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Frustration of employment contract and duty to make reasonable adjustments

Posted by TonyBrownEmploymentSolicitor on October 14, 2013

Can the common law doctrine of frustration of contract apply where there is a duty to make reasonable adjustments?

The doctrine of frustration of contract, as it applies to the contract of employment, states that the contract of employment will terminate without any action by the employer or worker where either or both of the parties to the contract of employment is unable by reason of circumstances or events beyond their control to perform the contract of employment.

In the next case, the Claimant was employed as site manager for a small business specialising in the refurbishment of retail outlets and public houses. The job required a high level of mobility and some carpentry. In February 2010 the Claimant suffered a stroke and was hospitalised until April 2010. In June he was still unable, or virtually unable, to walk. At first the employer treated the Claimant well. They continued to pay the Claimant full pay until the end of May although there was no contractual obligation to pay sick pay. Managers visited him in hospital and kept in touch on the telephone. In September 2010 the Claimant moved to live with family in Dorset and the parties lost contact. He did not contact the employer to say that he anticipated returning to work. In January 2011 the employer sent the Claimant his P45 with a letter confirming his employment was at an end.

The employment tribunal was critical of the employer, saying that it ought to have taken steps to ascertain the Claimant’s medical condition and discuss the matter with him. But it rejected his claim for unfair dismissal, upholding the employer’s argument that the Claimant’s contract of employment had been frustrated by operation of law.

The Claimant argued before the EAT that the doctrine of frustration was incompatible with the duty to make reasonable adjustments under the Equality Act.

Dismissing the Claimant’s appeal, the EAT ruled that the tribunal was correct to hold that the Claimant’s contract of employment came to an end by virtue of frustration on the facts of this case.

The EAT said that, before the doctrine of frustration can apply in the case of a disabled person, the tribunal must consider whether the employer is in breach of a duty to make reasonable adjustments. However, where, as the tribunal found in this case, there was no breach of the duty to make reasonable adjustments (because there was nothing that the employer could reasonably have done), the tribunal was entitled to find that the contract was frustrated.

Comment

Many people think that the doctrine of frustration is at odds with the protection Parliament (and Europe) decided disabled employees should have in the workplace but the EAT was constrained by precedent. It did, however, regard the behaviour of the employer in this case, simply sending the P45 as neither good practice nor even common practice where there has been a long period of absence.

If you would like advice about how the issues in this note apply to your situation, please contact Tony Brown on 01225 740097 or by e mail to tony@bathemploymentlaw.co.uk

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