- Alex Kleanthous
- Updated: Tue, 6th Dec 2016
If you believe that you have been wrongfully dismissed you may be entitled to compensation. We specialise in advising senior employees and directors on their position following dismissal and handle complex claims.
Our wrongful dismissal services for senior employees and directors include:
Review of the wrongful dismissal case
Wrongful dismissal is when a contract of employment is unlawfully terminated by the employer. Fairness is not an issue and the sole question is whether the terms of the contract, express or implied, have been breached.
A wrongful dismissal claim may arise out of an actual or constructive dismissal.
Wrongful dismissal cases can be brought by employees or directors.
Self employed contractors who believe they have been terminated early would not be eligible for a wrongful dismissal claim. However, they may have a claim for early termination of contract.
Common causes of wrongful dismissal
Wrongful dismissal claims often involve:
• Breach of a notice term, whether express or implied;
• Breach of a contractual procedure; and
• Termination of a fixed-term contract or a “specific task” contract before its expiry.
There may be other breaches of contract terms that can amount to wrongful dismissal. We can review your contact and quickly tell you if you have a claim.
Breach of notice period
The most common claim for wrongful dismissal is the employer’s failure to comply with your termination notice period. Notice periods are calculated by either of the following:
• Statutory notice period: the statutory minimum notice period depends on your years of service with the employer; the minimum is one week for employment under two years, rising each year to a maximum of twelve weeks’ notice.
• Express contractual notice period: if you are in a position of seniority within a company, then your contract of employment is likely to contain a notice period. An express contractual notice period is subject to the statutory minimum.
• Implied notice period: where there is no express notice period, common law decisions provide for a reasonable period. This will depend on all the circumstances, such as your seniority within the company and the length of your employment.
Where there is a contractual obligation to follow a procedure and the employer fails to follow it, the employee may claim for the loss. The claim can be equal to the salary plus benefits and bonus payments due in the period of time that the procedure would have taken had it been followed. A claim may extend damages for breach of contract beyond the length of the notice period. Also, the claim may bring matters into account such as bonus payments which the employer is trying to avoid.
If a fixed-term contract or a contract for a specific task is terminated before the term expires or the task is complete, this will amount to a wrongful dismissal. The only exception is if a term of the contract entitles the employer to dismiss in the particular circumstances.
If the employer is in breach, it will have to pay for the entirety of the rest of the term of the contract unless there is a provision within the contract for notice of early termination to be given. Where there is such a provision, the claim will only relate to the period of that notice which was not given.
Negotiating with the employer
There are many ways we can help you to handle wrongful dismissal with your employer, including:
• Responding to and defending allegations put forward by your employer;
• Drafting employment grievances and managing disciplinary, performance management claims, appeals and processes;
• Dealing with announcements to the market of your departure
Court action is costly in terms of terms of both time and money for you and an employer. We pride ourselves on avoiding court action where ever possible as that is usually not in your best interest.
Often a robust, well argued response that lays out a clear case for wrongful dismissal results in an employer quickly offering a settlement. Most employers consider the wasted management time, and that the case is a distraction from generating profits.
Signing a settlement agreement involves your agreeing not to make a claim for unfair dismissal in the employment tribunal.
Is the offer enough?
We tell you if the settlement offer is appropriate and are skilled at negotiating improvements to the offer, based on:
• A legal and commercial analysis of the agreement and the case for wrongful dismissal; and
• Our experience of similar scenarios.
Defending allegations brought by the employer
The employer may challenge the claim of wrongful dismissal. Typical arguments are that the dismissal without notice is justified because the employee has committed an act which has breached the employment contract. Often, an employer will argue that the employee has committed an act of gross misconduct.
Establishing your claim and rebutting these challenges requires expertise and strategic thinking. We are experienced in dealing with these claims and our specialist team will give you a realistic overview of the strength of your claim.
Claims against the employer for wrongful dismissal
You will need to decide whether to bring your claim in the Employment Tribunal or County Court or High Court. There are advantages and disadvantages to the choices.
Advantage of Employment Tribunal
There are advantages to claiming wrongful dismissal in the Employment Tribunal. One important reason is that generally speaking in an Employment Tribunal you are not at risk on costs. This means that if you lose you will generally not be ordered to pay the employer’s legal costs.
County or High Court
In the County or High Court if you lose you will generally be ordered to pay both your costs and your employer’s costs. Taking the risk on costs into consideration the most common reasons for claiming wrongful dismissal in the County or High Court are:
• There is a cap on available award amount in the Employment Tribunal – if your claim is high value, it may not be appropriate to claim unfair dismissal; and
• You do not have the requisite period of employment (now 2 years continuous employment) to qualify to make an unfair dismissal claim.
We evaluate the employment contract and the circumstances leading to the dismissal. We advise you on your options and best course of action bearing in mind the strength of your claim, the risks and the possible outcomes.
We analyse your complete remuneration and benefits package, including share options and other investment mechanisms and advise you on your likely level of damages.
When assessing the likely damages, employers will have to take into account the salary and contractual benefits including, but not limited to:
- Salary increase during notice period;
- Pension scheme benefits;
- Holidays; and
- Other benefits.
Where there is no contractual entitlement to a specified notice period, a reasonable notice period will be implied.
Duty to mitigate loss following wrongful dismissal
Employees must always mitigate their loss by seeking alternative employment. The duty to mitigate can be used by an employer to negotiate on the appropriate settlement. This may be more difficult to achieve where the prospects of securing alternative employment are small. Much depends upon the particular facts of your case.
Example of a successful wrongful dismissal case for an employee
A recent sports case illustrates important legal points. A high profile rugger player posted a photo of a team mates’ unclad posterior on his twitter account. You might think that posting such pictures is part of every rugger players’ job description. However, his club and employer dismissed him for gross misconduct.
The player claimed wrongful dismissal and was awarded £167,000.00 in damages. This case shows:
High Court claim
The claim was brought in the High Court and for wrongful rather than unfair dismissal. The amount awarded for unfair dismissal is capped. This claim was higher than the cap.
However, High Court claims are riskier. If the player lost, he would face paying the club’s costs. Generally, Employment Tribunal claims don’t result in adverse cost awards.
Fundamental breach of contract
Dismissal for gross misconduct requires a fundamental breach of contract. So the club claimed that posting the photo was a fundamental breach. We are surprised they believed this. There was evidence that the club was seeking to reduce their wage bill.
Social media risks
The case highlights the risk of social media. The club may have believed they were within their rights to dismiss based on somewhat analogous cases. Social media activity has resulted in dismissals. However the activity was racist or homophobic.
Future loss of earnings
The amount awarded accounted for actual, and a degree of future loss of earnings. Note the player had a duty to mitigate his loss by seeking alternative employment. His claim for future loss succeeded, because he argued the dismissal hampered his reputation and employability.
In the context of a sportsman, this is interesting. Afterall the primary reason for their employment is sporting prowess. It indicates a trend that even professional sports organisations select are staff, not just on on sporting prowess criteria, but also potential non-sporting risk.
Wrongful dismissal: track record
We have the expertise to pursue complex contractual claims for employees who are rewarded with incentives such as carried interest, shares and bonuses. We apply our specialist wrongful dismissal employment law expertise across a range of sectors including but not limited to financial institutions, large corporates, media and technology. We do understand that guarding your reputation is critical and assure you of total confidentiality.
To demonstrate our expertise we have set out below example of our recent instructions:
• Successful wrongful dismissal claim for corporate finance director of a large software company based in Bank. Our client received damages equal to what he would have earned had the company complied with the notice period within our client’s service agreement.
• Highly favourable settlement agreement: We notified a household financial institution in the City of London of our client’s right to claim for wrongful dismissal. This lead to a settlement agreement on highly favourable terms.
• Negotiated our client’s exit: The employer varied our client’s employment contract making it impossible to achieve the bonus target. We issued proceedings on behalf of our client, a strategic media programmer, negotiated his departure, plus an excellent settlement agreement.
• Successful claim for wrongful dismissal: Our client, a director of an IT consultancy firm, had been forced out of the company through the conduct of the other directors. It transpired that our client had agreed a verbal variation on his remuneration. This we used to our client’s advantage when quantifying damages in the High Court.
Wrongful dismissal is closely linked to breach of employment contract claims. We review the facts, your contract of employment and the notice period to provide honest and reasoned advice on the prospects of success. Costs can escalate when bringing a wrongful dismissal claim, we are cost transparent and if there are no chances of success, we have the courage to tell you.
Alex has considerable experience and success in wrongful dismissal cases - he has the commercial acumen and negotiating skills as well as legal knowledge to represent an excellent choice as your lawyer.