Commentary

(b) Debt; liquidated damages clauses

Division AII Contract of Employment
| Commentary

(b) Debt; liquidated damages clauses

| Commentary

(b)     Debt; liquidated damages clauses

The employee may have a debt action for wages and other sums due to them under the contract, provided they have rendered the work or service which is the consideration for this or were ready, willing and able to do so. Where the employment still subsists, a claim for unpaid wages may be brought by an action in the County Court for breach of contract or in the employment tribunal for unpaid wages under ERA 1996 Part II. A breach of contract claim may not be brought in the ET where the employment relationship continues. Such an action in the ET is open to the employee once the relationship ends. In that circumstance, if the claim is purely one for unpaid wages, it is better brought under the ERA 1996 as it is open to an employer to make a counterclaim against the employee in a breach of contract action.

An employer cannot avoid paying accrued wages even if there was misconduct prior to the dismissal which justified summary termination (see Healey v Française Rubastic SA [1917] 1 KB 946, where the employee was held entitled to recover wages which fell due after he had committed a repudiatory breach but before his employers dismissed him).

This principle was further elucidated by

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