Whether you’re an employer or employee, you’ll be familiar with employment contracts. They are legally binding documents that state the terms and conditions of the employment.

The contract of employment will state the duties and rights of both parties and key details of the role. The contract that you sign at the start of a new role is valid until the employment period ends unless the contract is renegotiated.

If the employment terms change, a new contract must be signed with the updated details. An employment period may end if the employer dismisses the employee or the employee decides to hand in their notice.

What is a Breach of Contract?

Because contracts are legally binding, there are consequences for breaking the stipulations of the contract. Contractual rules apply to any kind of business, whether it’s an Amazon business, restaurant, florist, or more.

A civil breach of contract occurs when one of the parties who has signed the contract (the employer or employee) fails to meet the previously agreed terms of the contract. It might involve one party refusing to perform their duties or going against the rights of the other party.

Verbal and Written Agreements

While it’s relatively easy to identify a breach of contract when the agreement is written, things become much more complicated when verbal agreements are involved.

Every employment contract should contain expressed terms, such as the salary, length of employment (temporary or permanent), probationary period, and notice period. Including these details in the contract is mandatory by law.

Sometimes, a mutual agreement isis made between an employer and employer that is not written down. In other words, it’s implied and is not explicitly stated. Implied terms are usually contractually binding but don’t get written down formally in the employment contract.

If a party breaks this verbal agreement, it’s harder for the other party to take legal action because there is no written evidence. As a result, a breach of contract claim might be overturned in court.

What Counts as a Breach of Contract?

Contracts in the workplace are complex. It’s not always easy to determine if there has been a breach of contract, especially if there are a lot of implied terms.

Below, we’ve listed some of the most common reasons for a breach of an employment contract. Being able to identify a breach is important for both parties to ensure all of the pre-agreed terms and conditions aren’t broken.

Employer breach of contract:

  • Withdrawing an unconditional job offer after the contract has already been signed by the new employee
  • Wrongful termination of an employee’s contract
  • Ending an employee’s contract early if they’re on a temporary contract
  • Making changes to salary, working hours, or duties without informing the employee or creating a new contract
  • Refusing to provide the stated holidays or paid leave
  • Refusing to allow an employee paid sick leave if this has been stated in the contract

Employee breach of contract:

  • Quitting a job without informing the employer or working the necessary notice period
  • Gross misconduct in the workplace
  • Sharing sensitive information about the company with others

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Linda Bradley
Linda Bradley
Formerly a senior accountant with a business degree, Linda now manages to generate story ideas; planning, assigning, and editing content for our website.


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