Thefollowing report will outline in detail the differences between the wrongfuland unfair dismissal.
In the UK alone, every year, thousands of dismissal claimare made every year. Case studies will be utilised to demonstrate how currentregulations and legislations can be implemented in real life scenarios. In addition to this, detail explanations willbe provided about various remedies available to the employee depending on thetype of dismissal. Lastly, a step-by-step procedure will be outlined such thatemployee can make a claim against unlawful actions. Contents Abstract. 1 1.
Introduction. 2 1.1 Employment Law.. 2 1.2 Historical Development.
2 1.3 Introduction to dismissal 2 2. Type of Employment Status. 3 3.1 Wrongful dismissal 4 3.
2 Remedies for wrongful dismissal 4 4.1 Unfair dismissal 5 4.2 Remedies for unfair dismissal 8 5. Conclusion. 9 6. Cases. 9 7.
Acts. 9 8. References. 10 List of figuresFigure1: showing the various way a contract can be ended. Figure 2: showingthe various tests to conduct to check the status of an individual List of tablesTable 1: showingreasons for automatic unfair dismissalTable 2: showingreasons for potential unfair dismissalTable 3: showingreasons for automatic unfair dismissalTable 4: showingthe basic award calculation based on ageTable 5: showingfactors that attributes to the compensatory award Title of the essay Define what is meant by ‘wrongful dismissal’ and by’unfair dismissal’ and explain what the routes for seeking remedies are andwhat remedies are available 1. Introduction1.1 Employment Law Employmentlaw is a branch of the law that regulates affairs among the employer, employeeand trade unions.
It ensures that matter such as employment contracts, minimumwages, working hours, sick pay, holiday pay, redundancy, discrimination,disability, parental leave and any disciplinary processes are not unlawfullyexploited. 1 This law facilitates the cooperation of threefundamental relationships: employee-employer, employer-trade union and trade-union member. 2In the past, employment law used to protect the employersfrom the employees, but in the modern society it is primarily operated toprotect the employee from discrimination, health, and safety and to preventwork disruption for unfair reasons. When issues arise between the two parties,then an independent judicial body, the Employment tribunal, analysis thesituation and provide remedies to the damages occurred to the employee. 3 1.
2 Historical DevelopmentThe very first law protecting theworker from the unfair dismissal was introduced in the UK about 40 years ago(1963).4 In particular, the Blue metal v Hughes case proposed thefirst feasible notice period required to terminate an employment contract. Such case led to the formation of threelegislations that protects the worker from unlawful dismissal. The three actsare labelled as follows:- Contract of Employment (1963)- Redundancy Payment Act (1965)- Industrial relations act (1971)The contract of employment (1963)was the first legislation that was produced from the Hughes case.
This act statethe minimum period of notice required between the employer and the employeebefore an employee can be dismissed. The second act, the Redundancy PaymentAct, allowed the worker to receive acompensation network in case of job loss. The third act, mainly theIndustrial relations act (1971), protects the worker from unfairdismissal.
This act is particularlyimportant, as for the first time, it allowed the worker to appeal to thetribunal. 5 1.3 Introduction to dismissal Dismissalcan be defined as the termination of the contract, performed by the employeragainst the employee, with or without providing valid justification. 6 This might lead to loss anddamages to the employee. In fact, employment law requires the employer tofollow a certain standard and procedure before terminating the employmentcontract, such that least amount of damage is affected to the employee. Thereare various ways to terminate a contract as shown in the image in Figure 1 underneath.
Figure1: showing the various way a contractcan be ended (Employee Rescue, 2018) 7 2.Type of Employment Status Employmentlaw can be ruled, only when an individual is actually an employee of a company.It is required to identify and define whether an employee is a worker, a self–employer or a sub-contractor.
According to The ERA 1996, S.230 (1), theemployee is defined as following “anindividual who has started work or worked under a contract of employment”. 8 In order to make any claim forwrongful or unfair dismissal, the worker must be a fully qualified employee. Apartfrom this, there are other benefits that employee can claim, such as protectionright, sick pay, holiday pay and many more. To determine the status of theemployer several tests can be conducted. These tests are: integration test,control test, economic reality test, mutuality test and multiple test as shownin Figure 2. Figure 2: showingthe various tests to conduct to check the status of an individual 9Depending on circumstances, the type of job and thenature of the work these tests can be implemented to assess the nature of theemployment.
In some cases, multiple test needs to be carried out, whichconsists running all the test mentioned above together. 3.1 Wrongful dismissal Wrongful dismissal is a type of dismissal that occurswhen the contract is breached.
In order for a dismissal to be wrongful, thefollowing conditions need to be met: 1- Noprior or sufficient notice has been provided by the employer to terminate thecontract 2- The employer has not provided a valid reason fortermination of the contract The length of the notice period depends on the contractand on the nature of the job. This can be agreed between the employer andemployee when signing the contract. However, if this is not explicitly stated,then the common law states to “imply aminimal period of reasonable notice, which is reliant on the circumstances ofthe employment in question”.10However,recently the common law has changed the regulation regarding the minimum periodof notice. The current legislation states that if the length of theemployment is between one week and to two years, then the notice period shouldbe one week. If the length of the employment is more than 12 years, then thenotice period should be 12 weeks.
Hence, it is possible to state that for everyyear of employment there is a week of the notice period is added. In additionto this, it is worth mentioning that the notice period also depends on thelevel of the employee. In fact, a senior employee can demand more prolongedperiod of notice. 11When this occurs, the employee can take the case to theEmployment Tribunal. The employment law facilitates the assessment in Tribunalby analysing the employment contract and current legislation. Hence, itrequired to assess whether such contract was breached.However, in some cases, the employer can dismiss theemployee without any prior notice, such condition is known as SummaryDismissal. This occurs when the employee commits gross misconduct such astheft, criminal act, and acts that are against the conventional norm.
12A worth mentioning case, is the case Hanley v Pease (1915) where the employee was dismissed for beingabsent from work without authorisation from the Employer. Since no clearagreement was made in the contract regarding the suspension, the employeemanaged to obtain the salary for the day. In this case, the employer could havesimply dismissed for the reason mentioned above, but an unpaid day, helped theemployee to win the case.
13 3.2 Remedies for wrongful dismissal The employee can claim damages forwrongful dismissal. However, no damage claim can be claimed if the employee wasdismissed for gross misconduct or gross negligence. Damages caused by the wrongfuldismissal are usually calculated based on the pay rate of the employee. There aretwo types of damages can be demanded: lost in salary (working days thatemployee can claim if the dismissal did not occur in the first place) and lostin work day due to “notice to quit” (loss in working days due inappropriatenotice period). 14To make these claims, cases needsto be taken to the tribunal. Generally,a tribunal consists of three core individual: the employment judge, theemployer expert, and a worker form the union.
15 Before proposing to the tribunal, the employee must contactthe Advisory Conciliation and Arbitration Service (ACAS). This is the firststage where the employee and the employer can come to an agreement without theintervention of the court. The employment tribunal can makeonly claims that are no more than £25,000. For any amount above this threshold,claims need to be approved by the High Court. 16There are some advantages to takethe case to the High Court.
Firstly, an employee can have up to 6 years to makea claim. Secondly, High Court civil procedure is utilised to maintain theclaim. This means that the losing party will have to pay the legal fees for thewinning individual.
17Analysing the SmithV Trafford Housing Trust case, it is possible to observe that suchdamages can be low. In this case, a housing trust humiliated a manager formaking comments about opposing gay marriages in church on his Facebook page. Forthis reason, the worker claimed for damages for wrongful dismissal by utilisingthe case of Hogg v Dover College. 18 This case is particularlyimportant as the employer agreed to a new contract after a demotion. Hence, thedamage paid in this case was the difference between the contractual salary andthe new role, which was £98.Another worth mentioningcase is the Malik v Bank of Credit and CommerceInternational (BCCI),where the employee was working for a fraudulent bank and it was eventually shutdown. After closure, the worker had difficulty to find an alternate job in thesame industry due to the previous reputation.
For this reason, a case was madeagainst the employer due to economic loss caused by the wrong reputation. 19 Injunction: an alternative to damage An alternative remedy fordamages is injunction. Injunction can be defined as an order from the courtthat persuades or forces the employer to continue with the contract.Injunctions are approved or requested by the court in rare cases when it isdifficult to establish a feasible solution to the case. If the circumstancesallow, the Court needs to grant an injunction as a remedy for the wrongfuldismissal. An injunction, in order to be effect, must follow the followingconditions:- Damages would not be an alternative remedy (e.g.employee working in health sector)- There must be reciprocal trust between theworked and employee such that employment relationship is not weaken beyondrepair.
– Employee must claim protection for statutoryrights. 20A worth mentioning case ofan injunction is the Hill v CA Parson & Co Ltd, where the employee, Mr Hill, after providing 30 yearsof service decided to join a trade union not recommended by the company. Forthis reason, the worker was dismissed with a one-month notice. Consequently, MrHill claimed for the injunction. The Court awarded him six months’ noticebefore ending the contract. In this case, providing financial compensationwould have been inappropriate since there is still mutual trust and confidencebetween the employer and the employee. 21 4.1 Unfair dismissal Unfair dismissal can be defined as a statutory right;hence it occurs when there is a breach of the statues.
Unlike the wrongful dismissal,the fairness of the dismissal is judged based on the reason provided by the employer.This concept was first introduced in the Industrial Relations Act 1971 and isnow endorsed by section 94 of theEmployment Rights Act 1996. Certain jobs, such as share fishermen, police service andpeople who are employed outside the Great Britain like the armed forces andCrown employee cannot claim for the unfair dismissal. In addition, those in anillegal employment contract cannot make any claim. 22In order to make claim for unfairdismissal, there are key three requirements that needs to be follow. Those requirements include being in contractduring the dismissal, be employed for at least one year and claim the dismissalwithin three months from the dismissal date. 23A dismissal can be refereed as fair when the employerdismisses the employee under the regulations provided by the Employment RightsAct 1996.
Those conditions include:- The employee fails to complete the job to thedesired standard. This also implies not be able adapt to new changes andintegrating with co-workers. – Persistent long term illness that affects workperformance- Statutory restriction Hence, if the employee getsdismissed for any of the reasons mentioned above, then unfair dismissal cannotbe claimed.A compelling case is the Martin v Yeoman Aggregates LTD: EAT 1983, where the argument between theemployer and employee led to the dismissal of the employee. However, after ashort period of time, the employer withdrew the dismissal when he wasthoughtful and less angry. In this case, it is important to observe that thedismissal was mentioned in a “moment of heat”, hence, it was ineffective. 24 In contrast, discrimination ordismissal based on the age of the employee, for instance, is certainlyunlawful. Age related discrimination is regulated by the Employment Equality (Age) Regulations1.
Thisregulation states the employee dismissed at the age below 64 can be claimed asunlawful. However, depending on the job circumstances, it can be fair todismissed at a different age. A good example of this, is the Payne v Royal and Sun Alliance Group plc casewhere the employer provided a valid reason to the employee to retire on time.In fact, Mr Payne’s could retire at age 62 instead of 65 without any permissionfrom the employer.Hence, the worker claimedboth for unfair and wrongful dismissal.
This is due to the breach of contractas well as breach of the statue. Since there is no legislation that allowsearly retirement, the Employment tribunal agreed to keep the contract open. According to the EmploymentRights Act 1996, the reasoning behind the unfair dismissal can be classifiedinto three categories:- Automatically fair reasons- Automatically unfair reasons- Potential fair reasons Automatically fair reasons occur when the employee takesunofficial industrial action and hence threats the national security.
In thiscase, it is reasonable to dismiss the worker. Thus, unfair dismissal cannot beclaimed. In contrast, automatically unfair reasons include a listof situation where the dismissal is unlawful, such as: Automatic unfair dismissal · Pregnancy related issues · Health and Safety issues (e.g. unable to work due to the safety of the environment) · Spent conviction · Trade union issues · Fixed-time employees’ or part-time employees’ regulations contravention · Asserting a statutory right Table 1: showingreasons for automatic unfair dismissal 25 For the reasons mentioned above, it is not required forthe employee to have one year of service, hence it can be taken into court forthe claim.The potential fair dismissal, instead is based on how theemployer handled the dismissal. Examples of potential fair dismissal might fallin the following group: potential unfair dismissal · Capability or qualifications · Conduct · Redundancy · Statutory bar · Some other substantial reason Table 2: showingreasons for potential unfair dismissal 26 The first in the list refers to the capability andqualification of the employee to perform the task at the desired standard.
Statutory bar applies when the employee has no right to due to the expired workpermit. Lastly, misconduct relates to the breach of the contract due to thebreak of the rules imposed by the employer.A worth mentioning case is the The British Waterways Board (T/A Scottish Canals) V Smith. In thiscase the employee, Mr Smith was dismissed for publishing negative comments onFacebook about his work and his manager. In addition, he published pictures ofhimself consuming alcohol in the work environment. The case was eventuallytaken to court and at the end Mr smith was dismissed due to the act ofmisconduct. This case demonstrates that action can be taken later for misconductand it Is important to keep a social media policy.
ref Other possible reasonsfor potential fair dismissal includes: 1- Refusalto an agreement to amend the terms and conditions when considered mandatory bythe manager2- Employeeunable to be employed at the termination of the fixed term contract 3- Anindividual external forces for the dismissal of the employee (. e.g. customer) 4.2 Remedies for unfair dismissal As a remedy for unfair dismissal, the following can begranted by the court: Remedies for unfair dismissal · Compensation · reinstatement · Re-engagement · decleration Table 3: showing the remedies available for unfair dismissal 27 Compensation occurs when a monetary payment is providedto the employee for the unfair dismissal.
Reinstatements refers to there-allocation of the employee to the previous job such that the employee wasnever dismissed. Re-engagement, similar to reinstatements, offers the employeeits previous job, but with different role or conditions. Compensation iscalculated mainly in two ways: basic award and the compensatory award.Basic award is calculated as follows: Basic award calculation · If over age 41, entitled to have 1.5 week’s pay for every year of the service completed · If age between 22 and 41, entitled to have 1 week’s pay for every year of the service completed · If age between 18 and 22, entitled to have 0.5 week’s pay for every year of the service completed 7 Table 4: showingthe basic award calculation based on age 28 There is a limitation in this which consists in receivinga maximum of £280 a week for 20 years of work.
This implies that the maximum compensation granted for unfair dismissalis £8,400. Nevertheless, the number has now changed to £489 weekly if the weeklygross exceeds £489. This will only apply if the dismissal was caused after 6thApril 20174. The compensatory award, in contrast, is not fixed and isbased from case to case. ref. In this compensation financial compensation ofup $80, 541 (for dismissal after 6th April 2017) is provided due tothe loss caused by the dismissal. Calculations are made based on the followingelements compensatory award · Loss of earning (i.
e. due to the dismissal) · Loss of future earning (i.e. losses after the hearing) · Any expenses (i.e. to find alternative jobs) · Loss of statutory rights (e.g. unable to claim sick pay) · Loss of pension rights Table 5: showingfactors that attributes to the compensatory award 29 This compensation, however, might be reduced if theemployee contributed to the dismissal, failed to source alternative jobs orclaimed benefits after the dismissal.
30 5. ConclusionOverall,any employee after an unlawful termination of the contract has the right toclaim for either wrongful or unfair dismissal. It is critical to know thedifferences between the two before making any claim. Based on the damage,different remedies are available.
For wrongful dismissal damages and injunctionare the possible remedies while for unfair dismissal, compensation reinstatement,re-engagement or a declaration might be award to the employee. Decision aremade from case to case, on the nature of the job and by stipulating the trueintention of the employer and employee1 Employment Equality (Age) Regulations2006 (SI 2006/1031)