Wrongful dismissal compensation

The following Employment practice note provides comprehensive and up to date legal information covering:

  • Wrongful dismissal compensation
  • Contrasting wrongful dismissal with unfair dismissal
  • The general rule
  • Loss of salary
  • Holiday entitlement that would have accrued during the notice period
  • Fringe benefits and pension
  • Accommodation
  • Damages assessed on basis that contract performed in manner most beneficial to the employer
  • Contractual termination provisions and PILONs
  • Damages for the manner of dismissal
  • More...

Wrongful dismissal compensation

This Practice Note examines the remedies (heads of claim) available in the case of dismissal in breach of an employment contract (wrongful dismissal), and in particular how compensation for wrongful dismissal (ie damages for breach of the contract of employment) are assessed.

At common law an employee is wrongfully dismissed if their dismissal was in breach of the contract of employment. Normally this will mean dismissal without the notice due under that contract, but it could also cover a purported summary dismissal for cause by the employer (such as where there is an act or a series of breaches which, taken individually, would not amount to gross misconduct) where in fact the employee had not been guilty of gross misconduct.

The remedies for breach of a contract of employment are similar to, but not exactly the same as, the remedies available for breach of an ordinary contract. Broadly, these are:

  1. claims in debt, ie for monies owed for wages or salary already earned and (in some cases) where the employer operated a payment in lieu of notice (PILON) clause (see Contractual termination provisions and PILONs, below); when successfully suing on a debt claim, an obligation to mitigate loss does not arise and loss need not be proved as it does in a damages claim

  2. claims arising in relation to a liquidated damages clause (see

Popular documents