In Hatton Logistics v Waller, the EAT have decided that the contract of employment of an LGV driver signed off work awaiting a potential pacemaker had not been frustrated, but he had in fact been unfairly dismissed by his employer.

Mr Waller was employed by Hatton Logistics as a LGV driver. At a routine health check on 10 November 2004 it was identified that Mr Waller suffered from heart palpitations and should not drive, pending further investigations. He was signed off work accordingly and provided medical certificates, including one, which stated “awaiting possible pacemaker”. On 27 May 2005 Mr Waller was handed a letter by his manager, which confirmed that his employment was being terminated “under frustration of contract” because, through no fault of either party, he was no longer able to fulfil the requirements of his job. Since the employer believed that this was not a dismissal, there was no hearing, or appeal offered. Subsequently Mr Waller was fit to return to work and challenged the termination of his employment. Before the tribunal he argued that his employer was wrong to believe that he was due to have a pacemaker fitted, as this was only one possible outcome of the medical investigations. He also contended that his employer wrongly believed that after having a pacemaker fitted he would be unable to work for 6 months, as the recovery period was actually 6 weeks.

The case was appealed to the EAT, on the grounds that the Tribunal’s decision on frustration of contract was erroneous in law. The EAT were critical of the Tribunal’s reasoning but ultimately found that its decision had been correct. There was undisputed evidence that the recovery period following the fitting of a pacemaker was in fact 6 weeks and not 6 months and that the employer erred in terminating Mr Waller’s employment on the basis of the mere possibility that he might need a pacemaker. Mr Waller’s contract had not been frustrated and he had been unfairly dismissed.

Although not commonly argued, this case is a reminder that frustration should rarely be relied on in employment cases. As the Tribunal noted “it was abundantly clear that, whilst the language of frustration of contract was used, the Respondent terminated the Claimant’s contract of employment and thereby dismissed him.” In addition, a danger in relying on frustration of contract is that employers may not follow any of the mandatory procedural requirements under the statutory dismissal procedures, with the risk that the dismissal will be automatically unfair and damages will be increased by 10 to 50%.