Breach of employment contract

When it comes to employment, the contract signed between the employee and the employing company is a vital legal document.

At its core, these documents outline what is required from an employee to receive payment from the company. This means that the employee has his or her duties outlined, as well as his or her salary and other basic issues. However, an employment contract also outlines further specifications, such as non-disclosure agreements, restrictions on sharing company data and other issues.

Needless to say, the breach for such a contract can be quite serious and, depending on the breach itself, there can be a number of different outcomes. Our specialist employment team has plenty of experience in this field and we can help find a solution whether by agreement or through the Courts or an Employment Tribunal.

What Is A Breach?

To put it simply, a contract breach occurs when either party fails to uphold their end of the contract. For instance, an employee is required to work for the expected amount of time, while an employer is required to ensure regular payments.

Furthermore, there are also other issues outside of these express terms. An employment contract will also include implied terms which are not necessarily written down but which both the employer and employee are required to comply with. This would include that both parties will act with mutual trust and confidence towards one another.

What if an Employee breaches their contract of employment?

When minor breaches of the contract occur, such as lateness, these may be dealt with informally or by use of the early stages of a Disciplinary Procedure.

In some cases, the company may be able to claim damages for losses suffered due to the employee’s breach. For instance, if a member of staff quits without giving contractual notice, the employing company may be able to sue for damages: specifically, these relate to any losses suffered due to lack of staff in the short term or expenses acquired from having to quickly replace this employee.

Furthermore, many contracts restrict employees’ post-employment activity. As such, if a staff-member abruptly quits, as described above, to work for a competitor, or him or herself, the employer may be able to claim for an injunction, especially if the employee is in possession of confidential material that they are not allowed to share or possess, once their employment is terminated. If the contract of employment contains Post Termination Restrictive Covenants, it is important that an employee understands the potential ramifications in the event of a breach.

What if the Company breaches a contract of employment?

When the company breaches the contract, an employee may sue for damages if they have lost money as a result. However, claims for breach of contract can only be brought at the Employment Tribunal when the contract has ended. Claims for breach of contract at the Employment Tribunal are also capped at £25,000. If a breach of contract claim is likely to be more than the maximum cap and employee should consider instigating a claim in the County Court.

Many contracts also state circumstances in which an employment contract can be terminated. If a staff member feels his or her contract was terminated unfairly, he or she may also be able to bring a claim for Unfair Dismissal. For instance, an employer cannot terminate a contract because an employee does not work additional hours that are not stated in the document itself.

Furthermore, if an employer fails to pay an employee or pays less than the stated amount, this could amount to an unauthorised deduction of wages. An employee could take this up via an Employment Tribunal, likely resulting in an award equal to the lost pay.