three people discussing breach of employment contracts

If any of the terms of an employment contract are broken (by either the employee or employer) – it is known as a breach of employment contract. As contracts are legally binding documents, being in breach of one can result in serious consequences.

If you believe you or your employer have breached an employment contract, it’s important you understand your rights and obligations. If you need assistance with this, please contact the experienced employment lawyers at Owen Hodge today.

Some common examples of how an employee can breach an employment contract include:

  • Misusing or sharing the employer’s confidential information.
  • Breaking any restraint of trade clauses in the employment contract, such as going to work for a competitor when your contract doesn’t allow it, taking your client contact list with you when you leave, and disclosing any proprietary information about the company in the public domain.
  • Quitting without giving proper notice as per your contract.

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By checking the terms in your contract, you should be able to determine if you’re in breach of an employment contract. You can also speak to the employment contract lawyers at Owen Hodge for assistance.

Can I be dismissed for breach of contract?

Yes, in NSW you can be dismissed if you breach your employment terms in your contract. However it is important that your employment contract specifies that you will be liable for dismissal should you break any of the terms in your contract.

Can you break an employment contract?

As an employee, you can terminate an employment contract. However, you must ensure you give and serve out your notice period – otherwise you may be in breach of contract.

For an employer, a breach of an employment contract occurs when an employer:

  • Wrongfully dismisses an employee, such as:
    • Terminating an employee without giving proper notice
    • Terminating a fixed-term employment contract before the end of the contract
    • Terminating an employee on the basis of severe misconduct, without having reasonable grounds for it.
  • Changes the terms in your contract without consulting you (in some cases).
  • Unlawfully withholds wages or bonuses

Learn more: Difference between unfair dismissal and wrongful dismissal

Before seeking legal action, it is advisable you discuss the matter with your employer or employee first. Check the terms of the employment contract to determine if there has been a breach, and if there has, try to come to an agreement of how the issue can be resolved. However, if such a discussion cannot resolve the issue, this is when you may want to seek legal advice.

In NSW, there are two remedies available for breaches of contracts. They are:

1. Compensation

In employment law, you can claim compensation for financial loss as a result of the breach of employment contract. However, this will primarily depend on the terms and conditions of the contract.

Apart from compensation for financial loss, you may also claim compensation for:

  • Loss of wages and other remunerations
  • Injuries suffered due to wrongful termination of an employment contract, which includes psychiatric illnesses and psychological injury
  • Loss of opportunity to obtain further employment or participate in bonus schemes

2. Specific performance of an employment contract

Specific performance is an order of the court requiring a party to perform their obligations under their contract. However, specific performance is a very complex area of law and there are certain circumstances which may prevent the court from making the order.

This is why it’s highly recommended you speak to an employment lawyer to discuss which option is best for you.

How do you prove a breach of contract?

To prove there has been a breach of employment contract, you will need to show the following:

  • That an employment contract exists
  • Length of the employment served
  • Proof that the employee or employer failed to honour the terms of the contract (i.e – severe misconduct on behalf of the employee)

Speak to Owen Hodge Lawyers

Whether you’re an employee or employer, a breach of employment contract can be a complicated area of law to navigate. However, the experienced lawyers at Owen Hode are here to help you.

If you have any questions about employer or employee breach of contract or wrongful dismissal, please contact our team on 1800 770 780 to schedule an initial consultation.

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