The dismissal of an employee when the employer is in breach of contract. The employee can found a common law action on the breach. An employee, summarily dismissed in breach of his notice and other contractual entitlement, will have a claim for damages unless the dismissal was justified under the employment contract. The risk is insurable by the employer under employment practices liability insurance and legal expenses insurances. Compare with unfair dismissal.

A director who trades on knowing that there is no reasonable prospect that the company will avoid going into liquidation, paying its debts and the winding up expenses is guilty of wrongful trading. The Insolvency Act 1986, s.214, provides that a civil remedy may lie against the director who may then become personally liable to contribute to the assets of the company for the benefit of creditors. See DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE.