October 10, 2018

A contract of employment may be broken if you or one of your employees does not follow the terms of the contract.

A contract may also be broken if you change the terms without first agreeing on the changes with the relevant employee.

If an employee can prove that the contract has been breached, and they have suffered a financial loss because of it, they may be entitled to claim compensation.

Examples of breaches where compensation can be claimed include:

  • Non-payment of wages;
    • Employees will most likely seek to claim for unlawful deduction of wages, rather than damages for breach of contract for non-payment of wages.
  • Non-payment of travel expenses;
  • Non-payment of holiday pay;
    • Again, employees will most likely seek to claim for unlawful deduction of wages.
  • Non-payment of notice pay if an employee is dismissed;
    • This also includes non-payment in lieu of notice if the incorrect notice is given.
  • Changing the terms and conditions of an employee’s contract without their agreement.

If you want to amend an employee’s contract, you should consult with the relevant employees to seek their approval.

It is best to make sure you get the employee’s agreement in writing. 

If you attempt to impose a new contract without your employee’s consent, this will be a breach of contract, entitling your employees to bring a claim.

If the breach is fundamental and significant, then an employee may be able to bring a claim for constructive dismissal.

Failure to follow the correct grievance, disciplinary or dismissal procedure

If you fail to follow one of the above procedures correctly, an employee may be able to claim financial compensation if they can show that this has resulted in a loss to them.

To deter an employee from bringing a claim, it is best practice to try and resolve the matter informally, before they decide to take the matter any further.

Most employees will be entitled to bring a claim.

However, there may be certain qualifying conditions that need to be met.

An employee can only bring a claim for breach of contract to an employment tribunal if they are no longer working for you.

If they are still employed by you, they can bring a claim to a civil court.

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About the author 

James Rowland

James is the Commercial Director at Neathouse Partners and regularly writes articles surrounding issues in HR & Employment Law. Outside of the office, James is a keen Cricketer, playing in the Cheshire League for Nantwich CC. He also loves going to watch his football team, Crewe Alexandra. Feel free to connect with James on LinkedIn.

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