Ethical leadership plays a pivotal role during a period of frequent organizational change, reducing the adverse effects on employees and facilitating their adjustment to and acceptance of change. However, the conditions under which ethical leadership is most effective remain underexplored. Grounded in the Conservation of Resources Theory, this study posits that employee perceptions of psychological contract breach can undermine the effectiveness of ethical leadership in alleviating the negative consequences of frequent change. Drawing on data from two empirical studies involving Australian public sector employees during a period of significant organizational reforms across the federal and state levels, this research advances the literature by highlighting the importance of addressing psychological contract breach. It highlights the need for leaders and organizations to account for psychological contract breach when leveraging ethical leadership to lessen the detrimental outcomes of frequency of change.
