Breach of Contract at Work: Your Complete UK Guide

This article provides information about UK employment law for England, Wales & Scotland. It is not legal advice. Every situation is different, and you should consider speaking to a qualified employment solicitor for advice specific to your circumstances.

Summary

Breach of contract occurs when your employer fails to honor employment agreement terms-like not paying agreed wages, dismissing without notice, or changing hours without consent. You typically have 3 months minus 1 day to claim at tribunal (potentially extending to 6 months under the proposed Employment Rights Bill in 2026/2027). Compensation covers actual financial losses, with tribunal awards ranging from £500 to £25,000. You don't need a written contract to claim-verbal and implied contracts count. Options include raising a grievance, negotiating settlement, or making a tribunal claim through ACAS early conciliation.

Introduction

Your employer just changed your contract. Maybe they cut your hours without asking. Or stopped paying your contractual bonus. Perhaps they moved you to a different office 50 miles away without your agreement.

You feel something's wrong, but you're not sure if it's actually unlawful. And even if it is, what can you do about it?

Your employment contract is legally binding. When your employer breaks the terms of that contract, it's called breach of contract - and you have rights.

This can be stressful and confusing. You might feel powerless, especially if you need your job. But understanding your rights is the first step to taking back control.

In this guide, you'll learn:

• What breach of contract actually means
• The most common employer breaches
• Your basic rights and time limits
• What options you have

What is Breach of Contract?

A breach of contract happens when either you or your employer fails to honor the terms of your employment agreement.

Your Employment Contract Can Be:

Written: Most employees have a written contract - the document you signed when you started your job. This is the clearest form of contract.

Verbal: Even without a written contract, verbal agreements count. If your manager promised you specific terms when hiring you, that's a contract.

Implied: Some terms are implied by law or custom, even if they're not written down. For example, the implied duty of trust and confidence between employer and employee.

Important: You don't need a formal written contract to have employment contract rights. If you work for someone and they pay you, a contract exists.

Why This Matters

Employment contracts are legally binding under the Employment Rights Act 1996. When your employer breaks that agreement, you have legal remedies available.

Many employers rely on workers not knowing their rights. Don't let that be you.

Common Employer Breaches of Contract

Here are the contract breaches most often seen in employment disputes:

1. Not Paying Agreed Wages or Bonuses

What this could look like:

• Your salary is less than stated in your contract
• Contractual bonus not paid
• Commission structure changed without agreement
• Regular pay deductions without explanation

Example: Your contract states £30,000 per year, but your payslips only add up to £28,000. That's a £2,000 breach.

2. Not Paying Notice When Dismissing You

What this could look like:

• Fired immediately without notice period
• No payment in lieu of notice (PILON)
• Given shorter notice than contract states

Example: Your contract requires 3 months notice, but you're dismissed immediately with no notice pay.

Note: If this has happened to you, you may be eligible to a claim called "wrongful dismissal". It is one of the most common breach types.

3. Changing Working Hours Without Agreement

What this could look like:

• Hours reduced from full-time to part-time
• Shift patterns changed unilaterally
• Required to work different days
• On-call requirements added

Example: Your contract says 40 hours per week. Your employer cuts you to 25 hours without your consent.

4. Changing Workplace Location

What this could look like:

• Moved to different office or site
• Significantly longer commute required
• Relocated to different city

Example: You work in London. Your employer tells you to report to their Manchester office (200 miles away) starting next month. Unless your contract has a mobility clause, this may be a breach.

5. Removing Contractual Benefits

What this could look like:

• Company car taken away
• Health insurance cancelled
• Pension contributions reduced
• Phone or laptop allowance stopped

6. Demotion or Changing Job Duties

What this could look like:

• Job title downgraded
• Key responsibilities removed
• Reporting line changed
• Different role entirely

7. Not Following Contractual Disciplinary Procedures

What this could look like:

• Skipping warning stages required in contract
• Not allowing you to bring a companion to meetings
• Failing to follow investigation procedures
• Dismissing without following process

Important: The ACAS Code of Practice sets standards employers should follow. Tribunals can adjust compensation by up to 25% for unreasonable failure to comply.

Your Rights Under UK Law

When your employer breaches your contract, UK employment law gives you specific rights:

You Can Claim Compensation

Employment tribunals can award up to £25,000 for breach of contract claims under the Employment Tribunals Extension of Jurisdiction Order 1994.

Compensation is based on your actual financial losses - what you've lost because of the breach.

You Don't Need to Be Dismissed

Unlike unfair dismissal claims, you can bring a breach of contract claim while still employed. However, many workers find this practically difficult.

No Minimum Service Required

There's no qualifying period for breach of contract claims. You can claim even on your first day of employment if a breach occurs.

This is different from unfair dismissal, which typically requires 2 years service.

⏰ Critical: Time Limits

Current Law: You Have 3 Months Minus 1 Day

This is the strict deadline to make an employment tribunal claim for breach of contract under the Employment Tribunals Act 1996.

Tribunals rarely grant extensions except in exceptional circumstances where it was not reasonably practicable to claim in time, so it's always best to work to the deadlines to avoid risking your case.

The clock starts from:

• The date of the breach, OR
• Your last day of employment (if dismissed)

Examples:

• Dismissed without notice on June 1st → Deadline: August 31st
• Unpaid bonus due April 1st → Deadline: June 30th

Proposed Change: Extension to 6 Months

The Employment Rights Bill proposes extending tribunal time limits from 3 months to 6 months for most employment claims.

These changes, if implemented, will come into effect 2026/2027. As of November 2025, the 3-month deadline still applies.

ACAS Early Conciliation

HMS Tribunal strongly recommends that before filing a tribunal claim, you must contact ACAS for free early conciliation. This pauses the clock and typically extends your deadline by about one month.

Approximately 70% of cases settle during ACAS early conciliation.

What You Can Claim

Compensation for breach of contract is based on your actual financial losses.

Types of Losses You Can Claim:

• Unpaid wages or salary
• Notice pay (if dismissed without proper notice)
• Unpaid contractual bonuses
• Lost benefits (company car, health insurance, pension)
• Unpaid holiday pay

How Much Can You Get?

Employment Tribunal limit: £25,000 maximum

Typical awards vary significantly based on:

• Your salary level
• Length of notice period
• What benefits were in your contract
• The type of breach
• How quickly you find new work

What to Do Next

If you think your employer has breached your contract, you have several options:

1. Try Informal Resolution

Speak to your manager or HR. This can work for genuine mistakes or minor breaches.

2. Raise a Formal Grievance

Put your complaint in writing and follow your company's grievance procedure under the ACAS Code of Practice.

3. Work Under Protest

Object in writing immediately. State you're working "under protest" to prevent your employer claiming you accepted the breach.

4. Negotiate a Settlement

Try to reach agreement on compensation without going to tribunal.

5. Make an Employment Tribunal Claim

File a formal claim through ACAS early conciliation. This takes 6-12 months and involves evidence gathering, settlement attempts, and potentially a hearing.

6. Resign and Claim Constructive Dismissal

If the breach is fundamental and makes continued employment impossible, you may resign and claim both constructive dismissal and breach of contract.

Warning: This can be high-risk. It's best to talk through your options with an employment solicitor to understand your position and before resigning.

Breach of Contract vs Unfair Dismissal vs Wrongful Dismissal

Many workers confuse these claims. Here's the key difference:

Factor	Breach of Contract	Unfair Dismissal
Can claim while employed?	Yes	No (must be dismissed)
Service requirement	None	Usually 2 years
Tribunal limit	£25,000	No limit (caps apply)
Time limit	3 months minus 1 day	3 months minus 1 day

Wrongful dismissal is a specific type of breach of contract - being dismissed without proper notice.

Important: You can claim multiple types if applicable - In fact, it's common: On average each claimant submits 2-3 claims. This is not to say you should, but that often there can be overlap/multiple claim types.

Frequently Asked Questions

Can I claim breach of contract if I'm still employed?

Yes. You don't need to be dismissed to claim. However, many workers find it difficult to remain in a job while actively pursuing a claim against their employer.

Do I need a written contract to claim?

No. Verbal and implied contracts are legally binding. Evidence can include:

• Offer letters
• Emails confirming terms
• Payslips showing agreed pay
• Employee handbook
• Witness statements

How long do I have to make a claim?

Currently: 3 months minus 1 day from the breach or termination.

Proposed change: Extension to 6 months expected in 2026/2027, but the 3-month limit still applies as of November 2025.

How much compensation can I get?

It depends on your actual financial losses:

• Unpaid wages/bonuses
• Notice pay
• Lost benefits
• Holiday pay

Awards vary significantly based on salary, notice period, benefits package, and breach type.

But it's important to remember that in employment tribunals the maximum claim amount for this claim type is £25,000.

Do I need a solicitor?

Solicitors are not legally required. In fact, it's estimated that 30% of people self-represent. However it's important to be conscious of the complexity of your case and your specific needs. You should consider factors like:

• Complexity of your case
• Strength of your evidence
• Amount at stake

Generally it's better to have a solicitor than not - but of course for many this is not affordable. There are alternatives out there:

• If you are a member of a union, you'll likely be able to get union representation for free.
• ACAS early conciliation can give you impartial advice.
• LegalWorks and CitizensAdvice may be able to point you to pro bono/free legal resources.
• Yerty is designed to help equip you with resources and information tailored to your circumstances. Though not legal advice, it aims to support you with some of the heavy lifting that you can use to minimise your legal costs or as part of your self-representation.

Does this guide apply in Northern Ireland?

No. This guide covers England, Wales, and Scotland.

Northern Ireland has separate employment legislation. Contact the Labour Relations Agency (LRA) instead of ACAS.

Sources

• "Employment Contracts", ACAS (2024) – https://www.acas.org.uk/employment-contracts
• "ACAS Code of Practice on Disciplinary and Grievance Procedures", ACAS (2015) – https://www.acas.org.uk/grievance-procedure-step-by-step
• "Check if your employer's dismissal process is unfair", Citizens Advice (2024) – https://www.citizensadvice.org.uk/work/dismissal/check-your-rights-if-youre-dismissed/check-if-your-employers-dismissal-process-is-unfair/
• "Employment Rights Act 1996", Legislation.gov.uk – https://www.legislation.gov.uk/ukpga/1996/18/contents
• "Employment Tribunals Act 1996", Legislation.gov.uk – https://www.legislation.gov.uk/ukpga/1996/17/contents
• "Employment Tribunals Extension of Jurisdiction Order 1994", Legislation.gov.uk – https://www.legislation.gov.uk/uksi/1994/1623/contents/made
• "Making a Claim to an Employment Tribunal", GOV.UK (2024) – https://www.gov.uk/employment-tribunals/make-a-claim
• "What early conciliation is", ACAS (2024) – https://www.acas.org.uk/early-conciliation
• "National Minimum Wage and National Living Wage rates", GOV.UK (2024) – https://www.gov.uk/national-minimum-wage-rates