What is unfair dismissal?
An unfair dismissal occurs when an employer fires an employee for reasons that violate employment law or their employment contract. Less commonly, unfair dismissal may refer to any firings that the employee deems unjust, even if they aren’t illegal.
In California, “unfair dismissal” is synonymous with wrongful termination and encompasses any illegal firings. Employment laws governing wrongful or unfair termination vary by state and country, so a firing may be lawful in one place and unfair in another.
Unfair dismissal examples
Many different scenarios qualify as unfair dismissal. If the main reason behind an employee’s dismissal was any of the following, it would be likely an example of unfair dismissal:
- The employee joined a trade union
- The employee requested a flexible working arrangement
- The employee was involved in whistleblowing
- The employee needed time off to serve on a jury
- The employee put in for parental or extended medical leave
These are just a few examples of automatically unfair dismissals. There are also rules around who can claim they were dismissed unfairly. For example, workers in the United Kingdom must be continually employed for two years before bringing an unfair dismissal claim, but that isn’t the case with automatic unfair dismissals. These dismissals include obvious violations of the employee’s statutory rights and failure to follow proper dismissal procedures. In short, the reasons are so blatantly unfair that they are exempt from the two-year rule.
Although much of the United States practices at-will employment, which gives employers the power to terminate employees with or without cause, there are still cases of unfair dismissal. These examples typically pertain to employees who were dismissed from a job due to retaliation over wage and hour disputes, or protected activities, such as reporting harassment or discrimination.
As an example, imagine a worker in California who noticed that a manager at the company was regularly discriminating against older employees. This worker reports the behavior to human resources, only for the employer to terminate them shortly after. Employers in California cannot fire employees for reporting illegal behavior, so firing the worker for reporting a manager who is discriminating against other employees would be an unfair dismissal. As a result, the terminated worker might be eligible for monetary damages.
What is the difference between wrongful and unfair dismissal?
People often use the terms “wrongful dismissal” and “unfair dismissal” interchangeably, but they aren’t the same. In the United States, wrongful dismissal (also known as wrongful termination) refers to firings for illegal reasons—violating employment laws or the employee’s contract. If an employer violates federal anti-discrimination laws by firing an employee, for example, that would be a wrongful dismissal.
The term “unfair dismissal” is less common in the U.S. than in Britain. Employees may claim unfair dismissal if their employers fire them for reasons they deem unfair but don’t violate employment laws or contracts. In the United Kingdom, unfair dismissal is any illegal termination.
Can you sue your employer for unfair dismissal?
Employees who feel their employer unfairly dismissed them may wonder, “Can I sue my employer for unfair dismissal?” Yes, employees can sue their employers for unfair dismissal, but the process is complicated. Employment laws vary from state to state, and the legal proceedings can drag on for a long time. Workers may choose to work with unfair dismissal lawyers to help them through the process.
Employees must submit formal complaints to the relevant authorities to sue their former employers for unfair dismissal. The employee bringing the unfair dismissal claim has the burden of proof. They must show that the dismissal was unfair and violated their contract. The court may award the former employee monetary damages if they can prove their dismissal was unlawful.
If the worker and their former employer cannot reach an unfair dismissal settlement agreement, calculating compensation for unfair dismissal cases is up to the court. The unfair dismissal payout depends on factors like the employee’s skill set and salary as well as the employer’s conduct.
Protecting against unfair dismissal claims
Employers trying to reduce the likelihood of unfair dismissal claims must stay up to date on all relevant employment laws. Before firing an employee, the company should be certain that the reason for the termination is lawful. Some common lawful reasons to fire an employee include misconduct and poor performance. Check the employee’s employment contract (if they have one) to ensure that the termination follows all terms in the contract.
Employers should cover their bases to avoid the costly consequences of unfair dismissals. Your business may still face some unfair dismissal claims, but if you adhere to applicable employment laws and company policy, you can minimize their impact.
Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.
Employers of Record (EORs) in the UAE: Everything you need to know
How an EOR can help you hire in the UAE.
Employers of Record (EORs) in Sweden: Everything you need to know
Discover how an EOR service can help you hire in Sweden.
Curious about Oyster? Book a personalized demo
Leave your details and one of our experts will be in touch.