The Employment Court’s decision was based on the finding by the Judge that boy’s allegation had produced consequences for the farmer making continued employment of the worker “radically different from the original undertaking” the contract was frustrated and there was no dismissal.
In the Court of Appeal there was no argument whether or not the doctrine of frustration (this occurs when a supervening event produces consequences for an employer which would render the situation radically different from what had been undertaken when the contract had been entered into thus bringing the contract to en end) could be applied to employment contracts .The argument was whether or not in these circumstances the doctrine applied.
The evidence was that the farmer and his wife said that the immediate effect of the allegations (that is of indecent assault made by their son against their worker) made it intolerable for them to have the worker on the farm regardless of the outcome of the Police investigation.
The Court of Appeal found that the Judge erred by then not asking the question whether or not that fact (that it was intolerable for them to have the worker on the farm) made performance of the contract something radically different from what had originally been undertaken.
I apologise if any of you are thinking – who cares. Well actually I don’t apologise because the decision in the Employment Court had potential to significantly change employment law rules as we know them.
The Court of Appeal concluded that the Employment Court was not correct to conclude that the contract was frustrated and sent it back to the Employment Court to consider whether the dismissal was justifiable on an objective basis in terms of section 103A of the Employment Relations Act – in other words the usual test as to whether or not the employer’s actions were what a fair and reasonable employer would have done in all the circumstances at the time the dismissal occurred.
