Continuing our regular series on the implications of recent significant
cases. James Humphery, partner at
Thethowans Solicitors, Southampton, looks at the issues
Illness and Frustration
Hogan v Cambridgeshire County CouncilUnreported decision of EAT Case
HR Professionals often find themselves grappling with the concept of a
‘frustrated’ contract in the context of an employee’s long-term illness. If
something unforeseen occurs making a contract impossible to perform, the law
may recognise an automatic termination of the contract thereby releasing the
parties from their obligations. A lengthy inability to work due to illness
might frustrate an employment contract, but courts and tribunals have been
reluctant to line up behind the doctrine of frustration.
An employee had a rolling employment contract that included provision for
sick pay, retirement, ordinary notice of termination and an ill-health
procedure. She went on sick leave and was paid for seven months, after which
her employer was advised she was unfit to return to work. Nothing was done, and
a few months later the employee started a full-time college course. When her
absence reached 16 months the employer decided enough was enough and wrote to
the employee to say her contract had ended by frustration. She countered with a
claim of unfair dismissal and breach of contract. The claim failed, but there
was an appeal in which the EAT looked at the principles of frustration.
In her appeal, the employee argued that the contract envisaged long-term
illness through the provisions of sick pay and an ill-health termination
procedure. In this way, she claimed, her absence was foreseeable and could not,
therefore, be capable of frustrating the contract. She also pointed to the
open-ended nature of the contract and her seven years’ service. On the other
hand, the frustration indicators were that she had enrolled for full-time
study, had not been paid for nine months, was not a key employee, had been
unable to work for 16 months with the prognosis poor.
The EAT dismissed the appeal, but in so doing differentiated between whether
the facts were capable of establishing frustration (a question of law) and
whether those facts really did frustrate the contract (a question of fact). It
could not, of course, reconsider the facts and found the tribunal was entitled
to conclude that the contract had been frustrated. The EAT was unwilling to
enunciate new principles for applying frustration to employment contracts and
indicated that no individual factor was determinative.
Although the employee failed in this case, it seems that frustration is
still an uncertain course for employers. Devising and applying sensitive
sickness and capability procedures seems to offer the safest way out of a
Cosgrove v Caeser and Howie(2001) IRLR 653
Cosgrove was employed as a secretary. She became dep-ressed and, after she
had been absent for 12 months, she was dismissed. Cosgrove presented claims for
declarations of unfair dismissal and disability discrimination.
The tribunal found no evidence that Cosgrove had been treated any
differently from the way her employer would have treated anyone else who had
been absent for a year. It also noted that neither Cosgrove nor her doctor
could suggest any reasonable changes to her work arrangements. The
discrimination claim was dismissed.
Cosgrove appealed. The EAT decided the tribunal’s approach was incorrect.
The EAT asked as to the material reason for Cosgrove’s dismissal and found it
was her absence and uncertainty as to whether she would return. It then asked
whether the reason for her dismissal related to disability and found that it
did. Lastly, the EAT asked if the employer would have dismissed another
employee to whom the material reason did not apply.
The EAT was unhappy with the tribunal’s choice of comparator because it
compared Cosgrove’s absence with another’s absence which might be for different
reasons or for no good reason at all. It said the proper comparison was with an
employee who had not been absent and decided there would not have been a reason
to dismiss such a comparator unless other potentially fair grounds for
dismissal existed. Cosgrove had been treated less favourably than someone to
whom the material reason did not apply.
The EAT then looked at whether the apparent discrimination was justified and
said that it cannot be justified where there is a duty under section 6 of the
Disability Discrimination Act to make reasonable adjustments to working
arrangements. There was such a duty in this case and the EAT emphasised that
the duty lies with the employer. Employers will not discharge their obligations
if they simply pass the buck to the employee or the employee’s doctor.
Cosgrove’s employer did not believe she was disabled so did not consider
The EAT found there was discrimination and remitted the case for a remedies
Injunctions may restrain a breach of a disciplinary procedure.
Barros D’sa v University Hospital Coventry and Warwickshire NHS Trust (2001)
A consultant surgeon was suspended pending investigation of allegations of
professional misconduct. He had a contractual disciplinary procedure, which
required his employer to commission an investigation and report prior to a
sanctions hearing before the CEO. The inquiry found the allegations proved, but
recommended a first written warning.
In its preparation for the sanctions hearing, the employer indicated there
was an irretrievable breakdown in trust and confidence caused by a letter sent
by the consultant to his MP about his employer and some of his colleagues. This
had not been before the inquiry panel. The consultant saw this as an indication
that the CEO would be likely to dismiss him and he applied for an injunction to
stop the use of the new allegation. An injunction was granted because the
introduction of this new issue was outside the disciplinary procedure and
contrary to natural justice.
The employer appealed. The Court of Appeal said it must be an intrinsic part
of the fairness of the procedure that issues considered at the sanctions
hearing be limited to those in which the inquiry made findings. It was unfair
and a breach of the contractual procedure for the employer to try to prove a
more serious case, as it put the consultant at risk of being disciplined for an
offence that had not been tested or substantiated. The appeal was dismissed.