Constructive, Unfair & Wrongful Dismissal: A Guide

If you've been dismissed unfairly or in breach of contract, you may have a dismissal claim. If you do have a claim, you'll need to act quickly as there are strict time limits.

By MyLegalAdviser - Last Updated March 2018

If you've been unfairly fired/dismissed or badly treated by your employer, you may have a dismissal claim.

It's important you act quickly though, as you'll only have a very limited time to make a claim. Read on to find out how it all works.


The three types of dismissal claims

There are three common types of dismissal claim:

  1. unfair dismissal – where the grounds for, or process of, dismissal was unfair (e.g. you were dismissed for no good reason, or the reason given for dismissing you was automatically unfair).
  2. constructive dismissal – where the employer makes such a serious breach of contract the employee is forced to leave their job (e.g. your employer stops paying you or makes dramatic changes to your hours/work location without your consent).
  3. wrongful dismissal - where the employer breaches their employment contract with the employee when dismissing them (e.g. by giving the wrong notice period).

What is unfair dismissal?

This is when the employer doesn’t have a good reason for dismissing the employee or they fail to follow fair dismissal procedures.

What are the fair reasons for dismissal?

Unless the dismissal was automatically unfair, only employees who have worked for the employer for over two years (less a week) are able to make a claim for unfair dismissal. Employees who've been employed this long can only be "fairly" dismissed for one of five reasons:

  • misconduct – this ranges from minor to gross misconduct. Whilst the former may only require a verbal or written warning the first time it happens (and will generally require the employee to be given two formal written warnings before dismissal can be considered), gross misconduct (e.g. fraud, theft or violence) can entitle to the employer to dismiss the employee on the spot without the right to notice.
  • capability – where the employee isn’t capable of the job (e.g. because they lack the necessary skills or qualifications, or sickness means they aren’t capable of performing their job). However, the employer will need to demonstrate they acted fairly and reasonably (e.g. they gave the employee the necessary training in order to fulfil their duties) prior to the dismissal.
  • redundancy – where there is no longer a role for the employee at the business – e.g. because new technology is being introduced or all/part of the business is being closed. Employers must be careful follow the rules on selecting employees for redundancy.
  • illegality – this is where the employee cannot continue to do their job as it would be illegal - e.g. if they are a taxi driver and they lose their driving licence, or if they are no longer entitled to work in the UK.
  • 'some other substantial reason' – a catch-all reason, this will need to be considered carefully in light of the circumstances. For example, the non-renewal of a contract for an employee recruited for maternity leave cover (where the circumstances were made clear to the employee). If considering this form of dismissal, advice should be taken from an employment specialist to ensure the grounds are a “substantial reason”.

What might be considered unfair dismissal?

There’s lots of different situations where dismissal is likely to be considered unfair and it’s not possible to list them all. If you've worked for your employer for 2 years (less a week) and you weren't dismissed for one of the five fair reasons, you may have an unfair dismissal claim.

A couple of examples of unfair reasons for dismissal would be if you: joined a trade union, applied for maternity/paternity leave or were dismissed without following a fair process.

What is automatically unfair dismissal?

Some reasons for dismissal are automatically unfair, these are where the dismissal relates to:

  • pregnancy or maternity.
  • family rights – e.g. parental leave, adoption or paternity rights.
  • employee acts as an employee/trade union representative.
  • taking part in industrial action.
  • employee acts as pension scheme trustee.
  • membership or non-membership of a trade union.
  • status as part-time or fixed-term employee.
  • pay and working hours.
  • discrimination on the grounds of: age, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation.
  • disability (unless there are no reasonable adjustments which can be made to allow them to do their job).
  • age (unless the employer can objectively justify it).

Can any employees not claim unfair dismissal?

Some employees can’t claim unfair dismissal. This includes:

  • self-employed people or independent contractors;
  • members of the armed forces;
  • police staff (unless the dismissal relates to health & safety whistle-blowing);
  • employees who’ve reached a settlement through ACAS or through a settlement agreement;
  • employees taking part in unofficial industrial action (unless the dismissal is automatically unfair);
  • employees under an illegal contract;
  • employees covered by a legally exempted dismissal procedure agreement;
  • fishermen working on a vessel and paid by a share of the profits/earning of the vessel.

How much compensation do you get for unfair dismissal?

If an employee successfully proves they were unfairly dismissed, an employment tribunal has the power to award compensation to the employee (as at 2017):

  • of up to £14,670 for a basic award; and
  • in addition, a compensatory award of up to £80,541.

What is constructive dismissal?

This is where an employer’s conduct forces the employee to leave their job. A few examples of where a claim could be made for constructive dismissal include:

  • demotion for no good reason
  • failing to pay you, or reducing your pay
  • unreasonable/unfair disciplinary proceedings or performance-related procedures/sanctions
  • a dramatic change to your job description
  • unreasonable change in your work location or hours
  • causing or condoning harassement or bullying
  • failing to address work-related stress
  • not making reasonable allowances for a disability

How long do you need to have been employed before you can claim constructive dismissal?

Generally speaking, you'll need to have been continuously employed for 2 years (less a week) to be able to make a claim for constructive dismissal - although there are some exceptions where there's no minimum period of employment required (e.g. discrimination).

If you haven't been employed for over 2 years, you may be able to bring a claim for wrongful dismissal if your employer breached your contract when dismissing you.

How do you bring a claim?

The first step is generally to lodge a formal grievance against your employer. This gives the employer a chance to remedy the issue and can avoid a reduction of up to 25% by the Employment Tribunal if no such grievance is brought.

You don't have to bring a grievance (in some cases it may better not to), but its usually worth discussing this with your solicitor. One good reason for raising a grievance is that it may lead to your employer entering into a settlement agreement (which is generally preferable to going to a Tribunal).

If you need to bring a claim then you, or your solicitor, will need to lodge a claim form at the Employment Tribunal. Your employer will then have to decide whether to defend the claim or not and, if they do, the Tribunal will schedule a hearing date, following which they will make their decision.

How much compensation do you get for constructive dismissal?

If an employee successfully proves they were constructively dismissed, an employment tribunal has the power to award compensation to the employee (as at 2017):

  • of up to £14,670 for a basic award; and
  • in addition, a compensatory award of up to £80,541.

What is wrongful dismissal?

This is when the employer breaches the contract of employment when dismissing the employee, generally by not giving them the correct amount of notice or a payment in lieu of notice (i.e. they dismiss you without allowing you to work your notice).

However, the employee will not have a claim for wrongful dismissal where:

  • the employer has made a Payment in Lieu of Notice (PILON) - i.e. a payment equivalent to the amount the employee would have recevied if they'd worked their notice; or
  • the employee has committed gross misconduct.

How much compensation do you get for wrongful dismissal?

Employees who are wrongfully dismissed are entitled to compensation for the pay and benefits (e.g. company car and pension contributions) they should have received under their contractual notice period. This amount is capped at £25,000 at a Tribunal, but no such cap exists at the County or High Courts.

Compensation awarded under a successful wrongful dismissal claim will reduce any compensatory award under an unfair dismissal claim.

What's the deadline for making a dismissal claim?

The deadline for making a dismissal claim is 3 months (less a day) from the date the employee was dismissed.

If you think you might have a claim you should take legal advice quickly to avoid missing the deadline.

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