What Happens If Your Employer Breaks Your Contract? Your Legal Rights Explained

An employment contract is more than just a formal document—it defines your rights, responsibilities, pay, working conditions, and job security. When an employment contract is broken, it can create serious financial stress, uncertainty, and emotional strain for employees. Unfortunately, employment contract breaches are more common than many people realise.

If you believe your employer has failed to honour the terms of your agreement, understanding your legal rights is critical. This article explains what constitutes a breach of employment contract, the types of breaches employees face, and how Perth employment lawyers can help you protect your interests and seek compensation.

Understanding an Employment Contract

An employment contract can be:

• Written (formal employment agreement)
• Verbal (spoken promises)
• Implied (based on workplace conduct, policies, or industry standards)

Regardless of its form, once an agreement exists, both the employer and employee are legally bound to follow it. If an employer fails to meet their obligations, this may amount to an employment contract breach under Australian employment law.

What Is a Breach of Employment Contract?

A breach of employment contract occurs when an employer does not comply with the agreed terms of employment without lawful justification. This may include failing to pay wages, changing duties unfairly, or terminating employment incorrectly.

Breaches can be minor or serious, depending on how significantly the employer’s actions affect the employee.

Common Examples of Employment Contract Breaches

Many employees do not immediately realise their contract has been breached. Some of the most common situations include:

1. Failure to Pay Wages or Entitlements

If your employer withholds wages, superannuation, bonuses, commissions, or overtime payments outlined in your contract, this is a clear breach.

2. Unauthorised Changes to Job Role

Employers cannot significantly alter your duties, location, or hours without your consent if these changes contradict your contract.

3. Reducing Pay or Hours

A unilateral reduction in salary or working hours without agreement may be unlawful.

4. Unfair or Unlawful Termination

If your employer terminates your employment without proper notice or valid reason, it may amount to both employment contract breach and unfair dismissal.

5. Failure to Provide Notice

Most contracts require a notice period. Dismissing an employee immediately without cause or notice can be a serious breach.

6. Breach of Workplace Policies

If workplace policies are incorporated into your contract, failing to follow them can also constitute a breach.

Is Every Contract Breach Illegal?

Not every disagreement is a legal breach. Employers may sometimes rely on:

• Clauses allowing reasonable changes
• Business restructuring provisions
• Performance management processes

However, if the employer’s actions are unreasonable, unfair, or contradict written terms, employees may have strong legal grounds to challenge them.

What Should You Do If Your Employment Contract Is Broken?

If you believe your employer has breached your contract, taking the right steps early can significantly strengthen your case.

Step 1: Review Your Employment Contract

Carefully read your contract, including:

• Pay and entitlements
• Termination clauses
• Duties and responsibilities
• Dispute resolution procedures

Step 2: Document Everything

Keep records of:

• Payslips
• Emails and messages
• Contract versions
• Performance reviews
• Witness statements

Documentation is crucial evidence in employment disputes.

Step 3: Raise the Issue Internally

In some cases, breaches occur due to misunderstandings. Raising the issue formally with HR or management may lead to a resolution.

Step 4: Seek Legal Advice Early

If the issue is not resolved, it’s time to hire an employment lawyer. Early legal advice can prevent costly mistakes and protect your rights.

How Perth Employment Lawyers Can Help

Experienced Perth employment lawyers understand local and federal employment laws and can guide you through the process effectively.

They can:

• Review your contract and identify breaches
• Advise whether you have a valid claim
• Negotiate with your employer on your behalf
• Represent you in Fair Work or court proceedings
• Help you seek compensation or reinstatement

Legal representation often leads to faster and more favourable outcomes than handling disputes alone.

Can You Claim Compensation for a Breach of Employment Contract?

Yes. If an employment contract breach causes financial loss or unfair treatment, you may be entitled to compensation.

Potential remedies include:

• Unpaid wages or entitlements
• Payment in lieu of notice
• Compensation for lost income
• Damages for financial loss
• Reinstatement (in some cases)

The amount of compensation depends on factors such as the severity of the breach, your role, and the contract terms.

Breach of Employment Contract vs Unfair Dismissal

While related, these are different legal claims:

• Breach of employment contract focuses on broken contractual terms.
• Unfair dismissal focuses on whether termination was harsh, unjust, or unreasonable.

In some cases, employees may pursue both claims simultaneously, depending on the circumstances.

Time Limits for Employment Contract Claims

Employment law claims are time-sensitive. Missing deadlines can result in losing your right to claim.

• Unfair dismissal claims often have a 21-day limit
• Contract breach claims may have different limitation periods

This is another reason why it’s important to hire an employment lawyer as soon as possible.

Why Early Legal Advice Matters

Many employees delay seeking advice, hoping the issue will resolve itself. Unfortunately, delays can weaken your position.

Early legal advice helps you:

• Understand your rights clearly
• Avoid signing unfair settlement agreements
• Preserve evidence
• Meet legal deadlines
• Maximise compensation

Frequently Asked Questions (FAQs)

1. What counts as an employment contract breach?

An employment contract breach occurs when your employer fails to meet agreed terms such as pay, duties, notice periods, or working conditions.

2. Can a verbal agreement be enforced?

Yes. Verbal agreements can be legally binding if proven, especially when supported by emails, witnesses, or workplace practices.

3. What if my employer changes my role without consent?

Significant changes without your agreement may constitute an employment contract breach, especially if they affect pay or responsibilities.

4. Should I resign if my contract is breached?

Not immediately. Resigning too early may affect your legal rights. Always seek advice from Perth employment lawyers before resigning.

5. How long do I have to make a claim?

Time limits vary depending on the claim type. Speaking to a lawyer early ensures you don’t miss important deadlines.

6. Can I negotiate a settlement without going to court?

Yes. Many employment disputes are resolved through negotiation or mediation with the help of a lawyer.

7. Do I need a lawyer to make a claim?

While not mandatory, it is strongly recommended to hire an employment lawyer to improve your chances of success and fair compensation.

Final Thoughts

If your employment contract is broken, you do not have to accept unfair treatment. Australian employment laws provide strong protections for workers, but enforcing your rights requires knowledge and timely action.

Whether your issue involves unpaid wages, unfair termination, or altered working conditions, understanding your legal options is the first step. Consulting experienced Perth employment lawyers can help you navigate the process confidently and achieve the best possible outcome.

If you believe you’re facing an employment contract breach, seek legal advice early—your rights, income, and future career may depend on it.