Skip to content Skip to footer

Employment tribunals - claims for breach of contract

This advice applies to Scotland

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

An employee has a contract of employment with their employer. If the employer does not keep to the terms of the contract, and makes changes without the agreement of the employee, 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 may be able to claim compensation.

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. However, it may be easier to make a claim for unlawful deduction from wages for this. You are entitled to claim for any untaken statutory holiday you have built up if you are dismissed. However, if you get additional contractual holiday pay and you have not been able to take your holiday before your dismissal, you can only claim this pay for untaken contractual holiday if your contract says you can. If there is an agreement, whether written or verbal, to pay it, then if it is not paid you can claim a breach of contract
  • 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.

Claims for unlawful deductions from wages

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.

Claims for unpaid notice or unpaid pay in lieu of notice

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.

Next steps

Other useful information

Did this advice help?
Why wasn't this advice helpful?
Did this advice help?

Thank you, your feedback has been submitted.