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Various issues can arise when terminating employment and a number of claims can be brought by an employee who has been dismissed.

Key points

  • In addition to termination by the employer, there will be a dismissal where the employee resigns in response to a fundamental breach by the employer (constructive dismissal).
  • Dismissing in breach of contract will give rise to a claim for wrongful dismissal. Typically, wrongful dismissal claims concern a dismissal with inadequate notice.
  • Employees with more than one month of service are entitled to statutory minimum notice.
  • A payment in lieu of notice (PILON) clause allows an employer to dismiss without notice and make a payment in lieu without being in breach of contract.
  • Unfair dismissal claims can be brought by employees who have sufficient qualifying service.
  • A dismissal will be unfair if is not for a fair reason and/or the employer has acted unreasonably in treating the reason as sufficient.
  • The five fair reasons for dismissal are capability, conduct, redundancy, statutory illegality and some other substantial reason.
  • No qualifying service is required to bring an unfair dismissal claim where the dismissal is for one of the automatically unfair reasons.
  • If an employee is dismissed without following the Acas Code of Conduct: Disciplinary and Grievance Procedures, there is an increased risk of the dismissal being found to be unfair and any compensation awarded can be increased by up to 25 per cent.
  • Compensation for unfair dismissal can take the form of a basic award (based on age, pay and years of service) and a compensatory award for losses.
  • Tribunals have the power to order reinstatement or re-engagement following a successful claim for unfair dismissal.