Wrongful dismissal
Has there been a dismissal?
To make a claim for wrongful dismissal, the employee must have been dismissed under a reason under s95 and s136 ERA 1996.
How did the dismissal occur?...just state which way dismissal occurred…deciding if it was ‘wrong’ is
below
Actual dismissal – the contract is terminated by employer:
S95(1)(a) and s136(1)(a) – the employee is dismissed if ‘the contract under which they are employed…is terminated by
the employer (whether with or without notice).
Employer gives the employee notice in accordance with their employment contract
o Termination by notice – for an unfixed term contract
o Termination of a fixed-contract – cannot occur by notice. Termination only can occur by:
Having a break-clause in the contract (early termination) – but was this breached?
Other party commits a repudiatory breach
Termination by agreement – if this occurs there is no claim for WD.
Dismissal without notice / short notice but with payment in lieu of notice:
There are 2 scenarios’…
1. Employee accepts the paying in lieu, although there is no express provision in the contract
permitting such payment, and the employee agrees either expressly or impliedly to waive
the requirement for notice.
o In this case: either will be no breach by the employer or the breach has been
waivered
o Meaning: no claim for wrongful dismissal will arise.
2. Employer pays the employee in lieu of notice, and there is no provision in the contract
permitting such payment to be made and the employee, while taking the money, does not
accept the payment as waiving their right to proper notice.
In this case, the employer is in breach of contract
Meaning: A claim for wrongful dismissal will arise.
Summary dismissal – dismissal due to the employee breaching the contract:
If the employee has committed a repudiatory breach, the employer can treat the contract as terminated and dismiss the
employee without needing to give notice.
What was the breach
To do this – employer will need to rescind the contract and make sure they do not act as if they have accepted the
breach and affirmed the contract.
NOTE: dismissal without notice can be justified even if employer discovered grounds
for dismissal after dismissal has occurred.
NOTE: If the employer is mistaken about the breach and dismisses without notice,
employer has dismissed in breach of contract and be liable for a wrongful dismissal
claim.
Constructive dismissal – employee resigns due to the employer’s breach:
The general rule is that an employee who resigns has no claim for wrongful dismissal.
However…if the employer commits a repudiatory breach of an express or implied term the employee can accept the
breach and resign and treat the contract as discharged. The employee is treated as having been constructively dismissed.
And can make a claim for WD. What was the breach
The employee should resign in reasonable time to make sure deemed affirmation has not occurred
Examples of constructive dismissal:
Employer seriously undermines duty of trust and confidence
Repudiatory breach going to heart of the contract.
Threat to change contract terms and threat to dismiss if employee does not agree (and employee does not agree)
Breach of express term (paying below minimum wage / not pay over time rates / varying term with no agreement
1 Making unjustified allegations about employee’s competence/ theft/refusal to make reasonable adjustments
, Wrongful dismissal
Was it wrongful dismissal?
For a dismissal to be ‘wrongful’ the employee must have been dismissed in breach of contract.
What was the breach?
Actual dismissal – wrongful dismissal:
Look at the contract and how it says employment should be terminated – has employer complied/breached this?
Wrongful dismissal example:
No notice
Insufficient notice - Is the contractual notice period less than the statutory minimum?
HOWEVER – actual dismissal with no notice / insufficient notice can be justified if the employee has committed a
repudiatory breach.
NOTE: If the employer dismisses the employee without notice/insufficient notice / in breach of contract and post-
dismissal the employer discovers the employee has committed a repudiatory breach = employer can justify dismissal
without notice – Boston Deep Sea Fishing v Ansell
Termination by notice must be reasonable – so check the contract and see if notice needed to be longer.
S86(1): Period of continuous employment Notice
1 month – 2 years 1 week
2 years – 12 years 1 week notice per year of employment
12 year – more 12 weeks
Dismissal without notice / short notice but with payment in lieu of notice:
Employer pays the employee in lieu of notice, and there is no provision in the contract permitting such payment to be
made and the employee, while taking the money, does not accept the payment as waiving their right to proper notice.
The employee does not expressly/impliedly waive the breach.
In this case, the employer is in breach of contract
Meaning: A claim for wrongful dismissal will arise.
Constructive dismissal – wrongful dismissal
A repudiatory breach committed by the employer which breaches the contract
What was the act that breached the contract?
Examples of constructive dismissal:
Employer seriously undermines duty of trust and confidence
Repudiatory breach going to heart of the contract.
Threat to change contract terms and threat to dismiss if employee does not agree (and employee does not agree)
Breach of express term (paying below minimum wage / not pay over time rates / varying term with no agreement
Making unjustified allegations about employee’s competence/ theft/refusal to make reasonable adjustments
NOTE: A breach of duty of mutual trust and confidence – is always a repudiatory breach – Morrow v Safeway Stores
Dismissal in a fixed term contract
If the employer dismisses the employee before the expiry date of a fixed term contract, this will be WD.
However, it can be justified either if the employee has committed a repudiatory breach or there is a break clause which
has been complied with. Check whether there is a break clause
if there is not a break clause = WD.
If there is a break clause but this has not been complied with = WD.
Employee committed a repudiatory breach = NO WD, as this give the employer justification.
Was the dismissal wrongful?
2
Has there been a dismissal?
To make a claim for wrongful dismissal, the employee must have been dismissed under a reason under s95 and s136 ERA 1996.
How did the dismissal occur?...just state which way dismissal occurred…deciding if it was ‘wrong’ is
below
Actual dismissal – the contract is terminated by employer:
S95(1)(a) and s136(1)(a) – the employee is dismissed if ‘the contract under which they are employed…is terminated by
the employer (whether with or without notice).
Employer gives the employee notice in accordance with their employment contract
o Termination by notice – for an unfixed term contract
o Termination of a fixed-contract – cannot occur by notice. Termination only can occur by:
Having a break-clause in the contract (early termination) – but was this breached?
Other party commits a repudiatory breach
Termination by agreement – if this occurs there is no claim for WD.
Dismissal without notice / short notice but with payment in lieu of notice:
There are 2 scenarios’…
1. Employee accepts the paying in lieu, although there is no express provision in the contract
permitting such payment, and the employee agrees either expressly or impliedly to waive
the requirement for notice.
o In this case: either will be no breach by the employer or the breach has been
waivered
o Meaning: no claim for wrongful dismissal will arise.
2. Employer pays the employee in lieu of notice, and there is no provision in the contract
permitting such payment to be made and the employee, while taking the money, does not
accept the payment as waiving their right to proper notice.
In this case, the employer is in breach of contract
Meaning: A claim for wrongful dismissal will arise.
Summary dismissal – dismissal due to the employee breaching the contract:
If the employee has committed a repudiatory breach, the employer can treat the contract as terminated and dismiss the
employee without needing to give notice.
What was the breach
To do this – employer will need to rescind the contract and make sure they do not act as if they have accepted the
breach and affirmed the contract.
NOTE: dismissal without notice can be justified even if employer discovered grounds
for dismissal after dismissal has occurred.
NOTE: If the employer is mistaken about the breach and dismisses without notice,
employer has dismissed in breach of contract and be liable for a wrongful dismissal
claim.
Constructive dismissal – employee resigns due to the employer’s breach:
The general rule is that an employee who resigns has no claim for wrongful dismissal.
However…if the employer commits a repudiatory breach of an express or implied term the employee can accept the
breach and resign and treat the contract as discharged. The employee is treated as having been constructively dismissed.
And can make a claim for WD. What was the breach
The employee should resign in reasonable time to make sure deemed affirmation has not occurred
Examples of constructive dismissal:
Employer seriously undermines duty of trust and confidence
Repudiatory breach going to heart of the contract.
Threat to change contract terms and threat to dismiss if employee does not agree (and employee does not agree)
Breach of express term (paying below minimum wage / not pay over time rates / varying term with no agreement
1 Making unjustified allegations about employee’s competence/ theft/refusal to make reasonable adjustments
, Wrongful dismissal
Was it wrongful dismissal?
For a dismissal to be ‘wrongful’ the employee must have been dismissed in breach of contract.
What was the breach?
Actual dismissal – wrongful dismissal:
Look at the contract and how it says employment should be terminated – has employer complied/breached this?
Wrongful dismissal example:
No notice
Insufficient notice - Is the contractual notice period less than the statutory minimum?
HOWEVER – actual dismissal with no notice / insufficient notice can be justified if the employee has committed a
repudiatory breach.
NOTE: If the employer dismisses the employee without notice/insufficient notice / in breach of contract and post-
dismissal the employer discovers the employee has committed a repudiatory breach = employer can justify dismissal
without notice – Boston Deep Sea Fishing v Ansell
Termination by notice must be reasonable – so check the contract and see if notice needed to be longer.
S86(1): Period of continuous employment Notice
1 month – 2 years 1 week
2 years – 12 years 1 week notice per year of employment
12 year – more 12 weeks
Dismissal without notice / short notice but with payment in lieu of notice:
Employer pays the employee in lieu of notice, and there is no provision in the contract permitting such payment to be
made and the employee, while taking the money, does not accept the payment as waiving their right to proper notice.
The employee does not expressly/impliedly waive the breach.
In this case, the employer is in breach of contract
Meaning: A claim for wrongful dismissal will arise.
Constructive dismissal – wrongful dismissal
A repudiatory breach committed by the employer which breaches the contract
What was the act that breached the contract?
Examples of constructive dismissal:
Employer seriously undermines duty of trust and confidence
Repudiatory breach going to heart of the contract.
Threat to change contract terms and threat to dismiss if employee does not agree (and employee does not agree)
Breach of express term (paying below minimum wage / not pay over time rates / varying term with no agreement
Making unjustified allegations about employee’s competence/ theft/refusal to make reasonable adjustments
NOTE: A breach of duty of mutual trust and confidence – is always a repudiatory breach – Morrow v Safeway Stores
Dismissal in a fixed term contract
If the employer dismisses the employee before the expiry date of a fixed term contract, this will be WD.
However, it can be justified either if the employee has committed a repudiatory breach or there is a break clause which
has been complied with. Check whether there is a break clause
if there is not a break clause = WD.
If there is a break clause but this has not been complied with = WD.
Employee committed a repudiatory breach = NO WD, as this give the employer justification.
Was the dismissal wrongful?
2
