unfair dismissal claim, but should a claim for unfair dis-
missal be brought by an employee who has been ‘bought
off ’, the tribunal concerned will want to see evidence of
a genuine and fair agreement by employer and employee
and may allow a claim of unfair dismissal if the dis-
charging agreement is one-sided and biased in favour of
the employer.
By passage of time
In the case of a fixed-term contract, as where an em-
ployee is engaged for, say, three years, the contract will
terminate at the end of the three years, though there
may be provisions for notice within that period.
By frustration
A contract of service can, as we have already seen, be
discharged by frustration which could be incapacity,
such as illness. However, other events can bring about
the discharge of a contract of service by frustration, e.g.
a term of imprisonment. Thus, in Harev Murphy Bros
(1974) Hare was a foreman employed by Murphy Bros.
He was sentenced to 12 months’ imprisonment for
unlawful wounding and could not, obviously, carry out
his employment. The court held that his contract was
frustrated.
Furthermore, death of either employer or employee
will discharge the contract by frustration from the date
of the death so that, for example, the personal represent-
atives of the employer are not required to continue with
the contract. However, the estate has a claim for wages
or salary due at the date of death.
Under the ERA 1996 claims for unfair dismissal aris-
ing before the employer’s death survive and may be
brought after the death of the employer against his estate.
Furthermore, the death of a human employer is usually
regarded as a ‘dismissal’ for redundancy purposes and
the employee may make a claim against the employer’s
estate.
If the employee is re-engaged or the personal repres-
entatives renew his contract within eight weeks of the
employer’s death, the employee is not regarded as hav-
ing been dismissed. Where an offer of renewal or re-
engagement is refused on reasonable grounds by the
employee, then he is entitled to a redundancy payment.
If he unreasonably refuses to renew his contract or accept
a suitable offer of re-engagement he is not entitled to
such a payment.
Ordinary partnership dissolution
A person who is employed by an ordinary partnership
which is dissolved is regarded as dismissed on dissolu-
tion of the firm. Under the ERA 1996 this is regarded as
having occurred because of redundancy.
The dismissal is also regarded as wrongful at common
law and there may be a claim by the employee for damages
but these will be nominal only if the partnership business
continues and the continuing partners offer new employ-
ment on the old terms (Bracev Calder (1895)).
A partnership is dissolved whenever one partner dies
or becomes bankrupt or leaves the firm for any reason,
e.g. retirement. However, the business usually continues
under a provision in the partnership articles but there is
nevertheless a technical dissolution.
Of course, if a firm or sole trader sells the business as
a going concern, employees are transferred to the new
employer automatically under the Transfer of Under-
takings (Protection of Employment) Regulations 2006.Limited liability partnerships:
administration and liquidation
The rules set out above for the ordinary partnership do
not apply to limited liability partnerships under the
Limited Liability Partnerships Act 2000 and regulations
made under it. Such a partnership is a separate legal
person from its members, and the insolvency structures
applying to it in terms of the appointment of an admin-
istrator and of a liquidator mirror the corporate legal
rules set out below.Appointment of an administrator –
corporate rehabilitation
The object of administration orders is primarilyto allow
a company to be put on a profitable basis if possible,
or at least disposed of more profitably than would be
the case if other forms of insolvency proceedings, such
as liquidation, were used. On the appointment of an
administrator, the company’s executive and other direc-
tors are not dismissed but their powers of management
are exercisable only if the administrator consents. He
also has power to dismiss and appoint directors.
Since an administrator is made an agent of the com-
pany by the court under the administration order, em-
ployees are not automatically dismissed. In addition,
an administrator who wishes to trade with the company
and for that purpose to retain employees may adoptPart 4Business resources