Paulette Neil | An employer’s escape from a frustrating employment contract

Persons in Jamaica are eligible for employment as early as 15 years of age.

The relationship between the employer and employee is principally determined by the terms of an employment contract.

It is commonplace for an employment contract to be oral or written, so long as there are the relevant ingredients which make a contract between two parties binding, for example, the parties intended to create legal relations between themselves and/or there is sufficient consideration – an exchange of promises – between the parties.

An employment relationship usually contemplates the availability of an employee to carry out the various tasks for which they are contracted. However, what happens when an employee falls ill, whether due to injury on the job or otherwise, and such illness results in the employee being unable to work for weeks, months or even years? Similarly, what happens when an employee is imprisoned, and a natural consequence of such imprisonment is that the employee is unable to perform the services for which they are contracted? Both situations can place an employer in quite an invidious position.

Often, long-term illnesses or imprisonment are unforeseen circumstances and are usually not contemplated at the time when the employment contract was entered. However, such situations either make it impossible for the contract to be performed or render its performance fundamentally or completely different from its original terms. In such instances, the salient question then is whether the employment contract has been ‘frustrated’.

Legal doctrine

Frustration is a legal concept, which, if successfully established, will provide a basis on which an employment contract can be terminated. In such an instance, the employee is not deemed to be dismissed, and therefore cannot claim wrongful or unfair dismissal or that they are entitled to redundancy payment. It is usually the employer who is left in a predicament following the long-term absence of the employee due to illness or imprisonment, that seeks to rely on the legal doctrine of frustration.

When an employee falls ill ,and as a result of such illness he or she is unable to attend to his or her contracted duties, the employee has a duty to notify his or her employer of such impending absence. Where such illness has been for an extended period the employee ought to keep his employer informed of the progress of the illness; however, where an employee fails to do so, an employer should make reasonable enquiries about such progress.

In determining whether such illness has frustrated the employment contract, thereby bringing it to an end, the following factors should be considered:

• The length of employment prior to the illness;

• How long the employment was likely to last in the absence of the incapacity;

• The nature of the job;

• The likely length of time the incapacity will last and the effect of the illness or disabling event;

• The need of the employer for the work to be done and the need for a replacement to do it;

• Whether the employee continued to receive wages;

• Whether the terms of the contract provide for incapacity;

• The conduct of the employer in relation to the employment; and

• Whether in all the circumstances a reasonable employer could be expected to wait any longer to see if the employee would return to work.

On the other hand, the imprisonment of an employee does not automatically infer that the employment contract has been frustrated. The circumstances of each case must be examined carefully.

An employer must, in the circumstances of the imprisonment of an employee, consider the expected duration of any incapacity before concluding that the contract has been frustrated. In instances where the incapacity was for a short duration, case law has shown that it is less likely that the employment contract can be deemed frustrated. Therefore, an employer must safeguard against hasty conclusions of frustration.

Possible solutions

An employer should consider other options available under employment law. For example, the employer may consider disciplinary procedures governing the contract of employment.

If, for example, an employee is alleged to have committed an offence within the course of his employment in breach of the company’s code of conduct, and such an offence is also deemed criminal, by other legal provisions, instead of waiting to see if imprisonment of the employee may frustrate the employment contract, the employer should in such an instance follow the procedures outlined in the company’s disciplinary procedure or the Labour Relations Code and apply the appropriate disciplinary sanction.

Of course, practical questions of the employee’s availability to attend a disciplinary hearing may eventually arise here.

There are other instances in which the performance of an employment contract is hindered and the question of frustration may arise, for example, where a contract is dependent on an employee securing a specific licence or a security pass but is denied, or such licence or security pass has been issued to the employee but later revoked or withdrawn. Whether any such contract is deemed frustrated will depend on the circumstances of the case.

An employer should bear in mind that the legal principle of frustration will not be available to an employer where the frustrating event should have been foreseen or if the frustrating event or circumstance was caused by him.

When circumstances arise where an employer may be able to rely on the principle of frustration as a basis to terminate a contract of employment, a careful review should be done to ensure that the employer, when terminating the contract of employment, is not in breach of the Labour Relations Code and cannot be said to have acted unjustifiably.

When in doubt, consult a qualified lawyer who specialises in employment law.

Paulette Neil is an attorney at law at DunnCox Montego Bay.

paulette.neil@dunncox.com