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Do Your Employees Have Contracts? What You Should Know About Contract Breaches

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Having a contract with an employee is a great way to make sure both sides have an understanding of the expectations related to a job. Even though contracts add clarity, they bring with them the potential problem of the contract being breached. If you have employees in your company with a contract, this is what you need to know about contract breaches.

Who Is Able To Breach A Contract?

Even though many things in a contract are related to your employee, both of you can potentially breach the contract. This will happen if either party does not meet the minimum requirements of commitments that are defined in their employment contract. An example would be if you terminate an employee for a reason not permitted by the contract, or if the employee does not give the proper amount of notice prior to leaving the company.

What Happens If The Employer Breaches The Contract?

An employee can take legal action against their employer if their contract has been breached. A common reason this can happen is because of wrongful termination. When your employee feels like their termination was not within the contract, they can seek legal help from an attorney.

The consequence of wrongfully terminating an employee can be the need to pay them compensatory damages. This would be the amount of money they lost due to not having the contract withheld. For example, if you did not give an employee a required 30 days notice of termination as defined in their contract, you may still be required to pay them for those days.

What Happens If The Employee Breaches The Contract?

If the employee is the one that breaches the stipulations of a contract, they can be held responsible for paying compensatory damages as well. This may result in getting the money back that was because of the need to replace an employee.

Keep in mind that if a contract breach was not intentional, because of an injury or medical condition that is beyond their control, the employee may not be responsible for paying those compensatory damages.

Understanding the contracts that your employees have is crucial, but there can be times where you need help figuring out the legalities behind certain situations. If you do have questions about employee contracts, speak to a lawyer in your area. They can read over the contract, and let you know how your specific situation applies to it.