Termination of employment by operation of law

You are fired
You are fired! FILE PHOTO | NMG 

Employment contract can end in various ways, including dismissal, resignation and frustration.

Unless the contract specifically states otherwise, termination need not be effected in writing, as it can as well be done orally. If an employer wishes to dismiss an employee lawfully, the dismissal must not be unfair nor breach the employee's contract of employment.

Having taken the decision to dismiss, there are further decisions for the employer like whether or not to give notice, pay the employee in lieu of notice, and or put the employee on garden leave. In this article, we consider termination by operation of law and how it arises.

A termination by operation of law maybe a dismissal for redundancy but certainly not a dismissal for unfair dismissal purposes.

A contract of employment may be terminated by frustration where a supervening event or change in circumstances is so fundamental as to be regarded by the law both as striking at the root of the contract and as being entirely beyond what was contemplated by the parties during engagement.


Frustration can arise; on death of employee or employer if it is a contract of personal service. In other instances, where an employee by his own conduct makes the performance of his contract impossible for example by committing an offence resulting in an imprisonment.

Subsequently, an employee’s illness may also be considered a frustrating factor in an employment contract as was noted in Marshall vs Harland & Wolff Ltd (1972)2 ALL ER 715. Briefly, the claimant was a worker who was off work due to illness for 18 months. He later claimed a redundancy payment which the employer disputed as lacking basis. However, the court held that he was entitled to redundancy payment.

Further the court noted that in determining the question whether an illness is a frustrating factor in any particular matter, regard must be to the following: The terms of the contract, including provisions as to sick pay; the length of time the employment is likely to last whether permanent or temporary; nature of employment. Illness of an employee in a senior key position is more likely to lead to the contract being frustrated than the illness of a junior.

Termination by operation of law may also arise where an employer is undergoing liquidations, bankruptcy, and or dissolution of a partnership.

The writer is associate, Simiyu and Wekesa Advocates.