It might be a long time since you last saw your employment contract, as most people just sign it on their first day and get on with their job. In this case you might not even know your employer has breached the terms. That said, on further inspection, perhaps you’ve noticed something untoward occurring?
Do you think your employer might have breached your contract? If you have an employer who has decided to breach the terms of your employment contract, it is hard to know how to challenge it.
In this post, we’ll give you a brief employment contract definition, explain what constitutes a breach of contract and give some common examples. We will then give you some advice on what to do if your employer has breached your contract, including the option to sue for breach of contract. So, for all this, read on below.
Employment Contract 101: Your Questions Answered
An employment contract is a legally binding agreement between you and your employer. They can be either verbal or physical, and a breach of the agreed terms by either party is considered a breach of contract.
Where Might You Find An Employment Contract?
Usually, a contract will be legally recognised if it is written in:
• An employee handbook or company notice board
• In an offer letter sent to you by your employer
• Legal requirements, e.g. paying you the National Minimum Wage
• Collective agreements, which are negotiated agreements between employers and trade unions
What Should An Employment Contract Set Out?
Typically, the terms of an employment contract will set out an employee’s:
• Employment conditions
• Responsibilities
• Rights
• Duties
What Constitutes A Breach Of Employment Contract?
Employees and employers must stick to these terms until the contract ends, or the terms are changed (which is usually agreed by both parties). A breach of contract can occur even if you’re working without a contract of employment, as it doesn’t need to be physically written down to be legally binding.
In terms of those without a physical employment contract, the moment someone accepts a job, they have an unwritten contract with their employer. These verbal agreements exist even if you have a physical contract and are known as implied terms, these include:
• Employees not stealing from their employer
• Your employer providing a safe and secure working environment
• A legal requirement to provide a minimum of 5.6 weeks of paid holiday
• A necessary skill or license such as a driver’s license, to be able to do the job
• A regular tradition, such as paying a Christmas bonus to staff members
So, if you’re thinking of challenging your employer for breach of contract, finding one of these written or implied employment contract terms is the key. This proves their breach was against the terms, and you can pursue legal action.
Common Breaches Of Contract
As we’ve pointed out so far, a breach of contract is when either party – the employer or employee – doesn’t keep to the terms of the employment contract. To get an idea of when this might occur, we’ll start by giving you a list of common claims employees make against their employees for breach of contract. This way, you can see if your breach is similar, and whether it’s worth taking to court:
• Non-payment of wages or unlawful deduction of wages: the latter tends to be an easier claim.
• Non-payment of travel expenses: cannot claim these as unlawful deductions from wages.
• Non-payment of holiday pay: this is only a breach if your employment contract stipulates how much paid holiday you’ll get. However, if your employer doesn’t pay you the statutory minimum holiday pay, you can make a claim for lawful deduction from wages.
• Non-payment of contractual sick pay: it may be easier to make a claim for unlawful deduction from wages for this.
• Not being paid during your notice period: this only applies if you’ve been dismissed, of course.
• Not being paid in lieu of notice: if you’ve been dismissed without being offered your agreed notice period.
• Changes to your terms and conditions: in terms of where you work, your job duties, or where you work.
• Discrimination: for example, if you have to leave your job because the workplace moved but you can’t move to a new house because you’re disabled or because of childcare reasons.
• Not following the proper disciplinary procedures: if this leads to you losing out financially, you can sue your employer for breach of contract.
If any of these contract employment breaches are serious enough that you have to leave your job, it’s classified as constructive dismissal. For example, if your employer significantly docks your pay, or changes your working conditions to the degree that it forces you to leave your job.
It’s very difficult to make a claim for constructive dismissal. So, if you’re really struggling in your job and you feel you need to resign, you should speak to a lawyer or to your local Citizens Advice Bureau before making that decision.
What To Do If Your Employer Breaks Your Employment Contract
Now that we’ve covered what employment contracts are and what a breach might look like, you’re probably at the stage where you’ve decided whether your employer has breached the terms or not. If you believe they have, then this is how you go about claiming a breach of contract.
Start With Mediation
One thing to consider before you decide to take legal action against your employer, is to try mediation. This where you and your employer come up with a solution, with the help of a third party, that both sides can accept.
Mediation is a quicker, less expensive, and less stressful action than taking your employer to court. Organisations like the Labour Relations Agency (LRA) offer professional mediation services.
Consider A Conciliation
You could also consider conciliation, which is basically the same as mediation but is normally used where there is a particular legal dispute rather than more general problems.
Taking Legal Action
If your attempts to agree on a solution through mediation fail, then it might be time to take legal action. Think long and hard before you decide to take legal action against your employer because you might end up losing more than you gain.
You need to ask yourself what you want to achieve and how much it will cost. You’ll only get compensation, or ‘damages’, if you can prove you’ve suffered actual financial loss. So, consult the financial examples we mentioned in our list of common breaches earlier in the post.
Also, prompting legal action against your employer might force them to take out a counter claim against you if they feel they have one. Make sure your actions haven’t violated your employment contract either before you decide to take legal action.
If you want to know what your legal standing is before you make this decision, seek legal advice from a trade union, if you’re part of one, or a solicitor who specialises in employment contract law.
Industrial Tribunal Or Civil Court?
If you decide to take legal action, the two places you can take your case are through an industrial tribunal or a civil court. To make a claim through an industrial tribunal it’s important to know these facts:
• Your employment must have ended to make a claim.
• There is a cap of £25,000 on what they can award.
• You can’t seek £25,000 from the tribunal and then go to civil court and try there afterwards.
• There are restrictions on the type of claim you can make e.g. you can’t make a personal injury claim.
• There is a three-month time limit on making a claim after you’ve been dismissed from employment.
• There are no fees for claims, and they are usually quicker than civil courts.
If you wish to go through a civil court, it’s a little different. In these cases, you can make a claim if you’re still employed, and court fees will usually need to be paid. What’s more, there is a longer time limit than for industrial tribunal claims, so your choice is simply down to your own discretion.
Want To Make A Claim?
That brings us to the end of our post. We managed to cover what employment contracts are, the common ways contracts are breached by employers, and what to do if you think you have a claim against them.
Hopefully there is enough information here to help inform your decision, and you manage to fix whatever dispute you’re having with your employer. Whether it be through a mediated solution or a tough legal battle, we hope that you get the outcome you were looking for.
