termination.
What is the role of ACAS code in dismissal cases?
The ACAS code provides guidance on fair procedures for handling disciplinary and grievance issues in the workplace, which can be essential in determining whether a dismissal was fair or not.
Find out more!
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