Breach of Contract

What is a breach of contract?

A contract of employment constitutes a legally binding agreement between yourself and your employer. A breach of contract happens when either you or your employer breaks one of the terms. For example, if your employer doesn’t pay your wages, or you don’t work the agreed hours, this could constitute a breach of contract.

Not all the terms of a contract are written down. A breach may be of a verbally agreed term, a written term, or an ‘implied’ term of a contract.

Your pay has special extra protection and in some situations your employer may be prevented from taking money out of your pay even if this wouldn’t be breaching the contract.

Has my employment contract been breached?

If you think there’s been a breach of contract, check the terms of your contract to make sure. If there has, you should try to sort out the problem directly with your employer first of all.

What is mediation?

Before taking legal action, you could try other ways of resolving the dispute if your employer agrees. For example, you might try mediation through Acas (the Advisory, Conciliation and Arbitration Service).

Can I sue my boss for breach of contract?

If you can’t sort out the problem with your employer, you could decide to take legal action and sue your boss. The first step will be to write a formal letter of grievance.

Think carefully before taking any legal action against your employer. Ask yourself what you want to achieve and how much it will cost.

Remember that you will only get compensation (called ‘damages’) if you can prove real financial loss, for example, if your employer doesn’t pay your wages – there’s no compensation for distress or hurt feelings.

Also remember that suing your boss might prompt your employer to take out a counter-claim against you if they feel they have one.

If you are a member of a trade union, it would be good to speak with them before taking any legal action, as some unions provide a legal advice service for their members. Otherwise, you could talk to a solicitor, or discuss your case with an Acas adviser.

Can I go to an Employment Tribunal?

If you do decide to take legal action, it can either be through an Employment Tribunal or through a civil court.

To make a breach of contract claim through an Employment Tribunal, your employment must have ended. There are restrictions on the types of claim that can be made, for example you cannot make a personal injury claim through the Employment Tribunal.

Employment Tribunals are cheaper and often quicker than the civil courts.

Can I go to a civil court?

To make a claim while you are still employed you will normally go through the small claims track of the county court or other civil court.

The time limit for making your claim to a civil court is longer than the time limit for complaining to an Employment Tribunal. But the award that a civil court could make is unlimited.

What happens if I breach my employment contract?

If you breach your contract, your employer should try to settle the matter with you informally. If your employer suffers a financial loss because of your breach, they could make a complaint for damages against you.

Your employer would normally use a county court for a breach of contract claim. The only way your employer would be able to make an application to an Employment Tribunal is in response to a breach of contract claim that you have made.

Damages are only awarded for financial loss. For example, if you don’t give enough notice your employer could claim for damages from the extra cost of hiring temporary staff to do your work, or for lost revenue. You would still have the right to wages you earned before you left, plus pay for any statutory holiday which has not been taken.

The most common breaches of contract by an employee are when you quit without giving (or working) proper notice, or when you go to work for a competitor when your contract doesn’t allow it.

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This page was last updated on 1/12/2014

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