The law is stated as at 19 December 2007
What are the differences between wrongful and unfair dismissal claims?
Wrongful dismissal and unfair dismissal claims are entirely different - see the question above which explains the different concepts.
In most unfair dismissal claims there is a qualifying period of one year, whereas an employee who has only been employed for one day may be entitled to bring a claim for wrongful dismissal. In many cases, if an employee does not have one year’s continuity of employment and has been dismissed, the main claim to consider will be that of wrongful dismissal as the employee does not have the required continuity of employment for an unfair dismissal claim.
Unfair dismissal is exclusively statutory in nature and can only be dealt with by employment tribunals, not the normal civil courts. Costs are rarely recoverable in unfair dismissal claims. By contrast, a successful employer or employee may recover their legal costs in a wrongful dismissal claim in the normal civil courts.
The concepts of compensation are also different. In wrongful dismissal claims, the measure of damages is based upon putting the employee in the position they would have been in had they received the proper notice to which they were entitled under their contract. In unfair dismissal claims, there is a basic award based on a mathematical formula, and a compensatory award which will usually encompass loss extending beyond the end of the notice period. As a dismissal can be both wrongful and unfair at the same time, compensation paid by the employer for wrongful dismissal will normally be set off against the compensatory award part of an unfair dismissal award. See also the question on compensation in our Unfair dismissal FAQ.
Another key difference is that in wrongful dismissal cases the employer can rely on facts which came to their knowledge after the employee has been dismissed (see Boston Deep Sea Fishing v Ansell [1888] 39 Ch D 339). In unfair dismissal cases, what the employer knew at the time the employee was dismissed is the important factor to be taken into account.
The chart below summarises the key differences beween the two claims.
| Wrongful dismissal |
Unfair dismissal |
| Ancient legal concept |
Relatively recent legal concept |
| Contractual concept |
Statutory concept |
| No qualifying period of employment |
One year qualifying requirement in most cases (unless one of the exceptions apply) |
| Damages only based on salary and benefits for the notice period |
Compensation based on the statutory concept of a basic award and a compensatory award based on ongoing and future loss
|
| Uncapped damages may be awarded based on the notice period |
Compensation subject to a statutory maximum |
| Claims can be brought in the employment tribunal up to a limit of £25,000 |
Claims can be brought in an employment tribunal up to the current statutory maximum of £60,600 for the compensatory element of the award [this limit is likely to increase from 1 February 2008] |
| Claims can be brought in the County or High Court |
Claims cannot be brought in the County or High Court, only in an employment tribunal
|
| Legal costs may be recoverable by a successful party in the County or High Court |
Legal costs rarely recoverable by a successful party in the employment tribunal
|
| To justify the dismissal the employer can rely on facts which it did not know about when the decision to dismiss was made |
To justify the dismissal the employer can only rely on facts which it knew about when the decision to dismiss was made |
| Time limit for bringing the claim in the County or High Court is six years or three months in the tribunal |
Time limit for bringing the claim is three months in the tribunal |
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.