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Wrongful dismissal and unfair dismissal claims will often go hand-in-hand. However, they require different matters to be proved, and different remedies are available for each.

Wrongful dismissal

Wrongful dismissal is a dismissal in breach of contract. This means that the contractual obligations of the employer will be the only thing which the court focusses on in assessing whether wrongful dismissal has taken place. The remedy is usually the pay or notice pay which the employee has lost out on as a result of the wrongful dismissal.

Unfair dismissal

Conversely, protection against unfair dismissal is a statutory right, not a contractual one. The questions the court will focus on will be the employer’s reasons for the dismissal; the reasonableness of treating these reasons as sufficient to dismiss; and whether the procedure followed was fair.

If there is a dismissal for misconduct, as in this case, when considering the fairness of the case the court will look to what is known as the Burchell test:

  1. Whether the employer reasonably believed that the employee was guilty of misconduct.
  2. Whether the employer had reasonable grounds on which to base that belief.
  3. Whether it had arrived at that decision after conducting a reasonable investigation.

Factual background to Finlayson v Diamond Financial Scotland Limited

In this case, the claims were brought by Ms Finlayson, the Claimant, who had been employed by the Respondent accountancy practice as a Senior Accounts Manager. During the course of the Claimant’s employment, the company’s director, Ms Fox, grew wary and suspicious of the Claimant. This came about when the Claimant refused Ms Fox’s offer of some shares in the company. When the Claimant informed Ms Fox that she wanted to leave the company, the relationship soured further.

The Respondent (through Ms Fox) began a disciplinary process in relation to the Claimant, alleging that she had broken her confidentiality agreement, and was acting in competition to the company. This was apparently based on the fact that the Claimant had done tax returns for herself and family/a friend, and forwarding herself emails from her work address to her Hotmail. The Claimant, despite appealing, was dismissed.

The Employment Tribunal’s decision

The tribunal was keen to point out that, whatever the Respondent’s suspicions or beliefs were that the Claimant was acting in competition with the company and hadn’t kept her confidentiality, they were flimsy and poorly founded. The tribunal concluded that Ms Fox had already decided she was going to get rid of the Claimant before coming to the disciplinary process.

There was also serious procedural unfairness: no witnesses were interviewed on behalf of the Claimant, and, in the appeal process, the conclusion was that “the claimant was clearly guilty but [the Respondent] found it difficult to articulate why.” This was despite witness statements indicating that the Claimant was not guilty of the acts alleged in the disciplinary process.  Neither Ms Fox nor Mrs Blair (who carried out the appeal process) spoke to the Claimant at any point during the process.

Conclusions

The tribunal ruled that the dismissal had been both procedurally and substantively unfair. It also ruled that the Claimant had robustly mitigated her loss, and had not contributed to the fault, and therefore no reduction was made to the award, which was calculated at £31,600.

Link to judgment: https://assets.publishing.service.gov.uk/media/6080018ae90e076ab6cbdcf5/Ms_F_Finlayson_v_Diamond_Financial__scotland__Limited_-4100852.2020-_Final.pdf

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