TL;DR

Wrongful termination (or wrongful dismissal in UK law) occurs when an employer ends an employment contract without following the terms of that contract -- most commonly by failing to give proper notice. It is distinct from unfair dismissal, which is a statutory claim about the fairness of the reason and process for dismissal.

Contract Breach, Not Statutory Right

Wrongful dismissal is a common law breach of contract claim, not a statutory employment right. This distinction matters because unfair dismissal claims require two years of continuous employment in most cases. Wrongful dismissal has no qualifying period -- an employee dismissed on day one without the notice their contract specifies has a wrongful dismissal claim from the moment it happens.

The most common form is summary dismissal without notice when the contract requires notice to be given. If an employee's contract states four weeks' notice and the employer dismisses them immediately without payment in lieu of notice (PILON), that's a breach. The employee is entitled to the money they would have earned during the notice period, along with any contractual benefits (pension contributions, healthcare, bonuses that would have vested) that accrue during notice.

Summary dismissal -- dismissal without notice -- is only lawful when the employee has committed gross misconduct serious enough to constitute a repudiatory breach of contract. That's a high bar. Persistent lateness is rarely enough. Fraud, theft, violent behaviour, or serious breach of confidentiality typically clears it.

Why It Matters for Recruitment

HR and recruitment teams are most likely to encounter wrongful dismissal risk during restructuring, performance management, and probationary dismissals. Probationary periods in particular generate confusion. A contract that specifies a notice period during probation still requires that notice to be given (or paid). Dismissing a probationary employee on the spot without paying the notice period is wrongful dismissal, even if the decision to dismiss was entirely reasonable.

Notice periods in senior roles are often long -- three to six months is common at Director and above. An employer who terminates without working notice and without a PILON clause in the contract must make a damages payment equivalent to the full notice period value, including benefits. For a Director on £150,000 with three months' notice, that's a £37,500 exposure minimum before adding benefits.

Garden leave is one mechanism to manage notice periods for senior leavers -- the employee serves their notice at home, preventing them from immediately joining a competitor, while the employer remains compliant with the contract. This requires the employment contract to specifically allow garden leave; it cannot be imposed without a contractual basis.

In Practice

A sales director is dismissed following a board dispute. Her contract provides six months' notice. The company, frustrated with the process, dismisses her immediately with two months' pay in lieu. The remaining four months' notice, plus unvested share options that would have vested during that period, constitute wrongful dismissal damages. She brings a claim in the civil courts (or employment tribunal, if within the £25,000 threshold) and recovers the remaining four months' salary plus the share option value.

The company's error was not in dismissing her -- they had grounds. The error was miscalculating the notice entitlement and not checking whether the share options contained a good leaver provision.

Key Facts