Breach of Employment Contract by Your Employer: Your Rights and Options
Breach of Employment Contract by Your Employer: Your Rights and Options
This article applies to England, Wales and Scotland.
Last updated: March 2026
In brief: When your employer breaks the terms of your employment contract — whether by cutting your pay, changing your hours, or failing to pay notice — this is a breach of contract. You may have a claim through an employment tribunal (if your employment has ended), through a separate wages claim while still employed, or in some cases for constructive dismissal. The deadline for most claims is three months.
Something has changed at work. Maybe your pay has been cut without warning, or your employer has moved you to a different role, removed a benefit you relied on, or dismissed you without paying your notice. You know something is wrong, but you are not sure what you can actually do about it.
Your employment contract is a legally binding agreement. When your employer breaks it, you have options. This guide explains what counts as a breach, which route is available to you, and the deadlines that apply.
What Counts as a Breach of Contract by Your Employer?
A breach of contract occurs when your employer fails to honour a term of your employment contract. Those terms come in two forms.
Express terms are what has been explicitly agreed — either in writing or verbally. These include your pay rate, working hours, job title, location, notice period, holiday entitlement, and any contractual benefits such as bonuses, sick pay, or a company car. Failing to honour any of these is a potential breach.
Implied terms are not written down but are treated by law as part of every employment contract. The most significant is the implied duty of mutual trust and confidence, established in Malik v BCCI [1997]. Your employer breaches this when their conduct, even if it does not break any written term, is calculated or likely to destroy or seriously damage the trust between you. Persistent bullying, false accusations, or treating an employee in a humiliating way can all amount to a breach of this implied term.
Not every breach is equal. A minor breach — a late expense payment, for example — is unlikely to give you grounds for resignation or a large claim, though it can be raised as a grievance. A fundamental breach is one that goes to the heart of your contract: a significant pay cut, removal of a contractual benefit, or conduct that makes it impossible to continue working. The distinction matters because a fundamental breach may open the door to constructive dismissal.
Common Examples of Employer Breach
Breach of contract covers a wide range of conduct. The most common situations include:
Unpaid or reduced wages — cutting your pay without agreement, or failing to pay wages you have earned, is both a breach of contract and potentially an unlawful deduction from wages under Part II of the Employment Rights Act 1996.
Changing your terms without consent — altering your working hours, location, duties, or other contractual terms without your agreement. For more on this, including the concept of working under protest, see our guide on what to do when your employer changes your contract.
Failure to pay notice — dismissing you without working notice or pay in lieu of notice (PILON), where your contract entitles you to it. This is also called wrongful dismissal. See our article on dismissed without notice: your rights.
Removing contractual benefits — taking away a bonus, sick pay, car allowance, or other benefit that forms part of your contract.
Breach of mutual trust and confidence — sustained bullying, victimisation, making false allegations, or other conduct that fundamentally undermines the employment relationship.
The Affirmation Trap
One issue that catches many employees out: if you continue working normally after becoming aware of a breach, you risk affirming it, effectively accepting the new terms. This is particularly relevant where your employer changes your contract without agreement.
Continuing to work in silence after a unilateral change can be treated as acceptance. If you want to preserve your position, putting your objection in writing promptly, stating clearly that you are not accepting the change, is the right approach. This is sometimes called working under protest. Time matters here: the longer you leave it without objecting, the harder it becomes to argue the breach is ongoing.
Your Options
Which route is available to you depends primarily on whether you are still employed or whether your employment has ended.
1. Raise a grievance
For many breaches — particularly minor or ongoing ones — raising a formal grievance is the first practical step. It creates a written record, demonstrates you have tried to resolve things internally, and may lead to a remedy without needing to go to tribunal. Your employer is required to have a grievance procedure under the ACAS Code of Practice.
2. Unlawful deduction from wages (while still employed)
If your employer has reduced your pay or stopped paying you contractual sums, you may be able to bring a claim for unlawful deduction from wages under the Employment Rights Act 1996. Crucially, this claim can be brought in the employment tribunal while you are still employed, without needing to have resigned or been dismissed. This is often a better option than a breach of contract claim if the dispute is about money and you want to remain in your job. The deadline is three months from the date of the relevant deduction. See our guide on unpaid wages claims for more detail.
3. Breach of contract claim at the employment tribunal
The employment tribunal can hear breach of contract claims, but only where your employment has ended. This is an important limitation. Awards are capped at £25,000. The three-month time limit runs from the effective date of termination — not from when the breach occurred.
4. Civil court claim
If your employment has ended and your potential claim exceeds £25,000, or if you are still employed and cannot use the wages route, the civil courts are an alternative. The time limit is six years. However, civil proceedings involve greater cost and complexity, and for most employees the tribunal or wages route is more proportionate.
5. Constructive dismissal
Where your employer's breach is fundamental, going to the root of the contract, and you feel you have no option but to resign, you may have a claim for constructive dismissal under section 95(1)(c) of the Employment Rights Act 1996. To succeed, you would need to show there was a fundamental breach, that you resigned because of it, and that you did not affirm the breach by continuing to work for an unreasonable period after becoming aware of it. Constructive dismissal claims require two years' continuous service in most cases. For more on this, see our constructive dismissal guide.
6. ACAS early conciliation
Before any employment tribunal claim, you are required to notify ACAS and go through the early conciliation process. This is a free service and can result in a negotiated settlement without the need for a hearing. See our guide on ACAS early conciliation for how the process works.
The Time Limits: Do Not Miss These
Missing a deadline can end your claim entirely, regardless of its merits.
| Claim type | Time limit | Runs from |
|---|---|---|
| Unlawful deduction from wages | 3 months less one day | Date of the deduction |
| Breach of contract (ET) | 3 months less one day | Effective date of termination |
| Constructive dismissal | 3 months less one day | Date of resignation |
| Civil court claim | 6 years | Date of breach |
ACAS early conciliation stops the clock on tribunal time limits while conciliation is ongoing, and any time spent in conciliation is added to your deadline.
ERA 2025 note: The Employment Rights Act 2025 received Royal Assent on 18 December 2025. The Government intends to extend employment tribunal time limits from three months to six months for most claims, though this is expected no earlier than October 2026.
What Evidence Will You Need?
For any type of breach of contract claim, you will need to show what your contract said and how your employer departed from it. This generally means gathering your contract of employment, written statement of particulars, payslips, correspondence about the change or incident in question, and any internal communications relevant to the dispute.
A subject access request to your employer can be useful for obtaining documents held about you that you do not already have.
Frequently Asked Questions
Can my employer change my contract without telling me? No. Changes to your employment contract generally require your agreement. Your employer may have a contractual right to vary certain terms (for example, through a flexibility clause), but this power has limits and must be exercised reasonably. Unilateral changes imposed without consent may be a breach of contract.
My employer has cut my pay. What can I do? A pay cut imposed without your agreement is likely both a breach of contract and an unlawful deduction from wages. You may be able to claim while still employed. The three-month deadline runs from the date of each underpayment.
Can I claim if I am still employed? Yes, in some circumstances. An unlawful deduction from wages claim can be brought while you are still employed. A breach of contract claim at the employment tribunal, however, can only be brought once your employment has ended.
What is the £25,000 tribunal cap? The employment tribunal can only award up to £25,000 for breach of contract claims. If your losses exceed this, you would need to pursue the balance in the civil courts, though you cannot split the same claim between both forums.
Do I need to raise a grievance before going to tribunal? There is no strict legal requirement to do so before bringing a breach of contract or wages claim, but tribunals may take into account whether you attempted to resolve the issue internally. Following the ACAS Code of Practice where relevant is good practice.
How long does a tribunal claim take? Employment tribunal backlogs are currently significant. The mean clearance time across all claim types is around 28 weeks, though this varies by claim type and region.
What if my employer says the change is covered by a flexibility clause? Flexibility clauses must be exercised reasonably and in good faith. A clause allowing an employer to change your working location, for example, does not permit them to relocate you from London to Edinburgh overnight with no reasonable notice. Whether a flexibility clause was exercised lawfully depends on the specific wording and circumstances.
Can my employer counter-claim against me at tribunal? Yes. Once you bring a breach of contract claim at the employment tribunal, your employer may bring a counter-claim. This is something to consider before proceeding. Take advice if you have any concerns about your own exposure.
Sources
- Employment Rights Act 1996, Part II (unlawful deductions from wages); s.95(1)(c) (constructive dismissal)
- Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994
- Malik v Bank of Credit and Commerce International SA [1997] UKHL 23 (implied term of mutual trust and confidence)
- Western Excavating (ECC) Ltd v Sharp [1978] EWCA Civ 4 (constructive dismissal test)
- ACAS Code of Practice 1: Disciplinary and Grievance Procedures
- Employment Rights Act 2025 (Royal Assent 18 December 2025) — implementation dates subject to secondary legislation
Important notice: This article is published by Yerty for general informational purposes only and does not constitute legal advice. It should not be relied upon as a substitute for professional legal advice tailored to your specific circumstances. Yerty is not a law firm and does not provide legal advice.
Employment law is highly fact-sensitive. The applicability of any legal principle, time limit, or remedy will depend on the particular facts of your situation, your contract terms, and the conduct of the parties involved.
If you are facing a breach of contract issue at work, we strongly encourage you to seek independent legal advice before taking any action — particularly before resigning, signing any agreement, or commencing tribunal proceedings. Use Yerty's free assessment as a first step to understanding your situation, then speak to a qualified employment solicitor before making any significant decisions.