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
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
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
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.