Friend told relationship at work was breach of contract

I am emailing in regards to a close friend. She works for a small business which includes a few different companies. She has been having a relationship with one of the directors of the company she works for. When she found out she was pregnant, she went to the director of the company she is employed by and he has told her that she has breached her contract. However, she was never issued a contract and has never signed anything in regard to this contract. She was never verbally informed that this was against policy by her boss or the director she was seeing. The relationship has broken down since the news and she has also been informed that the company she is paid by is going into liquidation. There are talks of employees from the liquidised company being taken on by the other companies within the business, but she is unsure where she stands and what rights she has. Can you give us any advice on this matter?

I understand that your friend has recently found out that she is pregnant. She informed the director of the company of her pregnancy and the fact that she has been having a relationship with another director. Your friend was informed that she had breached her contract. However, she was never issued a contract. Although she had not signed a contract there would be an implied one through custom and practice. Some contracts have a clause that requires you to inform the employer of any relationships at work. However, as your friend only had an implied contract this would not, strictly speaking, apply to her.

If your friend can prove that she has been treated less favourably because of, or for a reason related to, her pregnancy, childbirth or maternity leave then she may have a claim for pregnancy discrimination or a detriment linked to pregnancy. If she is dismissed and can prove it was for a reason related to pregnancy, childbirth or maternity then she may have an automatic unfair dismissal claim.

I understand that since your friend informed the company of her pregnancy she has been informed it is going into liquidation. If this is the case and she brought a claim against them, then she would join the bottom of the list of people that are owed money, provided her claim was successful. A dividend would be declared in the pound as to how much she would receive of any compensation awarded (for example, if there was money left in the pot after the preferential creditors had been paid of, say, 40p in the £1, she would only receive 40% of any sum awarded). If, however, there is no money left in the pot she would not receive anything.

Finally, you mention that there has been talk that some employees from the company going into liquidation may be taken over by other companies within the business. I would need further information on this point to establish whether or not they would be transferring under TUPE legislation (The Transfer of Undertakings (Protection of Employment) Regulations 2006). If TUPE legislation does apply then your friend’s employment should automatically transfer on the same terms and conditions. I note that you indicate this is simply office gossip at the moment. If your friend receives any correspondence from the company regarding a transfer please ask her to send it to me directly at so that I can provide her with more specific advice.

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