Controversial Tribunal ruling opens door to historical breach of contract claims

A Tribunal has held that the 6 year limit on bringing a breach of contract claim does not apply to claims made to Employment Tribunals.

This means that employees who have been dismissed may now be able to pursue a claim against their former employers in order to claim damages in respect of a breach of contract that occurred more than 6 years ago.

Former employees can bring breach of contract claims in the Employment Tribunal for unpaid wages, notice payments, contractual holiday or sick pay, bonuses, commission and any other sums or benefits that are due to them via their employment contract.

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Facts in the case

NBC News Worldwide ended Ms Grisanti’s employment. She then brought a claim against them for their failure to make National Insurance contributions between 1996 and 2003.

Her payslips showed National Insurance deductions but no payments had reached HMRC.

Ms Grisanti lodged her claim with the Employment Tribunal in March 2015 in compliance with the Employment Tribunal time limit of 3 months, plus the ACAS conciliation period from the termination date. However, it was some 12 years after the last National Insurance payment should have been made i.e. when the breach of contract had occurred.

NBC argued that the 6 year limitation rule applied and the claim should be struck out because it had been made out of time.

Tribunal’s Ruling

The Tribunal rejected the arguments put forward by NBC. They held that the Extension of Jurisdiction Order 1994 which governs breach of contract claims in the Employment Tribunal is not subject to the 6 year limitation rule.

The Tribunal’s ruling contradicts previous Tribunal rulings requiring compliance with both pieces of legislation.

Unfortunately the Tribunal gave no indication about how old a breach of contract can be before a claimant is prevented from bringing a claim.

Therefore, the ruling has arguably left Employers facing an Employment Tribunal claim for breach of contract many years after the Employee’s employment is terminated.

Employment Law Advice

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