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Forms of termination

Updating author: Max Winthrop


  • 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 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.
  • A contract can be unilaterally terminated by way of resignation by the employee or dismissal by the employer. (See Dismissal and 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 Dismissal)
  • 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 Constructive dismissal/repudiation of contract)
  • A contract can be terminated by mutual agreement between employer and employee. This is sometimes classified as a resignation. (See Termination by mutual consent)
  • 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 Expiry of a fixed-term contract and Termination by performance)
  • 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 Frustration)
  • 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 Notice and pay in lieu of notice)

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