Damages for wrongful dismissal – when may compensation be available?

Damages are one of the most important remedies when an employer has breached the Employment Protection Act. Sometimes they are an alternative to having the dismissal declared invalid, and sometimes they are an additional remedy.

Two types of damages

Under Section 38 of LAS, an employer that breaches the Act may be required to pay both:

• Financial damages for the loss you actually suffer, such as lost salary.
• General damages for the infringement resulting from the breach of the law.

Damages may be reduced if reasonable, and the amount depends on the circumstances of the individual case. We cannot provide any generally applicable amounts.

When may damages be available?

• When a dismissal lacks objective reasons, whether or not you seek a declaration of invalidity.
• When a summary dismissal has occurred without sufficient grounds.
• When the selection-order rules have not been followed in a redundancy. Such a dismissal cannot be declared invalid on that ground alone, but damages may be available.
• When formal requirements have not been met, such as advance notification (Sections 30–31 of LAS) or information in the dismissal notice (Section 8 of LAS).
• When the priority right to re-employment has not been respected.

If the employer does not comply with a judgment

If the court has declared a dismissal invalid but the employer refuses to comply with the judgment, the employment relationship is considered dissolved, and under Section 39 of LAS the employer must then pay damages determined by your length of service. This applies only in that situation.

Time limits

Anyone wishing to claim damages must, as a general rule, notify the employer within four months of the act causing the damage and then bring proceedings within a further period (Section 41 of LAS). For having a dismissal declared invalid, the time limit is considerably shorter: generally two weeks (Section 40 of LAS). The time limits may be affected by collective agreements and by whether negotiations have been requested. Missing a deadline may result in the loss of the right to bring a claim.

Negotiation and settlement

Many employment-law disputes are resolved through negotiation and sometimes through an agreement, such as a severance payment or buyout agreement. Whether an agreement is reasonable depends on the strength of the supporting evidence.

If you would like to know whether damages may be available in your case, you can get a free initial assessment.