Explore Breach of Employee Contract Legislation

We are often asked questions by employees about their contracts of employment such as….

“My employer has never given me a written contract. Do I have a contract with my employer?”

“Does my employer have to provide me with a written contract?”

“I have never signed my contract, am I bound by it?”

A contract of employment comes into being when an employee agrees to work for an employer in return for pay whether or not the details of employment are in writing. An employer is legally obliged to provide an employee with a written statement of particulars within eight weeks of starting employment, which should include key terms, such as:

  • Job title.
  • Rate of pay.
  • Holiday entitlement.
  • Pension schemes.

However, most employers will provide a much more detailed contract of employment which includes clauses to cover sick pay, mobility, company equipment, pay in lieu of notice, garden leave and post termination restrictive covenants; these details, as it were, govern the employment relationship.  There could also likely be other policies which are not necessarily contractual such as disciplinary and grievance procedures, bonus and commission policies. 

Within any contract of employment, there are two types of terms – express and implied.

Terms expressed orally or actually written into your contract are express terms. Implied terms refer to those that are too obvious to mention, or terms both employee and employer would assume to be incorporated into the contract. These include statutory rights, such as:

  • Equal pay.
  • Statutory Sick Pay.
  • Freedom from discrimination on the grounds of sex, race, religion, age, sexual orientation,  or disability.

There’s also an implied term of trust and confidence which applies to both employer and employee.

VARYING CONTRACT TERMS

Contractual terms can only be amended with the employee’s consent. In addition, the law greatly restricts the changes that can be made to an employee's contract if they have transferred to a new employer and is subject to the TUPE (Transfer of an Undertaking Protection of Employee) Regulations. 

An employer who is faced with making changes to an employee’s contract of employment should consult with the employee regarding the proposed changes. Factors such as the employee’s length of service, how many employees are likely to be affected by the change and the timing of the consultation will impact on the approach the employer takes. If you are an employee whose employer is trying to amend your contract then please call us to discuss this further.

BREACH OF CONTRACT

As an employee, if you feel your employer has breached your contract and you suffer a loss as a result, you may make a claim either in an employment tribunal or in the civil court.  In cases where an employee resigns because the employer has breached a fundamental term of his or her contract, the employee may also have a claim for constructive dismissal.

Although an employer cannot initiate a breach of contract claim in the employment tribunal an employer can do so in the civil courts for example if an employee fails to to work out his or her notice period and this costs the business money ie: through the non completion of a job; or if the employee is in breach of his or her post termination restrictive covenants.

An employment tribunal can only hear a breach of contract claim if it arises or is outstanding on the termination of the employee’s employment. There are other restrictions, too, such as the claim cannot relate to personal injury or to a restrictive covenant. There is also a limit on the damages the tribunal can award an employee for breach of contract which is capped at £25,000. If an employee’s claim is worth more than £25,000 then he or she must go straight to the civil court, as an employee cannot make an initial claim for part of the compensation from an employment tribunal and then go on to seek the balance from another court.

COUNTER CLAIMS

It’s important to be aware that if an employee brings a breach of contract claim against his or her employer the employer may counter-claim against the employee if the employer suffers a loss, through the employee’s failure to abide by the terms of his or her contract. 

TIME LIMITS

An employee has three months after the date of his or her termination of employment, to bring a breach of contract claim to an employment tribunal, regardless of whether the employee has pursued an internal grievance or appeals procedure. Within this 3-month period the employee must contact ACAS to go through early conciliation.  It is important to note that a claim will not be accepted by the employment tribunal unless the employee has first been through early conciliation and been issued with an early conciliation certificate.  The early conciliation process will press pause on the time limit (or limitation clock).  However, the rules relating to limitation and early conciliation are complex so please contact us if you require further information.

In the civil courts the employee has 6 years (from the date of breach) to bring a breach of contract claim. Although, for obvious reasons, it is not advisable to bring any kind of claim, including breach of contract claims, at the last minute.

Please get in touch with us today for your initial free consultation