Frustration of contract

There will be no dismissal if a contract of employment is “frustrated”. Frustration is the legal term used to describe what happens to a contract when an unexpected event takes place through no fault of either party, so serious that the contract can no longer continue. An example could be a long custodial sentence.

It is theoretically possible for an employment contract to be frustrated by long-term illness. In practice, tribunals rarely apply the doctrine of frustration to ill-health dismissals because it removes the chance for employees to challenge the fairness of the dismissal. Once a contract is frustrated, it comes to an end automatically. There is no dismissal, and therefore no possibility of claiming unfair dismissal.

In Warner v Armfield Retail & Leisure Limited [2013] UKEAT/0376/12/SM, the EAT ruled that where an employee is disabled, a contract can only ever be “frustrated” by long-term sickness or injury if all reasonable adjustments have been made and it is still impossible for the employee to return to work.