Playbook 3: The Termination & Remedies Playbook
Unfair Dismissal, Redundancy & Litigation Strategy
Summary: This playbook navigates the complex landscape of employment termination — distinguishing wrongful dismissal at common law from unfair dismissal under statute, exploring redundancy frameworks, analysing dismissal with cause, and providing a practical litigation strategy checklist drawn from common law jurisdictions.
Chapter 1 — Unfair Dismissal – Statutory Protection
1.1 Distinguishing Wrongful Dismissal from Unfair Dismissal
A critical distinction in employment law exists between wrongful dismissal and unfair dismissal. Wrongful dismissal is a common law remedy for breach of contract — typically where an employer terminates without proper notice or fails to follow contractual termination procedures. Unfair dismissal, by contrast, is a statutory remedy that focuses on whether the reason for dismissal was fair and whether the employer followed a fair procedure.
Key distinction: As the Cayman Islands Law Reports explain, "an employee who is wrongfully dismissed has his remedies before this court at common law. But the common law does not provide a remedy for unfair dismissal."
1.2 Qualifying Conditions for an Unfair Dismissal Claim
To bring a claim for unfair dismissal, the claimant must satisfy several qualifying conditions:
- Employee status: The claimant must have "employee" status under section 230 of the Employment Rights Act 1996
- Qualifying period: Traditionally, two years of continuous employment. However, under the Employment Rights Act 2025, the qualifying period will reduce to six months from 1 January 2027
- Dismissal: The claimant must have been dismissed as defined in section 95 of ERA 1996
- Time limit: The claim must be submitted within three months of the effective date of termination
Important reform: The Employment Rights Act 2025 also removes the cap on compensatory awards for successful unfair dismissal claims at employment tribunal. Claims will continue to be calculated on the basis of actual and projected losses evidenced by the claimant.
1.3 Miller v Community Links Trust Ltd – Time Limits
In Miller v Community Links Trust Ltd, the claimant's claim was submitted nine seconds late and was held to be time-barred. The case illustrates the strict application of the three-month time limit for unfair dismissal claims and the high bar for obtaining an extension where it was not "reasonably practicable" to submit on time.
This decision underscores the importance of strict adherence to procedural time limits in employment litigation.
Miller v Community Links Trust Ltd — BAILII
Chapter 2 — Redundancy – Common Law and Statutory Framework
2.1 What Constitutes Redundancy
Under the Employment Rights Act 1996, redundancy occurs where an employee is dismissed because the employer has ceased or intends to cease carrying on the business, or because the requirements of the business for employees to carry out work of a particular kind have ceased or diminished.
As noted in the Irish Court of Appeal decision in Kearney, challenges to redundancy dismissals are properly brought under the statutory unfair dismissal framework. An implied term of trust and good faith does not deprive an employer of the right to terminate an employment contract with proper notice based on a redundancy.
Kearney v Employer — A&L Goodbody (2019)
2.2 Common Law Redundancies and Reasonable Selection Criteria
At common law, employers must exercise care in selecting employees for redundancy. Failure to apply reasonable, objective selection criteria may constitute a breach of the implied term of mutual trust and confidence.
Key considerations:
- Employers should use objective, non-discriminatory selection criteria
- Employees should be consulted meaningfully
- Alternative roles within the organisation should be considered
Kearney v Employer — A&L Goodbody (2019)
2.3 Statutory Redundancy Payments
Employees who are made redundant may be entitled to a statutory redundancy payment. The amount is calculated based on the employee's age, length of service, and weekly pay, subject to statutory caps. The statutory scheme provides a minimum entitlement, but employers may also offer enhanced contractual redundancy packages.
Kearney v Employer — A&L Goodbody (2019)
Chapter 3 — Dismissal with Cause – Justifying Summary Termination
3.1 What Constitutes "Cause"
Summary dismissal (termination without notice) requires "cause" — a fundamental or repudiatory breach of the employment contract by the employee. The employer must demonstrate conduct that goes to the root of the contract, making it impossible for the employment relationship to continue.
Examples of cause include:
- Gross misconduct, such as fraud or theft
- Wilful disobedience of lawful and reasonable instructions
- Serious negligence
- Breach of the duty of fidelity
Wilsher v Olympic Wholesale (2026) — Dentons
3.2 The Employer's Obligation to Investigate – Metrolinx v ATU Local 1587
In Metrolinx v ATU Local 1587, the court affirmed that employers have a standalone obligation to investigate harassment complaints even without a formal complaint from the employee. This duty arises from the employer's implied obligation to maintain a safe workplace and to deal with workplace issues in good faith.
Key holding: An employer cannot rely on the absence of a formal complaint to avoid investigating allegations of workplace misconduct. The duty to investigate arises from the employer's broader obligations under the employment contract.
Metrolinx v ATU Local 1587 — CanLII
3.3 Managerial Employees Held to a Higher Standard – Lagala v Patene Building Supplies
In Lagala v Patene Building Supplies, the court held that managerial employees are held to a higher standard in relation to cause for dismissal. Managers are expected to demonstrate a higher degree of loyalty and compliance with workplace policies, including confidentiality obligations.
Lagala v Patene Building Supplies — CanLII
3.4 Confidentiality in Investigations – Jarvis v The Toronto-Dominion Bank
In Jarvis v The Toronto-Dominion Bank, the court addressed the disclosure of redacted investigation reports in the context of workplace investigations. The decision affirmed that employers may redact portions of investigation reports to protect confidentiality, but must balance this against the employee's right to know the case against them.
Jarvis v The Toronto-Dominion Bank — CanLII
Chapter 4 — The Effective Date of Termination and Time Limits
4.1 Determining the Effective Date of Termination (EDT)
The effective date of termination is a critical jurisdictional question for unfair dismissal claims. The EDT determines whether the claim has been brought within the statutory three-month time limit. The date is normally the date on which the termination takes effect, which may differ from the date notice is given.
In Miller v Community Links Trust Ltd, the claimant's claim was submitted nine seconds late and was time-barred. This illustrates the strict approach courts take to time limits.
Miller v Community Links Trust Ltd — BAILII
4.2 Extensions to Time Limits
The employment tribunal may extend the time limit where it was not "reasonably practicable" for the employee to bring the claim within the three-month period. Factors considered include:
- The employee's knowledge of the time limit
- Whether the employee was incapacitated
- Whether the employer contributed to the delay
The courts have consistently held that the bar for obtaining an extension is high. Mere inconvenience or lack of awareness of the time limit is generally insufficient.
Miller v Community Links Trust Ltd — BAILII
Chapter 5 — Litigation Strategy
5.1 Pre-Action Considerations
Before commencing proceedings, practitioners should:
- Collect information: Gather all relevant documents including the contract of employment, termination correspondence, and internal communications
- Assess the termination package: Determine whether the severance satisfies common law and statutory entitlements
- Identify the claim type: Determine whether the claim is for wrongful dismissal (common law), unfair dismissal (statutory), or both
- Consider alternative dispute resolution: Explore whether early settlement or mediation might resolve the matter without litigation
From 1 January 2027, the qualifying period for unfair dismissal claims will reduce from two years to six months under the Employment Rights Act 2025. This means a much larger proportion of employees will acquire the right to claim unfair dismissal far earlier in the employment relationship.
5.2 Intake and Assessment Resources
Effective case preparation requires:
- Intake resources: A checklist of essential information needed from the client, including service history, salary details, and the circumstances of termination
- Assessment resources: A framework for evaluating the strength of the claim — including the likelihood of success on the merits, the availability of evidence, and the estimated damages
- Termination package review: A structured approach to assessing whether the offered severance satisfies both common law reasonable notice entitlements and statutory redundancy or unfair dismissal compensation
Chapter 6 — Key Case Clips: Termination & Litigation
⚖️ Wilsher v Olympic Wholesale (2026 ONSC 3620) — Notice Period Damages
The Ontario Superior Court awarded 14 months of Wallace damages on top of a 19-month notice period, totalling 33 months of pay in lieu of notice. The court found that the employer's "topping up" practice (manually inputting full shifts when employees worked through breaks) had been condoned for 19 years, and the employee was specifically trained to do it. This decision departs from the widely-adopted Honda v Keays approach of compensating bad faith behaviour through aggravated damages, instead extending the notice period under the earlier Wallace method.
⚖️ Miller v Community Links Trust Ltd — Time Limits
The claimant's unfair dismissal claim was submitted nine seconds late and was held to be time-barred. This decision illustrates the strict approach courts take to the three-month time limit for unfair dismissal claims and the high bar for obtaining an extension where it was not "reasonably practicable" to submit on time.
⚖️ Metrolinx v ATU Local 1587 — Employer's Duty to Investigate
The court affirmed that employers have a standalone obligation to investigate harassment complaints even without a formal complaint from the employee. This duty arises from the employer's implied obligation to maintain a safe workplace and to deal with workplace issues in good faith.
⚖️ Lagala v Patene Building Supplies — Managerial Employees
The court held that managerial employees are held to a higher standard in relation to cause for dismissal. Managers are expected to demonstrate a higher degree of loyalty and compliance with workplace policies.
⚖️ Jarvis v The Toronto-Dominion Bank — Confidentiality in Investigations
The court addressed the disclosure of redacted investigation reports, affirming that employers may redact portions to protect confidentiality but must balance this against the employee's right to know the case against them.
FAQ
What is the difference between wrongful dismissal and unfair dismissal?
Wrongful dismissal is a common law remedy for breach of contract — typically where an employer terminates without proper notice. Unfair dismissal is a statutory remedy focused on whether the reason for dismissal was fair and whether the employer followed a fair procedure. As the Cayman Islands Law Reports explain, "the common law does not provide a remedy for unfair dismissal."
Roulstone and Coffee v Cayman Airways Limited
How has the Employment Rights Act 2025 changed unfair dismissal?
The Employment Rights Act 2025 reduces the qualifying period for unfair dismissal claims from two years to six months from 1 January 2027. It also removes the cap on compensatory awards for successful unfair dismissal claims at employment tribunal. Claims will continue to be calculated on the basis of actual and projected losses evidenced by the claimant.
GOV.UK — Unfair Dismissal Changes (2026)
What is the time limit for bringing an unfair dismissal claim?
The claim must be submitted within three months of the effective date of termination. In Miller v Community Links Trust Ltd, a claim submitted nine seconds late was time-barred, demonstrating the strict approach courts take. Extensions are available only where it was not "reasonably practicable" to submit on time, and the bar for obtaining an extension is high.
Miller v Community Links Trust Ltd — BAILII
References
Roulstone and Coffee v Cayman Airways Limited (1993) — Cayman Islands Law Reports
Unfair Dismissal Changes — Summary of Stakeholder Roundtables — GOV.UK (2026)
Orrick — UK Employment Law Monthly Highlights (January 2026)
Miller v Community Links Trust Ltd — BAILII
Wilsher v Olympic Wholesale (2026 ONSC 3620) — Dentons
Kearney v Employer — A&L Goodbody (2019)
Metrolinx v ATU Local 1587 — CanLII
Lagala v Patene Building Supplies — CanLII
Jarvis v The Toronto-Dominion Bank — CanLII
The UK's Employment Rights Act 2025 — Mason Hayes Curran
Jersey Unreported Judgments — Johnson v Unisys (2025) — BAILII
Comments
Post a Comment