When is Employee Contract Termination Acceptable?

There are many reasons why an employer might choose to terminate an employee’s contract. Some of these reasons are acceptable and lawful, while others can fall under the category of wrongful dismissal.

Terminating a contract can be deemed unlawful if an employer does not provide a valid or fair reason for doing so. This is known as wrongful termination or unfair dismissal. It’s an unethical workplace practice and happens more often than most people realize.

Being aware of when it is and isn’t acceptable for your employer to terminate a contract is a dentist for knowing whether or not you need to take action after a dismissal. Below, we have covered the acceptable reasons for an employer to terminate an employee’s contract.

What Are the Reasons for Lawful Employee Contract Termination?

If your employer terminates your contract and provides any of the following reasons for their decision, it’s most likely a lawful termination.

Poor conduct

One of the most common causes of fair dismissal from the workplace is poor employee conduct. Poor conduct can take a variety of forms, including:

Consistently poor attendance

Disclosing private information about the company

Violence towards other employees or customers



Generally, poor employee is split into two categories – minor and major. Minor conduct often only warrants a warning, whereas major misconduct can lead to immediate dismissal.

Lack of capability

If your employer feels that you’re unable to perform your job role adequately, they may be on fair grounds to dismiss you. Your employer may implement a training program or a performance improvement plan to support you, and if your performance doesn’t improve, it may lead to your contract being terminated.


When a company goes into liquidation or can no longer afford to maintain its current staff numbers, it may be forced to make some employees redundant. If your job role no longer exists or you’re no longer required at the company you work for, you may be dismissed via redundancy.

In many cases, redundant employees are offered a redundancy or severance pay package. This may be the case for you, and your employer should specify your payment amount. They must also provide a valid reason for redundancy and prove it is non-discriminatory.

What Should You Do if Your Employer Dismisses You Unlawfully?

If you’re ever unsure of whether your employer is fair in their decision, consider contacting a wrongful termination lawyer. They can assess your situation and provide expert guidance if you need to take action.

Your lawyer will help you to build a case against your employer and gather evidence if they believe your dismissal has been unfair or illegal. If required, your lawyer will take your case to the employment tribunal or court to gain a fair settlement for your situation.

You may be offered your job back if your dismissal is deemed unlawful. However, if you don’t want to return to work for the same employer, you may be offered compensation for your financial losses and trauma.

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