Employment tribunals - claims for breach of contract
A contract may be broken if either you or your employer does not follow a term in the contract. This is known as a breach of contract. For example, if your employer doesn't pay you in lieu of notice which you are entitled to under your contract, this would be a breach of contract.
If your employer breaks your contract, you should try and sort the matter out with them informally first.
If this doesn't work, you could try raising a grievance against your employer if you have time within the time limit to make a tribunal claim. You may be entitled to compensation if your employer has breached your contract and you have lost out financially as a result.
What counts as a breach of contract
You have a contract of employment with your employer. This might be in writing or you might have discussed it. If your employer doesn't keep to the terms of the contract, and makes changes without your agreement, this is known as a breach of the contract.
If you can prove you have lost out financially because of a breach of the contract, you might be able to claim compensation.
Counterclaims by your employer
You should be aware that if you make a breach of contract claim, your employer could make a counterclaim. For example, they could make a claim against you if you’ve been overpaid and owe them money. If they can prove that, they can deduct that money from any compensation you might get.
You could be claiming compensation for one of the following breaches of the contract:
- non payment of wages. However, it may be easier to make a claim for unlawful deduction from wages for this
- non payment of travel expenses. These cannot be claimed as unlawful deductions from wages
- non payment of holiday pay. This is only a breach of contract if your contract says how much paid holiday you’ll get. If you haven’t been paid for untaken holidays when you leave your job, it’s only a breach of contract if your contract says you’ll be paid for this. If your employer doesn't pay you the statutory minimum holiday pay, you can make a claim for unlawful deduction from wages, whether or not your employment has ended. Find out about your statutory holiday entitlement
- non payment of contractual sick pay. However, it may be easier to make a claim for unlawful deduction from wages for this
- not being paid during your notice period if you have been dismissed
- not being paid pay in lieu of notice if you have been dismissed without the correct notice
- changes to your terms and conditions, such as changes to your job duties, or your pay, or where you work. For example, if your employer takes back your company car when it is a term of the contract that you have a company car for all the time that you are an employee (including your notice period). If the changes mean you have lost out financially, for example, you have had to hire a car for your notice period, you may be able to claim compensation for this loss. You may be able to make other claims for these reasons. For example, if you have to give up your job because your workplace moves, and you cannot move because of childcare reasons, or because you have a disability, you may be able to claim discrimination
- not following the correct disciplinary, dismissal or grievance procedures set out in the contract. If your employer's failure to follow these procedures means you have lost out financially, you may be able to claim compensation for this loss.
If the breach of contract is very serious - constructive dismissal
Constructive dismissal occurs when your employer seriously breaches your employment contract, by taking action such as cutting your pay, or changing your working conditions, with the result that it is impossible for you to continue working there and you are forced to resign.
Is very difficult to make a claim for constructive dismissal, and if you think it is impossible for you to carry on working you should seek help from an experienced adviser immediately, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB. This is because there is a time limit from the date of dismissal within which you must make a claim.
Can you make a breach of contract claim to an employment tribunal?
You can only make a breach of contract claim to an employment tribunal if you are no longer working for your employer. If you are still working for your employer, you have to make a breach of contract claim to a court. In England and Wales, to the county court or the High Court. In Scotland, to the sheriff court or the Court of Session.
Some breach of contract claims, such as non-payment of wages, non-payment of holiday pay and non-payment of contractual sick pay, are also unlawful deduction from wages claims. In these cases, it may be better to make a claim for unlawful deduction from wages to an employment tribunal, rather than claiming breach of contract to a court.
A claim for unpaid notice or pay in lieu of notice should be made as a breach of contract claim rather than a claim for unlawful deduction from wages. If you have not been paid for your notice period or have not been given a payment in lieu of (instead of) being given notice, these claims are called wrongful dismissal. You can claim compensation equal to the amount of notice pay that you should have received, with tax and national insurance deducted.
These claims can be made to an employment tribunal, unless you are claiming more than the set limit or if you have missed the time limit to make a claim to a tribunal. In these cases, you will have to make your claim to a court. If the tribunal agrees with your claim, they can award compensation for your financial loss up to a maximum of £25,000.
Compensation for breach of contract will be in addition to any compensation you can also claim for unfair dismissal or discrimination. Your employer should always follow a proper dismissal procedure before dismissing you. Otherwise, the dismissal may be unfair.
- How to make a claim to a tribunal
- What is a contract of employment
- Claims for unlawful deductions from wages
- Employer withholds your pay
- Your employer's duty to follow a proper procedure if they are dismissing you