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The purpose of employment contracts is to set clear expectations of an employee’s duties and behaviour.
In the UK, breach of contract claims account for approximately 14 per cent to 17 per cent of all employment tribunal complaints, so it is important for employers to make decisions carefully.
How you respond often matters more than the breach itself, as a poorly handled reaction can create legal and reputational difficulties.
What counts as a breach of contract?
A breach of contract can be an employee failing to do something they’re contractually required to do or doing something they’re contractually prohibited from doing.
Examples can include resigning without notice or refusing to carry out contractual duties. Sharing confidential information with competitors is another common example.
While a one-off breach may be treated as misconduct, serious violations can lead to a dismissal.
Underperformance often does not constitute a breach of contract and should instead be managed through performance procedures.
With any infraction, it is important to always check the contract and agreements when deciding what counts and what doesn’t.
How should you respond to a breach of contract?
If you’ve reviewed contracts and suspect a breach of contract, you should consider the following steps:
- Ensure the process is fair: Investigate impartially and allow the employee to respond to claims. If dismissal is being considered, evidence of a fair process is paramount.
- Evaluate intent and seriousness: Look at the case holistically to assess if actions were deliberate and whether trust and confidence have been damaged.
- Decide the outcome: The reasoning behind sanctions must be recorded in writing, alongside the evidence that was used to make the decision.
- Offer an appeal: Where possible, offer the employee a chance to appeal decisions to an objective mediator.
As with any decision, it is important to avoid impulsive or knee-jerk decisions when handling suspected breaches of contract.
Dismissals should be reserved for serious misconduct, with warnings and reassignment more appropriate for less serious breaches.
If a relationship has seriously deteriorated, consider whether a settlement agreement may be the best outcome to resolve a dispute.
Speak to a solicitor
Our solicitors can help review contracts and the facts to decide whether a breach has occurred and how it should be dealt with.
We can ensure a fair process is followed and reputational fallout is minimised, with all decisions supported by clear evidence.
If the dispute escalates to a formal tribunal, we can also represent you and work in your best interests
Suspect a breach of contract? Speak to our solicitors to review your legal position.
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