The law is stated as at 19 December 2007
Are wrongful dismissal and unfair dismissal claims based on the same concept?
No, they are entirely different. Wrongful dismissal is a long established concept emanating from contract law. Contractual wrongful dismissal cases have been around since the 18th century. By contrast, 'unfair' dismissal is less than 40 years old. It is statutory creation originally emanating from the Industrial Relations Act 1971.
A wrongful dismissal claim is essentially based on what the parties agreed in their contract, and whether the employer has reneged on that agreement. Unfair dismissal is based on more arbitrary concepts of fairness. There is no qualifying period of employment for wrongful dismissal claims whereas in most unfair dismisaal cases the employee has to demonstrate one year’s continuity of employment.
Unfair dismissal can, and frequently does, occur without there being a wrongful dismissal claim. However some dismissals will be unfair, some will be wrongful, and some will be both.
The following scenario provides an example: Alex has been an employee of ABC Publishing limited for two years. He has a three-month notice period in his contract. He has always felt that the working relationship with his line manager was slightly strained, although they maintain a veneer of co-operation. One Friday, in a tense department meeting, Alex openly disagrees with the manager for the first time. Immediately after the meeting the line manager summons Alex to his office and dismisses him saying he will be paid up to that Friday and not beyond. Alex will have the following claims:
- a wrongful dismissal claim relating to the salary and benefits for his three month notice period, and
- a claim for unfair dismissal because there appears to be no fair reason to dismiss, and the dismissal was not fair in all the circumstances. Because the correct statutory procedure was not followed, the dismissal would be automatically unfair.
If Alex had been allowed to work his notice period or had been paid in lieu in accordance with a payment in lieu clause in his contract, then he would not have a claim for wrongful dismissal. His claim would then be for automatically unfair dismissal alone.
Our Unfair dismissal FAQs give more information on unfair dismissal claims and how to prevent them.
While every care has been taken in compiling these notes, the CIPD cannot be held responsible for any errors or omissions; the notes are not intended to be a substitute for specific legal advice.