Today's EAT review concerns the case of Jimmy Lee v CG Power Systems Ireland Ltd (UD 810/2010), a decision involving a career break and the often-forgotten doctrine of frustration of contract.

Case Name: Jimmy Lee v CG Power Systems Ireland Ltd (UD 810/2010)

Legislation: Unfair Dismissals Acts 1997-2007

Subject Matter: Failure to return from a career break, leading to a frustration of contract.


Facts

The Respondent Company offered staff the opportunity of taking a career break. Under the written agreement, when an employee availed of the career break they were to give the Company three months' notice of their intention to return to work. The Appellant went on a year long career break from early November 2007. The Respondent contacted the Claimant on 28 November 2008 and pointed out that they had had no contact from the Claimant and asked if he intended on returning to work. The Respondent said that the Claimant was dismissive on the phone, asking if the Respondent had nothing better to do than to check up on him.

The Respondent tried several times in January 2009 to contact the Respondent to no avail. On 14 January 2009, the Respondent wrote to the Claimant outlining that, as he had not returned to work and had not contacted the Company stating when he intended to return to work, that the Company deemed that he had voluntarily resigned.


Determination

The Tribunal stated that the Appellant had frustrated his contract of employment and was not unfairly dismissed.


Legal Review

The Tribunal found that the Claimant in this case had frustrated his contract of employment. Irish judges have only rarely considered the doctrine of frustration in employment law as, by the nature of the doctrine, it presents a significant hurdle for a party to surmount. The Supreme Court in Re the Trusts of the Will of Simon Sheil 1977 outlined three possible bases upon which the doctrine might be said to rest;

1. ‘where there has been such a change in the circumstances that the performance of the contract has become unlawful;
2. ‘where events make it physically impossible for the contract to be performed; or
3. ‘where, although performance is physically possible, there has been such a change as to destroy the whole object of the contract to make performance no longer viable in commercial terms’

It is not always easy to determine whether there has been such a change in circumstances as to frustrate the contract.

It is difficult to see how the contract in this case was in fact frustrated. Both parties to the contract could physically continue in the employment relationship. We are given no evidence that the factory where the employee was based had been damaged or was no longer operational. In contrast, we understand from the evidence given that the employee was asked to return to his employment, suggesting that there was in reality a position to be filed by the employee.

We would be more inclined to think that the employee in this case committed a fundamental breach of contract which entitled the employer to terminate the contract. The employee’s wilful repudiation of the terms and conditions he was employed under could be considered an act of repudiation of the contract entitling the employer to consider the contract so repudiated.

The lesson from this case is that employees cannot ignore the conditions of their contract of employment. The EAT is often influenced by both the express and implied terms agreed between the parties. Among the most important terms implied by law in the contract of employment are both the duty on the employee to obey lawful instructions and the mutual obligation of trust and confidence between the parties. In this case, the employee disengaged with the Company, he did not communicate with the Respondent and when asked to identify when he would return to work, he did not respond and he ignored all future contact.

We suggest that the employee in this case could be considered to have repudiated both his expressed and implied terms of employment through his non-engagement with the company and failure to return to work.

It is unlikely that any Tribunal hearing a case with such facts would find that an employee was unfairly dismissed.

Full decision:
http://bit.ly/mYUoQH