Wrongful Dismissal Flashcards
Definition of WD
Termination of an employment contract that is in breach of contract. Action for damages brought at common law.
Summary Dismissal
At common law, an employer is entitled to dismiss an employee summarily where the employee has committed a serious breach of contract.
s 86 ERA 1996
Minimum notice periods that employers must give for terminating contract of employment.
1 weeks’ notice for an employee with less than 2 years of continuous service.
For every year (up to 12 max) of service above 2 years of continuous employment, 1 weeks’ notice must be give. So 8 years continuous employment = 8 weeks notice.
s 86(3) ERA 1996
Rights to notice may be waived or payment in lieu of notice made by the employer.
Wilson v Racher
All circumstances must be taken into account in determining whether the breach of contract was sufficiently serious to warrant summary dismissal.
Since the employee swearing in front of employer’s wife and children was an isolated incident during years of good service, the employer was wrong to summarily dismiss him.
West London Mental NHS Trust v Chhabra
C was a psychiatrist who accidentally breached patient confidentiality while talking on a train. SC held that this was not gross misconduct that could give rise to summary dismissal. Breach of contract was not wilful or deliberate, so breach was not sufficiently serious.
SC upheld an injunction against the NHS hospital from requiring the employee from facing a charge of gross misconduct for disciplinary proceedings.
Gunton v Richmond LBC
Buckley LJ stated that the employee is entitled to damages for wrongful dismissal, subject to mitigation, equivalent to the wages he would have earned under the contract from the date of dismissal to the end of the contract (as required by notice under s 86 ERA 1996).
Gunton extension = courts can additionally award damages for the period in which the employer’s dismissal procedure should have taken place.
Addis v Gramophone
Damages for WD cannot include compensation for injured feelings (aggravated damages), or stigma damages.
Malik v BCCI
However, where the implied term of mutual trust and confidence has been breached, the employee may be able to bring a claim for stigma damages.
HL distinguished Addis since the claim in Malik was not brought on basis of dismissal - instead, it was for breach of contract (separate from the dismissal).
Geys v Societe Generale
SC held that a party’s repudiation of the contract of employment only terminates the contract if and when the other party elects to accept the repudiation.
Elective theory accepted over the automatic theory for breach of contract giving rise to termination in the employment context.
Reda v Flag
Express term in contract enabling the employer to dismiss the employee ‘without cause’ is NOT subject to any implied qualification. This means that this power does not have to be exercised in accordance with the implied term of mutual trust and confidence.
Johnson v Unisys
C was summarily dismissed - successfully brought a wrongful dismissal claim. He then also tried to claim damages at common law on the basis that the dismissal breached various implied terms, including the implied term of mutual trust and confidence since the employer did not follow their disciplinary procedure.
HL refused to grant a remedy in relation to J’s claim for wrongful dismissal because it would run contrary to the intentions of Parliament. Parlt. included a cap on damages for unfair dismissal, which was designed to cover circumstances relating to the fairness of the dismissal itself.
Ratio = an employee cannot recover damages for wrongful dismissal due to the fairness of the dismissal (substantive or procedural), even where the dismissal breached the implied term of mutual trust and confidence. This is governed by the statutory UD regime.
JEZ = acts related so closely to fairness of the dismissal itself -> no WD claims for this.
Wrongful dismissal confined to equivalent wages for the notice period employee was entitled to + Gunton extension (if applicable).
Eastwood v Magnox Electric
Lord Nicholls said that the JEZ only applies to where the dismissal itself is a breach of implied term of mutual trust and confidence.
Therefore, an employee can bring a claim for damages for breach of implied term of mutual trust and confidence for breaches PRIOR to the dismissal.
Financial losses flowing from psychiatric illness caused be pre-dismissal unfair treatment fall outside of the JEZ and thus damages at common law can be claimed for this.
Edwards v Chesterfield Royal Hospital
C was summarily dismissed after disciplinary hearing. C claimed damages on the basis that the employer did not properly comply with the express disciplinary procedure in contract, and he would not have been dismissed if it had been.
SC 4-3 majority held that this claim about fairness of procedure fell within the JEZ and C could not claim damages. Employees can only recover damages at common law for WD if the loss proceeds and is independent of the dismissal itself, which it was not with the disciplinary procedure here. Parlt. has linked failure to comply with procedural fairness to unfair dismissal - e.g. under s 98(4) ERA 1996. E’s dismissal flowed from the panel’s errors = so closely connected to the dismissal itself that it fell within the JEZ.
Lady Hale said that the JEZ could only apply where the employer has breached the implied term of mutual trust and confidence - Parlt cannot have intended to restrict damages based on breach of express contractual term relating to disciplinary procedure. The other two judges in the minority, Lord Kerr and Lord Wilson, said that the JEZ can apply to express contractual terms - however, they said that E’s claim for reputational damage arose as soon as the disciplinary panel reached its decision, and resulting dismissal the next day was separate.
