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Termination of Employment Contract and Unfair Dismissal Claims – Advice for Employers

Dismissal claims against employers – How can I protect my business?

There are three different types of dismissal claim that can be brought against employers and can result in a business being taken to an employment tribunal if termination of an employment contract is not conducted correctly:

Unfair Dismissal:

Unfair dismissal claims arise where the employee is dismissed by the employer. The employee makes a claim against their employer on the grounds that the reason for their dismissal is unfair, or the process that was used, was unfair.

It is within your legal rights to dismiss an employee, but it must be done using the correct procedure and for a fair reason e.g. the poor performance, or conduct was in breach of firm policy.

Some dismissals may be deemed ‘Automatically unfair’ and include dismissals where the reasons are discriminatory e.g. dismissing a female member of staff because she is pregnant, if someone is dismissed in connection with health and safety activities, where someone has blown the whistle or for asserting a statutory right under the Employment Rights Act 1996. An employee can make a claim of automatic unfair dismissal regardless of length of employment.  There is also no upper cap on the level of compensatory award which can be made.

Wrongful Dismissal:

Wrongful dismissal claims can arise where you have failed to follow the correct terms of your employees’ contract during the dismissal, an example of this would be failing to give them any notice. This is a breach of contract that could result in you being unable to enforce restrictive covenants and other conditions stipulated in the contract.

This type of claim can be brought against an employer with no length of service requirement.

Constructive Unfair Dismissal:

Constructive dismissal claims arise where an employee has resigned in response to the employer acting in a way that is in breach of their contract. For example, reducing pay without consultation, or bullying and harassment in the workplace. For the employee to succeed with this type of claim they must be able to prove that there has been a breach of their contact, that resulted in their resignation.

We would always recommend seeking legal advice at an early stage when considering a contract termination, we seek to ensure that you will not be in breach of your employee’s contract terms which in turn can protect you from claims against your business.

When can you terminate an employee’s contract?

As an employer you are entitled to terminate an employee’s contract if they have committed an act of gross misconduct or have failed to follow a process, for example, failure to act on feedback of subsequent disciplinary warnings.  Aside from conduct, other potentially fair reasons for dismissing an employee are performance, redundancy, contravention of a statutory restriction (for example dismissing an employee because they lost their driving licence and needed to be able to drive to carry out their job); or “some other substantial reason” (a reason other than those listed here and which is potentially fair in the circumstances).

Employment law dictates that you must ‘act reasonably’ when dismissing an employee, failure to conduct a dismissal in a fair and reasonable manner could result in a tribunal claim against your business.

Here are some key steps to ensure your business is covered:

  • Having a valid reason for the dismissal and having sufficient evidence to support this, conducting a thorough investigation into the circumstances surrounding the claim or misconduct before making the final decision
  • Ensuring your disciplinary and dismissal procedures are published to your employees and followed correctly when carrying out a dismissal
  • Keeping the employees informed throughout the process and keeping records for your own evidence e.g. copies of letters sent to the employee outlining the reasons and terms of the dismissal and accurate minutes of any meetings
  • Giving the employee a chance to improve (if it is a first offence and not sufficiently serious to constitute gross misconduct)
  • Giving the employee a chance to appeal
  • Ensuring the correct notice period is given as stipulated in the original contract, or paying them in lieu of this notice period (does not apply for gross misconduct)

Why use Rotheras when looking to terminate an Employee’s contract?

We can help your business through every stage of the dismissal and contract termination process. From advising on whether this is the right step for your business to be taking through to drafting termination of employment contract letters, we help you navigate the process to ensure you get the outcome you want with unnecessary risks minimised.

We have experience of representing businesses at employment tribunals and can help you understand all of the options available to your business where tribunals are concerned.  We are prepared to help you represent your business if you wish to fight the claim, or we can assist with negotiations to reach an early resolution out of court.

We can advise on termination of employment for employers and whether alternatives should be explored further before making an employee redundant or seeking to terminate a contract.

We can advise on any potential breach of company contracts and procedures, to better assess whether a termination of contract is necessary.

We will work closely with you and your business to ensure you are legally compliant where seeking to execute a redundancy or dismissal.

We can assist you in resolving workplace disputes.


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Natalie Abbott has over a decade of experience advising businesses on employment law, helping them to navigate difficult situations and potential pitfalls whilst saving time and money in the process. Get in touch with Natalie by email or by phone 0115 910 6244.

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Natalie Abbott

“We work hard to get your business the outcome it deserves”

Natalie Abbott
Employment Law Specialist

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