This guide is maintained as a current resource for September 2026 and covers only the laws of England and Wales. Information is for general guidance, not legal advice. Consult a qualified solicitor for advice specific to your situation.
Explanation of breach of implied employment terms in UK dismissal cases, including mutual trust and confidence, employer duties, constructive dismissal, wrongful dismissal claims, tribunal assessment, and legal consequences for employers and employees.
A breach of implied employment terms in dismissal cases occurs when an employer fails to comply with obligations that are not explicitly written in the employment contract but are automatically included by law. These implied terms form part of every employment relationship in England and Wales and can significantly affect whether a dismissal is lawful or wrongful.
In dismissal disputes, a breach of implied terms can lead to claims such as wrongful dismissal, unfair dismissal, and constructive dismissal. Tribunals assess whether the employer's conduct broke these fundamental contractual obligations and whether that breach justified the employee's termination or resignation.
What Are Implied Terms in Employment Contracts?
Implied terms are contractual obligations that are not expressly written in the employment contract but are legally recognised as part of it. They arise from:
- Common law principles developed through case law
- Statutory employment protections
- Necessity for the contract to function properly in practice
- Established workplace norms recognised by tribunals and courts
These terms apply automatically to most employment relationships under English law.
The Most Important Implied Term: Mutual Trust and Confidence
The most significant implied term in dismissal cases is the duty of mutual trust and confidence.
This requires both employer and employee not to:
- Act in a way that destroys or seriously damages the working relationship
- Behave arbitrarily, unfairly, or capriciously
- Undermine the employment relationship without reasonable cause
A breach of this term is often central to claims involving dismissal or resignation in response to employer conduct.
Examples include:
- Unjustified disciplinary action
- Bullying or harassment by management
- Failure to investigate serious complaints properly
- Sudden and unexplained removal of duties
If this term is breached, it may justify resignation as a constructive dismissal or support a wrongful dismissal claim.
Other Key Implied Terms in Dismissal Cases
1. Duty to provide a safe working environment
Employers are expected to take reasonable care for employee safety. A breach may occur where:
- Health and safety risks are ignored
- Workplace bullying is not addressed
- Stress-related risks are not managed
A failure in this duty can contribute to a breakdown in trust leading to dismissal claims.
2. Duty of care in investigation and disciplinary processes
Employers must carry out fair and reasonable investigations before dismissal. Although disciplinary procedures are often written down, fairness standards are also implied.
A breach may arise where:
- Investigations are biased or incomplete
- Evidence is ignored or selectively used
- Employees are not given a proper chance to respond
Tribunals consider whether the process was reasonable in all the circumstances.
3. Duty to pay wages and benefits properly
Even without explicit contractual wording, employers are impliedly required to:
- Pay wages correctly and on time
- Honour accrued entitlements such as holiday pay
- Apply agreed benefits consistently
Failure to do so can amount to a breach serious enough to justify resignation or legal action.
4. Duty not to act in bad faith
Employers must not misuse contractual powers dishonestly or for improper purposes. Examples include:
- Fabricating performance concerns to justify dismissal
- Targeting employees unfairly during restructuring
- Using redundancy as a cover for dismissal unrelated to business needs
Such conduct may render a dismissal legally defective.
How Breach of Implied Terms Leads to Dismissal Claims
Breach of implied terms can give rise to several types of employment claims:
1. Wrongful dismissal
Occurs where breach of implied terms leads to termination without proper contractual notice or justification. For example, dismissal following a breakdown in trust caused by employer misconduct.
2. Constructive dismissal
Occurs where the employee resigns in response to a fundamental breach of implied terms by the employer.
Common triggers include:
- Persistent bullying
- Failure to address grievances
- Significant unilateral changes to working conditions
- Erosion of trust and confidence
The resignation is treated in law as a dismissal.
3. Unfair dismissal
Even where implied terms are not strictly contractual issues, breaches often overlap with statutory fairness requirements under the Employment Rights Act 1996.
Tribunals assess:
- Whether the employer acted reasonably
- Whether a fair procedure was followed
- Whether dismissal was proportionate
Tribunal Approach to Implied Terms in Dismissal Cases
Employment Tribunals assess breach of implied terms using established legal principles, including:
- Whether conduct objectively undermined trust and confidence
- Whether the employer acted reasonably in context
- Whether the breach was serious enough to justify termination
- Whether the employee affirmed the contract by continuing to work
Case law consistently emphasises that not every disagreement or poor management decision constitutes a breach; the conduct must be sufficiently serious.
Examples of Breach of Implied Terms in Practice
Example 1: Unfair disciplinary action
An employee is dismissed after a disciplinary process where key evidence is ignored and the outcome appears predetermined. This may breach the implied duty of fair process and trust.
Example 2: Workplace bullying ignored
An employee raises repeated complaints about bullying, but management takes no action. Continued exposure may breach the duty of trust and confidence.
Example 3: Sudden removal of duties
An employee is stripped of responsibilities without explanation, leading to humiliation and loss of role identity. This may be treated as a fundamental breach.
Example 4: Non-payment of wages
Repeated failure to pay wages on time may constitute a breach of the implied duty to pay remuneration properly.
Legal Consequences of Breach
Where a breach of implied terms is established in dismissal cases, possible outcomes include:
- Compensation for financial losses
- Notice pay in wrongful dismissal claims
- Damages for breach of contract
- Unfair dismissal awards under statutory law
- Injury to feelings (in related discrimination cases)
The severity of the breach influences the level of compensation awarded.
Time Limits for Bringing Claims
Time limits depend on the type of claim:
- Employment Tribunal claims: 3 months minus 1 day from dismissal or resignation
- ACAS Early Conciliation pauses limitation periods
- Civil breach of contract claims: generally 6 years
Failure to act within these limits may prevent a claim from being heard.
Practical Issues in Implied Term Cases
Key evidential considerations include:
- Emails and written communications
- HR records and grievance documentation
- Witness statements from colleagues
- Disciplinary records and investigation notes
Tribunals place significant weight on documented conduct and procedural fairness.
Key Takeaways
Breach of implied employment terms in dismissal cases occurs when an employer violates legally recognised obligations that form part of every employment contract, particularly the duty of mutual trust and confidence. Such breaches often arise in situations involving unfair disciplinary action, workplace bullying, poor investigation processes, or failure to pay wages. These breaches can lead to wrongful dismissal, constructive dismissal, or unfair dismissal claims depending on how the employment relationship ends. Employment Tribunals assess whether the breach was serious enough to justify termination and whether it undermined the employment relationship.
