Written statement of reasons
for dismissal
At common law an employer is not required to give his
employee any reasons for dismissal. However, the ERA
1996 provides that where an employee is dismissed, with
or without notice, or by failure to renew a contract for a
fixed term, he must be provided by his employer on
request, within 14 days of that request, with a written
statement giving particulars of the reasons for his dis-
missal. This provision applies only to employees who
have been continuously employed full or part time for
a period of one year (ERA 1996, s 92), though there is
no service requirement in pregnancy dismissals. All
women, regardless of service or hours worked, have a
right to written reasons for dismissal if dismissed while
pregnant or during the statutory maternity leave period
and regardless of whether the woman requests it or not.
The written statement is admissible in evidence in any
proceedings relating to the dismissal and if an employer
refuses to give a written statement the employee may
complain to an employment tribunal. If the tribunal
upholds the complaint, it may make a declaration as to
what it finds the employer’s reasons were for dismissing
the employee and must make an award of two weeks’
pay without limit as to amount to the employee.
Employer’s insolvency
If the employer is bankrupt or dies insolvent, or where
the employer is a company and is in liquidation, the
unpaid wages of an employee have under Sch 6 to the
Insolvency Act 1986 priority as to payment but only to a
maximum of £800 (taken by insolvency practitioners to
be the grosswage) and limited to services rendered dur-
ing the period of four months before the commence-
ment of the insolvency. Any balance over £800 or four
months ranks as an ordinary debt. Also preferential is
accrued holiday remuneration payable to an employee
on the termination of his employment before or because
of the insolvency.
The Schedule adds to the above preferential debts by
including in the list sums owed in respect of statutory
guarantee payments, payments during statutory time off
for trade union duties, ante-natal care and to look for
work, remuneration on suspension for medical grounds,
or remuneration under a protective award given because
of failure to consult properly on redundancy. Statutory
Sick Pay, Statutory Maternity Pay, parental leave and
adoption leave pay are also preferential.
It should also be noted that under the ERA 1996 an
employee may, in the case of his employer’s insolvency,
make a claim on the National Insurance Fund rather
than relying on the preferential payments procedure set
out above. The relevant insolvency practitioner, e.g. a
liquidator, will normally calculate what is due and obtain
authorisation through BERR. Insofar as any part of this
payment is preferential, the rights and remedies of the
employees concerned are transferred to BERR, which
becomes preferential in respect of them.
The limits of the employee’s claim on the National
Insurance Fund are as follows.
■arrears of pay for a period not exceeding eight weeks
with a maximum of £330 per week;
■holiday pay with a limit of six weeks and a financial
limit of £330 per week;
■payments instead of notice at a rate not exceeding
£330 per week;
■payments outstanding in regard to an award by an
employment tribunal of compensation for unfair
dismissal;
■reimbursement of any fee or premium paid by an
apprentice or articled clerk.
There is no qualifying period before an employee
becomes eligible and virtually all people in employment
are entitled and the amount of £330 refers to the
employee’s grosswage.
It should be noted that claims on the National Insur-
ance Fund were, in the past, not admitted unless the
relevant insolvency practitioner gave the DTI (now BERR)
a statement of the amount due, though this could be
waived and payments made if there was likely to be an
unreasonable delay in providing the statement. Chapter
VI of the ERA 1996 now provides that the DTI (now
BERR) may make payments without a statement if it is
satisfied that adequate evidence of the amounts due has
been made available. Nevertheless, the relevant insol-
vency practitioner will normally provide a statement.Damages for wrongful dismissal
An award of damages is the most usual remedy for
wrongful dismissal. The period by reference to which
damages will be calculated is either:
■in the case of a contract of indefinite duration, the
period between the date of wrongful dismissal and the
earliest date on which the employer could lawfully have
terminated the contract – generally the date requiredPart 4Business resources