Breach of Contract

A contract of employment is an agreement between an employer and employee that outlines the duties, responsibilities and mutual benefits of the relationship. A Breach of Contract is a situation where either of the parties fails to keep up to their part of the contract. So, a breach of contract can occur when:

• Contract terms are only partly fulfilled but not to the correct extent.

• Contract terms and duties aren’t performed at the agreed timeframe.

• Contract terms and duties aren’t performed at all. 

When any of these occurs, it is safe to say that there has been a breach of contract. 

Two terms are used in a contract between an employer and an employee.

Express terms are contract terms that are agreed upon and stated in the contract agreement between both parties. 

Implied terms are not stated in a contract but are assumed or implied due to the nature and arrangement of the contract agreement. 

However, despite how the agreements are reached, a breach of contract can occur, whether from the employer or the employee. 

Some of the ways an employee can breach a contract include: 

• Quitting your job without proper notice.

• Working for a competitor organisation when your company does not allow it.

• Sharing information about your place of work with competitor brands.

• Failing to carry out duties assigned to you. 

• Gross misconduct that leads to a quantifiable company loss. 

Also, a breach of contract can happen from an employer’s end by: 

• Breaching basic contract terms, like payment, notice periods, and sick pay.

• Failing to comply with the company policies and procedures.

• Unfair or wrongful dismissal.

• Not following health & safety regulations.

Employers who want to ensure that the issue of breach of contract is handled in the organization must be sure to include a breach of contract clause in the contract of agreement. A breach of contract clause addresses how to handle a breach of contract if it happens. The clause could be general or specific and both parties can decide to deal with it externally or internally when it comes up. However, whatever the case may be, both parties must oblige to the clause to determine the next step for resolution.

When a breach of contract has been proven to be done by either of both parties, there are steps to handle the breach of contract to avoid unfair treatment of the other party. The steps are:

• Interpersonal Resolution: The first step towards handling a breach of contract is to try to resolve the issue by both parties. This can occur when both parties have a meeting or conversation, stating where either person has breached the agreement and trying to come up with solutions or compromises. In this case, it is mostly peaceful and usually requires professionalism and maturity. 

• Mediation: Another step to handle a case of breach of contract is to use the mediation method. In this step, a trusted third-party authority can be brought in to mediate between both parties and reach a compromise. The third party could either be internal or external. 

• Legal Actions: In cases where there is no peaceful resolution between both parties, legal action can be taken against the offender. Compensation in the form of “damages” can be rewarded to the offended to cover up for whatever may have been lost.

In conclusion, a contract of employment establishes the terms and obligations between an employer and employee, while a breach of contract occurs when these terms are not fulfilled as agreed upon. Whether it's the employer or employee at fault, breach of contract can have serious implications. It's essential for organizations to include a breach of contract clause in agreements and follow proper steps to address breaches fairly and efficiently, ensuring the smooth functioning of the employment relationship.