Definition
When either the employer or the employee fails to comply with a term of the employment contract without lawful justification. Common examples include failure to pay wages, changing terms without agreement, and leaving without serving notice.
UK Context
Breach of contract claims can be brought in the employment tribunal (if arising on termination, capped at £25,000) or the civil courts (no cap). The Employment Rights Act 1996 requires employers to provide a written statement of employment particulars. Wrongful dismissal (breach of the contractual notice term) is distinct from unfair dismissal (a statutory claim). Both may apply simultaneously.
Best Practices
- Ensure employment contracts are clear, comprehensive, and reviewed by an employment lawyer
- Never change terms and conditions unilaterally — always consult and obtain agreement, preferably in writing
- Comply with contractual notice periods when dismissing — consider pay in lieu of notice if the contract permits
- Include clear restrictive covenant clauses drafted proportionately to the employee's role and seniority
Frequently Asked Questions
What is the difference between wrongful dismissal and unfair dismissal?
Wrongful dismissal is a contractual claim — the employer dismissed the employee in breach of the contract (typically without proper notice). Unfair dismissal is a statutory claim — the employer dismissed the employee without a fair reason or without following a fair procedure. Both claims can arise from the same dismissal, but they have different legal bases, remedies, and forums.
Can an employer change an employee's contract without agreement?
No. An employment contract can only be varied with the agreement of both parties. Unilateral changes are a breach of contract. If the employee continues to work under the new terms without protest, agreement may be implied through conduct, but this is a risky approach for employers.
What can an employer do if an employee leaves without notice?
The employer can claim damages for breach of contract (the cost of replacing the employee at short notice, agency fees, etc.) through the employment tribunal or civil courts. In practice, employers rarely pursue such claims unless the financial loss is significant. The employer should not withhold wages owed — this would itself be a breach.