What are wrongful dismissals?
Wrongful dismissal happens when an employer breaches the terms of an employee’s contract when ending their employment.
Unlike unfair dismissal, which is based on statutory employment rights under the Employment Rights Act 1996, wrongful dismissal is a contractual claim.
The most common situations where wrongful dismissal arises include…
- Failure to give contractual or statutory notice
- Dismissing an employee without the correct notice period, or without pay in lieu of notice.
- Breach of dismissal procedures
- Not following the disciplinary or dismissal processes set out in the employment contract.
- Improper use of summary dismissal
- Dismissing an employee without notice for gross misconduct when the behaviour may not legally qualify as gross misconduct.
Wrongful dismissal claims can be pursued in an employment tribunal, where compensation is capped at £25,000, or in the civil courts, where damages can be higher. While awards are usually limited to the value of notice pay and benefits, claims can still be time-consuming, costly, and reputationally damaging for employers.
Why do wrongful dismissals matter to your business?
Many employers underestimate the risks associated with wrongful dismissal because the potential compensation is often lower than in unfair dismissal claims. However, the business impact can be far-reaching.
Risks of wrongful dismissal include…
- Financial costs
- Compensation can include notice pay, holiday pay, pension contributions, bonuses, and other contractual benefits.
- Linked claims
- Wrongful dismissal is often combined with claims for unfair dismissal or discrimination, significantly increasing your liability.
- Legal costs
- Defending a claim in tribunal or court can be expensive, even if the award itself is relatively modest.
- Reputational damage
- Tribunal judgments are public, and claims can affect your brand as an employer.
- Employee relations issues
- Mishandled dismissals can damage morale and trust among your remaining workforce.
Benefits of managing dismissals properly include…
- Reduced legal risk
- By following contracts and procedures carefully, you minimise the likelihood of claims.
- Fair and consistent processes
- Staff understand what to expect and feel reassured that dismissals are handled transparently.
- Stronger management confidence
- Managers know how to deal with performance or conduct issues without fear of legal repercussions.
- Positive reputation
- Demonstrating that you treat employees fairly strengthens your brand as an employer and business partner.
How can we help you with wrongful dismissal claims?
As HR and employment law specialists, we help employers prevent wrongful dismissal claims and manage them effectively if they arise. Our goal is to reduce your legal risk while protecting your organisation’s reputation and ensuring staff are treated fairly.
Our support includes…
- Employment contract and policy review
- We review your contracts of employment, handbooks, and dismissal procedures to make sure they are clear, legally compliant, and reduce the risk of breach.
- Advice on notice periods and pay
- We provide practical guidance on contractual and statutory notice requirements, including when you can use pay in lieu of notice (PILON) or garden leave clauses.
- Step-by-step dismissal support
- We guide you through dismissals to ensure they are managed fairly and in line with both contractual and statutory requirements, from performance issues to misconduct cases.
- Risk assessment before dismissal
- Before you take action, we help identify potential legal risks, including wrongful dismissal, unfair dismissal, and discrimination, and advise on the safest approach.
- Defending wrongful dismissal claims
- If an employee does bring a claim, we help prepare your case, collate evidence, and liaise with legal representatives to strengthen your defence.
- Manager training and coaching
- We train managers to understand the differences between wrongful and unfair dismissal, giving them the confidence to handle dismissals correctly and consistently.
By working with us, you gain peace of mind that dismissals in your organisation are handled lawfully, consistently, and in a way that protects both your business and your people.
Which other HR topics are related to wrongful dismissals?
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