17th July 2023 | Mark Fellows | Employment, tribunal, disciplinary
Employment lawyers will tell you that not a day goes by without hearing somebody assert that they have been unfairly dismissed, constructively dismissed and / or wrongfully dismissed. To confuse matters further, an employee can also be summarily dismissed. Dare I say it, we even refer to dismissals that are discriminatory…
The obvious theme being the ‘dismissal’, and the fact that employment is ending or has ended. However, in many cases, those concepts are used interchangeably as if they all represent the same claim, yet they are all very distinct and separate claims that have to be considered against the applicable legal principles. A bit like an Urban dictionary, we will tell you what they really mean…
This one is easy – a summary dismissal is a dismissal of an employee without any notice (and without paying them any notice either). Thus, it is quite common in cases of gross misconduct for the employee to be summarily dismissed.
This is a breach of contract claim, namely that the employer has dismissed the employee in breach of the terms of the employment contract.
If the employment contract provides that the employee is entitled to 3 months’ notice on termination, but the employer only gives 2 months’ notice, then this will give rise to a wrongful dismissal claim. It is a contractual claim, and the employee will point to the fact that they have suffered loss – 1 month’s loss of salary and benefits.
Often this claim is pursued when the employer terminates without any notice (see summary dismissal above), but the employee contends that the employer did not have grounds to terminate without notice. This claim is not concerned with the fairness of the procedure followed; it is simply an anaylsis of whether the employer has breached the employment contract.
This claim can be pursued in the Employment Tribunal but a cap of £25,000 applies on the value of that claim. Thus, if the wrongful dismissal claim is worth more than £25,000, it may need to be pursued in the High Court.
To bring a standard unfair dismissal claim, the employee needs 2 years continuous service with their employer. No such service requirement exists for wrongful dismissal claims.
If an employee has more than 2 years of continuous service and is dismissed by their employer (irrespective of whether notice was given), they can claim that they have been unfairly dismissed.
The Employment Tribunal will consider three key issues. Firstly, did the employer have a potentially fair reason to dismiss the employee. There are currently 5 recognised potentially fair reasons – capability, conduct, redundancy, breach of a statutory duty or restriction, and some other substantial reason. The dismissal must be for one of those reasons. Secondly, the Tribunal has to be satisfied that the employer followed a fair procedure in reaching the decision to dismiss and thirdly, that the employer acted reasonably in treating that reason as sufficient to warrant dismissal.
Thus, this claim is not about notice; it is about the fairness of the dismissal and will involve an analysis of the reason for dismissal, the procedure followed and whether the decision to dismiss was reasonable.
The fundamental principle of a constructive claim is that the employee has resigned, as opposed to the employer expressly dismissing them. Note that like an unfair dismissal claim, the employee needs 2 years of continuous service with their employer to pursue a constructive dismissal claim.
In many cases, the employee will resign without notice, but equally, claims can be pursued even if the employee works their notice following their resignation. The employee typically argues that they are resigning either in response to a repudiatory breach of their employment contract by the employer (an express or implied term) or that the employer has engaged in cumulative conduct over a period, resulting in a ‘final straw’ incident, leaving them no choice but to resign.
There is much case law on examples of successful constructive dismissal claims, which can include reductions to, or non-payment of, salary or where the employer has breached trust and confidence.
In essence, the employee has to prove that they have been dismissed ‘constructively’ by their employer. If they are able to overcome that burden, then the Employment Tribunal will consider the fairness of the ‘dismissal’.
All clear…well, brace yourselves…it is possible for an employee to be summarily dismissed (for say gross misconduct), who then alleges that they were unfairly dismissed (because, for instance, they do not believe the employer followed a fair process in dismissing them) and also alleges that they were wrongfully dismissed (on the basis that the employer did not have grounds to terminate without notice)…
We like to keep things straightforward at Sherrards; we cannot say the same for the law.