Dismissal Whilst On Sick Leave Due To 'Frustration of Contract'

Peninsula Team

July 02 2013

Landmark CasesEmployers must be careful when dealing with employees who are out on long-term sickness, as persistent pressure could extend an illness, or some employers may be unknowingly (or deliberately) discriminating against an employee with a medical disability. 

However we have previously posted that there is a clear process to be followed when addressing the employment status of an employee on long-term absence. This gives an employer clear guidance on how to fairly terminate the employment of an employee who is absent, and with no prospects of a return to work.

In a recent Tribunal decision, De Sousa -v- Kepak Group (UD 964/2011),  there is also an interesting take on this as the employer deemed the employees absence to be a "frustration of contract" which had made the contract inoperable. Fair procedures were still followed and the employer got medical assessments carried out for the employee to determine if they could return to work.

It was deemed that the employee could not return to work (as they had only been able to attend work for a single day in two years due to a back injury), and as there was not alternative roles available the employee was terminated, as per Section 6 (4) of the Unfair Dismissals Act 1977 they were unable to carry out the role for which they were employed.

The Tribunal noted that the employer behaved prudently and acted reasonable in all circumstances, and that 'the contract of employment was frustrated and had become inoperable'. As the role was clearly unable to be performed this was deemed not to fall under the heading of an "unfair dismissal", and the legislation had no application.

It should be noted for employers that two years is a long time to have someone on sick leave (especially in the public service where they will continue to accrue annual leave), and that an employer should act much quicker when dealing with such issues.

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