A breach of employment contract occurs when either an employer or an employee fails to adhere to the terms and conditions set out in an employment contract. This legal agreement outlines the responsibilities, rights, and obligations of both parties. When these are not fulfilled, it can lead to a breach with legal implications. At Stephensons, we have extensive experience advising individuals on all aspects of employment law, including breaches of contract.
Understanding the employment contract
An employment contract can be written, verbal, or implied, and it typically includes details such as job title, salary, working hours, holiday entitlement, notice period, and other terms of employment. The contract may also include clauses related to confidentiality, restrictive covenants, and redundancy procedures. Even if not all terms are written down, the law can imply certain conditions into every contract, such as the duty of mutual trust and confidence.
Understanding the precise terms of your employment contract is vital in determining whether a breach has occurred. In many cases, what constitutes a breach may not be immediately clear without a full legal review of the agreement and the events in question.
Common examples of a breach of employment contract
Breach of contract claims can arise in a wide range of workplace situations. Some of the most common examples include:
- Failure to pay agreed wages or bonuses
- Unlawful reduction of hours or change in job responsibilities
- Wrongful dismissal or failure to give proper notice
- Non-payment of contractual benefits such as holiday pay or pensions
- Refusal to allow an employee to take statutory or contractual leave
- Violation of restrictive covenants after employment ends
Each of these situations involves a breach of one or more terms of the employment contract. At Stephensons, we analyse the facts and advise whether a breach has occurred and what remedies may be available to the employee.
Implied terms and mutual obligations
Not all terms of an employment contract are written down. UK employment law recognises the existence of implied terms—obligations that are understood to exist, even if they are not explicitly documented. One such example is the mutual duty of trust and confidence, which requires both employer and employee to act in a manner that does not damage the relationship of trust between them.
If an employer acts in such a way that fundamentally breaches the implied term of mutual trust and confidence—for instance, through bullying, harassment, or arbitrary disciplinary action—an employee may have grounds for constructive dismissal, which itself is a form of breach of contract.
Constructive dismissal and breach of contract
Constructive dismissal arises when an employee resigns due to breaches of the employment contract by the employer that make continued employment untenable. This is often a response to significant breaches, such as unilateral demotions, non-payment of wages, or a toxic work environment.
To succeed in a constructive dismissal claim, an employee must typically show the following:
- There was a serious breach of contract by the employer
- The employee resigned because of this breach
- The resignation happened without undue delay following the breach
Constructive dismissal claims can be complex, and the evidentiary threshold is high. Our team at Stephensons can provide expert legal guidance on the merits of your claim.
Wrongful dismissal
Wrongful dismissal refers to a breach of contract that arises when an employer terminates an employee’s contract without adhering to the contractual notice period or in breach of other contractual terms. Unlike unfair dismissal, which is a statutory claim, wrongful dismissal is purely a contractual issue.
If an employee is dismissed without notice where notice is required, or if the employer fails to follow the correct disciplinary or redundancy procedures stated in the contract, a wrongful dismissal claim may be appropriate. Compensation in such cases is typically limited to the financial loss suffered as a result of the breach—usually equivalent to the wages the employee would have earned during the notice period.
Remedies for breach of employment contract
The remedies available following a breach of employment contract depend on the nature and seriousness of the breach. Common remedies include:
- Financial compensation (also known as damages)
- The enforcement of specific contract terms
- Injunctions to prevent ongoing breaches (for example, preventing poaching of clients)
Compensation will typically be awarded to place the employee in the position they would have been in had the contract been properly performed. It is essential to act quickly in such matters, as delay can sometimes affect your right to claim.
Time limits for bringing a claim
Employment contract disputes are typically dealt with through the civil courts, although some claims, such as wrongful dismissal, can also be heard by the employment tribunal. For tribunal claims, the time limit is generally three months less one day from the date of the breach or dismissal.
Court claims for breach of contract must normally be brought within six years of the date of the breach. However, it is advisable to take legal advice promptly as shorter time limits may apply in certain contexts. Stephensons can assist you in identifying the most appropriate forum for your claim.
Do verbal agreements count?
Verbal agreements can form part of an employment contract and can be enforceable in the same way as written terms. However, proving the existence and specifics of a verbal agreement is often more challenging. Courts and tribunals will rely on evidence such as correspondence, witness testimony, and workplace practices to assess the credibility of a verbal agreement.
While verbal agreements are legally binding, having clear written terms protects both employees and employers and reduces the likelihood of disputes. If you believe a verbal agreement has been breached by your employer, it is crucial to document everything and seek legal advice as soon as possible.
How to respond to a breach of contract
If you believe that your employer has breached your employment contract, the first step should be to address the issue informally, if possible. Raising the matter through internal procedures such as a grievance process may resolve the issue quickly and without further escalation.
If informal steps are unsuccessful or inappropriate, more formal legal action may be necessary. This could include making a claim for breach of contract, pursuing a constructive or wrongful dismissal claim, or seeking an injunction to prevent further breaches. Stephensons offers tailored advice to help individuals understand their options and navigate the process with confidence.
Mitigating losses
In breach of contract claims, employees have a duty to mitigate their losses. This means taking reasonable steps to reduce the financial impact of the breach, such as seeking alternative employment or applying for benefits. Failure to do so may affect the level of compensation awarded.
Our solicitors at Stephensons will advise you on how to mitigate your losses effectively and ensure that your claim is prepared and presented in the strongest possible way.
Employer defences to breach of contract claims
Employers may defend a breach of contract claim by arguing that:
- No breach occurred
- The employee failed to mitigate their losses
Anticipating and countering such defences is key to building a successful case. Our experienced employment solicitors can help assess the strength of your claim and represent your interests throughout the process.
Why choose Stephensons for breach of contract advice
Stephensons has a long-standing reputation as one of the UK’s leading law firms in employment law for individuals. Our solicitors have years of experience in advising employees on breach of employment contract issues and representing them in both tribunals and courts.
We understand how stressful and disruptive a breach of contract can be, especially when it affects your livelihood and professional reputation. We provide clear, practical advice tailored to your specific circumstances. Whether you are dealing with non-payment of wages, a wrongful dismissal, or a fundamental breach of your employment terms, Stephensons is here to help.
Final note
To speak to one of our expert employment solicitors call 0161 696 6170 or fill in our enquiry form.
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