Non payment of wages breaching contract and my notice period

[oddone87]

Hello there I'm looking for a bit of advice. I did try searching the forum but wasn't too sure what to search for.

I am suppose to be paid on the "first working day of the month" according to my contract. this used to be the last friday of the month but due to late payment they pushed it back to the next month and had us sign a piece of paper agreeing to this. Well now they have failed to pay us again in time. they did not tell us this would be an issue until midday on our due day. as it fell on a Friday we were told the company had failed to receive they're payment (source unknown) and due to this they could not pay us until the following Monday. and now today being the Monday we have been advised the money has still not cleared into their account and so we must wait until tomorrow for further information.

I'm curious to know where I legally stand with this. Firstly I am sure I will get the money however it has led me to feel very unsettled in my current job as there are persistent rumours over the companies finances and our inability to pay suppliers, this has lead to suppliers cutting contact with us completely. Now my contract states that I have to give 3 months notice if I wish to leave. If they do not pay me in time can they still hold me to the 3 months notice? I'm curious as it makes it hard to find new employment with such a long notice period.

Our employer has told us they are only in breach of contract until we receive the money and if we try to do anything they will get solicitors involved. being a large company that deals in millions of pounds the thought of solicitors scares the hell out of me.

any advice would be greatly appreciated as I don't like being threatened with legal action when I haven't done anything wrong.

[stevemLS]

Re: Non payment of wages breaching contract and my notice period

It is a "material" breach of contract and technically you have the right to take action for damages so payment of what was due and perhaps a tiny bit of interest and any bank charges etc.

However, for a "large company that deals in millions" their finances don't sound terribly healthy and you might be well advised to start looking for another job.

[oddone87]

Re: Non payment of wages breaching contract and my notice period

Thank you very much for the reply. I currently have faith that they will provide me with money owed. however you are right in that the companies finances do not sound healthy. would a "material" breach of contract help me reduce my notice period with the company if this is possible? I only ask because I am struggling to find another job that is willing to wait while I work my 3 month notice period

[stevemLS]

Re: Non payment of wages breaching contract and my notice period

Yes, a material breach entitles you to repudiate the contract, that is to say that because of their repeated breach you are able to terminate the contract and they cannot hold you to the notice period.

However, that would be an immediate termination rather than a reduced notice period, so you would need to think carefully about it.

[oddone87]

Re: Non payment of wages breaching contract and my notice period

Thank you very much for the information yet again. I will do some research on the term And I will not be rash with my decision! would this option be lost once I receive my pay? Sorry for the naivety on the subject

[des8]

Re: Non payment of wages breaching contract and my notice period

I believe you will find that an occasional late payment of wages due to a reasonable cause (eg late payment by a major customer ) will not automatically be classed as a material breach of contract. Your employer could in principle defend an action for constructive dismissal by arguing it was the only reasonable course of action.
If you were to resign and to claim constructive dismissal you would need to show persistent late payment amounting to unilateral change to your contract.

[stevemLS]

Re: Non payment of wages breaching contract and my notice period

I don't think anyone has mentioned constructive dismissal.

The contractual relationship is entirely between employer/employee and is not contingent on third parties - so I would say it is a material breach. It is a fundamental term of the contract and one of the few where I would say it is implicit that time is of the essence.

Once remedied, however, by the payment of the outstanding wages, by continuing to work their, I believe OP will have lost the right to repudiate.

[oddone87]

Re: Non payment of wages breaching contract and my notice period

It's a bit tricky to explain as we don't have customers. we are a sports team. our money is provided by sponsorship and investment. I believe the payroll money was never in place (or has been spent paying a supplier) and our accounts team have had to ask our shareholders for the money (this is to the best of my knowledge). I have been told today by my manager that they don't have budgets to work too (sounds very irresponsible to me) thy just do what needs to be done. The manager also oversee's buyers in our company so if he doesn't work to a budget that's scary news!

This has happened twice in the past 12 months but on this occasion we are still waiting for our wages. would this be too infrequent to be considered as persistent?

The whole thing confuses me if I am honest. I just don't currently have faith in my employer to consistently pay wages with the financial uncertainty surrounding the business.

[des8]

Re: Non payment of wages breaching contract and my notice period

If oddone resigns, giving less than 3 months notice because of breach of contract, the employer is threatening legal action, ie threatening oddone with breaching the contract.

The employer will maintain his delay in payment of wages was reasonable because of the unexpected failure or delayed payment by a major client, and therefore not a major breach.

By resigning outside of contract terms Oddone is in effect saying the employers unreasonable actions have breached the Implied trust between them to such an extent the contract no longer exists and that he has been dismissed. This is in fact what is being suggested in post 8. (I don't have faith)

So whilst Oddone might not be LODGING a claim for constructive dismissal, he might have to claim unfair constructive dismissal as a defence in any possible action brought by his employer.

On the other hand I doubt the employer would take such expensive steps, unless Oddone is very senior management, as it appears they lack any finance control

[stevemLS]

Re: Non payment of wages breaching contract and my notice period

At least we agree Des on the unlikelihood of the employer taking any action for apparent breach of contract if less than 3 months notice is given.

If the did, I agree repudiatary breach would be the defence.