The termination of the Employment contract

Modes of termination

Dismissal and Notice Under S 86 (1) of the ERA 1996 – the notice required to be

given by an employer to terminate the contract of employment of a person who has been continuously employed for [one month] or more

(a) shall be not less than one week’s notice if his period of continuous employment is less than two years;

(b) shall be not less than one week’s notice for each year of continuous employment if his period of continuous employment is two years or more but less than twelve years; and

(c) shall be not less than twelve week’s notice if his period of continuous employment is twelve years or more.

Dismissal and Notice

S 86 (2) the notice required to be given by an employee who has been continuously employed for [one month] or more to terminate his contract of employment shall be not less than one week.

The statutory minimum period of notice extends to part-time employees regardless of their hours of work

Failure by the employer to comply with notice requirements entitles the employee to bring an action for damages based on breach of contract. Such a claim is known as ‘wrongful dismissal’

McLachlin in the Supreme Court of Canada in Wallace v United Grain Growers Ltd 1997

“The action for wrongful dismissal is based on an implied obligation in the employment contract to give reasonable notice of an intention to terminate the relationship (or pay in lieu thereof) in the absence of just cause for dismissal…A “wrongful dismissal” action is not concerned with the wrongness or rightness of the dismissal itself….A wrong arises only if the employer breaches the contract by failing to give the dismissed employee reasonable notice of termination. The remedy for this breach is an award of damages based on the period of notice which should have been given”

Wrongful/Summery dismissal

Instant Termination of the employment contract without notice;

Breach because of gross misconduct – disobedience, neglect, dishonesty or misbehaviour (undermines the trust and confidence Neary and Neary v Dean of Westminister 1999)

Until recently an action for wrongful dismissal was a common law claim for breach of contract directed in the ordinary courts. Now employment tribunals also have jurisdiction to hear an action for wrongful dismissal;

Remedy for a successful claim for wrongful dismissal Remedy for a successful claim for wrongful dismissal is an

action for damages amounting to the loss of wages payable during the notice period;

A contract of employment could make provision for a minimum period of notice on termination, and also provide that the employer “may make a payment in lieu of notice”

In the case of a dismissal in breach of contract, where the employer ignores disciplinary and appeals procedures the employee should be able to rely on the implied contractual rights not to be unfairly dismissed

Statutory Dismissal s.95 ERA 1996

For the purposes of unfair dismissal the meaning of ‘dismissal’ is defined in s. 95 of the ERA 1996 as:

Express Dismissal s. 95 (1)(a) Implied dismissal s.95(1)(b) Constructive dismissal s.95(1)(c)

Express Dismissal s. 95 (1)(a)

Section 95(1)(a) an employee shall be treated as dismissed by his employer if , but only if;

The contract under which he is employed is terminated by the employer, whether it is terminated by notice or without notice, or

Implied dismissal s.95(1)(b)

Section 95(1)(b) an employee shall be treated as dismissed by his employer if , but only if;

Where under the contract he is employed for a fixed term, that term expires without being renewed under the same contract, or

Constructive dismissal s.95(1)(c)

Section 95(1)(c) an employee shall be treated as dismissed by his employer if , but only if;

The employee terminates the contract, with or without notice, in circumstances such that he is entitled to terminate it without notice by reason of the employer’s conduct.

The employee’s conduct in ‘walking out’ and treating the contract as at an end;

Where the reason for leaving was due to the conduct of the employer or those under his control, it may be that the employee could show that the employer is responsible for the contractual termination;

Such a dismissal is commonly referred as constructive dismissal and usually provides the applicant to secure a remedy for unfair dismissal

Constructive dismissal s.95(1)(c)

Unilateral variation of the employment contract - breach by the employer of the express terms of the contract of employment covering matters like wages, job location, contractual duties and job description may constitute repudiation on behalf of the employee;

In a case where the employee resigns with notice there may be evidence that the resignation is a response to the employer’s repudiatory breach of contract and constitute constructive dismissal;

Employers have a clear duty in relation to the health of non-smokers so that if smoking is allowed at the workplace this could constitute a breach of the employers’ duty towards passive smokers;

Constructive dismissal s.95(1)(c)

An employer is of course vicariously responsible for the actions of his employees within the scope of their employment – this can be taken to be the ‘employers’ conduct’;

Frustration

No dismissal for the purpose of s. 95 if it can be shown that the contract of employment has been brought to an end through the operation of the common law doctrine of frustration;

It occurs due to a change in circumstances; Performance becomes impossible or radically

different than the performance envisaged by the parties when they made the contract- long illness and imprisonment

Resignation

There is no dismissal if the employee expressly terminates the contract of employment by resignation. A resignation will usually be express but could be implied from the conduct provided that it is clear and unambiguous;

Failure to comply with notice requirements is a breach of contract for which the employee could be made liable in damages;

The unilateral resignation must be distinguished from the consensual termination of employment;

Mutual termination

Mutual agreement for termination of the employment contract – it is a fundamental principle of contract law;

Fixed term contracts in particular are most usually terminated by the agreement of the parties;