Claims for wrongful dismissal are based upon the employment contract and will allege breach of the contract of employment. An action can be brought either in the county court or before an employment tribunal and is based on contract law. Probably the most common breaches are dismissal from employment without notice or where the notice period has given is too short. Failure by an employer to follow a contractual disciplinary procedure can also be wrongful dismissal.
An employer may, however, justify dismissing an employee without notice where there has been a serious breach of the contract, for example, theft by the employee. The employer does not have to have absolute proof of the theft, genuine and reasonable suspicion is enough.
Where an employer breaches the contract, the employee may accept the breach and continue working or resign. In either case, compensation may be sought.
Examples of breaches of contract by an employer have been held to be anything which destroys the goodwill and goes against the mutual trust and confidence necessary between employer and employee such as:
• false allegations of misconduct;
• harassing the employee;
• not paying wages/salary;
• changing an employee’s job or terms of employment;
• changing the employee’s work location without notice (if it is a major change).
The wrongful dismissal claim will usually be for damages designed to put the employee in the same position that they would have been in if the contract had not been breached by the employer. This normally includes the correct amount of money for the correct notice period. It can also include any wages/salary that have not been paid including damages for loss of perks, holiday pay, commissions, and loss of pension rights.
If an employee resigns, they must give the proper notice as set out in their contract of employment. If they do not have a contract or a notice period is not set out in the contract, the employee must give the statutory minimum of one weeks’ notice.
An employee is, however, entitled to resign without notice where the employer commits a serious breach of the employment contract, such as would make further employment impossible.
Where an employment contract stipulates a disciplinary procedure which is not complied with, then the employee may claim payment for the length of time that the disciplinary procedure would have taken if it had been used.