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There are two types of terms within the contract - express and implied. Express terms are those which are expressed orally or actually written into the contract, some of which you are legally obliged to include within a 'written statement of particulars' which your employee is entitled to within 8 weeks of the start of their employment. Details such as job title, rate of pay, holiday entitlement and pension schemes must be included.
Implied terms refer to those that are too obvious to mention or those which both you and your employee would assume to be incorporated into the contract, for example statutory rights such as equal pay, minimum wage, statutory sick pay and freedom from discrimination on the grounds of sex, race or disability. There is also an implied term of trust and confidence which applies to both you and your employee.
If you or your employee break either the express or implied terms of a contract of employment or any other contract connected with employment then a breach of contract occurs. If an employee of yours suffers a loss as a result of any such breach, they may make a claim for breach of contract either in the employment tribunal or in the civil courts.
An employment tribunal can only hear a breach of contract claim if the claim arises or is outstanding on the termination of the employee's employment, and there are other restrictions such as the claim cannot relate to personal injury or a restrictive covenant. The same rules apply to both employee claims and any counter claims made by you. If your employee resigns as a result of a breach of contract on your part, they may also have a claim for constructive dismissal.
The tribunal may award damages to an employee of up to £25,000 for their loss, for example an agreed bonus, or pay in lieu of notice. If the employee wishes to claim more, they must go straight to the civil court – they 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.
You may make a counter-claim to the tribunal if you suffer a loss through the employee's failure to observe the terms of their contract of employment, but you can only do this if the employee has already presented a tribunal claim and not since withdrawn or settled it and you cannot initiate a claim against your employee in the employment tribunal. If the dismissed employee withdraws their breach of contract claim after you have made a claim, your counter-claim can still be considered by the employment tribunal.
An employee has three months after the date of their termination of employment to bring a breach of contract claim to an employment tribunal, regardless of whether or not an internal grievance or appeals procedure is being used.
If you would like more detailed information about what constitutes a breach of contract, Ashby Cohen can help you. We specialise in employment law cases, and our years of experience as employment lawyers make us uniquely qualified to assist you with any breach of contract issues you may have. Please contact us for an initial free consultation.
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