Wrongful Dismissal
Outcomes
1. Plan a letter of advice to a client in a wrongful dismissal context, explaining the concept of
constructive dismissal.
2. Explain the basis on which wrongful dismissal damages are calculated
3. Identify and explain the consequences of commercially realistic options available to an
employee and employer when a repudiatory breach of contract has taken place, or may take
place.
Bringing a claim- Employment Tribunal v Civil Court proceedings- can be brought in
both
Court • 6 year limitation period- s.5 limitation act
• No limit on damages
• Claim worth less than 5k- allocated to small track
• Expensive and time consuming
ET- 3 months less one Ss.3, 8 ETA 1996 : Pre-conditions
day
• The claim must be for a breach of contract of employment
25,000 cap on awards and must arise or be outstanding on the termination of
s.111 employment.
• Capek v Lincolnshire County Council- ET does not have
jurisdiction to hear claims prior to dismissal or termination of
an employment contract.
• Need to go through acas early conciliation
• Can only award damages and with a limit of £25,000
• S.111 the claim HAS to be brought within 3 months of the
termination
, Termination of a contract:
Termination by agreement No WD claim
Where the parties agree to bring the contract to an end and there will be
no breach of contract.
Termination by notice- only applies to • When the proper notice period for termination is given, there is
indefinite term contracts no breach of contract.
Actual dismissal s.95(1)(a) and s.136(1)(a) • Newcastle upon Tyne Hospitals NHS Foundation Trust v
ERA 1996 Haywood held that termination will only start to run from the
date the employee received written notice of their dismissal and
has reasonable time to read it- DEFAULT position unless there
is a term varying it by way of express contractual term.
• This rule only applies to contracts for an indefinite period- in the
absence of a break clause, limited-term contracts cannot be
terminated by notice- that will be a breach
• If the contract contains a provision that either party may give
notice, a party that gives shorter notice will be in breach.
• If an expressly agreed notice period is less than the statutory
minimum required by s.86 ERA 1996, the longer statutory
minimum period is to be given.
Implied term of reasonable notice PAGE 91
• In absence of express clause on notice on indefinite
employment contracts, can be terminated by reasonable notice
by either party
• What is reasonable depends on the circumstances and the job
role- Clark v Fahrenheit- employee’s seniority and status and the
employers financial position are to be taken into account when
determining what is reasonable. Court held that a pilot and
salesman required 3 months but only 1 week for a milk carrier.
• BUT CANNOT BE LESS THAN STATUTORY MINIMUM under
s.86 ERA 1996
• Problem can be avoided by including expressly agreed
notice periods into the employee’s contract
Effect of PILON
• The employee accepts PILON although there is no provision in
the contract permitting such a payment to be made to the
employee, and agrees expressly or impliedly to waive the
requirement for notice. There will be no breach for the employer
or the breach has been waived for consideration by the
employee. NO LIABILITY FOR WD
• Option 2: (more common) the employer pays PILON but there is
no provision in the contract permitting such a payment to be
made to the employee, while taking the money DOES NOT
accept the money as waiving his right to notice. The employer is
in breach of the contract and the employee could claim WD.
However, unless the PILON is significantly less than what
would be awarded in damages, it would not be advisable to
pursue in financial terms.
Outcomes
1. Plan a letter of advice to a client in a wrongful dismissal context, explaining the concept of
constructive dismissal.
2. Explain the basis on which wrongful dismissal damages are calculated
3. Identify and explain the consequences of commercially realistic options available to an
employee and employer when a repudiatory breach of contract has taken place, or may take
place.
Bringing a claim- Employment Tribunal v Civil Court proceedings- can be brought in
both
Court • 6 year limitation period- s.5 limitation act
• No limit on damages
• Claim worth less than 5k- allocated to small track
• Expensive and time consuming
ET- 3 months less one Ss.3, 8 ETA 1996 : Pre-conditions
day
• The claim must be for a breach of contract of employment
25,000 cap on awards and must arise or be outstanding on the termination of
s.111 employment.
• Capek v Lincolnshire County Council- ET does not have
jurisdiction to hear claims prior to dismissal or termination of
an employment contract.
• Need to go through acas early conciliation
• Can only award damages and with a limit of £25,000
• S.111 the claim HAS to be brought within 3 months of the
termination
, Termination of a contract:
Termination by agreement No WD claim
Where the parties agree to bring the contract to an end and there will be
no breach of contract.
Termination by notice- only applies to • When the proper notice period for termination is given, there is
indefinite term contracts no breach of contract.
Actual dismissal s.95(1)(a) and s.136(1)(a) • Newcastle upon Tyne Hospitals NHS Foundation Trust v
ERA 1996 Haywood held that termination will only start to run from the
date the employee received written notice of their dismissal and
has reasonable time to read it- DEFAULT position unless there
is a term varying it by way of express contractual term.
• This rule only applies to contracts for an indefinite period- in the
absence of a break clause, limited-term contracts cannot be
terminated by notice- that will be a breach
• If the contract contains a provision that either party may give
notice, a party that gives shorter notice will be in breach.
• If an expressly agreed notice period is less than the statutory
minimum required by s.86 ERA 1996, the longer statutory
minimum period is to be given.
Implied term of reasonable notice PAGE 91
• In absence of express clause on notice on indefinite
employment contracts, can be terminated by reasonable notice
by either party
• What is reasonable depends on the circumstances and the job
role- Clark v Fahrenheit- employee’s seniority and status and the
employers financial position are to be taken into account when
determining what is reasonable. Court held that a pilot and
salesman required 3 months but only 1 week for a milk carrier.
• BUT CANNOT BE LESS THAN STATUTORY MINIMUM under
s.86 ERA 1996
• Problem can be avoided by including expressly agreed
notice periods into the employee’s contract
Effect of PILON
• The employee accepts PILON although there is no provision in
the contract permitting such a payment to be made to the
employee, and agrees expressly or impliedly to waive the
requirement for notice. There will be no breach for the employer
or the breach has been waived for consideration by the
employee. NO LIABILITY FOR WD
• Option 2: (more common) the employer pays PILON but there is
no provision in the contract permitting such a payment to be
made to the employee, while taking the money DOES NOT
accept the money as waiving his right to notice. The employer is
in breach of the contract and the employee could claim WD.
However, unless the PILON is significantly less than what
would be awarded in damages, it would not be advisable to
pursue in financial terms.
