# Wrongful dismissal and redundancy: contract vs statute

> **Key takeaway:** Wrongful dismissal = breach of contract notice (damages for notice period). Unfair dismissal = separate statutory claim. Redundancy = ERA s.139 definition; may be fair reason + statutory pay if eligible. Collective duties: TULRCA s.188. Don't conflate the three.

- **Jurisdiction:** England & Wales
- **Practice area:** Employment
- **Last reviewed:** 2026-08-04
- **Interactive page:** https://kttclegal.info/library/notes/Employment/wrongful-dismissal-and-redundancy
- **Keywords:** wrongful dismissal, redundancy, notice, ERA 1996, statutory redundancy payment, unfair dismissal, PILON, collective consultation

## What is this about?

Wrongful dismissal is a common-law claim for dismissal in breach of contract (typically inadequate notice). Redundancy is a statutory concept that can justify dismissal as a potentially fair reason and, where eligible, trigger a statutory redundancy payment. The two are often confused but protect different interests.

## What is the core rule?

Wrongful dismissal: the employer terminates in breach of the contractual notice term (or fixed term) without lawful summary dismissal for repudiatory breach; damages are generally limited to sums due over the notice period (and rarely stigma damages), with mitigation. Unfair dismissal (ERA 1996) is a separate statutory claim with its own qualifying rules. Redundancy (ERA 1996 s.139): dismissal wholly or mainly attributable to cessation of business, cessation of work of a particular kind, or diminished requirements for employees — potentially fair reason if a fair procedure is followed; qualifying employees may claim statutory redundancy pay (ss.135–162 framework).

## What are the elements or test?

1. Wrongful dismissal: what notice was due; was there PILON; was summary dismissal justified by repudiatory breach?
2. Measure damages for wrongful dismissal (wages/benefits over notice; mitigation)
3. Redundancy: does s.139 definition apply; was the employee dismissed; pool/selection/consultation issues for unfairness?
4. Statutory redundancy payment eligibility (continuity, age/service formula historically — check current ERA figures)
5. Collective redundancy consultation (TULRCA 1992 s.188) where numbers/time thresholds met

## Which authorities matter?

- **Employment Rights Act 1996, ss.94–98, 135–140, 162 (as applicable)** — Unfair dismissal framework, redundancy definition, and statutory redundancy payment structure.
- **Addis v Gramophone Co Ltd [1909] AC 488** — Classic limit on recovering general reputation/stigma damages in pure wrongful dismissal (later cases carve limited exceptions).
- **Murray v Foyle Meats Ltd [1999] UKHL 30, [2000] 1 AC 51** — House of Lords approach to 'work of a particular kind' in the redundancy definition — causation-focused.
- **Trade Union and Labour Relations (Consolidation) Act 1992, s.188** — Collective consultation duties for proposed large-scale redundancies.

## How does this apply in practice?

Always separate: (1) contract notice claim, (2) unfair dismissal fairness, (3) statutory redundancy pay, (4) collective consultation. Settlement agreements and ACAS EC apply to tribunal claims. PILON clauses change the wrongful-dismissal analysis. Check current qualifying periods and pay caps — they change.

## What are common pitfalls?

- Treating every redundancy as automatically fair without procedure
- Confusing wrongful dismissal damages with unfair dismissal compensatory awards
- Missing collective consultation thresholds
- Assuming 'redundancy' label in a letter establishes s.139 without the statutory test

## When would a practitioner use this?

Exit negotiations, tribunal claim selection, and collective restructuring programmes.

## Quick reference

Wrongful dismissal = breach of contract notice (damages for notice period). Unfair dismissal = separate statutory claim. Redundancy = ERA s.139 definition; may be fair reason + statutory pay if eligible. Collective duties: TULRCA s.188. Don't conflate the three.

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*Reference material from [KTTC Legal](https://kttclegal.info/), not legal advice. Work product supports instructing solicitors and barristers under their supervision. England & Wales.*