Unfair Dismissal

Employees who have been employed continuously for in excess of two continuous years have the right to raise a claim of unfair dismissal challenging the termination of their employment.


When an employee is dismissed and has not completed two years of continuous service with the same employer, they are not protected by ‘fair reasons’ as per the Employment Rights Act 1996.


This claim is a statutory claim for loss of salary together with a basic award which is equivalent to statutory redundancy pay.

How much compensation can you get for unfair dismissal?

The sums of money which can be claimed by employees relate primarily to their loss of salary which means that those employees that secure a job quickly will recover less than those who are out of work long-term following their dismissal.


An unfair dismissal claim has to be filed by the employee within three months of the date of the termination of employment. An employee may contact ACAS which is the advisory conciliation service to arrive at an agreement for severance with their former employer.


An employee is required to draft a form ET1 and file this together with his or her particulars of claim at the Employment Tribunal closest to his or her usual place of employment.


One way of settling an unfair dismissal claim is when an employee and an employer enter into an agreement known as a settlement agreement.

What’s the difference between a COT3 and a settlement agreement?

An alternative is an agreement known as a COT3 agreement.


In both cases, either when a settlement agreement is entered into or when a see COT3 is entered into, the employee will be required to forgo his or her rights to continue to pursue the unfair dismissal claim in the Employment Tribunal.


The employee will typically be awarded a sum of money as compensation within the settlement agreement, and this is a consideration for his or her agreement to waive the entitlement to continue with the claim of unfair dismissal.


The employee entering into the COT3 agreement, or the settlement agreement should seek legal advice on the terms of that agreement prior to signing it.


It is a legal requirement for the individual to seek legal advice on the terms of a settlement agreement otherwise that agreement will not be enforceable.


There is no legal requirement for an employee to seek advice on the terms of a COT3 agreement which is enforceable whether or not legal advice is sought.


That said, regardless of whether or not there is a requirement to seek legal advice, it would be advisable for an individual entering into a COT3 as well as a settlement agreement to always seek legal advice on the terms of that agreement to determine whether or not the rights he or she is waiving should be waived in the circumstances of their case.

Employment Tribunal claims

Unfair dismissal claims are by far the most common claims that are seen in the Employment Tribunals of England and Wales.


In order to succeed with an unfair dismissal claim, an employee needs to show that the termination of his or her employment falls outside of the band of reasonable responses. This can be because the employer’s process which was followed prior to the dismissal was flawed or alternatively, where the dismissal itself was substantively unfair.


In the event the process was unfair, the employee is at liberty to argue that had a proper process been followed, then a fair dismissal would have taken place.


In that event, an employer may be able to argue a reduction in damages is appropriate and this is known as a Polkey defence.

Constructive unfair dismissal claim

One type of unfair dismissal is constructive unfair dismissal which is where an employee chooses to resign due to the employer’s poor behaviours and argues that his or her dismissal has been forced by those poor behaviours.


A constructive unfair dismissal claim is more difficult and comparatively less likely to succeed than an ordinary unfair dismissal claim brought in by the Employment Tribunal.