Wrongful dismissal: What lessons can be learnt from this case?

Wrongful dimissal is a common claim in the UK, so what lessons can be learnt from this case? Our employment law experts take a look.

Wrongful dismissal is a contractual claim under UK employment law, arising when an employer terminates an employee’s contract in breach of its terms. Unlike unfair dismissal, which is statutory and focuses on fairness and reasonableness, wrongful dismissal is concerned solely with whether the employer complied with the contractual obligations; particularly notice provisions and agreed procedures.

What constitutes wrongful dismissal?

Under the Employment Rights Act 1996 and common law principles, wrongful dismissal occurs when:

• The employer fails to provide the contractual notice period (or statutory minimum if greater)
• The employer dismisses without following contractual procedures, such as disciplinary or probationary processes
• The employer terminates without justification for summary dismissal (eg. gross misconduct).

Common examples include:

• Dismissing an employee on the spot without notice or pay in lieu (unless expressly allowed)
• Ending a fixed-term contract early without contractual grounds
• Ignoring agreed probationary review procedures.

The Betancourt case: Key facts

In Betancourt v United Kingdom Research and Innovation [2025] EAT 148, the claimant was employed part-time and subject to a six-month probationary period requiring two formal reviews. His contract provided for five weeks’ notice during probation but did not include a payment in lieu of notice (PILON) clause.

UKRI dismissed Mr Betancourt after two months with immediate effect, paying him five weeks’ salary in lieu of notice. He claimed wrongful dismissal, arguing that the employer breached the contract by:

• Failing to follow the probationary review procedure
• Terminating without notice despite the absence of a PILON clause.

Employment Appeal Tribunal decision

The EAT overturned the Employment Tribunal’s initial finding and held that:

• The dismissal was wrongful because the employer had no contractual right to make a payment in lieu of notice.
• However, applying the ‘least burdensome’ principle, damages were limited to what the employee would have earned had the employer lawfully terminated with five weeks’ notice.
• Since Mr Betancourt had already received five weeks’ pay, no further compensation was awarded.

Key legal takeaways

• Check for PILON clauses: Employers must ensure contracts allow payment in lieu of notice if they intend to use it
• Follow contractual procedures: Breaching probationary or disciplinary processes can lead to liability, even if damages are minimal
• Damages assessment: Courts will consider the least burdensome lawful termination method, limiting compensation to actual loss
• Difference from unfair dismissal: Wrongful dismissal is about contract breach, not fairness or statutory rights.

Practical guidance for employers & employees

• Employers: Review employment contracts for clear notice and PILON provisions; adhere to probationary and dismissal procedures
• Employees: Understand contractual rights – claims for wrongful dismissal often focus on notice pay and procedural breaches rather than reinstatement.

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