Wrongful dismissal

Produced by Tolley in association with Hogan Lovells
Wrongful dismissal

The following Employment Tax guidance note Produced by Tolley in association with Hogan Lovells provides comprehensive and up to date tax information covering:

  • Wrongful dismissal
  • Damages
  • Damages for the manner of dismissal
  • Duty to mitigate damages
  • Failure to mitigate

A wrongful dismissal is a unilateral breach of the employment contract by the employer. It occurs most often in a situation where the employer:

  1. dismisses the employee without notice or with insufficient notice

  2. does not have an adequate reason for the dismissal (ie is not entitled to dismiss the employee summarily because the employee has committed an act of gross misconduct)

Wrongful dismissal, unlike unfair dismissal, does not depend on legislation. It is a common law cause of action that is based on the breach of the employment contract. This does not mean that a wrongful dismissal cannot also constitute an unfair dismissal, or vice versa.

See the Termination of employment guidance note.

Damages

The employee suffering breach of contract by way of a wrongful dismissal is to be put into a position that they would have been in had the contract been performed. If an employee is deemed to be wrongfully dismissed, they will be entitled to compensation for all the benefits that they would have received had they remained employed until:

  1. the end of their notice period

  2. in the case of a fixed or limited-term contract that cannot be terminated on notice

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