What is Wrongful Dismissal?
Wrongful dismissal occurs when an employer breaches the terms of an employee’s contract by dismissing them without proper notice or without following the contractual procedure. In the UK, wrongful dismissal is a contractual matter, not a statutory one, and is distinct from unfair dismissal, which is governed by statutory employment rights.
Definition of Wrongful Dismissal
Under UK employment law, wrongful dismissal happens when an employee is dismissed in a way that breaches their employment contract. This most commonly involves the employer failing to provide the notice period required by the contract, or by law, unless there is gross misconduct that justifies immediate dismissal. The legal basis for wrongful dismissal claims can be found in the Employment Rights Act 1996, which sets out minimum notice periods and other key employment protections.
How Wrongful Dismissal Differs from Unfair Dismissal
It’s important to understand the difference between wrongful and unfair dismissal. Wrongful dismissal focuses on whether the employer has breached the terms of the employment contract, particularly regarding notice. Unfair dismissal, on the other hand, is about whether the employer had a fair reason and followed a fair process for the dismissal, as set out in employment law. For more on this distinction, you may want to read about What Is Unfair Dismissal?
Common Examples of Wrongful Dismissal
Some typical situations where wrongful dismissal might arise include:
- An employer dismisses an employee without giving the notice required by their contract or by law.
- An employee is dismissed immediately for alleged misconduct, but the misconduct is not serious enough to justify instant dismissal (gross misconduct).
- The employer fails to follow a contractual disciplinary or redundancy procedure before dismissing the employee.
For example, if your contract states you are entitled to four weeks’ notice and you are dismissed without any notice or payment in lieu, this is likely wrongful dismissal.
Why Understanding Wrongful Dismissal Matters for Compensation Claims
Recognising wrongful dismissal is crucial because it affects your right to claim compensation. If you have been dismissed in breach of your contract, you may be entitled to damages equivalent to what you would have earned during your notice period, including pay and benefits. Understanding your rights under wrongful dismissal can help you decide on the best steps to take and whether to pursue a claim. If you want to explore the broader context or need more detail, see our main page on Wrongful Dismissal.
By knowing the difference between wrongful and unfair dismissal, and the specific legal protections in place, you can better protect your rights and make informed decisions about seeking compensation.
How Compensation for Wrongful Dismissal Works
When you are dismissed from your job without the proper notice required by your contract, you may have a claim for compensation due to wrongful dismissal. This type of claim is based on a breach of contract, rather than whether the dismissal was fair or unfair under employment law.
When Can You Claim Compensation for Wrongful Dismissal?
You can claim compensation for wrongful dismissal if your employer ends your employment without giving you the notice period stated in your contract, or the minimum statutory notice if your contract is silent on this point. For most employees, statutory notice is at least one week’s notice after one month of continuous service, increasing by one week for each year worked, up to a maximum of 12 weeks. If your employer fails to provide this notice or pay you in lieu of notice, you may have grounds for a claim.
It’s important to note that wrongful dismissal is different from unfair dismissal, which is concerned with the reason and process for your dismissal. If you are unsure about the difference, you can read more about the types of compensation for unfair dismissal.
What Losses Does Compensation Cover?
Compensation for wrongful dismissal is primarily designed to put you in the financial position you would have been in if your contract had been properly followed. This usually means covering:
- Lost wages: The pay you would have received during your notice period.
- Loss of benefits: This can include pension contributions, private healthcare, bonuses, or other contractual benefits you would have received during the notice period.
- Other contractual entitlements: For example, if your contract includes a bonus that would have been earned during the notice period, you may be able to claim for this too.
However, compensation does not cover losses for distress, injury to feelings, or the manner of your dismissal – these are not considered under wrongful dismissal claims.
How Does Breach of Contract Affect Compensation?
Wrongful dismissal is a form of breach of contract. The amount of compensation is based on the losses directly resulting from your employer’s failure to give proper notice. If you would have earned income from another job during the notice period, any such earnings may be deducted from your compensation.
There are also limits to the compensation that can be awarded in an employment tribunal for wrongful dismissal – currently capped at £25,000. If your claim is for more than this, you may need to bring your case in the civil courts.
The Role of Employment Contracts in Compensation
Your employment contract is central to any wrongful dismissal claim. It sets out your notice period and details of your pay and benefits. If your contract provides for more generous notice or benefits than the statutory minimum, your compensation will be calculated based on the contract. If there is no written contract, statutory notice rules apply.
Having a clear, up-to-date employment contract makes it much easier to understand your rights and what you may be owed. If you do not have a copy of your contract or are unsure of its terms, it’s a good idea to formally request one. Find out more about how to request your employment contract as a UK worker.
Why a Clear Employment Contract Matters
A well-drafted employment contract protects both you and your employer. It ensures everyone understands the notice period, pay, and benefits, reducing the risk of disputes if your employment ends. If you are considering a wrongful dismissal claim, reviewing your contract is an essential first step.
If you believe you have been dismissed without proper notice, gathering evidence of your contract terms and any losses you have suffered will strengthen your claim for compensation. If you are unsure about your rights or how to proceed, seeking legal advice can help you understand your options.
Who Can Claim Compensation for Wrongful Dismissal?
To claim compensation for wrongful dismissal in the UK, you must meet certain eligibility criteria. Understanding these requirements is essential before starting a claim, as they differ from those for unfair dismissal and depend mainly on your employment contract and the circumstances of your dismissal.
Basic Eligibility Criteria
Wrongful dismissal occurs when your employer breaches the terms of your employment contract – most commonly by failing to provide the required notice period or by dismissing you in a way that violates your contractual rights. To be eligible to claim compensation, you generally need to show:
- You were an employee: Only employees (not self-employed individuals or workers with other arrangements) can claim for wrongful dismissal.
- A contract existed: You must have had a contract of employment, which can be written, oral, or implied.
- A breach occurred: Your employer must have dismissed you in breach of your contract, such as not giving you the notice period stated in your contract or failing to follow contractual disciplinary procedures.
Length of Employment and Contract Terms
Unlike unfair dismissal claims, there is no minimum length of service required to bring a wrongful dismissal claim. You can make a claim from your first day of employment if your contractual rights have been breached. The key factor is what your contract says about notice periods and dismissal procedures.
For example, if your contract states you are entitled to one month’s notice but you are dismissed without notice or pay in lieu, you may be eligible for compensation for that notice period.
Wrongful Dismissal vs Unfair Dismissal: Eligibility Differences
It’s important to distinguish between wrongful dismissal and unfair dismissal, as the eligibility rules are different:
- Wrongful dismissal is based on a breach of contract and applies regardless of your length of service.
- Unfair dismissal is a statutory right and usually requires you to have worked for your employer for at least two years (with some exceptions). The focus is on whether your employer had a fair reason and followed a fair process.
If you are unsure which type of claim is right for your situation, you may find it helpful to compare who can claim compensation for unfair dismissal.
When to Check If You Meet the Requirements
You should check your eligibility for wrongful dismissal compensation as soon as possible after your dismissal. There are strict time limits for bringing claims – generally, you must start a claim within six years of the breach in the civil courts, but if you are bringing the claim to an employment tribunal (for example, if it is linked to another employment claim), the time limit is usually three months minus one day from the date of dismissal.
If you are unsure about your eligibility or want a more detailed breakdown of the requirements, see our guide: Am I Eligible to Claim Wrongful Dismissal? This resource provides step-by-step advice to help you determine your next steps.
Types of Compensation Available
When you make a claim for wrongful dismissal, the types of compensation you can receive are designed to put you in the financial position you would have been in if your employer had not breached your contract. Here’s what you need to know about the different types of compensation available, how they’re calculated, and the limits that apply.
Compensation for Lost Earnings and Benefits
The most common type of compensation for wrongful dismissal is for lost earnings. This covers the wages or salary you would have received during your notice period if your employer had followed the correct process. For example, if your contract entitled you to four weeks’ notice but you were dismissed without notice, you can claim the pay you would have earned during those four weeks.
In addition to basic pay, you may also be entitled to compensation for lost benefits. This can include things like:
- Pension contributions
- Bonuses and commission
- Private health insurance
- Company car or other allowances
The value of these benefits is usually calculated based on what you would have received during the notice period.
Damages for Breach of Contract
Wrongful dismissal is a breach of contract claim. Damages are awarded to compensate for the loss caused by your employer’s failure to follow the terms of your employment contract. This typically means pay and benefits for the notice period you should have worked, but not losses beyond that period unless your contract specifically provides for them.
Unlike unfair dismissal claims, wrongful dismissal does not cover compensation for the manner of your dismissal or for distress, except in rare circumstances.
Possible Additional Damages
In most cases, compensation for wrongful dismissal is limited to financial losses directly resulting from the breach of contract. However, in exceptional cases, you might be able to claim additional damages if your employer’s actions caused you distress or reputational harm, but this is rare and usually only applies if the contract specifically allows for it or if the employer’s conduct was particularly egregious.
Limits and Caps on Compensation Amounts
The amount you can claim for wrongful dismissal is generally capped at the value of your pay and benefits for the notice period specified in your contract. If you do not have a written contract, statutory minimum notice periods apply:
- At least one week’s notice if you have worked for your employer for one month or more, up to two years
- One additional week’s notice for each year of continuous employment, up to a maximum of 12 weeks
If you bring your claim to an employment tribunal, the maximum amount you can be awarded for wrongful dismissal is currently £25,000. If your claim is worth more, you may need to pursue it in the civil courts, where higher awards can be made.
How Compensation Is Calculated
Compensation is calculated based on your actual financial losses. This includes:
- The basic salary you would have earned during your notice period
- The value of any lost benefits
- Any other contractual entitlements (such as bonuses due during the notice period)
You are expected to mitigate your losses, meaning you should try to find another job as soon as possible. Any earnings from new employment during the notice period will be deducted from your compensation.
For more detailed advice on how compensation is calculated, including examples and practical tips, you can refer to this guidance on calculating compensation for wrongful dismissal from Citizens Advice.
Wrongful vs Unfair Dismissal: Are the Rules Different?
It’s important to understand that wrongful dismissal is different from unfair dismissal, which is a separate legal claim with its own rules and types of compensation. For a comparison of how compensation works in unfair dismissal cases, see our section on Types of Compensation for Unfair Dismissal.
Understanding these rules can help you assess what you might be entitled to and how best to proceed if you believe you have been wrongfully dismissed. If you’re unsure about your rights or how to calculate your losses, seeking advice from a legal professional or employment adviser is always recommended.
How to Claim Compensation for Wrongful Dismissal
After experiencing wrongful dismissal, it’s important to take clear, practical steps to protect your rights and maximise your chances of receiving fair compensation. Here’s what you need to know about the process:
1. Understand Your Position
Wrongful dismissal occurs when your employer breaches your employment contract – often by failing to give proper notice or by dismissing you without following the agreed procedures. Unlike unfair dismissal, wrongful dismissal is a contractual matter, and you do not need a minimum period of service to make a claim.
If you’re unsure about the difference between wrongful and unfair dismissal, you may find it helpful to compare the processes for claiming compensation for unfair dismissal.
2. Gather Key Evidence
Before making a claim, collect all relevant documents and evidence that support your case. This might include:
- Your employment contract and any staff handbooks
- Payslips and records of employment
- Correspondence with your employer (emails, letters, meeting notes)
- Details of the circumstances leading to your dismissal
- Any notes about disciplinary or grievance procedures followed
Employers are expected to follow a fair and transparent process, as outlined in the ACAS Code of Practice on Disciplinary and Grievance Procedures. If your employer failed to adhere to these standards, this can strengthen your claim.
3. Consider Early Resolution
Before proceeding to a formal claim, you may wish to try resolving the issue directly with your employer or through mediation. Acas (Advisory, Conciliation and Arbitration Service) offers free early conciliation services, which can help both parties reach an agreement without going to a tribunal or court.
4. Filing a Claim: Tribunal or Court
If informal resolution is unsuccessful, you can make a formal claim for wrongful dismissal. Most employees choose to do this through an employment tribunal, but in some cases – especially if the claim value exceeds the tribunal’s limits or involves complex contractual issues – you may need to go to the civil courts.
For a step-by-step guide on how to prepare and submit your claim, see How to File a Wrongful Dismissal Claim.
How to Start Your Claim
- Employment Tribunal: You can start your claim online or by post. The Employment Tribunal claim process on GOV.UK provides detailed instructions and the forms you’ll need.
- Civil Court: If your claim is for more than the tribunal’s maximum award (currently £25,000), you may need to take your case to the county court or High Court.
You can also refer to the Claim for wrongful dismissal form on the Acas website, which explains the process and what information you’ll need to provide.
5. Be Aware of Time Limits
Strict time limits apply to wrongful dismissal claims. For employment tribunals, you typically have three months minus one day from the date your employment ended to submit your claim. Missing this deadline can mean losing your right to claim, so act promptly.
6. What to Expect During the Claim Process
Once your claim is submitted:
- The tribunal or court will notify your employer, who must respond.
- Both sides may be asked to provide further information and evidence.
- There may be a preliminary hearing to clarify the issues.
- If the case goes to a full hearing, both parties will present their evidence and arguments.
- The tribunal or judge will make a decision and, if you are successful, award compensation based on your financial losses (such as notice pay and benefits).
Most wrongful dismissal claims are resolved within a few months, but more complex cases can take longer. You do not have to pay a fee to make a claim to an employment tribunal, but you should consider getting legal advice, especially for higher-value or complicated claims.
Taking prompt and informed action is essential after wrongful dismissal. By gathering evidence, understanding your rights, and following the correct procedures, you can improve your chances of securing fair compensation. If you want more detailed guidance, the links above provide further information on each stage of the process.
Tips for Increasing Your Chances of Success
Preparing your case for wrongful dismissal can feel daunting, but taking the right steps can significantly improve your chances of a successful outcome. Here are some practical tips to help you build a strong claim and avoid common mistakes:
1. Gather Clear Evidence
The foundation of any wrongful dismissal claim is solid evidence. You’ll need to show that your employer breached your employment contract when dismissing you. Collect all relevant documents, including:
- Your employment contract and any amendments
- Letters or emails regarding your dismissal
- Payslips, performance reviews, and any disciplinary records
- Notes from meetings or conversations about your employment status
Keep a timeline of key events, noting dates and details. The more organised and detailed your evidence, the better you can demonstrate your case.
2. Understand Your Contract and Legal Rights
Wrongful dismissal is based on a breach of contract, not on whether your dismissal was “fair” in general terms. Review your contract carefully to identify:
- The notice period you are entitled to (as per the Employment Rights Act 1996)
- Any contractual procedures your employer should have followed (e.g., disciplinary or redundancy processes)
- Whether your employer followed these terms
Understanding your rights will help you argue your case more confidently and spot where your employer went wrong.
3. Seek Legal Advice if Needed
Employment law can be complex, and every case is unique. If you’re unsure about your rights or how to proceed, consider getting advice from a solicitor or a legal advice centre. They can help you assess your claim’s strength, clarify the evidence you need, and guide you through the process. This is especially important if your case involves complicated contract terms or if your employer is disputing your claim.
4. Be Aware of Common Pitfalls
Many wrongful dismissal claims fail due to avoidable mistakes. Common pitfalls include:
- Missing the time limit: You generally have six years to bring a wrongful dismissal claim in the civil courts, but only three months (less one day) if you bring it to an employment tribunal.
- Confusing wrongful dismissal with unfair dismissal: These are different legal claims with different rules. Make sure you are pursuing the correct claim for your situation.
- Insufficient evidence: Relying on hearsay or not having key documents can weaken your case.
If your situation involves leaving your job due to your employer’s conduct, you might want to read about Claiming Constructive Dismissal, which is a related but distinct issue.
5. Present Your Case Effectively
When making your claim, clarity and professionalism matter. Prepare a clear statement outlining:
- What happened and when
- How your employer breached your contract
- What losses you have suffered (such as lost earnings or benefits)
Stay factual and avoid emotional language. Present your evidence in a logical order, and be ready to answer questions or provide further details if needed.
For more detailed strategies and advice, see our guide on How to Win Your Wrongful Dismissal Case, which covers practical steps for presenting your claim and handling the tribunal or court process.
By following these tips and taking a careful, informed approach, you can maximise your chances of a successful wrongful dismissal claim.
What to Do After Being Wrongfully Dismissed
After being wrongfully dismissed, it’s natural to feel uncertain about what to do next. Taking practical steps can help you manage the immediate impact and start planning for your future. Here’s what you should consider:
Managing Your Finances
Losing your job can put you under financial pressure, especially if the dismissal was unexpected. In the UK, you may be eligible to claim certain benefits while you look for new work. This could include Universal Credit, Jobseeker’s Allowance, or other support, depending on your circumstances. It’s important to act quickly, as some benefits can only be claimed within specific timeframes after your employment ends. For a detailed guide on the types of benefits you may qualify for and how to apply, see our page on Claiming Benefits After Being Sacked.
Looking After Your Mental Health and Wellbeing
Being dismissed can take a toll on your mental health. Feelings of shock, anger, or anxiety are common, especially if you believe your dismissal was unfair or handled poorly. It’s important to look after your wellbeing during this time. This could mean talking to trusted friends or family, accessing counselling services, or taking time to focus on self-care. You also have rights at work relating to your mental health, including protection from discrimination and access to reasonable adjustments if you have a mental health condition. For more information on your rights and available support, visit Mental Health and Work: Your Rights.
Seeking Support and Advice
You don’t have to face wrongful dismissal alone. There are several avenues for professional advice and support:
- Legal advice: Solicitors specialising in employment law can help you understand your rights and whether you have grounds for a wrongful dismissal claim.
- Trade unions: If you’re a union member, they can offer representation and advice.
- Advisory services: Organisations such as Acas (the Advisory, Conciliation and Arbitration Service) provide free and impartial advice on employment rights and resolving disputes.
Getting expert advice early can help you decide on the best course of action, whether that’s negotiating a settlement, making a formal complaint, or starting a legal claim.
Planning Your Next Steps in Employment
While you consider your options regarding your dismissal, it’s also helpful to start planning your next steps in employment. This might involve updating your CV, searching for new roles, or exploring training opportunities to expand your skills. If you are considering making a claim for wrongful dismissal, remember there are strict time limits – usually within six years for wrongful dismissal claims in the civil courts, but just three months less one day for unfair dismissal claims at an employment tribunal. For further guidance on how to make a claim and what happens afterwards, see How to File an Unfair Dismissal Claim.
Taking these steps can help you regain control and move forward after a wrongful dismissal, ensuring you protect both your immediate interests and your long-term career.
