Within an employer’s disciplinary rules or disciplinary procedure there will usually be a list, or examples, of what constitutes gross misconduct. This list will usually include fraud. Therefore, fraud on the part of an employee is likely to amount to a fundamental breach of contract that, if the employee was still employed, would entitle the employer to terminate the contract.

The tribunal will have jurisdiction to hear an employer’s claim for breach of contract against a former employee if, and only if, that former employee has included a contract claim in their ET1 claim form which has been served on the employer. The claim would therefore be a contractual counterclaim. However, if the former employee has not brought a breach of contract claim, or any claim for that matter, the employer will have to bring its breach of contract claim in the civil courts. In principle, there is no reason why an employee may not be held liable for damages for the breach of contract within the contract of employment.

However, it is rare to bring such claims since the employee is unlikely to be able to pay any damages that may be awarded and because pursuing an individual for damages may harm the employment relations of that company. Nevertheless, should a claim be progressed, the employer will have to prove that the employee misconduct (or other breach) in question was actually committed.