Understanding Breach of Employment Contract

By LawrenceGarcia

When you sign on the dotted line of an employment contract, you’re essentially entering a mutual agreement. But what happens when one party doesn’t uphold their end of the bargain? This scenario is known as a breach of employment contract. In this article, we’ll delve into the nitty-gritty of what constitutes a breach, the types, common causes, legal implications, and how to handle such situations.

Imagine this: you’ve just landed your dream job. Everything seems perfect until, out of the blue, your employer suddenly changes your work conditions or, worse, terminates you without any solid reason. Or perhaps, as an employer, your employee decides to jump ship to a competitor, taking confidential information with them. What recourse do you have? Understanding the intricacies of a breach of employment contract can provide both employers and employees with the necessary knowledge to navigate these murky waters.

What is a Breach of Employment Contract?

A breach of employment contract occurs when either an employer or an employee fails to fulfill the terms agreed upon in the employment contract. This could involve non-payment of wages, unauthorized changes in job responsibilities, premature termination, or violation of non-compete clauses. Essentially, any action that goes against the agreed terms can be deemed a breach.

Types of Breach of Employment Contract

Minor Breach

A minor breach, or partial breach, happens when one party fails to perform some part of the contract, but the breach is not substantial enough to undermine the entire agreement. For instance, an employer may occasionally delay payment, or an employee might be slightly late on a few occasions.

Material Breach

A material breach is more severe. This type of breach significantly impacts the contract’s essence, such as an employer failing to pay wages or an employee abandoning their job. Material breaches often lead to the aggrieved party seeking legal remedies.

Fundamental Breach

A fundamental breach is even more severe, potentially rendering the contract void. Examples include an employer terminating an employee without any notice or cause or an employee quitting without notice while holding a key position.

Anticipatory Breach

An anticipatory breach occurs when one party indicates in advance that they will not be fulfilling their contractual obligations. This can happen if an employer informs an employee ahead of time that they won’t be able to provide a promised promotion or salary increase.

Common Causes of Breach of Employment Contract

  1. Non-Payment of Wages: Employees expect to be paid as agreed. Failure to do so is a straightforward breach.
  2. Unauthorized Changes: Altering job responsibilities or conditions without mutual consent.
  3. Premature Termination: Terminating an employee without valid reason or notice.
  4. Violation of Non-Compete Clauses: Employees joining competitors or disclosing sensitive information.
  5. Failure to Provide Benefits: Not honoring agreed-upon benefits like health insurance, paid leave, or bonuses.

Legal Implications

The legal consequences of a breach can be quite severe. They can include:

  • Compensation: The aggrieved party can claim monetary compensation for losses incurred.
  • Reinstatement: Employees wrongfully terminated can be reinstated to their previous position.
  • Injunctions: Court orders to prevent an employee from joining a competitor.
  • Penalties: Employers might face fines or penalties for not adhering to employment laws.

Steps to Take When a Breach Occurs

For Employees

  1. Document Everything: Keep records of all communications and any evidence of the breach.
  2. Review the Contract: Understand the specific terms that were violated.
  3. Communicate: Address the issue with your employer first.
  4. Seek Legal Advice: If the breach is not resolved, consult with a lawyer specializing in employment law.
  5. File a Claim: If necessary, file a formal complaint with the relevant labor authorities or pursue legal action.

For Employers

  1. Investigate: Understand the details of the alleged breach.
  2. Communicate: Discuss the issue with the employee to find a resolution.
  3. Corrective Actions: Take steps to rectify the breach if it’s on the employer’s side.
  4. Legal Consultation: Consult with a lawyer to understand your legal standing.
  5. Disciplinary Actions: If the breach is on the employee’s part, take appropriate disciplinary actions as per the contract.


What is a breach of employment contract?

A breach of employment contract occurs when either an employer or an employee fails to fulfill their obligations as outlined in the contract.

What should I do if my employer breaches my contract?

Document the breach, review your contract, communicate with your employer, seek legal advice, and consider filing a formal complaint or legal action.

Can an employee be fired for breaching their contract?

Yes, an employee can be terminated for breaching their contract, especially in cases of material or fundamental breaches.

What are the common remedies for a breach of employment contract?

Common remedies include monetary compensation, reinstatement, and injunctions to prevent further breaches.

Is a non-compete clause enforceable?

Non-compete clauses are enforceable in many jurisdictions, but they must be reasonable in scope and duration.


A breach of employment contract can have significant ramifications for both employers and employees. By understanding the types of breaches, common causes, and legal implications, both parties can better protect their interests. Whether you’re an employer or an employee, knowing your rights and responsibilities is crucial. If you find yourself facing a breach of contract, taking the appropriate steps can help mitigate the damage and lead to a fair resolution.

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