Breach of Contract 101

A breach of contract occurs when the contract terms are violated by any party to the contract. The non-breaching party is entitled to recover damages

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A breach of contract occurs when the contract terms are violated by any party to the contract. The non-breaching party is entitled to recover damages regardless of the magnitude of a breach.

A breach potentially invalidates a contract besides relieving the non-breaching party from performance. A Toronto labour lawyer 

can help both employers and employees initiate a claim if the violation is significant or material.

Breach of Contract Explained 

A contract defines the enforceable terms and conditions that govern an employment relationship. A breach of employment contract occurs when either party breaks the term(s) of a contract. The affected party can seek legal redress. In the context of employment, most employment arrangements are either:

  • Express, or
  • Implied. 

Express contracts are typically written or verbal and explicit—detailed, specific, and clear. In contrast, implied contracts are based on the context of the employment relationship. Express agreements address the core contractual matters of engagement, including remuneration, work schedule, working hours, holiday eligibility, notice periods, and more. 

On the other hand, implied contracts are typically unwritten or unspoken. For instance, an implied contract can arise when you keep paying someone at the end of the month without fail. Most employment contracts contain implied terms, no matter how well they’ve been drafted. While implied terms are usually unwritten or unspoken, they’re contractually binding. 

Employer Breach of Contract 

Common breaches of contract committed by employers can include:

  • Unjustified reduction of remuneration;
  • Wrongful dismissal;
  • Amending the terms of engagement without consent;
  • Failing to reimburse employees’ travel expenses, holiday entitlements, and medical expenses;
  • Withdrawing an unconditional job offer after a prospective candidate has accepted;
  • Failing to follow appropriate dispute resolution mechanisms;
  • Unfair disciplinary actions, and more.

Employee Breach of Contract

The following actions constitute an employee breach of contract:

  • Quitting employment without notice;
  • Failing to provide appropriate notice periods;
  • Breaching restrictive covenants, and 
  • Gross misconduct.

Remedies for Contract Breach

The remedies for contract breach in the context of employment can be divided into two:

  • Remedies for employer’s breach of contract, and
  • Remedies for employee’s breach of contract.

Employer’s Breach of Contract Remedies 

Employees should tread carefully when dealing with breaches of contracts committed by employers. Review the terms of your agreement before engaging your employer to be sure your claim is justified. The following are the ways to resolve your case if indeed it exists:

1. Mediation

Employees should exhaust all other dispute resolution mechanisms before filing legal action for breach of contract against their employers. In other words, you should try different ways to sort things out. For instance, mediation through the Labour Relations Agency can work wonders.

2. Legal action

Employers are advised to consider legal action only if mediation doesn’t work. Filing legal action means filing a claim for breach of contract against your employer.

Always think carefully before taking this step. It would be best if you considered the following factors before making this momentous decision:

  • What do you want to achieve?
  • What is the cost of litigation?;
  • The likely success rate;
  • Security of your job;
  • Impact on prospects, and more.

3. Trade Unions and Industrial Tribunals 

Some trade unions offer legal counsel and other services to their members. That said, you should consult your trade union before considering legal action.

4. Industrial Tribunals

Legal action can either be through Industrial Tribunals or civil courts. Your contract must have ended if you intend to bring a breach of contract claim through an Industrial Tribunal. The maximum recoverable damages can vary by your case or jurisdiction. Unlike civil courts, Industrial Tribunals do not charge a fee, and the process is much faster. 

5. Civil Courts 

Civil litigation should only be considered when all other dispute resolution channels have been exhausted. Schedule a free legal consultation with a skilled employment attorney to initiate the litigation process. A good lawyer will review your case and recommend the appropriate legal remedies.

Employee’s Breach of Contract Remedies

Most employers prefer court litigation to resolve a breach of contract claim against their employees. They can only bring claims through Industrial Tribunals in response to their employees’ claims.

Employers can only recover damages for financial loss, especially when an exciting employee doesn’t give enough notice. The damages for breach of contract can also include the cost of hiring other people to do your work or for lost revenue resulting from the unprocedural resignation.

How can an Employment Lawyer Help?

 Employees have the right to receive the wages they earned before resigning. and unpaid pay for untaken statutory holidays, whether they left with or without appropriate notice. 

An employment attorney can act on behalf of employees or employers. While employment attorneys who represent employers ensure their clients avoid costly lawsuits and hefty fines, employment lawyers who represent employees fight to safeguard their clients rights.

Breach of contract occurs when a party to a contract doesn’t act as expected. Consult an employment lawyer if you think you have a breach of contract claim.