8 Termination of Employment Contract
The employment contract may come to an end by notice but the notice period must not be less than the statutory minimum period.
There are following rules for the termination of employment contract.
- There must be reason behind it otherwise it may not acceptable
- The notice period must not be less than the statutory minimum period.
The minimum statutory period depends upon the continuous service of employee.
- If a person is employed for continuous service of one month or more but below one year then one week notice of termination is sufficient and there will be no breach of contract.
- If person is employed for continuous service of one year of more but below twelve years then one week notice of termination for each year of continuous employment is sufficient.
- If a person is employed for twelve years of continuous employment or more then less than twelve week notice will never be acceptable.
If employees are dismissed or terminated from their job by the employer without notice is called dismissal.
In case of dismissal employee has right to ask reason of dismissal from his employer. And employer also has responsibility to provide written statement of the reason for dismissal within fourteen days.
Types of dismissal
- Summary dismissal: when employer terminated his employee without giving him notice, called summary dismissal. Employee may do this at the serious breach of contract by the employee.
In employment contract of two years employee was agreed that during his job here he will never join any other company for part time job but before the completion of employment contract employee accepted the job offer from another company. Here the employer has right to terminate the employee without notice.
- Constructive dismissal: is opposite to summary dismissal in which employer creates a situation that may affect employee in such a way that he has no other option but to resign. So in this employee terminates the contract at the breach of contract by employer.
- Wrongful dismissal: in which employee is terminated at the behalf of employer when employee has no fault. E.g. if an employer imposed some illegal conditions that are not acceptable by employee and terminated after that ,so in this case employee may have right to claim under common Law due to wrongful dismissal.
- Unfair dismissal: is closely related with wrongful dismissal but it is handled through statutory concept. In this employee is terminated by employer without any reason or fair reason.
Statutory concept introduced employment protection legislation that gave specific procedure to terminate the employee otherwise it will be considered as unfair dismissal.
8.1 Termination of employment by the breach of contract
Employment contract is terminated by breach in following circumstances
- Summary dismissal
- Constructive dismissal
Summary dismissal occurs when employer terminates employee without giving him notice at the serious breach of contract by employee.
In this case employee may justify himself that employer is liable for breach of contract, if it is proved then employee may claim a remedy for wrongful dismissal
Case law: Wilson v Racher
Constructive dismissal occurs at the breach of contract by employer.
In this case employer wants to carry on employment contract but changed some conditions that are not acceptable by the employee so he resigned from the job.
In order to claim for constructive dismissal employee may have to prove following
- There must be serious breach of contract only at the behalf of employer ,no other party or an employee is liable
- Employee left the job due to the breach only not due to another reason
If breach is not serious then there will be no dismissal
Case law: Western Excavating (ECC) Ltd v Sharp 1978
- There are some reasons that are not acceptable by the employee which leads to resignation.
- If salary of employee is reduced by his employer
Case law: Industrial Rubber products v Gillon 1977
- If employer is not providing safe working environment to his employees.
- If nature of job is changed
- If employer is involved in illegal business and employee came to know about it.
- If employer is imposing some personal duties outside his job obligations.