Unfair Dismissal and Constructive Dismissal

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The law of unfair dismissal is governed by the Employment Rights Act 1996. If an employee has the requisite period of continuous service to qualify for unfair dismissal or if he falls within one of the exceptions that do not require qualifying service, he or she may be able to bring a claim for unfair dismissal at an Employment Tribunal. An employer is able to fairly dismiss an employee on the following grounds:


  1. Capability or qualifications;
  2. Conduct;
  3. Redundancy;
  4. If the continuation of the employee’s employment would be in contravention of a legal enactment;
  5. Some other substantial reason.


In addition, the employer must have acted reasonably in treating one of the above reasons as a reason for dismissing the employee.


Ordinarily, an employee will gain the right not be unfairly dismissed after a continuous period of two years. The law was changed with effect from 6th April 2012. Previously, an employee only required one year’s service.


There are certain examples where the employee does not need the requisite minimum service in order to claim unfair dismissal and some of them are as follows:


  1. Where the dismissal is on the ground of pregnancy or maternity;
  2. Where the dismissal is on the ground of making a protected disclosure;
  3. Where the dismissal is on the ground that the employee brought proceedings to enforce a relevant statutory right;
  4. Where the dismissal is on the ground that the employee had alleged that the employer had infringed a relevant statutory right.

If an employee succeeds in a claim for unfair dismissal, the Employment Tribunal is under a duty to consider making an order for re-engagement or reinstatement having regard to the wishes of the employee. If it orders reinstatement or re-engagement, the Employment Tribunal will also specify any amount payable by the employer representing any benefit (including arrears of pay) which the employee might reasonably be expected to have had if he or she had not been dismissed.


If the Employment Tribunal does not make an order for reinstatement or re-engagement, it will make an order for compensation which comprises a basic award and compensatory award. The basic award consists of the employee’s gross weekly salary subject to a cap multiplied by the complete number of years of service (subject to a maximum of 20). A multiplier of 0.5, 1 or 1.5 will be applied to the number of years that the employee was employed below the age of 22, between the age of 22 and 40 and 41 years and over, respectively.  The compensatory award consists of an amount that the tribunal considers just and equitable in all the circumstances having regard to the loss suffered by the employee in consequence of dismissal in so far as that loss is attributable by the employer. The compensation may be reduced where it is found that the employee caused or contributed to the dismissal. There are other grounds for a reduction to compensation.

Constructive dismissal

Section 95(1)(c) and section 136(1)(c) of the Employment Rights Act 1996 states that where an employee terminates the contract with or without notice in circumstances that he or she is entitled to terminate it without notice by reason of the employer’s conduct, there is a dismissal. In order to claim constructive dismissal, the employee must establish:


  1. That there was a fundamental breach of contract on the part of the employer;
  2. The employer’s breach caused the employee to resign; and
  3. The employee did not delay too long before resigning, thus affirming the contract and losing the right to claim constructive dismissal.


A constructive dismissal is not necessarily an unfair one.

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