Non Payment of Salary: Breach of Contract

    30 Mar 1999

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    Where an employer failed to make available an agreed salary package to employees, that represented a deliberate failure to pay the employees and therefore was a fundamental breach of their contracts of employment. The fact that the amount of money was relatively small did not matter. The effect of the fundamental breach was serious for the employer, in that when the employees were dismissed, the employer was unable to rely on restrictive covenants preventing the employees working for a competitor, because the employer was itself in breach of contract.

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