Wrongful Termination

What is wrongful termination?

Wrongful termination (also called unfair dismissal or unjust dismissal) occurs when an employer terminates an employee's employment in violation of legal rights, contractual obligations, or public policy. It represents illegal or improper dismissal that breaches employment law, the employment contract, or principles of fairness.

Types of wrongful termination

Termination without just cause

• No valid reason for dismissal
• Insufficient grounds under law
• Arbitrary or capricious dismissal
• Personal dislike or discrimination
• Failure to follow proper procedures

Discriminatory termination

• Based on protected characteristics:
  • Gender, race, ethnicity, religion
  • Age, disability, pregnancy
  • Sexual orientation, marital status
  • National origin, political affiliation
• Direct or indirect discrimination
• Prohibited across most jurisdictions

Retaliatory termination

• Firing for exercising legal rights
• Whistleblower retaliation
• Complaining about discrimination or harassment
• Filing workers' compensation claim
• Reporting safety violations
• Participating in investigations
• Union activities or organizing

Breach of contract

• Violating employment contract terms
• Not following agreed termination procedures
• Insufficient notice period
• No severance when contractually required
• Terminating fixed-term contract early without cause

Constructive dismissal

• Forcing employee to resign
• Creating intolerable working conditions
• Fundamental breach by employer
• Employee has no choice but to quit
• Treated as termination by law

Violation of public policy

• Refusing to engage in illegal activity
• Performing public duty (jury service)
• Exercising statutory rights
• Disclosing employer's illegal conduct
• Taking protected leave

What constitutes "just cause" varies by country

Generally accepted grounds

• Serious misconduct (theft, fraud, violence)
• Gross negligence
• Repeated poor performance after warnings
• Insubordination
• Breach of confidentiality
• Criminal conduct
• Serious policy violations

Procedural requirements for fair dismissal

Investigation

• Proper investigation of alleged misconduct
• Gathering evidence
• Interviewing witnesses
• Documentation of findings
• Objective assessment

Notice of allegations

• Written statement of charges/concerns
• Specific details of issues
• Opportunity to review evidence
• Adequate time to prepare response

Hearing/opportunity to respond

• Chance to present their side
• Explain circumstances
• Provide evidence
• Bring representative (if permitted)
• Fair and impartial hearing

Decision-making

• Consider all evidence fairly
• Proportionate penalty
• Written decision with reasons
• Appeal opportunity (if required)
• Consistent with past practice

Documentation

• Written warnings (for performance)
• Performance improvement plans
• Investigation reports
• Meeting notes
• Decision letters
• Appeal records

Wrongful termination across APAC

Singapore

• Ministry of Manpower mediation available
• Employment Claims Tribunals for disputes
• Wrongful dismissal claims possible
• Remedies: compensation (not typically reinstatement)
• Must show breach of contract or unfair treatment

Australia

• Strong unfair dismissal protections
• Fair Work Commission jurisdiction
• Minimum employment period: 6 months (12 for small business)
• Must be harsh, unjust, or unreasonable
• Remedies: reinstatement or compensation (up to 6 months' pay)

Hong Kong

• Labour Tribunal handles disputes
• Wrongful dismissal claims for breach of contract
• Unreasonable dismissal claims
• Remedies: terminal payments, damages
• One month notice or payment in lieu required

Japan

• Very strong dismissal protections
• "Just cause" difficult to establish
• Doctrine of "abusive dismissal"
• Labor tribunals and courts
• Reinstatement common remedy
• Cultural expectation of lifetime employment

India

• Industrial Disputes Act protections
• Prior approval needed for layoffs in some states
• Labor courts and tribunals
• Reinstatement frequently ordered
• Back pay for illegal termination period
• Strong worker protections in organized sector

Malaysia

• Industrial Relations Act
• Industrial Court jurisdiction
• Must show just cause and due inquiry
• Domestic inquiry often required before termination
• Remedies: reinstatement with back pay or compensation

South Korea

• Labor Standards Act
• Just cause requirement
• Advance notice required
• Labor Relations Commission
• Reinstatement or compensation
• Strong employee protections

Thailand

• Labour Protection Act
• Wrongful termination damages
• Labour Court jurisdiction
• Remedies: compensation based on tenure
• Strict compliance with procedures

Philippines

• Security of tenure principle (very strong)
• Just or authorized cause required
• DOLE and NLRC jurisdiction
• Procedural due process required
• Illegal dismissal: reinstatement + back pay
• Separation pay for authorized causes

Vietnam

• Labor Code protections
• Disputes handled by labor arbitration/courts
• Procedural requirements strict
• Wrongful termination: reinstatement + compensation
• Severance if reinstatement impractical

Indonesia

• Omnibus Law reformed termination rules
• Mutual agreement termination encouraged
• Unilateral termination difficult
• Industrial relations court
• Substantial severance even for cause
• Complex termination requirements

Remedies for wrongful termination

Reinstatement

• Return to former position
• With back pay and benefits
• Seniority and tenure restored
• Common in some APAC countries (Japan, India, Philippines)
• Less common in others

Compensation/damages

• Payment instead of reinstatement
• Calculation varies:
  • Notice period pay
  • Severance equivalent
  • Months of salary (varies 1-12+ months)
  • Loss of earnings
  • Future loss of income
• Country and circumstances specific

Back pay

• Salary from termination to resolution
• Benefits during period
• Can be substantial if lengthy dispute
• Common remedy in some jurisdictions

Benefits restoration

• Continued health insurance
• Pension contributions
• Other benefits maintained
• Retrospective coverage

Other remedies

• Corrected employment records
• Reference letter
• Public apology (rare)
• Costs and legal fees
• Punitive damages (very rare in APAC)

Limitation periods

Must file claims within specified timeframes:

• Singapore: 1 year typically
• Australia: 21 days (unfair dismissal)
• Hong Kong: 6-12 months depending on claim
• India: Varies, often 1-3 years
• Malaysia: 60 days to Industrial Court
• Philippines: 4 years (illegal dismissal)
• Others: Vary from weeks to years

Critical to act promptly

• Don't delay asserting rights
• Seek legal advice quickly
• Gather evidence immediately
• File within deadlines
• Extension may be possible but risky

Defenses to wrongful termination claims

Legitimate business reasons

• Genuine redundancy
• Economic necessity
• Restructuring
• Position elimination
• Properly executed

Just cause established

• Serious misconduct proven
• Proper investigation conducted
• Fair process followed
• Evidence supports decision
• Proportionate response

Procedural compliance

• Notice given as required
• Severance paid
• Due process followed
• Investigation conducted
• Proper documentation

Performance issues substantiated

• Clear expectations communicated
• Adequate training provided
• Warnings issued
• Performance improvement opportunity
• Fair assessment

Economic considerations

• Financial difficulties proven
• Last resort action
• Fair selection criteria
• Proper consultation
• Severance provided

Preventing wrongful termination claims

Document everything

• Performance issues contemporaneously
• Warnings and improvement plans
• Investigation findings
• Consultation meetings
• Decision rationale
• Consistent with policy

Follow fair procedures

• Investigate properly
• Give opportunity to respond
• Fair hearing
• Proportionate decision
• Appeal mechanism
• Written confirmation

Legitimate grounds

• Valid reason for termination
• Supported by evidence
• Not discriminatory
• Business necessity
• Reasonable decision

Consistent treatment

• Apply policies uniformly
• Similar situations similarly handled
• No discrimination
• No favoritism
• Documented precedents

Legal compliance

• Know local termination laws
• Required notice periods
• Severance obligations
• Procedural requirements
• Prohibited grounds

Seek professional advice

• Consult HR specialists
• Legal counsel for complex cases
• EOR provider guidance
• Labor relations experts
• Before terminating if uncertain

Common wrongful termination scenarios

High-risk situations

• Employee recently complained of discrimination
• On medical/maternity leave
• Whistleblower
• Union organizer
• Filed workers' comp claim
• Senior employee near retirement
• Protected class member
• Pregnant employee

Red flags

• No documentation of performance issues
• Sudden termination without warnings
• Inconsistent with past practice
• Shortly after protected activity
• Timing suspicious
• No investigation conducted
• Discriminatory comments

Employee actions after wrongful termination

Immediate steps

• Request termination letter in writing
• Review employment contract
• Gather all documentation
• Email communications, performance reviews
• Witness contact information
• Calculate damages
• Seek legal advice promptly

Filing a claim

• Determine appropriate forum
• File within limitation period
• Prepare evidence
• Consider settlement negotiations
• Understand process and timeline
• Assess costs vs. benefits

Alternative dispute resolution

• Mediation often required or encouraged
• Conciliation services (government)
• Arbitration if agreed
• Settlement discussions
• Often faster and less costly
• Confidential resolution

How EOR providers help prevent wrongful termination

When using AYP:

• Ensures terminations comply with local law
• Advises on proper procedures and grounds
• Conducts terminations professionally
• Documents all steps appropriately
• Handles required consultations
• Calculates severance correctly
• Processes final payments properly
• Reduces client exposure to claims

Cannot prevent all claims

• Client directs termination decision
• Performance management by client
• Client workplace conduct matters
• Claims may still arise
• EOR assists with defense if needed

Best practices summary

For employers

• Document performance continuously
• Follow fair procedures always
• Have legitimate, non-discriminatory grounds
• Comply with local laws
• Seek advice before terminating in risky cases
• Act professionally and respectfully
• Pay all entitlements properly
• Maintain confidentiality

For employees

• Know your rights
• Document issues and concerns
• Seek advice if terminated unfairly
• Act within limitation periods
• Consider all options
• Assess merits realistically
• Negotiate if possible

Red flags for employees

• No clear reason given
• Shortly after complaint/protected activity
• Discriminatory comments
• No warnings for performance
• Rushed termination process
• Pressure to resign
• Threats or intimidation

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