The Complainant in Muiris Flynn v Iarnrod Eireann ADJ-00030195 brought an unfair dismissal complaint against his former employer, alleging that the purported rationale for his dismissal,
frustration of contract due to his imprisonment, was unlawful, and consequently the Respondent was in breach of the Unfair Dismissals Act. The Respondent submitted that the Complainant’s dismissal was lawful considering the imprisonment of the Complainant and the difficulties this posed for the employer.
Facts: The Complainant commenced employment with the Respondent as an electrician on 8 January 2008 and his contract of employment was terminated on 25 March 2020. The Complainant was involved in a serious road traffic accident in 2017, he was over the legal limit for alcohol and he subsequently pleaded guilty for dangerous driving causing harm. A four-year prison sentence was imposed with the final 30 months suspended.
The Complainant informed his supervisor following the accident and at all times kept his supervisors updated of the developments up to the imposition of the custodial sentence in October 2019. No disciplinary investigation was commenced at any period by the Respondent. The Complainant then received a letter in March 2020 terminating his employment on 25 March 2020 stating that it was frustrated as a result of his imprisonment.
The Complainant’s representative made a number of submissions; firstly, that frustration had not been demonstrated, particularly in circumstances where the employment was treated as still existing following the alleged frustrating event.
Secondly, the Complainant’s contract contained an express clause which allowed for an extended period of leave.
The Complainant submitted that the Respondent was still in a position to continue operations and as such the Complainant’s imprisonment was an imposition rather than frustration of contract. Finally, it was submitted that the contract can only be frustrated following a period of consultation, of which there was none.
The Respondent submitted that due to the imprisonment of the Complainant the mutuality of obligation between the parties is severed as the employee could no longer carry out his duties. It was following lengthy consideration by management that they determined the contract was frustrated. It was accepted that the imposition of a custodial sentence does not automatically frustrate a contact of employment, however, the type of work carried out by the Complainant and the length of custodial sentence were considerations.
They further submitted that as the Complainant’s employment contract was terminated by operation of law due to frustration, he was not dismissed within the meaning of the Unfair Dismissals Act and that a period of leave of foot of a custodial sentence was not a matter contemplated by the contract of employment.
Findings and Decision:
The Adjudicator referred to the High Court decision in Zuphen -v- Kelly Technical Services, [2000] 11 ELR 227 in which Murphy J. held
“The basis of the doctrine of frustration would appear from the authorities is that there is a supervening event which must be so unexpected and beyond the contemplation of the parties, even as a possibility, that neither party can be said to have accepted the risk of the event taking place when contracting.”
And,
“The court must accordingly operate on a general impression of what the rule in relation to frustration requires. It is for that reason that special importance is necessarily to be given to the occurrence of an unexpected event that, as it were, changes the face of things. It seems to me that this is not the case. It is not hardship or inconvenience or a material loss itself which calls the principles of frustration into play. There must have been such a change in the significance of the obligation that the thing undertaken would, if performed, be a different thing from that contracted for.”
Murray J. went on to hold that,
“It seems to me to be inappropriate in that circumstance to apply a strict contract law approach to employment disputes. Attempts to so apply tend to obscure the social implications of certain kinds of conduct or events by reducing them to legalistic principles.”
The Adjudicator found that the contract was not frustrated in particular due to the fact that the contract continued some four months after the Complainant was imprisoned and that the Respondent paid the Complainant notice, which is contrary to termination by operation of law. The Adjudicator referred to case law which found that consultation with the employee is a material factor to be considered in determining whether or not a contract is frustrated and there was no consultation in this case, regardless of ample opportunity to do so. Furthermore, the Adjudicator was critical of the Respondent not having any witness to give evidence of what was considered before deciding that the contract was frustrated.
The Adjudicator held that the Complainant significantly contributed to his own dismissal and on that basis he only awarded the sum of €4,000.
Takeaway for Employers:
This case highlights that termination of an employment contract by reason of frustration is difficult for employers to rely upon. It is not sufficient to show that the intervening event caused hardship or inconvenience or material loss itself. There must be such a change in the obligation that if performed, it would be something different from that contracted for. Furthermore, an employer must not be able to continue past the frustrating event that it seeks to rely upon. The employer needs to consider all the factors in determining whether frustration occurred and this includes the length of time which the employee is likely to be away form his work and unable to perform it and the importance of getting somebody else to do his job in the meantime, together with consultation with the employee in question.
Authors – Ethna Dillon and Anne O’Connell
25 November 2022