Wrongful dismissal

Wrongful dismissal is a common law action.

This common law action only arises in very limited circumstances. These circumstances are:


  • the employee is employed under a fixed term contract; or

  • the employee is employed under a contract of employment which specifies the only grounds for dismissal.


It follows therefore that the action is akin to an action for breach of contract but the claim is solely concerned with the method of dismissal and the question of whether there has been a breach of a contractual term. An action for wrongful dismissal is for damages only – there can be no reinstatement or re-engagement as this is outside the scope of the action.


Whilst it is possible to claim for both wrongful and unfair dismissal, the later action is concerned with wider issues of 'fairness'.


For many employees an action for wrongful dismissal does not provide an effective remedy as their periods of notice are so short as to effectively rule out an action for damages as their loss of earnings would be minimal. To some however such an action would be potentially much more significant and these might include:


  1. those on a fixed term contract and dismissed within the term of the contract;

  2. highly-paid employees who might lose out under the provisions which set limits for maximum claims for unfair dismissal; and

  3. those employees who are excluded from the provisions for unfair dismissal.

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