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Read more articles in: Amanda Hyam, Blog, Employment Law
Wrongful dismissal occurs when an employee’s contract is terminated in breach of its terms.
Typically, this involves the employer dismissing the employee without giving the correct notice period, as stipulated in the employment contract or under statutory minimum notice periods.
Unlike unfair dismissal, which is a statutory claim based on fairness and reasonableness, wrongful dismissal is a purely contractual claim.
The focus is on whether the employer failed to honour the terms of the contract, particularly around notice periods, pay during notice, or termination without cause where a cause is contractually required.
Despite common misconceptions, you do not need to have two years’ continuous service to bring a wrongful dismissal claim.
However, the remedies available are limited to financial compensation rather than reinstatement or a finding of unfairness.
The leading authority on damages in wrongful dismissal claims is Addis v Gramophone Co Ltd [1909].
In Addis, the House of Lords ruled that compensation for wrongful dismissal is limited to the financial loss arising directly from the breach, usually lost salary and benefits during the notice period.
Claims for injured feelings, reputational damage, or future loss of earnings beyond the notice period are not recoverable.
The principle established in Addis has been consistently upheld, as demonstrated in Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2011].
In this case, the Supreme Court clarified that even where the dismissal breaches contractual disciplinary procedures, damages are confined to financial losses tied to the notice period.
The Court reinforced that claims for loss of career opportunities or stigma damages fall outside the scope of wrongful dismissal remedies.
If you are bringing a wrongful dismissal claim, you must establish that the employer has breached a term of your contract, usually by failing to provide proper notice or by dismissing you without following contractual procedures.
Evidence of the contract terms – whether express or implied – is crucial.
Damages are calculated based on the net value of what you would have earned during the notice period, including salary, contractual benefits, bonuses, and pension contributions.
Courts do not award damages for emotional distress or for the manner of the dismissal.
You must also demonstrate that you have taken reasonable steps to mitigate your loss, such as seeking alternative employment.
Any earnings from new employment during the notice period may reduce the compensation awarded.
If you believe you have been dismissed in breach of your employment contract, seeking legal advice early is essential.
A solicitor can assess whether you have a valid claim, help gather the necessary contractual documentation and calculate potential damages.
We can also ensure you meet limitation periods and advise on whether pursuing a civil claim or settlement is the most appropriate course of action.
For more information, please get in touch with our team.
Head of Dispute Resolution and Employment
I have specialised in Dispute Resolution, Civil Litigation and Employment law for more than 15 years. I understand how daunting the prospect of litigation can be and because of this I am always available to discuss concerns.
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