Can I Sue My Employer for Breach of Contract?

Your employment contract is a legally binding agreement between you and your employer. When your employer breaks the specific terms written in that contract - whether it's about pay, notice periods, bonuses, benefits, or working conditions - you can sue them for breach of contract in the County Court or High Court.

This is separate from employment tribunal claims for unfair dismissal or discrimination. Breach of contract is a civil law matter: your employer promised specific things in writing, they didn't deliver, and you're entitled to compensation for the losses you suffered as a result.

Employment Contracts: What's Enforceable

Your employment contract consists of several elements, all of which create legally binding obligations on your employer:

Written Contract of Employment

The main document you signed when joining, specifying:

• Your job title and duties
• Salary and payment terms
• Working hours and location
• Holiday entitlement
• Notice periods for both parties
• Probation period terms
• Pension and benefits details

Offer Letter

Your original job offer forms part of the contract, particularly if it promises specific terms like bonuses, benefits, or conditions that weren't repeated in later documents.

Employee Handbook or Policies

Company policies referenced in your contract or stated to be contractual become binding terms. Not all handbook contents are contractual, but specific policies often are.

Verbal Agreements

Promises made verbally by managers about pay, promotions, or working conditions can form part of your contract, though they're harder to prove than written terms.

Collective Agreements

If your employer recognizes a union, collective bargaining agreements may be incorporated into individual contracts, creating enforceable rights.

Common Employer Breach of Contract Claims

Employers breach employment contracts in various ways. Here are the most common grounds for civil court claims:

1. Notice Period Breaches

Your contract specifies notice periods. Employers breach when they:

• Terminate without proper notice - Dismissing you with less notice than contractually required
• Fail to pay notice in lieu - If fired without notice but contract requires payment for the notice period
• Breach garden leave terms - Not following contractual garden leave provisions properly

What you can claim: Full salary and benefits for the notice period you should have received.

2. Unpaid Contractual Bonuses

If your contract promises specific bonuses (annual, performance, commission), employer breaches by:

• Not paying bonus when contractual conditions are met
• Changing bonus terms unilaterally
• Using discretion unreasonably to reduce or deny bonus
• Dismissing you to avoid paying earned bonus

What you can claim: The bonus amount you contractually earned, calculated according to the contract terms.

3. Salary and Payment Breaches

Beyond basic unpaid wages (which have separate legal routes), contractual pay breaches include:

• Not providing agreed pay rises
• Reducing salary without consent
• Failing to pay contractual allowances (car, housing, etc.)
• Not reimbursing expenses per contract terms
• Withholding final salary unlawfully

4. Benefits and Perks

Contracts often promise benefits that become binding terms:

• Company car specified in contract not provided
• Private medical insurance promised but not arranged
• Pension contributions below contractual percentage
• Share options not granted as promised
• Professional membership fees not paid as agreed

5. Job Role and Responsibilities

Your contract defines your role. Employers breach by:

• Demoting you without consent (constructive dismissal aspect but also breach)
• Fundamentally changing your duties without agreement
• Removing responsibilities that were key contract terms
• Forcing transfer to different location beyond contract terms

6. Working Conditions

Specific contractual terms about how you work:

• Requiring more hours than contracted
• Changing shift patterns against contract terms
• Not providing equipment or tools specified in contract
• Failing to provide training promised contractually

7. Restrictive Covenants

Post-employment restrictions (non-compete, non-solicitation) can be breached by employer too - if they fail to uphold their side of such agreements or don't pay consideration promised for restrictions.

What You Can Claim For

Breach of employment contract claims aim to put you in the position you'd have been in if the employer hadn't breached. You can claim:

Unpaid Contractual Entitlements

• Notice pay for period you should have received
• Bonuses that were contractually due
• Commission earned but not paid
• Benefits value for period employer failed to provide
• Salary increases that should have been applied

Loss of Earnings

If breach resulted in job loss or reduced earnings:

• Lost salary from breach until you find equivalent employment
• Difference in salary if new job pays less
• Lost bonus opportunities in subsequent employment
• Pension contribution losses

Consequential Losses

• Cost of finding new employment (recruitment fees if applicable)
• Relocation costs if you had to move for new job
• Loss of share options or equity that would have vested
• Professional reputation damage if breach was publicized

Benefits Value

Monetary value of benefits not provided:

• Company car value (calculated by HMRC benefit-in-kind rates)
• Health insurance premiums employer should have paid
• Gym membership or other contractual perks
• Professional development budget not provided

Proving Your Breach of Contract Case

Success requires clear evidence of what was promised and how the employer failed to deliver:

Your Employment Contract

• Signed employment contract or service agreement
• Original offer letter with terms
• Any contract amendments or variations
• Employee handbook if incorporated into contract
• Relevant company policies stated to be contractual

Communications

• Emails discussing the contractual term at issue
• Letters from employer about bonuses, pay, benefits
• Performance reviews mentioning contractual entitlements
• Meeting notes where terms were discussed
• Any correspondence about the breach

Payment Records

• Payslips showing payments (or lack thereof)
• P60 and P45 documents
• Bank statements showing salary deposits
• Previous bonus payments establishing a pattern
• Benefits statements

Evidence of Loss

• Job search records showing mitigation efforts
• New employment contract showing reduced salary
• Calculations of lost benefits
• Expert evidence on industry salary standards
• Pension statements showing contribution gaps

Where to Sue: County Court vs High Court

Choice of court depends on your claim value:

County Court

• Claims under £100,000
• Lower court fees
• Simpler procedures
• Small claims track for under £10,000 (you can self-represent easily)
• Fast track for £10,000-£25,000

High Court

• Claims over £100,000
• Complex contractual disputes
• Cases requiring detailed legal argument
• Higher court fees but faster resolution for large claims

Most employment contract breaches fall under £100,000 and go to County Court. High-earning executives with large bonus or notice pay claims may use High Court.

The Legal Process

Suing your employer for breach of contract follows these steps:

Step 1: Internal Grievance (If Still Employed)

If you're still working there, raise formal grievance first. This is required for some employment-related claims and shows you tried to resolve internally. However, for pure breach of contract after termination, this may not be necessary.

Step 2: Letter Before Action

Send formal letter to employer stating:

• Which contract terms were breached
• Specific clauses violated
• Timeline of events
• Losses you suffered
• Compensation demanded
• 14 days to settle before court action

Step 3: File Court Claim

Complete form N1 (or N1C for specified amounts). In particulars of claim:

• Explain the employment relationship
• Quote relevant contract clauses
• Detail exactly how employer breached
• Prove your losses with evidence
• Calculate compensation sought

Step 4: Employer's Defense

Employer has 14 days to acknowledge, then 28 days to file full defense. Common defenses include:

• Claiming no breach occurred
• Arguing term wasn't actually contractual
• Alleging you breached first (justifying their breach)
• Disputing loss calculations
• Claiming you failed to mitigate losses

Step 5: Disclosure and Evidence

Both sides exchange evidence. Employer must disclose relevant documents like:

• Personnel files
• Bonus calculation records
• Communications about your contract
• Evidence supporting their defense

Step 6: Hearing

Present your case to judge:

• Prove contract existed with specific terms
• Show employer breached those terms
• Demonstrate losses caused by breach
• Evidence you mitigated losses reasonably

Step 7: Judgment and Enforcement

If you win, court orders employer to pay. If they don't comply, use enforcement mechanisms like High Court enforcement officers or attachment of earnings.

Specific Scenarios: Notice Period Claims

Notice period breaches are among the most common employer contract breaches. Understanding the nuances helps maximize your claim:

Summary Dismissal

Employer fires you immediately for gross misconduct. If their gross misconduct allegation is unfounded, they still owed notice. You can claim wrongful dismissal (breach of contract) even if they had some reason to dismiss.

Claim: Full notice period pay plus benefits. Burden is on employer to prove gross misconduct justified summary dismissal.

Payment in Lieu of Notice (PILON)

Contract says employer can pay notice instead of working it. If they terminate without working notice OR paying in lieu, that's breach. Some contracts specify PILON calculations - employer must follow these exactly.

Garden Leave Breach

If contract permits garden leave, employer must still pay full salary and benefits during that period. Not doing so is breach. Also breach if they require you to work during contractual garden leave period.

Notice During Probation

Shorter notice periods often apply during probation, but employer must still give whatever notice the contract specifies. If contract says "1 week during probation," immediate termination without that week is breach.

Bonus Disputes: The Trickiest Area

Bonus claims are complex because contracts often give employers discretion. However, discretion must be exercised reasonably:

Contractual vs Discretionary

Distinguish between:

• Contractual bonuses - "Employee will receive annual bonus of 15% of salary" - this is enforceable
• Discretionary bonuses - "Company may pay bonus at its absolute discretion" - harder to enforce, but discretion can't be exercised irrationally

Implied Terms

Even with discretionary bonuses, courts may imply:

• Employer must consider bonus in good faith
• Can't exercise discretion capriciously or irrationally
• Must apply stated criteria consistently
• Pattern of past payments creates expectation

Dismissal to Avoid Bonus

If employer dismisses you shortly before bonus payment date to avoid paying, this is breach of implied duty of trust and confidence, potentially giving you contractual claim for the bonus you'd have earned.

Commission Schemes

Sales commission is typically contractual. If you earned commission per contract terms but employer refuses payment, clear breach. Check contract carefully for payment conditions and clawback clauses.

Time Limits

Breach of contract claims have strict time limits:

6 Year Limitation

You have 6 years from the date of breach to file your claim. For employment contracts, breach occurs when:

• Employer terminates without proper notice
• Bonus payment date passes without payment
• Benefits are withdrawn
• Salary reduction takes effect

Don't Delay

Despite having 6 years, act quickly:

• Evidence deteriorates (emails deleted, witnesses forget)
• Mitigation becomes harder to prove
• Employer may become insolvent
• Your losses compound over time

Continuing Breaches

If breach is ongoing (e.g., employer continues to underpay pension contributions), limitation runs from each individual breach, effectively extending your claim window.

Court Costs and Fees

Taking employer to court involves these costs:

• £25,000 or less: Use County Court money claim online, fees range from £35 to £455 based on claim value
• £25,000 - £100,000: County Court fees from £455 to £1,750
• Over £100,000: High Court fees, typically 5% of claim value up to £10,000 then smaller percentage

If you win: Court usually orders employer to pay your court fees back to you, plus interest on the amount claimed.

Legal costs: Small claims track (under £10,000) doesn't normally award legal costs beyond court fees. Fast track and multi-track may award reasonable legal costs to winner.

Common Employer Defenses

Anticipate and counter these typical defenses:

"That Term Wasn't Contractual"

Employer argues the term you're relying on wasn't actually part of the contract. Counter with evidence: signed documents, offer letter, emails confirming terms, past practice showing employer treated it as contractual.

"You Breached First"

Employer claims your misconduct or performance issues justified their breach. This defense only works for gross misconduct serious enough to justify summary dismissal. Minor issues don't excuse employer breach.

"You Haven't Mitigated"

Employer says you could have reduced losses by finding work sooner. Keep detailed records of job applications, interviews, and explain why you didn't accept jobs (too junior, wrong location, insufficient pay).

"The Loss Is Too Remote"

Employer argues certain losses weren't foreseeable consequence of breach. Stick to direct losses: notice pay, bonuses earned, benefits during notice. These are always recoverable.

"Contract Allowed Us to Do This"

Employer points to flexibility clauses. Read these carefully - they usually have limits. "Employer may vary terms" doesn't mean they can slash salary without consent. Variation clauses must still be exercised reasonably.

Employment Tribunal vs County Court

Understanding which court to use is critical:

County Court (Breach of Contract)

Use for:

• Claims based on written contract terms
• Notice pay disputes
• Bonus and commission claims
• Benefits not provided as contractually promised
• Claims over £25,000
• Claims after relationship has ended

Employment Tribunal

Use for:

• Unfair dismissal (statutory right)
• Discrimination claims
• Whistleblowing protection
• Redundancy pay disputes
• Unlawful deduction from wages (though contract claims possible too)
• Breach of contract claims under £25,000 (tribunal has concurrent jurisdiction)

Which to Choose?

For pure breach of contract claims, County Court is often better:

• No cap on compensation (tribunal caps at £25,000)
• Simpler procedures for straightforward contract disputes
• Can combine with other civil claims if needed
• Better enforcement mechanisms

However, if you have both contractual and statutory claims (e.g., unfair dismissal AND breach of contract), tribunal may handle both together efficiently.

Settlement Negotiations

Many breach of contract claims settle before court. Maximize your settlement:

Calculate Your True Loss

Don't accept first offer without knowing full value:

• Notice pay plus benefits value
• Any bonuses that would have been paid
• Pension contributions for notice period
• Share vesting you'll miss
• Loss of company car for notice period

Tax Treatment

Notice pay and contractual payments are usually taxable. Compensation for breach may qualify for £30,000 tax-free exemption if characterized properly. Factor tax into settlement negotiations.

Settlement Agreements

Employer may offer settlement agreement (formerly "compromise agreement"). These waive your right to sue in exchange for payment. Before signing:

• Get independent legal advice (employer must pay for this)
• Ensure payment covers all contractual losses
• Check the agreement doesn't waive more rights than necessary
• Understand tax implications

Without Prejudice

Mark settlement discussions "without prejudice" so they can't be shown to judge if case proceeds. This allows frank negotiation without weakening your court position.

Evidence You Need

Build comprehensive evidence bundle:

Contract Documents

• Signed employment contract
• Offer letter and acceptance
• Any contract amendments
• Bonus plan documents
• Share scheme rules if applicable
• Employee handbook sections incorporated into contract

Correspondence

• Termination letter
• Any emails about bonuses, pay, benefits
• Performance reviews
• Your grievance and employer's response
• HR communications

Financial Records

• Payslips for at least 12 months
• P60 forms
• Bonus payment history
• Benefits statements
• Pension statements

Evidence of Loss

• Job application records
• New employment contract
• Recruitment agency correspondence
• Benefits you've had to pay for yourself
• Any consequential losses with receipts

Why JustClaim Helps

Employment contract claims involve complex calculations and specific legal requirements:

• Contract analysis - Identifies which terms are truly contractual and enforceable
• Loss calculation - Accurately quantifies notice pay, bonuses, benefits, and consequential losses
• Mitigation evidence - Helps you document job search efforts properly
• Court documents - Generates particulars of claim with proper legal structure
• Defense responses - Prepares replies to common employer defenses
• Evidence bundle - Organizes documents professionally for court

Take Action Today

Your employment contract is a legally binding agreement. When your employer breaks its terms - whether by not paying bonuses, giving inadequate notice, withdrawing benefits, or violating other specific promises - you're entitled to compensation.

Don't let your employer get away with breaching your contract. These aren't vague employment rights - they're specific written promises that courts will enforce. The law is on your side when employers break clear contractual commitments.

Start your breach of contract claim now and recover what you're legally owed.