Breach of Employment Contract
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Breach of Employment Contract
Employment contracts are legally binding, and should an employer or employee fail to meet the terms of an agreement, they may be liable for a breach of employment contract claim. If this happens, depending on the type and severity of the violation, the aggrieved party can either raise concerns, make an official complaint/warning, or pursue legal action.
At Summit Law, our expert employment contract dispute lawyers help both businesses and employees with a wide range of breach of employment contract matters, including:
- Gross misconduct
- Termination of employee contracts
- Employee notice period issues
- Employment contract changes
- Violation of working hours/conditions
- Non-payment of wages/benefits
- Unfair dismissal claims
- Restrictive covenant breaches
- Disclosure of confidential information
- Negotiating exit packages
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Breach of employment contract by employee
High-profile employment contract breaches, especially those that make the news, tend to focus on situations where employers have failed to meet their contractual and statutory obligations. But in many cases, we represent employers who have suffered a loss due to an employee’s breach of employment contract.
If an employee breaches the terms of their employment contract, employers may want to take action to set an example or to ensure it doesn’t happen again.
The course of action taken will depend on the type of breach. For example, if an employee repeatedly fails to turn up for work, the employer may decide to terminate their employment contract. On the other hand, if an employee leaves the business and breaches a restrictive covenant by immediately working for a competitor, the employer may want to take legal action to sue for any losses experienced because of the breach.
Legal action can also be used to stop a former employee from making any further breaches.
Examples of employee breaches of contract include*:
- Failure to comply with contractual obligations (e.g. to carry out the work they were employed to do)
- Disclosure of confidential information
- Restrictive covenant breaches (e.g. violation of the non-compete clause)
- Unauthorised absence
- Abandonment of employment
- A failure to provide adequate notice on resignation
- Unauthorised use of company resources
- Data protection infringements
- Violation of the code of conduct
* Without proper justification or agreement.
At Summit Law, we help our business clients get justice for employment contract breaches by current and former employees. Legal advice is strongly recommended to keep employers on the right side of the law and to protect them from retaliatory breach of contract/unfair dismissal claims.
Breach of employment contract by employer
If your employer has breached your employment contract, you can challenge this in several different ways. In the first instance, and where the breach is not severe, we recommend talking to your employer to see if you can agree to a satisfactory solution. Often, breaches happen because of a one-off mistake and can be easily rectified.
Where your complaint is not resolved to your satisfaction, you might consider making the complaint formal. Doing this forces your employer to take the matter seriously, and it provides an evidence trail you can use should the issue later get to court. Because, if you make a formal complaint, your employer is legally required to address this, provide a written outcome, and give you the right of appeal.
You should seek expert legal advice for more serious cases, or where your complaint is still unresolved. Crucially, where a breach occurs, you mustn’t ignore it. Because if you do, and you continue to work as normal, your employer’s lawyers could argue that you accepted the breach if the case ends up in court.
Examples of employer breaches of contract include*:
- Violation of working hours
- Violation of working conditions
- Non-payment of wages (either in full or in part)
- Failure to provide agreed benefits
- Improper termination
- Changes to contract without agreement
- Failure to comply with contractual obligations.
* Without proper justification or agreement.
And remember, whatever it says in the employment contract, at the very least, employers must give their employees their statutory minimum employment rights.
What action can employees take for a breach of contract
There are several ways employees can set things right following a breach of employment contract. However, not all remedies are suitable in all situations, and the nature and severity of the breach will dictate the next steps.
For example, as mentioned above, employees might want to raise less serious violations with their employers. And they can make formal complaints where necessary. Where disputes are not resolved, legal action may be required.
When a breach of contract is not easily resolved, mediation can help both parties to achieve a suitable resolution whilst minimising the emotional and financial effects. With mediation, both parties attempt to resolve the employment contract dispute with the help of an impartial mediator. While any agreements reached via mediation are not compulsory, the settlement can be made legally binding if agreed.
In some cases, mediation can help to mend a fractured relationship and make it possible for both parties to keep working together. However, after a breach, the employer/employee relationship often breaks down to a point where this is no longer viable.
In these situations, a settlement agreement is often the preferred option. Backed by many years of experience, our employment lawyers have successfully negotiated thousands of favourable settlement agreements for our clients. And, whether you are an employer or an employee, we ensure you get the very best deal possible.
Where mediation is unsuitable or where it has failed, our litigation lawyers can help you take legal action. There are two main options available to employees:
- Employment Tribunal
- Civil Claim
Civil cases are heard at either the County Court or the High Court (depending on the claim’s value). A judge hears the claim, and both sides can present their side of the argument, share evidence, and call witnesses. The judge will decide on the outcome of the claim, who should pay the litigation costs, and how much these costs should be (the loser usually has to pay the winner’s fees).
If an employee is still employed by the employer they are claiming against, or if their claim is worth more than £25,000, they will need to make a civil claim. However, some claims must first be lodged with an employment tribunal before proceeding to a civil court.
Employment tribunals specialise in resolving disputes related to employment law. They have specific expertise and knowledge in handling unfair dismissal, discrimination, wages, and other employment-related issues.
An employment tribunal is less formal than making a civil claim. Employment tribunals were also designed to be cheaper and quicker than formal court proceedings as they specifically handle employment disputes. This can be advantageous, especially when a prompt resolution is desired.
According to the Ministry of Justice:
- Employment tribunals have increased by 13.42% since the beginning of the COVID pandemic
- The most common type of tribunal claims of the last ten years relate to working hours, unauthorised wage deductions, and unfair dismissal
- The success rate of employee claims at employment tribunal has risen over the last decade. Although in 2020/21 almost a quarter of all cases were settled out of court.
Certain employment claims can only be heard at an employment tribunal (e.g. unfair dismissal and breaches of the Equality Act). Moreover, employees can only make a breach of contract claim at an employment tribunal if their employment has ended.
To make a breach of contract claim at an employment tribunal, the claim must arise, or be outstanding, on termination of the employee’s employment. In addition, there is a three-month (plus one day) time limit for making a claim, and the maximum damages that can be awarded is £25,000. In employment tribunal cases, the loser doesn’t usually have to pay the winner’s legal fees.
If you have missed the deadline for making your claim at an employment tribunal, you may still be able to claim via the civil court, where the time limit for doing so is six years.
In some cases, an employment tribunal is the best avenue for making a claim, while a civil claim is more appropriate in others. At Summit Law, we will discuss your options and present the pros and cons. Ultimately, we ensure you make the most robust case possible, whatever legal action you decide to pursue and whatever route you choose.
Types of employment contract breaches
An employment contract sets out the terms by which an employee agrees to work, the work they will do, the payment and benefits they will receive from the employer in return for doing the work, and the rights and responsibilities of both parties.
Employment contracts bind both parties to certain standards – even if they are not explicitly set out in the written agreement. This is because employment contracts contain both express and implied terms.
- Express terms are specified in the employment contract (or verbally agreed)
- Implied terms are either established in law, or are a standard custom/practice.
A breach of employment contract can happen if either the express or implied terms are violated.
Material (or serious) breaches happen when either party fails to fulfil an important part of the employment contract. For example, if the employer consistently fails to pay the employee, or the employee deliberately discloses confidential company information to a competitor.
Material breaches tend to involve substantial deviations from the terms and conditions outlined in the employment contract. Intentional or serious misconduct is often involved, and dismissal, resignation, and legal action follow.
A non-material (or minor) breach happens when an employment contract has been broken, but not seriously enough to undermine the contract.
A minor breach might occur if an employee is required to attend a team meeting every week, but misses one meeting due to personal circumstances. Or, where the contract states that an employee is entitled to a monthly mobile phone allowance to cover work-related communication expenses, but the employer fails to provide the funding one month until the missed payment is highlighted.
Non-material breaches often involve accidental or isolated incidents and do not substantially impact the employer/employee relationship. Such violations can usually be resolved with an apology and swift remedial action where required.
Breach of employment contract examples
An employer consistently pays late
Not paying wages at the time agreed is a breach of contract. If this happens once, and there is a legitimate reason or error behind the late payment, it is unlikely that employees will take legal action. But, if it happens regularly, and employees can demonstrate that they have suffered a financial loss because of the late payments, they will have a potential claim.
Violation of the termination clause
Imagine an employer terminates an employee without following the agreed termination procedures set out in the employment contract (e.g. not providing a valid reason, not giving notice, etc.). In that case, it is likely to be a breach of contract, and the employer would have a claim for wrongful dismissal.
Change in job duties
An employer cannot unilaterally and significantly change an employee’s job duties without their consent and without a legitimate reason. As such, making changes without agreement by the employee could be considered a breach of the employment contract.
Employment breach of contract UK - FAQs
- Yes, because the employment contract is legally binding, an employer can sue an employee for breach of contract and ask for financial compensation for any damages suffered because of the breach. However, before taking legal action, employers should attempt to resolve their disputes via informal discussions and mediation. Legal advice is incredibly valuable during the early negotiation period.
- No, while most employment contracts are in writing, the agreement is still legally binding if made verbally. However, to ensure what is expected by the employer and the employee in fully understood, and to avoid future disputes, having a single document that includes the terms and conditions of employment is highly recommended.
- A breach of an employment contract occurs when one party fails to fulfil their obligations as outlined in the agreement. However, as well as the violation of any terms or conditions set out in the contract, breaches also include the breaking of any implied terms.
- For example, both parties owe each other a “duty of mutual trust and confidence” toensure a productive employment relationship. And employers owe employees a “duty of care” to protect their health, safety, and well-being while at work.
- Yes, the employment contract is made as soon as an employee accepts an offer made by an employer.
- Employment tribunals deal with all kinds of disputes related to employment law. This includes unfair dismissal, discrimination, wages, and other employment-related issues. Certain types of employment claims can only be heard at an employment tribunal (e.g. unfair dismissal and breaches of the Equality Act).
- If all attempts to resolve a breach of contract have failed, including mediation, the case may need to be progressed to an employment tribunal.
Contact our breach of employment contract lawyers today
Do you need expert support with an employment contract dispute? Our specialist employment lawyers are here to help you – no matter how complex the issues or fraught the discussions have become.
We support and advise both employees and employers with their breach of employment contract problems, and we help our clients to pursue and defend employment contract claims.
Get in touch with our employment contract solicitors today by calling 020 7467 3980 or complete the enquiry form on this page.
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