Limitation Period for Breach of Implied Contract Terms After Dismissal

When employment ends, disputes sometimes arise about whether the employer complied with the terms of the employment contract. These terms are not always written explicitly. Many are implied by law, including duties such as mutual trust and confidence, lawful and reasonable treatment, and proper notice of termination.

A claim for breach of implied contract terms after dismissal can be brought either in the Employment Tribunal or the civil courts, depending on the nature of the claim. The time limits for bringing such claims vary significantly depending on the forum. Understanding these limitation periods is critical, as missing a deadline will usually prevent a claim from proceeding.

Implied Terms in Employment Contracts

Employment contracts in England and Wales contain both express and implied terms. Implied terms arise automatically through common law and include:

• The duty of mutual trust and confidence
• The employer's duty not to act in a manner likely to destroy the employment relationship
• The duty to provide reasonable notice of termination (unless gross misconduct applies)
• The duty to provide a safe working environment
• The duty to follow contractual disciplinary procedures where applicable

After dismissal, claims often focus on whether the employer breached these implied terms in the way the dismissal was handled.

Legal Routes for Bringing a Claim

Employment Tribunal Claims

The Employment Tribunal has limited jurisdiction over breach of contract claims. It mainly covers claims arising or outstanding at termination of employment.

Common tribunal claims include:

• Wrongful dismissal (failure to give proper notice)
• Breach of contract relating to termination payments
• Some outstanding contractual payments due on termination

Tribunal jurisdiction for breach of contract is restricted and subject to statutory rules under the Employment Tribunals Extension of Jurisdiction Order 1994.

Limitation Period in the Employment Tribunal

Standard Time Limit

The standard limitation period for most tribunal claims involving dismissal is:

• 3 months less one day from the effective date of termination (EDT)

The EDT is typically:

• The last working day, or
• The end of the notice period (if notice is worked), or
• The date employment ends immediately (gross misconduct or summary dismissal)

This time limit applies to most claims linked to dismissal, including breach of contract claims that fall within tribunal jurisdiction.

Practical Effect

A claim must usually be lodged within this three-month window, and the claimant must also begin ACAS Early Conciliation within the same overall time frame. The ACAS process pauses the limitation clock but does not extend it indefinitely.

Extensions

Tribunals may extend time only in limited circumstances, such as where it was not reasonably practicable to bring the claim in time. Extensions are applied strictly.

Limitation Period in the Civil Courts

Where the claim falls outside tribunal jurisdiction, it may be brought in the civil courts (usually the County Court or High Court).

Standard Limitation Rule

Under the Limitation Act 1980, the general rule for breach of contract claims is:

• 6 years from the date the breach occurred

This applies to:

• Breach of express or implied contract terms
• Wrongful dismissal claims not pursued in the tribunal
• Claims for damages arising from contractual breaches after termination

The limitation period starts when the breach happens, not when it is discovered or when losses become apparent.

Key Distinction: Tribunal vs Civil Court

Forum	Claim Type	Limitation Period
Employment Tribunal	Wrongful dismissal / termination-related contract claims	3 months less 1 day
Civil Courts	General breach of contract (including implied terms)	6 years

This distinction is central. Many claimants lose claims by choosing the wrong forum or misunderstanding jurisdictional limits.

Breach of Implied Terms After Dismissal

Claims based on implied terms often involve allegations such as:

• Dismissal conducted in breach of mutual trust and confidence
• Failure to follow fair process where contractually required
• Unlawful removal of contractual benefits at termination
• Failure to pay contractual notice or benefits owed

Tribunal Position

Only certain breach of contract claims can be brought in the Employment Tribunal, and they must relate directly to termination and fall within jurisdictional limits.

Civil Court Position

Broader claims involving implied contractual duties (particularly conduct prior to dismissal or wider financial loss) are usually brought in the civil courts, subject to the six-year limitation period.

Interaction with Wrongful Dismissal Claims

Wrongful dismissal is a contractual claim based on failure to provide proper notice.

Key points:

• It is treated as a breach of contract claim
• It can be brought in either the tribunal (if within jurisdiction and time limits) or civil courts
• The limitation period depends on the forum, not the label of the claim

Where dismissal is immediate and without notice, the cause of action arises on the date of termination.

Common Limitation Issues

1. Misunderstanding the Effective Date of Termination

The limitation clock usually starts from the EDT, not from later internal appeals, grievances, or ACAS discussions.

2. Delay Due to Internal Procedures

Internal grievance or appeal processes do not normally extend limitation periods.

3. ACAS Early Conciliation Miscalculations

The ACAS process pauses limitation but does not restart it. Incorrect timing is a frequent reason for claims being out of time.

4. Wrong Forum Selection

A claim issued in the wrong forum may be struck out even if it is within the 6-year civil limitation period, if tribunal jurisdiction does not apply.

Practical Steps When Assessing Time Limits

A structured approach is generally required:

1. Identify the effective date of termination
2. Determine whether the claim is contractual and termination-related
3. Confirm whether tribunal jurisdiction applies
4. Apply the 3-month tribunal limit or 6-year civil limit accordingly
5. Account for ACAS Early Conciliation pause rules
6. Ensure the claim form is issued before expiry

Final Thoughts

The limitation period for breach of implied contract terms after dismissal depends primarily on the legal forum. Employment Tribunal claims must generally be brought within three months less one day of termination. Civil court claims for breach of contract, including implied terms, typically have a six-year limitation period under the Limitation Act 1980.

The key issue is jurisdiction. Tribunal claims are time-limited and narrowly defined, while civil court claims allow a longer period but are subject to stricter procedural and cost implications. Correct classification of the claim and accurate calculation of the limitation date are essential to preserve legal rights.