25.09.19

More frustration for employers as court rules no frustration of contract

Jahmar Clarke
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More frustration for employers as court rules no frustration of contract

What is a company to do when an employee cannot access his place of work? In the 2017 case of Kingston Wharves v the Industrial Disputes Tribunal and another, the Court ruled that the necessity of an employee to obtain an access pass from a third party to enter his place of work is tantamount to a job requirement and should properly be a term in the employee’s contract of employment if the contract is to be frustrated for revocation of the access pass. The Court went on to say that where the revocation of an employee’s access pass is foreseeable and the employee is not at fault, the employer should put measures in place to adequately deal with the situation.

In the Kingston Wharves case, the worker had been employed by Kingston Wharves from 1995. In 2005 the Port Authority of Jamaica, the statutory body with responsibility for safety and regulation of persons using the ports, implemented a requirement whereby employees of its clients, such as Kingston Wharves, were required to be issued with a port identification pass without which the employee would not be able to lawfully access his place of work. The access pass was never expressly included in the employee’s contract of employment as a job requirement and the employer was not the one who caused the employee’s access pass to be canceled. The Industrial Disputes Tribunal (IDT) ordered that the worker should be reinstated in his job with 18 months pay or, in lieu of reinstatement, 36 months pay. The Kingston Wharves sought to quash the IDT’s decision by an application to the Court for judicial review. One of the reasons advanced by the employer was that the contract of employment was frustrated since the revocation of the employee’s access pass rendered him incapable of performing the work he was employed to do. The Court ruled that the company was precluded from invoking frustration.

Understandably, employers will be frustrated by a decision like this since it seems as if the company was caught between the proverbial rock and a hard place. Before you start to pull out hair strands in frustration, let us examine the lessons to be learned from the Court’s decision.

First, take the Court’s advice and add the need for an access pass to the contract of employment as a job requirement, even in instances where the requirement for an access pass developed subsequent to the start of the employment relationship. In the case before the Court, the employee was engaged by his employer before there was a need for an access pass to enter his place of employment. The Court suggested that a reasonable employer would have expressly required the worker to have the access pass as a job requirement. Where the need for an access pass becomes a job requirement, the term goes to the root of the contract of employment and any breach thereof may repudiate the contract of employment.

The Court also suggested that the employer could have taken steps to assist the employee in respect of accessing any appeal procedure available with respect to the revocation of the access pass. The Court’s position begs the question of who has the duty to appeal the revocation. To what extent should the company involve itself in such a process, especially in circumstances where the employee is represented by a trade union? Would this apply to the case of a driver whose licence has been suspended by law? What about a security guard whose firearm licence is suspended or revoked by the Firearm Licensing Authority? A frustrated employer may go so far as to say that the imposition of such a duty on the employer offends the very nature of freedom to contract. However, the law gives recognition to the employee’s need to be secure in his employment. The employer has a duty to provide continuity of employment, insofar as it is in line with operational efficiency.

That said, there is another award by the IDT in similar circumstances that went the other way. This decision might therefore have turned on its own facts.

Frustration may be mounting for those who feel situations like these are unfair to employers. This is why it is important for companies to strengthen their contracts of employment. You do not want to run the risk of being liable to pay 36 months salary for doing what you consider to be the right thing.

Jahmar Clarke is an Associate at Myers, Fletcher & Gordon and is a member of the Litigation Department. He may be contacted at jahmar.clarke@mfg.com.jm or www.myersfletcher.com. This article is for general information purposes only and does not constitute legal advice.