Wrongful dismissal alternatively known as wrongful termination of a contract of employment or unfair dismissal relates to the wrongful repudiation of a contract. Wrongful termination of a contract of employment may stem from a variety causes attributable to either party. However in most cases, it is the employer who is responsible for most cases of wrongful dismissal. This is because workers are most often reluctant to terminate the labour relation even in cases of gross misconduct by the employer.

Wrongful termination of the contract of employment like every breach of contract entitles the aggrieved party to damages. The quantum of damages will generally depend upon the circumstances of each case presented before the competent court.


The mere fact that a worker has been dismissed doesn’t make the dismissal unlawful. In most cases of dismissal, the issue is whether the circumstances of the dismissal was fair or not. If the circumstances surrounding the dismissal was not fair, then it will considered wrongful dismissal taking into consideration the circumstances of each case. The decision upon the fairness or unfairness in the dismissal of a worker may depend on the terms of the contract as well as other surrounding circumstances.

The industrial relations act of 1974 laid down two test of unfairness;

  • An objective test, and
  • A subjective test.

Objective or Procedural Test

In order for the dismissal not to be unlawful, the employer must prove that there existed a prima facie reason as an objective fact which entitled him to dismiss the worker either summarily or without notice. For the employer to establish a prima facie case therefore, he must show that the primary reason for dismissal either;

  1. Related to the capabilities or qualification of the employee for performing the work he was employed to do,
  2. Related to the conduct of the employee,
  3. That the employee was redundant,
  4. That the employee could not continue to work in the position he held without contravention, whether on his part or that of his employer of a duty or restriction imposed by or under an enactment, or
  5. That it was some other substantial reason of a kind such as to justify the dismissal of the employee holding a position which the worker held.

Substantial or Subjective Test

After establishing a prima facie objective reason, the employer must show that the reason was substantive enough for him to have considered real and serious to warrant the dismissal of the worker taking into account any procedural unfairness that might arise or might have occurred. The appreciation of the substantive nature of the reason is left to the employer but subject to the control of the court. The employer must prove if challenged that a reasonable man in his place would have considered the reason as substantive.

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