The following Employment Tax guidance note Produced by Tolley in association with Andy Williams at Charles Russell Speechlys LLP provides comprehensive and up to date tax information covering:
The employee suffering breach of contract by way of a wrongful dismissal is to be put into the position that they would have been in had the contract been properly performed. Damages are assessed on the assumption that the employee would have performed the contract in the way least burdensome to themselves and that the employer would have given notice at the earliest opportunity.
If an employee is deemed to be wrongfully dismissed, they will be entitled to compensation for all the benefits to which they would have been contractually entitled had they remained employed until:
the end of their notice period
in the case of a fixed or limited-term contract that cannot be terminated on notice, the expiration of that contract
The benefits that will be considered in assessing damages include:
any other financial benefits the employee is contractually entitled to
health and life insurance
any other fringe benefits the employee is contractually entitled to
Silvey v Pendragon  IRLR 685
The basic principles ― that compensation for wrongful dismissal is limited to the loss of benefits to which the employee is contractually entitled and that the employer is assumed to have chosen the contractual options most favourable to itself ― have been qualified over the years, particularly in relation to bonuses. The courts have held that those assumptions are subject to the employer’s duty to exercise a discretion rationally. So, where an employee is entitled to participate in a discretionary bonus scheme, the employer is contractually obliged to exercise its discretion rationally and in good faith; the courts will not assume in such circumstances that the employer would have exercised its discretion to pay the employee no bonus or the minimum it could lawfully pay where it would have been arbitrary or unfair to do so.
Some contracts state the compensation the employer must or may pay if they want to terminate the contract with immediate effect
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