NO SPECIFIC STATUTORY REFERENCE - see notes below

latest news

"Breach of contract" and "wrongful dismissal" frequently refer to the the same thing. Wrongful dismissal is the name given to a breach of an employment contract by an employer which is connected with the actual dismissal or the constructive dismissal of an employee (for example failure to give an employee the length of notice to which he is entitled under his contract). Of course "breach of contract" does not necessarily result in dismissal and covers much more than "wrongful dismissal". However, from an employment law perspective, the two expressions are sometimes seen as interchangeable.

Breach of contract and wrongful dismissal are common law concepts. They have traditionally been and still frequently are dealt with by the ordinary courts of law. Wrongful dismissal/breach of contract is quite different from "unfair dismissal".

Unfair dismissal is a statutory "invention", governed by Act of Parliament and dealt with by employment tribunals not by the courts. Unfair dismissal can, and frequently does, occur without there being any breach of contract/wrongful dismissal. It is a relatively new concept, having been in existence in Great Britain only since the passing of the Industrial Relations Act 1971 (see notes at Unfair dismissal/a brief history and now ERA 1996 Part X, viz ERA 1996 s.94 to ERA 1996 s.134 inclusive).

Frequently "unfair dismissal" will also be "wrongful dismissal" (and vice versa) but not always - for an example of a dismissal which was "wrongful" but not "unfair dismissal" see Samuel v London Borough of Lewisham 2001 EAT on 29th November 2001. The only remedy for unfair dismissal is to present a complaint to an Employment Tribunal (ERA 1996 s.205 and see UNFAIR DISMISSAL/remedies for unfair dismissal ).

Wrongful dismissal has little relevance in most employment disputes. However, if it is relevant it is usually extremely important. Wrongful dismissal cases were traditionally dealt with by the courts. However since 1994 Employment Tribunals have had jurisdiction to deal with all wrongful dismissal cases but are not allowed to award more than £25,000 - see Employment Tribunals/jurisdiction of/extension to breach of contract cases . This contrasts with unfair dismissal cases where tribunals can award much greater amounts and discrimination cases where there is no limit on what an employment tribunal can award (see eg Compensation/2006 limit increases ).

Cases of wrongful dismissal typically occur when an employer dismisses an employee without giving the notice required by the employee's contract, and without adequate compensation in lieu. In practice it is usually only worth while for the employee to sue if the contract provides a fairly long notice period. This is because damages will be assessed by reference to loss suffered which will normally be limited to the value of lost remuneration and lost "perks" for the period of notice which the employer should have given.

However dismissal without contractual notice is by no means the only way in which wrongful dismissal can occur. If the employer is in breach of any significant term, whether express or implied, of an employee's contract then that employee may be able to resign and claim that he has been constructively dismissed (see notes at constructive dismissal and/or Implied terms in employment contracts ). Depending on the circumstances, the employee may then decide to claim damages for wrongful constructive dismissal (ie breach of contract) rather than compensation for unfair dismissal (see Wrongful dismissal/unfair dismissal and wrongful dismissal compared ).

In recent years there has been a trend for the distinction between unfair dismissal and wrongful dismissal to be blurred and for the practical importance of the distinction to be gradually whittled away. Nevertheless the distinction is still of great importance even if less so than in the 1980's or early 1990's. The blurring of the practical effect of the distinction is exemplified both by statute (eg the huge increase in 1999 in the maximum unfair dismissal compensatory award from £12,000 to £50,000) and by the courts (see Compensation/£50,000 new limit and Transco plc v O'Brien 2002 ICR 721, CA).

There are other relevant notes on this subject generally at Wrongful dismissal (generally) and/or Implied terms in employment contracts and/or Constructive dismissal and/or at Deductions from wages etc/time-limit for claims .