What is Wrongful Dismissal in Gibraltar and how does this differ from Unfair Dismissal?
Chris Brunt is a Gibraltar employment lawyer, a Barrister and Acting Solicitor who will consider all employee employment cases on a “no win no fee“ basis.
Unfair Dismissal or Wrongful Dismissal?
A claim for unfair dismissal can be brought in the Gibraltar Employment Tribunal when an employee has been employed for at least a year. Employment Act, section 60(1)(a), but note there are limited exceptions to the one-year rule [see section 62(1)(a)].
As explained in previous posts on unfair dismissal the Gibraltar Employment Act section 65 explains that the onus is on the employer to prove that the dismissal was fair and was for one of the following reasons:
s65.(1) In determining for the purposes of sections 59 and 70 whether the dismissal of an employee was fair or unfair, it shall be for the employer to show,
(a) what was the reason (or, if there was more than one, the principal reason) for the dismissal; and
(b) that it was a reason falling within the next following subsection, or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which that employee held.
(2) In subsection (1)(b) the reference to a reason falling within this subsection is a reference to a reason which–
(a) related to the capability or qualifications of the employee for performing work of the kind which he was employed by the employer to do;
(b) related to the conduct of the employee;
(c) was that the employee was redundant;
(d) was that the employee could not continue to work in the position which he held without contravention (either on his part or on that of his employer) of a duty or restriction imposed by or under any enactment.
So then how does Wrongful Dismissal differ from Unfair Dismissal?
Importantly, there is no one-year requirement of continuous employment required to claim wrongful dismissal in the Gibraltar Employment Tribunal.
While Unfair Dismissal as can be seen from above is based on statute or legislation, a claim for Wrongful Dismissal arises as a result of the common law rules of contract and is mostly, if not exclusively, associated with a breach of contract by the employer for failure to pay contractual notice pay to a dismissed employee.
On being engaged by an employer a notice period will be stipulated in the employment contract or on the Employment Training Board (ETB) “Notice of Terms of Engagement” form. This is the period of time that the employer has to give to the employee indicating that his employment will terminate on a certain future date. It is also the period of time that the employee has to provide to the employer when resigning from their employment.
In most cases one months-notice is the normal requirement, though in certain executive or specialised roles it can be higher as the employer requires a longer period of time to recruit the employee’s replacement, for instance, a three-month notice period is not unusual.
The most common reason why a claim for Wrongful Dismissal is brought by an employee is that an employer fails to give the employee the contractually required notice when dismissing them, and fails to pay them the requisite “pay in lieu of notice”(PILON). Note that there is usually a PILON clause in an employee’s employment contract which allows the employee to be dismissed without notice as long as they are paid for the notice period.
There is also usually a clause in the employment contract which allows the employer to dismiss without notice (or not pay the employee in lieu of notice) if the employee commits an act of gross misconduct.
The most common reason why an employer fails to give the requisite notice or give the employee pay in lieu of notice is that the employer concludes, following a disciplinary hearing, that the employee has committed an act of gross misconduct, and which, they allege, contractually entitles them to dismiss without giving notice or paying the employee in lieu of notice.
It is not unusual for an employee to feel aggrieved when being dismissed in such circumstances, particularly if they feel the employer’s reasoning in the disciplinary outcome is floored or unfair. The employee will usually want to claim they were unfairly dismissed (which they are able to do of course if they have been employed for one year or more).
If a claim is brought in the Gibraltar Employment Tribunal, the employer, on defending the claim for unfair dismissal will only have to show that when dismissing the employee, they reasonably believed the employee to be guilty of the disciplinary offence and that a reasonable investigation was carried out for the employer to base this reasonable belief on. This is known as the Burchell test. Further, the Employment Tribunal will have to conclude that the sanction of dismissal was within the band of reasonable responses (Iceland Frozen Foods v Jones), that is dismissing the employee was an outcome a reasonable employer could have deployed in the circumstances.
You will notice that arriving at the dismissal decision the employer’s disciplinary panel has to among other things believe the employee is guilty of the offence in line with the Burchell test. Note, the employer only, (among other things), has to have an honest belief in the employee’s guilt.
So then, the employer does not have to prove the employee’s actual guilt when dismissing an employee. A claim for unfair dismissal in the Employment Tribunal brought by the employee could therefore fail even if the employee was actually innocent of the allegation as long as the employer had an honest belief in line with the Burchell test and dismissal was within the band of reasonable responses. (Iceland Frozen foods)
When summary dismissal follows, as it almost certainly would in a gross misconduct case, the employee’s employment is terminated (on most occasions) with the employer invoking a contractual clause in the employment contract which allows them to terminate the employee’s employment instantly without payment in lieu of notice for gross misconduct.
This is where a claim for Wrongful Dismissal from the employee who maintains their innocence comes into play, either in addition or in the alternative to a claim for Unfair Dismissal. Or, if the employee has not acquired one year’s employment status disbarring them from bringing an Unfair Dismissal claim in the Gibraltar Employment Tribunal a claim can be brought as a stand-alone claim in the Employment Tribunal for Wrongful Dismissal.
Wrongful Dismissal is a Contract Claim
Wrongful Dismissal, therefore, is a contract claim, an employee bringing a claim for wrongful dismissal is alleging that the employer has breached the term in the contract of employment which entitles them to notice, or pay in lieu of notice, on termination of their employment contract.
The employer of course will say they are entitled to summarily dismiss because, they say, the employee committed an act of gross misconduct. But here the employer’s reasonable belief, as in an Unfair Dismissal claim, (as per the Burchell test) is not relevant. This time what is relevant is whether the employee had or had not committed an act of gross misconduct. Now the employer must prove in the Employment Tribunal that the employee had committed the act to the civil burden of proof, that is the employee is more likely than not to have done the act of gross misconduct they were dismissed for. This is a much higher threshold for the employer to cross, and as such, it is more difficult for the employer to prove.
It is submitted that in a Wrongful Dismissal claim an employee who was unable to bring a claim for Unfair Dismissal (those employed for less than a year who have been sacked) in this situation the Tribunal could look at the sanction of dismissal and could resolve whether or not even if the employee had committed the act in which they were dismissed for, could that act actually be construed as gross misconduct entitling the employer to dismiss without notice?
The remedy, a payment of a sum of money for Wrongful Dismissal is less than a claimant would expect to receive for a successful Unfair Dismissal claim as it is restricted to recovering unpaid notice pay. (Paid net of tax).
A case in which I represented a claimant for Wrongful Dismissal in the Supreme Court of Gibraltar was successful and the claimant recovered a significant amount, three-months notice pay as the employer was unable to prove that the claimant was actually guilty of the offence for which they were summarily dismissed for. See the case here.
Please note that this claim pre-dated the Employment Tribunal (Extension of Jurisdiction) Order 2016 and now a claim for Wrongful Dismissal should be brought as a contract claim in the Gibraltar Employment Tribunal.
Chris is an Employment Law Barrister and Acting Solicitor of the Supreme Court of Gibraltar who specialises in employment law.
Are you an employer who requires advice on reducing your business’s exposure to a wrongful dismissal claim?
Or are you an employee who following a disciplinary meeting has been summarily dismissed or sacked for gross misconduct and wishes to bring a claim for unfair dismissal or wrongful dismissal?
See the post below specifically for Unfair Dismissal Claims
Contact me for a free 30-minute consultation at Phillips Barristers & Solicitors, 292 Main Street, Gibraltar, GX11 1AA, on 200 73900. Or email me at chris.brunt@phillips.gi for advice to employers on reducing your business’ exposure to a wrongful or unfair dismissal claim – Or, if you are an employee, to evaluate your prospects for a claim for wrongful or unfair dismissal.
All employee cases are considered on a “no win no fee” basis
More Unfair Dismissal Posts
See the post on “Unfair Dismissal in Misconduct Cases“
See the post on “Unfair Dismissal in Gibraltar – An Introduction“
See the post on Constructive Unfair Dismissal in Gibraltar
See the post on “Unfair Dismissal in Gibraltar Health and Safety Cases”
See the post on “No appeal in Gibraltar is this automatically unfair”
Disclaimer
All opinions are my own and are provided for information only and do not constitute legal advice. Please note that the information and any commentary on Gibraltar law contained in this article are provided free of charge for information purposes only. Every reasonable effort is made to make the information and commentary accurate and up to date, but I do not accept responsibility for its accuracy and or for any consequences of relying on it. The information and commentary do not, and are not intended to, amount to legal advice to any person on a specific case or matter. You are strongly advised to obtain specific, personal legal advice about your case or matter and not to rely on the information or comments on this site https://www.employmentlawgibraltar.com/
