An employer can summarily dismiss an employee who commits a serious breach of a major term of the contract. Attitudes have changed as to what are the proper standards of behaviour of employees towards employers, and so the old court decisions are of little help today. The relative importance of the terms of a contract is usually determined by the importance the parties see them as having.
The following principles are generally applied when considering whether the employee's conduct would justify summary dismissal, but they are by no means the only ones -
- the conduct of the parties, or the words they have used in the contract, are the best guide as to what are the important terms
- certain implied terms are usually regarded as important, such as the obligation not to steal, or deliberately damage, the employer's property, not to act dishonestly and to obey reasonable orders
- a breach of an important term of contract does not always justify summary dismissal if there is a reasonable excuse for the breach
- the importance of the term breached will be influenced by the nature of the business and the employee's position
- single acts of misconduct are less likely to justify summary dismissal than a persistent pattern of misconduct, although a period of unsatisfactory performance followed by a single act of misconduct may well be enough
- decisions of the courts in other cases have little relevance in deciding a particular case, as each case must be examined in its own context
- whether misconduct is sufficient depends on the nature of the misconduct and not on proof that the misconduct gave rise to serious consequences.
If an employer summarily dismisses an employee in circumstances not warranting summary dismissal it may still be a defence to the employer to establish that, although he or she did not know of it at the time of the dismissal, grounds existed which did provide sufficient basis to exercise summary dismissal.
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