Dismissal with Notice vs Summary Dismissal: Employee Rights on Termination

Dismissal with notice (contractual or statutory) gives an employee their notice entitlement; summary dismissal (instant dismissal for gross misconduct) does not. Both can still give rise to unfair dismissal claims.

Overview

Every dismissal in England and Wales involves either giving the employee notice (or payment in lieu of notice — PILON) or summarily dismissing them without notice. The right to notice is governed by both the contract of employment and s.86 of the Employment Rights Act 1996 (minimum statutory notice: one week per year of service, up to 12 weeks after 12 years). Summary dismissal — instant dismissal without notice — is only justified where the employee has committed an act of gross misconduct so serious that it fundamentally breaches the employment contract. Critically, summary dismissal does not prevent an unfair dismissal claim. A fair summary dismissal requires the employer to have followed a fair procedure (Burchell test from British Home Stores v Burchell [1978]) — reasonable investigation, reasonable belief, and a proportionate sanction. Procedural failures can make even a justified dismissal unfair.

Side-by-Side Comparison

Dismissal with Notice

Cost: Notice pay (or PILON) at full contractual rate; statutory minimum under ERA 1996 s.86

Time: Statutory minimum: 1 week per year of service (up to 12 weeks); contractual notice may be longer

Pros

Legally straightforward — notice or PILON ends the employment cleanly
Employee cannot claim wrongful dismissal if proper notice or PILON is given
Maintains professional relationship — allows a handover period
PILON clauses in the contract allow immediate termination while preserving the payment obligation

Cons

Employee remains employed and entitled to full benefits during notice (or PILON is owed if terminated immediately)
Garden leave during notice can be expensive — employee paid for not working
An unfair dismissal claim is still possible if the reason for dismissal or the procedure was unfair
Wrongful dismissal claim possible if less than contractual notice is given without a PILON clause

Best For

Redundancy, business closure, performance-related dismissals following a fair process, and any dismissal that does not involve gross misconduct.

Summary Dismissal

Cost: No notice pay owed if justified; but tribunal award risk if unfair (up to £115,115 compensatory award + uplift)

Time: Immediate termination; any tribunal claim must be brought within 3 months

Pros

Appropriate response to serious misconduct — protects the business from an employee whose conduct has fundamentally undermined trust
Immediate effect — no obligation to pay notice if gross misconduct is genuinely established
Sends a clear message about the employer's standards and culture
PILON is not owed if summary dismissal is justified — the employee's own breach repudiates the contract

Cons

High risk — an unjustified summary dismissal is wrongful dismissal and potentially unfair dismissal
Fair procedure is still required even for gross misconduct — investigation, allegation letter, disciplinary hearing, and right to appeal (ACAS Code of Practice)
Failure to follow a fair procedure can make even a justified dismissal unfair — tribunal can uplift any award by up to 25% (ERA 1996 s.207A)
Employee may claim for notice pay (wrongful dismissal) if the conduct did not meet the gross misconduct threshold

Best For

Cases of theft, fraud, violence, gross insubordination, serious breach of data security, or other conduct so fundamental that it makes continued employment impossible — but only after a fair investigation and process.

Key Differences

AspectDismissal with NoticeSummary Dismissal

Notice paymentFull notice or PILON at contractual/statutory rateNo notice entitlement if gross misconduct is genuinely established

When appropriateRedundancy, capability, conduct not rising to gross misconductGross misconduct only — theft, violence, fundamental breach of contract

Unfair dismissal riskRisk if reason or procedure is unfair (ERA 1996 s.98)Risk if conduct does not justify summary dismissal or if procedure was unfair

Wrongful dismissal riskRisk if less than contractual notice given without PILON clauseRisk if the conduct was not gross misconduct (employee entitled to notice pay)

Procedure requiredACAS Code: investigation, letter, meeting, appealSame ACAS Code applies — no shortcut even for gross misconduct

ACAS upliftUp to 25% uplift on any award for failure to follow ACAS CodeSame 25% uplift risk — and additional uplift for unjustified summary dismissal

Our Recommendation

Never dismiss summarily without a proper investigation — even where the conduct appears clear-cut. The ACAS Code of Practice on Disciplinary and Grievance Procedures requires an investigation, a written allegation, a disciplinary hearing with the right to be accompanied, and a right of appeal. Follow this process even when summary dismissal is clearly warranted. Tribunals will examine both the reason for dismissal and the procedure — a fair reason conducted through a fair procedure is the only safe route. Take HR or employment law advice before dismissing for gross misconduct.

Related Guides

Official Resources

ACAS: Dismissal →ACAS Code of Practice on Disciplinary and Grievance Procedures →Employment Rights Act 1996 s.86 — legislation.gov.uk →