What is the legal issue of unfair dismissal relating to the workplace, including the responsibilities of employers and employees regarding unfair dismissal?
What are the costs and/or benefits of abiding by unfair dismissal policies for employees, employers, and society?
In the US, the terms unfair dismissal and wrongful termination are distinguished in that unfair dismissal refers to ending employment based on unethical reasons but not necessarily unlawful reasons. In contrast, wrongful termination refers to ending employment based on reasons that violate the law.
The US enacts an "employment-at-will rule," which simply maintains that employment is a contract between employee and employer that can be broken at-will for any purpose. Other countries only permit dismissal for just causes, but the US favors "at-will employment" over job security because it allows for "freedom of contract [and] employer deference" (National Conference of State Legislatures, "The At-Will Presumption and Exceptions to the Rule"). Each state also has its own at-will laws. However, while at-will permits an employer to dismiss an employee for any reason, the courts have also carved out exceptions to make dismissal more difficult and more ethical.
One exception concerns dismissing an employee based on any reason that conflicts with any already existing public policy. For example, it is illegal for an employee to be dismissed for refusing to do an activity for the employer that is illegal, for reporting the employer as having violated a law, for reporting to jury duty, or for filing legal claims such as filing for workers' compensation ("The At-Will Presumption").
Courts have also ruled against dismissal cases if the dismissal violates an implied contract, not just a written contract. An implied contract would include any promise made orally by an employer or put in writing in the employer's handbook or written policies. One example of an oral implied contract would be an employer saying something such as, "We need good people around here, you've got a job for life!" ("The At-Will Presumption").
There are also a few states that "recognize an implied covenant of good faith and fair dealing in employment relationships" ("The At-Will Presumption"). Examples of acts of dismissal that could be considered a violation of good faith and fair dealing could be considered firing an employer just prior to reaching the age of being eligible to receive retirement benefits or firing a salesperson just prior to a "large commission on a completed sale is payable" ("The At-Will Presumption").
Hence, while our employment contracts permit employers to fire at-will, the employer also has a responsibility to uphold laws and ethical conduct; failing to do so makes dismissals legally questionable.