ACCA F4 - Corp and Business Law (ENG)

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Part C Employment law  9: Dismissal and redundancy 143

3 Wrongful dismissal


Where the employer has summarily dismissed an employee without notice (as where the employer
becomes insolvent), there may be a claim for damages at common law for wrongful dismissal.

An action for wrongful dismissal, since it derives from the employee's common law rights in contract,
must be brought in the County Court or the High Court. Claimants must show that they were dismissed in
breach of contract, for example with less than the statutory minimum period of notice and that they have
as a result suffered loss.
As the action is taken for a breach of contract, the courts will usually only award damages for the loss of
notice period. A dismissal will not be wrongful if it is justified.

3.1 Justification of dismissal


The following have been taken as justifiable circumstances.

(a) Wilful disobedience of a lawful order suffices if it amounts to wilful and serious defiance of
authority.
(b) Misconduct, in connection with the business or outside it if it is sufficiently grave. For example,
acceptance of a secret commission, disclosure of confidential information, assault on a fellow
employee or even financial embarrassment of an employee in a position of trust.
(c) Dishonesty, where the employee is in a position of particular trust
(d) Incompetence or neglect, insofar as the employee lacks or fails to use skills which they profess to
have
(e) Gross negligence, depending on the nature of the job
(f) Immorality, only if it is likely to affect performance of duties or the reputation of the business
(g) Drunkenness, only if it occurs in aggravated circumstances such as when driving a vehicle or a
train, or is repeated

4 Remedies for wrongful dismissal


Generally, the only effective remedy available to a wrongfully dismissed employee is a claim for
damages based on the loss of earnings. The measure of damages is usually the sum that would have
been earned if proper notice had been given.

As with any other case of compensation, the wronged party is expected to mitigate their loss by, say,
seeking other employment.
Where a breach of contract leaves the employer as the injured party, they may dismiss the employee and
withhold wages. The employer may recover confidential papers, or apply for an injunction to enforce a
valid restrictive covenant.

4.1 Employment tribunals


Employment tribunals have jurisdiction to deal with all manner of employment related disputes such as
wrongful and unfair dismissal and redundancy, which formerly had to be heard in the civil courts. The
Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 apply to them.
The objective of an employment tribunal is to resolve employment disputes. A hearing is normally
convened with an Employment Judge and two other individuals. Each side makes its case and a decision
is made. In some cases, the parties will be encouraged to settle their dispute informally through
mediation.

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