Unfair and Constructive Dismissal – UK

Unfair Dismissal

An employer should not dismiss you in a way contrary to the terms of your contract. This is called “wrongful dismissal” and gives you a claim against your employer for breach of contract. An employer should also not dismiss you unfairly. If your performance is good, you have not committed any misconduct, your role is still required, and there is no other substantial reason to dismiss you, doing so is unfair and allows you to bring a claim.  

Normally you need to have worked for the same employer for two years before to bring an unfair dismissal claim. If the dismissal is for a discriminatory reason, however, it can be brought at any time. That includes before getting the job if the discrimination happened during recruitment. The two-year qualifying period also does not apply to whistleblowers (people who have made a complaint about employer misconduct) or when the termination relates to pregnancy. 

Procedural Unfairness

You can also bring a claim for unfair dismissal if the procedure used was unfair: for instance, if it did not adhere to the company’s policies and practices; or you were treated differently from others. 

Staff handbooks normally set out how your employer will handle complaints about your performance.  Except for the most serious cases, they usually require your employer to give you one or more verbal or written warnings so you have a chance to improve. Summary dismissal for minor reasons may create the basis for a legal claim. 

Unless you have committed gross misconduct, your employer should always give you notice of termination and allow you to work out your notice period or pay you the amount you would have earned during this period instead (this is called “pay in lieu of notice” or “PILON”). Your notice period will usually be stated in your terms or contract of employment. If it is not, the law requires that you be given at least one week for each full continuous year you have worked for your employer.  

Constructive Dismissal

In a situation where your employer has treated you so badly that you feel you must resign, you may be able to bring a claim for constructive dismissal. The necessary criteria are: 

1. your employer’s conduct breached your contract of employment in a fundamental way;  

2. you resigned because of that breach; and  

3. you made it clear that you did not accept the breach by resigning quickly.   

You would likely be justified in claiming constructive dismissal if, for example, an employer cut your salary unilaterally; or withdrew a significant benefit like a company car; or if a manager punched you in the face (that would be assault and battery also!). But tribunals can deny claims if they think the reason is not strong enough, so this can be tricky. It’s good to get legal advice first. But you should do this promptly, because if you keep enduring the bad conduct, you may be deemed to have accepted it. 

Awards for Unfair Dismissal in the UK

If your claim succeeds, you will be entitled to a basic award and a compensatory award.   

The Basic Award is calculated by taking your age, years of service and average weekly pay to arrive at a figure. As of 6th April 2020, the gross weekly pay is capped at £538. 

1. For each year of service below the age of 22, you will receive half a week’s pay (capped at half of £538) for each year. 

2. For each year of service when aged 22-40, you receive one week’s pay (capped at £538) is multiplied by 1. 

3. For each year of service when aged 41 or above, you receive one week’s pay (capped at £538) is multiplied by 1.5. 

So, for example, if you have worked for 20 years from the age of 41, the maximum Basic Award would be £16,140. 

On top of this is a Compensatory Award intended to compensate you for lost wages and benefits-in-kind, as well as future earnings and other losses caused by your unfair dismissal. It is capped as of April 2020 at one year’s gross pay or £88,519, whichever is lower.