We had an unusual and interesting query recently concerning a client whose employee was convicted for murder. Could they terminate the employee's contract?
In FC Shepherd and Co Ltd v Jerrom 1986 ICR 802 the Court of Appeal held that a custodial sentence imposed on an employee is capable of frustrating an employee contract. Frustration constitutes automatic termination of the contract by operation of law, rendering the employee unable to perform their duties under the contract of employment due to an unforeseen event.
Whether an employment contract has become frustrated, however, depends on the circumstances, and the length of sentence is a significant factor. Whether the imprisonment was within the contemplation of the parties at the time of appointment is also relevant. Tribunals will also consider when it becomes commercially necessary to fill the post left vacant, and whether this should be temporary or permanent.
Employers should heed caution both whilst employees are on remand and in considering a contract frustrated at arrest rather than conviction.
In general a charge or conviction does not necessarily allow for fair dismissal. As the ACAS code states "If an employee is charged with, or convicted of a criminal offence this is not normally in itself reason for disciplinary action. Consideration needs to be given to what effect the charge or conviction has on the employee's suitability to do the job and their relationship with their employer, work colleagues and customers"
In order for an employer to justify the dismissal the employer must have reasonable belief in their employee's guilt. They must conduct their own reasonable investigation into the issues, which may in some cases rely on information from the police investigation, and include a disciplinary meeting, and consider all options available to them. (290)
Pam Loch, Managing Partner of niche employment law practice, Loch Associates Employment Lawyers and Managing Director of HR Advise Me Limited.