Updating authors: Julian Hoskins and Sarah Lamont

On this page:
Summary
Future developments
Practical example
Action point checklist
Key references
Questions and answers
Termination overview
Termination by mutual consent
Expiry of a fixed-term contract
Termination by performance
Frustration
Dismissal
Resignation
Constructive dismissal/repudiation of contract
Date of termination

Summary

9.1

• Termination of employment is not a subject that can be categorised into a neatly packaged area of law. The termination of a contract of employment may have many ramifications ranging from an employee bringing a claim for breach of contract or perhaps a claim for disability discrimination, to an employer considering whether or not it should provide the employee with a reference or whether or not it can enforce the restrictive covenants in that employee's contract of employment post termination. (See 9.3 Termination overview)
• A contract of employment can be terminated in various ways. Some methods will amount to a dismissal in law and others will not. In some cases the actions and words of the parties may render it unclear whether there has been a dismissal or a resignation. 
• Many of the statutory rights and liabilities, for example the right not to be unfairly dismissed, are largely dependent on whether or not the termination has taken place by way of a dismissal. If there is a dispute regarding whether or not the contract has terminated by way of dismissal, this will be dealt with as a preliminary issue by the employment tribunal. (See 9.8 Dismissal)
• There are also other consequences that can flow from a termination that will not necessarily be dependent on whether or not the termination has taken place by way of dismissal. These will include a consideration of whether or not: there has been a breach of contract; damages or some other remedy may be available; and there are any effective post-termination duties and tax consequences. (See 9.104 to 9.115 Contractual rights on termination)
• If a contract is entered into for a fixed term or for a specific purpose or until a specific event occurs it will terminate at the end of that term by way of a dismissal of the employee. (See 9.5 Expiry of a fixed-term contract and 9.6 Termination by performance)
• A contract can be terminated by mutual agreement between employer and employee. This is sometimes classified as a resignation. (See 9.4 Termination by mutual consent)
• A contract can be frustrated by the happening of an unforeseen and unprovided for event such as severe or prolonged illness, death, war or imprisonment. (See 9.7 Frustration)
• A contract can be unilaterally terminated by way of resignation by the employee or dismissal by the employer. (See 9.8 Dismissal and 9.9 Resignation)
• A resignation can be converted into a "constructive" dismissal if the requirements of s.95(1)(c) of the Employment Rights Act 1996 are met. (See 9.10 Constructive dismissal/repudiation of contract)

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Future developments

9.2 There are no future developments.

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Termination overview

9.3 All contracts of employment will at some point come to an end for all employees.