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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.

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.

• Being paid and payslips

• Employment contract terms

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.

• How to resolve 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 (the Advisory, Conciliation and Arbitration Service).

• Mediation, conciliation and arbitration

Legal action

If you can't sort out the problem with your employer, you could 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 will 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.

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 good 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 an Acas adviser.

• Acas Opens new window

• Employment advice contact details

• Joining a trade union

• Find a solicitor or legal adviser

Employment Tribunals

If you do decide to take legal action, it can either be through an Employment Tribunal or through a civil court.

To make a breach of contract claim through an Employment Tribunal, your employment must have ended. There are restrictions on the types of claim that can be made, for example you cannot make a personal injury claim through the Employment Tribunal.

Employment Tribunals are cheaper and often quicker than the civil courts.

• Employment Tribunals: an introduction

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.

The time limit for making your claim to a civil court is longer than the time limit for complaining to an Employment Tribunal. The award that a civil court could make is unlimited.

• Making a court claim for money (money, tax and benefits section)

Breach of contract by an employee

If you breach your contract, your employer should try to settle the matter with you informally. If your employer suffers a financial loss because of your breach, they could make a complaint for damages against you.

Your employer would normally use a county court for a breach of contract claim. The only way your employer would be able to make an application to an Employment Tribunal is in response to a breach of contract claim that you have made.

Damages are only awarded for financial loss. For example, if you don't give enough notice your employer could claim for damages from 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.

• Notice pay

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 are 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 have earned. They should then decide whether to sue for any money they have lost because of your lateness.

• Being paid and payslips

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.

• References and job offers

• Employment contracts

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.

• Changes to employment contracts