Contracts are a legally binding verbal or physical agreement between two or more parties. As well as recognising the rights of all parties, it also enforces their duties in relation to the agreement.
A breach of employment contract by an employee or employer can occur even when the terms of the contract isn’t physically written down.
In this piece, we highlight what constitutes a breach of employment contract. We also explore the possible repercussions should this happen.
What is a breach of contract in employment?
It’s what occurs when either party doesn’t adhere to the terms of an employment contract. There're two 'terms' of an employment contract, the:
- Express terms.
- And implied terms.
Express terms are explicitly agreed upon by both parties via the contract of employment.
On the part of the employee, the contract of employment typically details their:
- Working conditions.
- Working hours.
- Dress code.
- Other collective agreements made during the recruiting process.
For the organisation, the contract typically details their obligations including:
- Duty of care.
- Reasonable adjustments.
- Notice periods.
- Adhering to health and safety regulations.
- Avoiding discrimination.
A breach of implied terms of an employment contract, on the other hand, relates to breaking other obligations that weren’t explicitly set out in the contact.
For example, while there’s no wording referring to the theft of office equipment, but the implied agreement is employees shouldn’t steal from you.
There’s also implied terms of mutual trust and confidence. Meaning, both parties can't act in a way that could 'destroy or seriously damage' the relationship of mutual trust and confidence they have in each other.
A breach of this contract may lead to you dismissing the staff member or the employee resigning and claiming constructive dismissal.
On your part, the implied agreement is you’ll provide a safe and secure working environment for your staff.
Breach of employment contract examples
There’re various examples of employers and employee breaching their employment contract.
The most common examples of an employer breach of contract include:
- Unlawful reduction of staff pay.
- Wrongful dismissal.
- Changes to working hours and other terms of the employment contract without approval.
- Not paying for travel expenses, holiday entitlements and contractual sick pay.
- Withdrawing unconditional job offer after the candidate has accepted.
- Failure to follow appropriate procedures for grievances, disciplinary actions, and dismissals.
Examples of employee breach of contract include:
- Quitting without giving the appropriate notice period.
- Breaching restrictive covenants.
- Gross misconduct.
Can an employer sue an employee for breach of contract?
The short answer is yes. However, it shouldn’t be your first course of action.
If you believe an employee’s breached a term of their contract, the first step should be to try to settle the matter informally.
You may receive damages, but only if you can prove the business suffered financial losses from the actions on the employee.
So for example, if an employee quits their job without working their notice period and it leads to financial losses, you can sue for the losses.
Alternatively, if an employee breaches their restrictive covenants by accepting a job with a competitor or establishing a similar business to yours, you could apply to the courts for an injunction to stop them.
Contact Croner today for help with issues relating to a breach of employment contracts or other aspects of employment law. Call us now on 0808 145 3380.