Term
| What is wrongful dismissal |
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Definition
| Claim for breach of contract arising from a failure to provide any notice (or PIL)/inadequate amount of notice |
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Term
| What is the checklist for wrongful dismissal |
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Definition
1) Employee?
2) Dismissal – actual or constructive
3) Breach of contract by employer – insufficient notice under statutory minimum notice, no notice given, PILON clause, early termination of a FTC with no ‘break clause’, breach of an express term
4) Employers defence – if employee conducted an act of gross misconduct (i.e. one off acts such as theft, swearing at client, punching colleague), the dismissal could justify as summary dismissal (dismissal without notice/payment in lieu)
5) Quantum – starting point: net loss of salary & other contractual benefits for the notice period (i.e. company car, private health care)/remainder of FTC |
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Term
| What is constructive dismissal and what are the elements |
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Definition
When an employee resigns by reason of the employer’s conduct, is entitled to terminate without notice.
To establish CS:
1) Were the employer’s actions significant/serious enough to amount to a repudiatory breach of contract?
2) Was the resignation a direct consequence of the employer’s breach?
3) Did the employee act promptly and resign or has the employee ‘affirmed the contract’ and waived his right to claim constructive dismissal
--> Chindove v Morrisons Supermarkets plc – EAT held that the time period should not be looked at in isolation, but also the employee’s conduct leading up to the resignation
Constructive dismissal is a piggyback claim – if constructive dismissal can be proven, they can also claim for unfair/wrongful dismissal |
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Term
| Give examples of breach of contract |
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Definition
1) Giving insufficient notice under s 86 ERA 1996
2) PILON clause - gives the employer a right to terminate the contract immediately and pay remuneration in relation to the notice period, rather than to allow the employee to work out the period of notice
--> if there is no express PILON clause, the employer will be in breach of contract without the consent of employee
3) Early termination of FTC with no break clause |
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Term
| Forums in which you can bring a claim for wrongful dismissal |
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Definition
Employment Tribunal
Time limit - 3 months of EDT + early conciliation procedure
Damages - up to £25k
Costs - parties bear their own costs
County/High Court
Time limit - 6 years from EDT
Damages - Unlimited
Costs - Loser pays winner’s costs |
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Term
| Types of heads which you can claim damages for: |
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Definition
1) Bonuses
2) Mitigation
3) Accelerated receipt
4) loss of reputation |
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Term
| Clark v Nomura International plc |
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Definition
| HC held that the employer’s decision to award a nil bonus to an employee who had earned substantial profits for the company was irrational. HC order for £1.35mil paid to Mr Clark had the employer complied with its contractual obligations |
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Term
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Definition
| Established that stigma damages will only be awarded where the employee’s difficulty in finding a new job is attributable to the dismissal |
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Term
| Tax treatment on termination of employment |
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Definition
1) Contractual payments - employee given full notice/put on garden leave, any pay and benefits during that period will be taxable. Payments for other contractual promises (i.e. outstanding contractual bonuses, entering into a new restrictive covenant) are also taxable
2) genuine compensation for loss of office (payment made to employee in connection with termination such as wrongful/unfair dismissal and discrimination) – first £30,000 is tax free |
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