Today, I’m going to discuss the distinction between unfair dismissal and wrongful dismissal, as the two are thought to be one and the same but for the adjectives. They are not. For example, a former employee may well be found to have been fairly dismissed. In other words, not unfairly dismissed but by the same time deemed to be wrongfully dismissed. Therefore, fairly and yet wrongfully dismissed. Let me explain.
Firstly, unfair dismissal is a statutory concept found in the Employment Rights Act 1996 and is based on the employer acting reasonably when deciding whether or not to dismiss an employee. Currently, save for some exceptions, an employee does not acquire the protection unless they have been continuously employed by the employer for at least 2 years.
On the other hand, wrongful dismissal is a common law action and is based not on reasonableness but on the balance of probabilities. The damages for an employer wrongfully dismissing an employee, which would amount to a breach of contract, is that the employee is entitled to payment i.e. salary/wages for the duration of the notice period under the express or implied terms of the contract of employment. Whereas the remedy for unfair dismissal is, in addition to reinstatement and re-engagement, capped at the former employee’s annual salary or that prescribed by law.
IN SUMMARY, therefore, an employer could be found to have fairly dismissed an employee because it acted reasonably in doing so, but, at the same time, on the balance of probabilities, be deemed to have breached the employee’s contract by wrongfully dismissing the employee for the same conduct in question.