Limitation Period: Wrongful Dismissal Claims

Wrongful dismissal claims arise when an employer breaches an employee's contract by terminating employment without proper notice or without paying contractual notice pay. Unlike unfair dismissal, wrongful dismissal is a contractual claim based on common law and employment contract terms.

Time limits are critical. A claim may be valid in principle but become unenforceable if issued after the legal limitation period has expired. The applicable time limit depends on whether the claim is brought in the Employment Tribunal or the civil courts.

What Is Wrongful Dismissal?

Wrongful dismissal occurs where an employer fails to comply with the contract of employment when ending employment. Common examples include:

• Dismissal without contractual or statutory notice
• Failure to pay notice pay or wages in lieu of notice (PILON)
• Immediate dismissal where notice was required under the contract
• Incorrect calculation of contractual entitlements on termination

It is distinct from unfair dismissal, which concerns the fairness of the employer's decision rather than contractual breach.

Where Wrongful Dismissal Claims Can Be Brought

Wrongful dismissal claims may be pursued in two main forums:

Employment Tribunal

The tribunal can hear wrongful dismissal claims as a breach of contract claim only in limited circumstances, typically:

• Where the claim arises or is outstanding after termination
• Subject to a financial cap (generally up to £25,000 for breach of contract claims in tribunal jurisdiction)
• Often linked to other tribunal claims such as unfair dismissal

Civil Courts (County Court or High Court)

If the claim exceeds tribunal limits or is purely contractual, it is usually brought in the civil courts.

Limitation Period in Employment Tribunal Claims

Standard Time Limit

For wrongful dismissal claims brought in the Employment Tribunal:

• 3 months minus 1 day from the effective date of termination

This is the same general limitation period that applies to most employment tribunal claims.

The effective date of termination is typically:

• The last day of employment if notice is worked
• The date of dismissal if employment ends immediately
• The end date of the notice period if notice is given but not worked

The claimant must usually notify ACAS before issuing proceedings, which affects timing due to mandatory early conciliation.

ACAS Early Conciliation and Time Limits

Before lodging an Employment Tribunal claim, the claimant must notify ACAS under the early conciliation process.

Key points:

• The limitation clock is paused while ACAS early conciliation is ongoing
• Time resumes once ACAS issues an early conciliation certificate
• After the certificate, a claimant typically has at least one month minus one day to submit the tribunal claim, if the original time limit would otherwise have expired during conciliation
  

Early conciliation does not create an unlimited extension. It only pauses the existing limitation period.

Limitation Period in Civil Courts

Where a wrongful dismissal claim is brought as a breach of contract claim in the civil courts:

• The limitation period is generally 6 years under the Limitation Act 1980

This applies to:

• Claims for unpaid notice pay
• Claims for breach of employment contract terms
• Claims exceeding tribunal financial limits
• Standalone contractual disputes following termination

This longer period is one of the key differences between tribunal and court-based claims.

Choosing Between Tribunal and Civil Court

The appropriate forum depends on several factors:

Employment Tribunal may be suitable where:

• The claim value is within tribunal limits
• The claimant is also bringing unfair dismissal or related employment claims
• A quicker, lower-cost process is preferred

Civil court may be suitable where:

• The claim value exceeds tribunal limits
• The claim is purely contractual and complex
• Longer limitation period is required due to delay

When Time Starts Running

For wrongful dismissal claims, time generally starts from:

• The effective date of termination, not the date of grievance or awareness
• The date employment legally ends under the contract

Issues can arise where:

• Notice periods are disputed
• Payment in lieu of notice is made
• Employment status is unclear at termination

Correct identification of the termination date is central to limitation calculations.

Extensions and Exceptions to Limitation

ACAS Early Conciliation

Pauses time but does not reset limitation periods.

Continuing breach arguments

Generally limited in wrongful dismissal cases because the breach usually occurs at termination.

Disability or incapacity

Courts may, in limited circumstances, consider whether a claimant could reasonably have brought a claim in time, but extensions are uncommon.

Contractual claims involving fraud or concealment

Limitation may be delayed where the employer deliberately conceals key facts.

Risks of Missing the Limitation Period

If a wrongful dismissal claim is issued late:

• The defendant can raise a limitation defence
• The claim may be struck out regardless of merit
• Settlement leverage is significantly reduced
• Tribunal or court may refuse to extend time except in rare circumstances

Employment tribunals in particular apply limitation rules strictly.

Common Misunderstandings

“Internal grievance extends time”

Internal procedures do not stop or extend limitation periods.

“ACAS gives extra time automatically”

ACAS pauses the clock only during conciliation, not indefinitely.

“Limitation starts when legal advice is obtained”

Time runs from termination, not from when advice is sought or understood.

Practical Steps in Managing Time Limits

• Identify the exact termination date early
• Record all contractual notice terms
• Notify ACAS before the limitation deadline expires
• Calculate both tribunal and civil court limitation periods where relevant
• Avoid relying on extensions unless clearly applicable

Key Takeaways

Wrongful dismissal claims in England and Wales are subject to strict time limits that vary depending on the forum. In the Employment Tribunal, the limitation period is generally 3 months minus 1 day from termination, subject to pauses during ACAS early conciliation. In civil courts, the limitation period is typically 6 years under the Limitation Act 1980.

Correct classification of the claim and accurate identification of the termination date are essential, as missing the deadline can prevent the claim from being heard regardless of its merits.