Termination Of Employment – A Potted Guide

If you lose your job you could have a claim for

(i) compensation for loss of employment (“unfair dismissal”), or
(ii) unpaid notice monies (“wrongful dismissal”) or
(iii) for both.

“Unfair dismissal” can normally only be claimed by employees with at least 2 years of continuous service. No time limit applies in cases of dismissals arising from maternity leave, trade union membership or for “whistle-blowing”, which are treated as “automatically unfair dismissals”. The Employment Tribunal can award up to the lower of (i) £86,444 or (ii) one year’s salary in compensation for loss of employment. Tax is payable on any compensation over £30,000.If you are dismissed unfairly with notice you have a potential claim for “unfair dismissal”. If your employer wrongly claims you are redundant but pays you your notice money and a SRP, you still have a potential claim for “unfair dismissal”

If you consider that relations have broken down, you may be able to resign because of your employer’s conduct and make a claim for “constructive dismissal”. This is a form of unfair dismissal where you consider yourself dismissed by reason of your employer’s conduct.

“Wrongful dismissal” happens if an employer does not give you notice or pay you your notice money. Your contract should say how much notice you or your employer must give. If the contract does not mention notice, then you must give at least one week’s notice, but your employer must give you one week’s notice for every full year you have been employed.

If you are dismissed unfairly and without notice you have a claim for “wrongful dismissal” and a potential claim for “unfair dismissal”.

“Summary dismissal” arises where an employee is guilty of gross misconduct and is dismissed on the spot without notice.

If things are going badly at work (but especially if your performance is affected) you should consider taking out a Grievance in order to achieve some resolution or improvement.

You need to look at your employer’s Grievance Policy. If you do not act promptly you might find that your employer or manager could decide to discipline you, which could result in you either (i) being put on a Personal Improvement Plan (“PIP”), (ii) receiving a “warning” which goes on your file for up to a year, (iii) receiving a final warning or (iv) being dismissed.

If you (i) resign amicably and receive your notice money, (ii) are summarily dismissed or (iii) are dismissed for good reason and paid notice, you probably don’t have any claims.

If you are dismissed for good reason but without notice you will have a claim for “wrongful dismissal”.

A genuine redundancy is a good reason for terminating your employment and will be “fair”. You will be entitled to your notice money. If you have 2 years continuous service your employer must pay you a statutory redundancy payment (“SRP”). The SRP is capped at 20 weeks’ pay and £525 per week and is paid to you tax free. You get half a week’s pay for each year worked before you were 21, a week from 21 to 41 and 1.5 weeks for each year worked over 41. The maximum payment is £10,500. You can calculate your entitlement using the attached link:-


However, your employment ends, it is possible that your employer will invite you to sign a Settlement Agreement. That is an issue which we cover in our next Guide.

We specialise in employment problems and would be happy to advise you if you are thinking of leaving your employment or are concerned that it may end for some reason. It is always best to take advice sooner rather than later in order to protect your interests.

Please contact Cormac Cawley at The Sethi Partnership Solicitors.

Cormac Cawley
T: 020 8059 4127
E: cormac.cawley@sethi.co.uk

The Sethi Partnership Solicitors I The Barn House I 38 Meadow Way I Eastcote I Ruislip I Middlesex I HA4 8TB

This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.

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