Employers have no free-standing right to bring claims against employees or former employees in the employment tribunals. They would normally need to use the civil courts. However, an employer may bring a contract claim when a contractual claim is brought against them in a tribunal.
In the tribunals employers are restricted to the right to make a counterclaim in those cases in which a former employee brings a breach of contract claim against them (Extension of Jurisdiction Order 1994 Article 4(d)).
An employer’s contract claim is not limited by the amount of the employee’s original claim and can still proceed irrespective of the outcome of the employee’s original claim, provided it has been presented before the employee’s claim has been settled or withdrawn (Extension of Jurisdiction Order 1994 Article 8(a)).
In Conway v Comms People Ltd UKEAT/388/01, the EAT upheld a tribunal’s decision dismissing an employee’s claims for unlawful deductions from wages and breach of contract, but upholding the employer’s breach of contract counterclaim. The tribunal had rejected the employee’s argument that there had been an unlawful deduction from his pay that had amounted to a fundamental breach of contract, entitling him to leave without notice. It had also found that the employer had suffered loss by reason of the employee’s breach of contract and unreasonable conduct in terminating his contract without notice. The employer had suffered loss as a result of the employee walking off site, precluding an effective hand-over to an alternative employee.
Requirements for a valid employer’s contract claim
For a tribunal to hear a contractual claim brought by an employer, the claim must:
- Be a claim that a court in England and Wales would have jurisdiction to hear and determine.
- Not be excluded (PI damages, living accommodation, IP property, an obligation of confidence or a covenant in restraint of trade), s.3(3) ETA 1996 & Articles 3 & 5 EOJO 1994.
- Arise or be outstanding on the termination of the employment of the employee in question.
- Be for one or more of the following:
- damages for breach of a contract of employment or any other contract connected with employment;
- the recovery of a sum due under such a contract;
- the recovery of a sum in pursuance of any enactment relating to the terms or performance of such a contract.
This blog was written by Anita Vadgama, Partner of didlaw.
