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What is a breach of contract?

A contract of employment is a legally binding agreement between you and your employer. A breach of contract happens when either you or your employer breaks one of the terms (for example, if your employer doesn't pay your wages, or you don't work the agreed hours).

Not all the terms of a contract are written down. A breach may be of a verbally agreed term, a written term, or an 'implied' term of a contract.

• More about the terms of a contract

Your pay has special extra protection and in some situations your employer may be prevented from taking money out of your pay even if this wouldn't be breaching the contract.

• Read more about deductions from wages

Breach of contract by your employer

If you think there's been a breach of contract, check the terms of your contract to make sure. If there has, you should try to sort out the problem directly with your employer first of all.

• More about how to sort out a problem at work

Mediation

Before taking legal action, you could try other ways of resolving the dispute if your employer agrees. For example, you might try mediation through Acas (or the Labour Relations Agency if you work in Northern Ireland).

• Find out more about mediation and conciliation

Legal action

If you can't sort the problem out with your employer, you can decide to take legal action. Think carefully before taking any legal action against your employer. Ask yourself what you want to achieve and how much it will cost.

Remember that you'll only get compensation (called 'damages') if you can prove real financial loss (for example, if your employer doesn't pay your wages) - there's no compensation for distress or hurt feelings. Because damages will only reflect your actual loss they're based on net pay (that is, after tax), not gross pay (before tax). Also remember that taking legal action might prompt your employer to take out a counter claim against you if they feel they have one.

If you are a member of a trade union, it would be a good idea to speak with them before taking any legal action, as some unions provide a legal advice service for their members. Otherwise, you could talk to a solicitor, or discuss your case with a Citizens Advice Bureau adviser.

• Information about trade unions
• Find a solicitor or legal advisor

If you do decide to take legal action, it can either be through an Employment Tribunal (Industrial Tribunal in Northern Ireland) or through a civil court.

Employment Tribunals

To make a breach of contract claim through an Employment Tribunal, your employment must have ended. There is also a cap of £25,000 on what a Tribunal can award (if you wish to claim more you cannot first seek £25,000 from a Tribunal and then go on to seek the balance from a civil court). There are restrictions on the types of claim that can be made (for example, you cannot make a personal injury claim through the Tribunal) and there is a three month time limit on making a claim.

• More about Employment Tribunals
• Industrial Tribunals in Northern Ireland - find out more Opens new window

Civil courts

To make a claim while you are still employed you will normally go through the small claims track of the county court or other civil court. There is a longer time limit than for an Employment Tribunal but there will normally be court fees to be paid.

• Information on making a claim on the HM courts website Opens new window

Breach of contract by an employee

If you breach your contract, your employer should try to settle the matter with you informally, but they can sue you for damages in the same way you can sue them.

Damages are only awarded for financial loss (for example, if you don't give enough notice, damages might be for the extra cost of hiring temporary staff to do your work, or for lost revenue. You would still have the right to wages you earned before you left, plus pay for untaken statutory holiday).

The most common breaches of contract by an employee are when you quit without giving (or working) proper notice, or when you go to work for a competitor when your contract doesn't allow it.

• More about notice requirements

Questions about breaches of contract

Most questions about breaches of contract can be answered by checking the terms of your contract.

Is it breach of contract to dock your pay for being persistently late?

You won't necessarily get paid for time that you're not at work but your employer should be careful about imposing extra penalties on top of this. If there's nothing in your contract that allows your employer to do so, they must pay you what you've earned and then decide whether to sue for any money they've lost because of your lateness.

• Unlawful deductions - read more

Your employer always pays you late - is this breach of contract?

Not paying at the agreed time will often be a breach of contract. If you can prove you suffered a financial loss (for example, having to pay overdraft fees), you can claim this back as damages. Talk to your employer first. If it keeps happening, you could try to get a court injunction to stop them repeating this breach.

What is wrongful dismissal?

This is a breach of contract in the way you were dismissed (for example, without being given proper notice or without following the procedures in your contract). You can take action in the same way as for any breach of contract.

Is it breach of contract to withdraw a job offer, or to turn it down, after it has been accepted?

Yes. The contract is made as soon as you accept the offer, and both sides are bound by the terms until the contract is terminated.

• More about how job offers work
• Contracts of employment - find out more

Can the terms of your contract be changed?

Some contracts allow the employer to make changes. If yours doesn't, you and your employer must agree any change. Making changes without agreement is a breach of contract.

• More about changing employment terms

Where to get help

The Advisory, Conciliation and Arbitration Service (Acas) offers free, confidential and impartial advice on all employment rights issues. You can call the Acas helpline on 08457 47 47 47 from 8.00 am to 6.00 pm Monday to Friday.

• Acas Opens new window

The Labour Relations Agency (LRA) offers free, confidential and impartial advice on all employment rights issues for residents of Northern Ireland. You can contact the LRA on 028 9032 1442 from 9.00 am to 5.00 pm Monday to Friday.

• Labour Relations Agency Opens new window

Your local Citizens Advice Bureau (CAB) can provide free and impartial advice. You can find your local CAB office in the phone book or online.

• Find your local Citizens Advice Bureau Opens new window

If you are a member of a trade union, you can get help, advice and support from them.

• Introduction to trade unions

Seek legal advice from a solicitor or advice agency on contract conditions.

• Seek legal advice from a solicitor or advice agency

More useful links

• Detailed guidance on contracts of employment from the Department for Business, Enterprise and Regulatory Reform (BERR) Opens new window
• Detailed guidance on contracts of employment from the Department for Employment and Learning in Northern Ireland Opens new window
• Advice for employers about the employment contract from Business Link Opens new window
• Advice for employers in Northern Ireland on employment contracts from nibusinessinfo Opens new window