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Contracts of employment: Bail conditions do not frustrate contract of employment

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    Four Seasons Healthcare Ltd (formerly Cotswold Spa Retirement Hotels Ltd) v Maughan [2005] IRLR 324 EAT (0 other reports)

Key points

In Four Seasons Healthcare Ltd v Maughan, the EAT holds:

  • Frustration of a contract of employment requires some outside event or extraneous change of situation not foreseen by or provided for by the contract. The existence of a detailed disciplinary procedure specifically dealing with patient abuse should inhibit a tribunal from finding frustration.
  • Suspending or dismissing an employee because of the effect of reg. 19 of the Care Homes Regulations 2001 requires a decision on the part of the employer or by the criminal court that the employee is not "fit to work" there. This would be inconsistent with any suggestion of automatic termination of the contract by frustration. Although there is case law that covers a term of imprisonment acting to frustrate a contract, there are no authorities to indicate that bail conditions, even if they prevent an employee attending his place of work, do so.
  • The employer had the option of dismissing the employee for gross misconduct. As it was, the employer decided to continue to suspend the employee while on bail and before his conviction, and did not consider the contract to have been automatically terminated. Therefore, wages were due for the period of suspension and must be paid.