Termination of Employment Contract and Unfair Dismissal Claims
Clear legal guidance when managing employee exits
Legal advice on dismissal claims
Claims for unfair dismissal can result in harm to a business, but financially and reputationally. If a termination of an employment contract isn’t conducted correctly, the firm can be taken to an employment tribunal.
Our team can make the process easier for you or your HR team, by outlining what risks there may be and helping you avoid them.
The three types of dismissal claims
1. Unfair dismissal
Unfair dismissal claims happen where the employee is dismissed by the employer. The employee makes a claim against their employer on the grounds that the reason for their dismissal is unfair, or the process that was used was unfair.
It’s within your legal rights to dismiss an employee. However, it must be done using the correct procedure and for a fair reason, e.g., poor performance or conduct was in breach of firm policy.
Some dismissals may be deemed ‘automatically unfair’. These include dismissals where the reasons are discriminatory. Examples of unfair dismissal include:
- because they’re pregnant
- someone is dismissed in connection with health and safety activities
- someone has ‘blown the whistle’
- an employee has asserted a statutory right under the Employment Rights Act 1996
An employee can make a claim of automatic unfair dismissal regardless of length of employment. There is also no upper cap on the level of compensatory award which can be made.
2. Constructive unfair dismissal
Constructive dismissal claims take place where an employee has resigned. This would be in response to the employer acting in a way that is in breach of their contract. For example, reducing pay without consultation, or bullying and harassment in the workplace.
For the employee to succeed with this type of claim they must be able to prove that there has been a breach of their contact that resulted in their resignation.
We would always recommend seeking legal advice at an early stage when considering a contract termination. We will ensure that you’re not in breach of your employee’s contract terms, which in turn can protect you from claims like these against your business.
3. Wrongful dismissal
Wrongful dismissal claims can happen where you have failed to follow the correct terms of your employees’ contract during the dismissal.
An example of this would be failing to give them any notice. This is a breach of contract that could result in you being unable to enforce restrictive covenants and other conditions stipulated in the contract.
This type of claim can be brought against an employer with no length of service requirement.
When can you terminate an employee’s contract?
As an employer you are entitled to terminate an employee’s contract if they have committed an act of gross misconduct or have failed to follow a process, for example, failure to act on feedback of subsequent disciplinary warnings.
Aside from conduct, other potentially fair reasons for dismissing an employee are:
- performance
- redundancy
- contravention of a statutory restriction (for example dismissing an employee because they lost their driving licence and needed to be able to drive to carry out their job)
Or “some other substantial reason”. This might be a reason other than those listed here and which is potentially fair in the circumstances.
Employment law dictates that you must “act reasonably” when dismissing an employee. Failure to conduct a dismissal in a fair and reasonable manner could result in a tribunal claim against your business.
Here are some key steps to ensure your business is covered:
- Have a valid reason for the dismissal and have sufficient evidence to support this. Conduct a thorough investigation into the circumstances surrounding the claim or misconduct before making the final decision.
- Ensure your disciplinary and dismissal procedures are published to your employees and followed correctly
- Keep the employees informed throughout the process and keep records for your own evidence e.g., copies of letters sent to the employee outlining the reasons and terms of the dismissal and accurate minutes of any meetings
- Give the employee a chance to improve (if it is a first offence and not sufficiently serious to constitute gross misconduct)
- Give the employee a chance to appeal
- Ensure the correct notice period is given as stipulated in the original contract, or pay them in lieu of this notice period. This does not apply for gross misconduct.
Why use our employment solicitors when looking to terminate an employee’s contract?
We can help your business through every stage of the dismissal and contract termination process.
From advising on whether this is the right step for your business, through to drafting termination of employment contract letters, we help you navigate the process, minimising risks, to ensure the outcome you want.
We have experience of representing businesses at employment tribunals. So we can help you understand all of the options available to your business where tribunals are concerned. We’re prepared to help you represent your business if you wish to fight the claim, or we can assist with negotiations to reach an early resolution out of court.
We can advise on termination of employment for employers and whether alternatives should be explored further before making an employee redundant or seeking to terminate a contract.
With detailed knowledge of employment legislation – including the Employment Rights Act 2025 – we can advise on any potential breach of company contracts and procedures, to better assess whether a termination of contract is necessary.
We will work closely with you and your business to ensure you are legally compliant where seeking to execute a redundancy or dismissal. We can also help you with resolving workplace disputes through legal guidance.
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Keep our employment law team on retainer
We offer bespoke retainer packages, tailored to your individual business needs.
At Rothera Bray we don’t believe that ‘one size fits all’ when it comes to ensuring you have the right support in place to grow your business. Our retainer packages are like having your own, specialist, in-house employment law experts at the end of the phone. Our solicitors are on hand when you need us, offering commercial and robust advice based on your business requirements and goals.
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Other employment law services for businesses:
- Settlement Agreements
- Redundancies and Restructuring
- Senior Executives and Directors
- TUPE
- Performance Management
- Managing Sickness and Absence
- Representation at Employment Tribunals
- Employment Dispute Resolution
Our team have decades of experience advising businesses on employment law. We can help you navigate difficult situations and potential pitfalls whilst saving time and money in the process.
If you’re thinking of dismissing an employee, get legal advice as soon as possible. It can save you time and money down the line.
