Wrongful dismissal applies to a situation in which an employer terminates an employee’s services in a manner that is seen to be contrary to the terms of their contract. Various conditions need to be met, if an employee is to be terminated and any course of action that does not comply with these expectations is considered wrongful and is thus liable to legal action by an employee, often in a tribunal. The conditions for wrongful dismissal include termination before the contract expires in the case of a fixed term contract, termination without following due process, termination based on discrimination against gender, race, physical disability, age, nationality or religion, retaliation as well as refusal to commit an illegal act. Unfair dismissal, on the other hand, implies a situation where an employee is terminated for joining a trade union, being a whistle blower, refusing to forego their rights as granted under the employment regulations, or doing anything that is considered as within their fundamental rights and liberties as employees. Unfair dismissal implies faulting an employee for exercising their rights within an organization. Generally, employees are cautious to avoid cases of wrongful and unfair dismissal, but when these cases occur, the remedies are limited in either case. This paper compares and contrasts the remedies available to an employee who is wrongfully and unfairly dismissed and analyses how effective are the remedies in each case.
Remedies for Wrongful Dismissal
Welch and Strevens note that in order to understand the remedies that are available by law to a case of wrongful dismissal, it is important to consider the conditions that qualify this situation in the first place. Wrongful dismissal can be defined as a situation where an employer goes contrary to the expectations of an employee in terminating them. An employee, in this case, is guided in their expectations by the employment regulations and contract, where in cases that the contract is absent the law often assumes that one exists based on the employment relationship between an employer and an employee. In such cases, an employer is seen as violating the rights of their employee by refusing to honour their contract or to respect their individuality in cases where the termination is based on discrimination or retaliation or refusal to commit illegal acts and belonging to a trade union.
A situation in which a dismissal is considered wrongful thus implies a rift between an employee and their employer, making it more like a situation in which trust and confidentiality have been broken on either side. An employer has refused to live up to their promise as stated in the employment contract, while an employee has also refused to keep it confidential and has involved third parties (the employment tribunal) into the situation. Mediating or finding a remedy for this situation must in such a way be approached with caution seeing as the applied remedy should be relevant and effective in resolving the situation at hand. The available remedies are reinstatement, re-engagement and compensation.
Welch and Strevens state that reinstatement is a non-monetary remedy for wrongful dismissal, which entails giving an employee their job back. This is often realized through the orders of a tribunal or the court, depending on where the matter was taken for resolution. Reinstatement obliges an employer to take an employee back, often without any form of retribution or fine for the time spent in litigation for the claim. There are a number of factors to consider under this kind of remedy, and these include the basis for the claim and the relationship between an employer and an employee.
When an employee files a claim for wrongful dismissal, the first thing that needs to be understood is that they were not expecting to lose their job. This means that they are against the idea being out of employment and are hence willing to fight for their livelihood at this point. Reinstatement is a remedy founded upon the notion that employees prefer to keep their jobs, and as follows giving them back the job is a way of resolving their situation effectively. This remedy is relevant to an employee who files a claim of wrongful dismissal if the dismissal is found to have been based on discrimination or belonging to a trade union, refusing to commit and illegal act among others. Here, an employee is willing to work but an employer feels threatened therefore resorting to wrongful termination.
Reinstating a dismissed employee here resolves the situation in two ways. First, an employer is reminded of the employment laws and persuaded to respect the laws and their employees in as far as rights and liberties are concerned. An employer will find himself or herself in a situation where the law forces their hand to do the right thing as opposed to abusing their power and trying to violate the rights of their employees. The remedy also ensures that an employee is not denied of their rights within the employment laws. The fact that they have claimed wrongful dismissal under the stated circumstances implies that they are at peace with their employment conditions and they most likely need the job. Reinstating them as follows protects them from having to look for another job or staying unemployed.
There are cases where this remedy is not a good choice. In a case where an employee is terminated without following due process is one such example. An employer, in this case, may have a valid reason to terminate an employee, such as redundancy or misconduct but they are unable to follow due process due to one reason or another. While this does not excuse an employer to terminate an employee wrongfully, it nullifies the relevance of reinstatement. Reinstating an employee is like offering an employer a second chance to do the right thing and if the reasons for terminating an employee are valid, they will still be terminated at the end of it all. This means that reinstating an employee does not achieve the remedial outcomes that would be expected of it in a different circumstance.
Another instance would be where an employee’s relationship with an employer has been severely damaged. This is often the case where an employee is terminated based on retaliation or discrimination among other personal reasons. Once an employee is unable to feel comfortable at the workplace, reinstating them does not serve them well at all. And while they may need the job owing to the tough economic times and highly competitive labour market, it should be noted that working in a hostile environment is not fulfilling under any circumstances whatsoever, and thus, reinstating an employee into an environment that they will not be welcomed in will not in any way resolve their grievances.
Reengagement is yet another non-monetary remedy that involves giving an employee a job in a different division but with the same employer. In cases where an employee is terminated based on discrimination, it may be considered effective to opt for reengagement in a department where they would feel comfortable working under their employer. An employee may be terminated because they are unable to meet an employer’s needs in terms of productivity due to their gender, physical disability or even cultural orientation. In such a case, the claim for wrongful dismissal stands despite the validity of an employer’s concerns and in order to resolve the situation effectively, an employee must be reengaged in a position where they are able to remain relevant for an employer. Filing a claim of wrongful dismissal, in this case, is more about seeking a solution from the necessary authorities in terms of the employment relationship between the two parties involved. An employer here is compelled to consider the needs and abilities of their employee and assign them to a position within which they can be of optimum use to an organization. This is the best way to solve such a conflict in that an employee gets to stay employed, and an employer keeps reaping the benefits of having a fully productive employee.
When the relationship between an employer and an employee has been completely damaged, monetary remedies are the best option given their finality. Once this has been enforced, each party can go on their way and seek alternative engagements to meet their specific needs and objectives. An employer, in this case, is free to seek a replacement as an employee goes ahead to look for another job. In essence, compensation is the only monetary remedy in wrongful dismissal cases, and it is often dependent on the state or statutory laws put in place within the given jurisdiction. The universal concept of compensation, however, is that an employer owes an employee and thus, they must pay for the time and energy invested in the employment if an employee is to be laid off.
Welch and Strevens confirm that there are various forms of compensation dependent on the state laws that apply in the case at hand. These could be back pay, front pay, legal fees, compensatory damages or even punitive damages. Back pay implies reimbursing an employee’s wages from the time they are terminated to the time they find another job, or to the time of the court ruling on the matter. In this case, an employer is required to pay for an employee’s lost time given that they have been found liable in the matter. Front pay, on the other hand, implies compensating an employee from the time they lose their job to the time they get reinstated or find a new job depending on the circumstances of the case. An employer here pays for the inconvenience caused by terminating an employee. Compensatory damages refer to the payment made with respect to an employee’s pain and suffering as brought about by the wrongful termination. The value here varies with each case given the challenge in quantifying the emotions being compensated. Punitive damages similarly refer to compensation that is aimed at punishing an employer and hopefully deterring them from similar wrongful actions in the future. This is considered more effective given the sensitivity of these employers to unnecessary expenses that should and could have been avoided.
The main aim of compensation as an overall remedy is to resolve the problem in a permanent and mutually beneficial manner in that an employee is taken care of in terms of their inconveniences, emotional troubles and time as well as effort. They are also enabled to move on and seek new employment elsewhere without having to worry about paying the bills as they look for work. It can be stated that compensation is an effective remedy, especially where back pay, front pay, compensatory damages and punitive damages are involved.
Remedies for Unfair Dismissal
Under most circumstances, unfair dismissal is met with non-monetary remedies given the need to correct the unfairness. The primary remedy is reinstatement and reengagement in some cases. In an unfair dismissal case, an employee is often looking to reverse the dismissal under statutory laws. For instance, in the recent case of General Dynamics Information Technology Ltd v Carranza, the employment tribunal of the United Kingdom, by a majority established that the responded, (Dynamics Information Technology Ltd) disregarded the employees unique circumstances, given that the claimant (Carranza) is a disabled person. This, therefore, amounts to unfair dismissal. Even though the appellate judge disagreed with the finding of the employment tribunal, its prayers of unfair dismissal were granted giving the claimant the right to pursue compensation with the respondent.
In cases of unfair dismissal, the main approach is to resolve the conflict with an employer and enable an employee to get their job back without punishment or penalty. An employer, further, is likely to suffer penalties in the form of legal fees, front pay until an employee is reinstated or reengaged, or even punitive damages to deter them from future unfair dismissals. What this means is that an employee, in this case, is fighting for their job and in the event that they cannot get it back due to broken trust and confidence, they are likely to be awarded compensation as they seek alternative employment. The compensation, in this situation, is often limited by law although there is not any fixed amount yet. The law only limits the rate to a year’s pay, depending on the amount of money an individual would have earned during employment as well as on the size of the company being charged.
The aim of a remedy in an unfair dismissal claim is to deter the unfairness by allowing an employee to get their job back. The context of an unfair dismissal is that the basis is not legally justifiable and therefore, it should not even be a dismissal at all. This implies that when seeking legal remedies, the main aim is to stop the dismissal and allow for continuity in employment. Ordering monetary remedies only serve to severe the relationship between an employee and an employer, and so, the more effective remedy would be the option of reinstatement or reengagement. These options allow an employee to remain employed, as the basis of their claim.
Elvin emphasises that when remaining with an employer is not an option, then stringent compensation is expected given the fact that an employee is seriously inconvenienced. In most cases, an employee simply needs their job back but an employer may feel threatened or simply uncomfortable about rehiring such an employee. This is why most cases of unfair dismissal end up with monetary remedies. The trust and confidence in the employment relationship is broken and accordingly, money can be easily spent if it has the potential of making an employee leave in peace. An employee too on their part may prefer the money to going back into a hostile environment after crossing their employer. This, however, fails to solve the main problem, which is the employee’s employment.
The main difference between the remedies for wrongful dismissal and those for unfair dismissal is that the ones meant for wrongful dismissal are crafted with an understanding that an employer is not willing to work with an employee anymore while those for unfair dismissal consider the possibility that an employee still has a place in an organization from which they have been unfairly dismissed. The remedies for wrongful dismissal consider that reinstating an employee may be good for them given the high unemployment rates and stiff competition in the labour market, but they do not ignore the fact that trust and confidence is already severed and thus the employment relationship is rather irreparable. The remedies for unfair dismissal, on the contrary, recognize that an employee needs the job back and consequently, compensating them in monetary form does not resolve their problems. This means that the more effective remedy would be reinstating or reengaging them in order to avoid the status of unemployment. In such as case, the only monetary compensation required would be back pay from the time of the dismissal to the time of reinstatement or reengagement. Either way, an employer is responsible for the decisions that lead to the wrongful or unfair dismissal and, in most cases, they are made to pay the legal fees.