Breach of contract

When do employment contract disputes arise?

Disputes typically happen:

• When an employer breaks a contractual provision, such as by failing to pay salary, bonuses or commission
• When an employer wants to change the contract
• When the interpretation of a term or condition is unclear
• When an employee wants to rely on a provision discussed with their employer but not properly reflected in the written employment contract
• In relation to an employee’s post-termination restrictions or restrictive covenants.

Non-payment of salary, bonus or commission

Non-payment of salary is normally a straightforward legal matter. Although this is likely to be a breach of the employment contract, the best way to pursue this in an employment tribunal is with an unlawful deduction from wages claim.

Bonus claims can be more difficult as bonuses tend to be described as discretionary payments, the details of which are often set out in a separate non-contractual policy document.

There are limited circumstances however when a discretionary bonus payment can become a contractual right, for example as a result of custom and practice or previous dealings.

Commission payments are more likely to form part of the wording of the employment contract itself and therefore non-payment of commission can often be treated like non-payment of salary for enforcement purposes.