What Is the Limitation Period for a Breach of Contract Claim After Redundancy?

A breach of contract claim after redundancy arises where an employer fails to comply with the terms of an employment contract when ending employment. This commonly involves disputes over notice pay, payment in lieu of notice, contractual redundancy entitlements, or other express contractual benefits.

The limitation period for bringing such a claim depends on whether it is issued in the Employment Tribunal or the civil courts. Choosing the correct forum and understanding the strict time limits is essential, as missing the deadline will usually prevent the claim from proceeding.

What Is a Breach of Contract in a Redundancy Context?

A breach of contract occurs when one party fails to perform their contractual obligations. In redundancy situations, this typically includes:

• Failure to give proper contractual notice
• Failure to pay notice pay or payment in lieu of notice (PILON) correctly
• Failure to follow contractual redundancy procedures
• Non-payment of contractual redundancy enhancements or bonuses
• Breach of express termination clauses in the employment contract

These claims are separate from unfair dismissal claims, which are based on statutory rights rather than contractual obligations.

Where Can a Breach of Contract Claim Be Brought?

In the UK, breach of contract claims after redundancy may be brought in either:

1. Employment Tribunal

Employment Tribunals can hear limited breach of contract claims where:

• The claim arises or is outstanding on termination of employment
• The claim falls within jurisdiction under the Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994
• The claim does not exceed the financial cap (generally £25,000)

2. Civil Courts (County Court or High Court)

More complex or higher-value breach of contract claims are usually brought in the civil courts under general contract law principles.

Limitation Period in the Employment Tribunal

General rule: 3 months less 1 day

For Employment Tribunal claims, the limitation period is:

Three months less one day from the effective date of termination

This applies to breach of contract claims that fall within tribunal jurisdiction.

What counts as the effective date of termination?

This is usually:

• The last day of employment, or
• The date notice expires (if notice is given correctly or should have been given)

Important limitation on tribunal claims

Employment Tribunals can only hear breach of contract claims that:

• Arise or are outstanding at termination
• Are presented within strict statutory time limits
• Fall within the financial jurisdiction cap

This makes tribunal claims suitable for smaller contractual disputes arising directly from redundancy dismissals.

Limitation Period in the Civil Courts

Six-year limitation period

For claims brought in the civil courts, the limitation period is:

Six years from the date the breach of contract occurred

This rule is set out in the Limitation Act 1980.

When does the breach occur?

In redundancy-related cases, the breach typically occurs when:

• Employment is terminated without proper notice
• Notice pay is not paid when due
• A contractual redundancy entitlement is withheld

This means the six-year clock usually starts on the termination date or the date payment should have been made.

ACAS Early Conciliation and Time Limits

Before issuing an Employment Tribunal claim, most claimants must go through ACAS Early Conciliation.

Key effects on limitation:

• The limitation clock is paused while Early Conciliation is ongoing
• Once completed, ACAS issues a certificate
• The claimant receives a short extension to submit the claim after conciliation ends

However, Early Conciliation does not extend the overall statutory time limit beyond this temporary pause.

When Does Time Start Running?

The starting point for limitation depends on the type of breach:

Common starting points include:

• The final day of employment
• The date contractual notice should have ended
• The date a contractual payment became due but was not made

In redundancy situations involving notice pay disputes, the timing can be affected by:

• Payment in lieu of notice clauses
• Garden leave arrangements
• Staggered or phased redundancy programmes

Correctly identifying the breach date is essential for calculating limitation accurately.

Can the Time Limit Be Extended?

Employment Tribunal

Extensions are extremely limited. A late claim may only proceed if:

• It was not reasonably practicable to present the claim in time, and
• It was submitted within a reasonable time afterwards

This is applied strictly, and late claims are rarely accepted.

Civil Courts

The six-year limitation period is generally fixed under the Limitation Act 1980, with very limited exceptions.

Common Types of Breach of Contract Claims After Redundancy

Typical claims include:

• Unpaid or underpaid notice pay
• Disputes over contractual PILON clauses
• Failure to pay enhanced redundancy payments set out in contract
• Breach of contractual bonus or commission arrangements triggered by termination
• Incorrect deductions from final pay

These claims often overlap with unfair dismissal or redundancy consultation disputes.

Practical Steps When Considering a Claim

Where a breach of contract is suspected after redundancy, key steps include:

1. Reviewing the employment contract and redundancy terms
2. Identifying the exact termination date and notice provisions
3. Calculating limitation deadlines for tribunal and civil court routes
4. Considering whether ACAS Early Conciliation is required
5. Preparing and issuing the claim within the correct jurisdiction and timeframe

Risks of Missing the Limitation Period

Failure to issue a claim in time usually results in:

• The claim being struck out or rejected
• Loss of entitlement to compensation
• Inability to recover unpaid contractual sums
• Potential costs consequences in civil proceedings

Time limits are therefore a decisive factor in breach of contract disputes following redundancy.

Key Takeaways

The limitation period for a breach of contract claim after redundancy depends on the forum:

• Employment Tribunal: 3 months less 1 day from termination, subject to strict jurisdiction and financial limits
• Civil courts: 6 years under the Limitation Act 1980

Correctly identifying the termination date and breach event is essential for calculating time limits. ACAS Early Conciliation can pause tribunal deadlines, but it does not remove the strict statutory framework governing these claims.