When can an employment contract be terminated without giving notice?

Authored by the LexisNexis Legal Writer team.

There are some occasions where an employment relationship can be lawfully terminated without notice being provided. The most notable of these situations include:

• summary dismissal; and
• when the other party has repudiated the employment contract (and the innocent party accepts the repudiation).

What is a summary dismissal?

Summary dismissal occurs where an employer terminates an employee’s employment without providing notice or payment in lieu of notice.

It is generally reserved for the most serious cases of employee misconduct where no lesser form of disciplinary action is appropriate.

An employer’s right to summarily dismiss an employee under the common law may arise from the employee’s breach of an essential term of the employment contract, a serious breach of a non-essential term or the employee’s repudiation of the contract.

Contracts of employment may specify acts and omissions that permit the employer to terminate the contract without notice. However, the courts will carefully scrutinise the wording of these provisions in the context of the overall contract before concluding that the parties intended to confer a broader power of summary dismissal than exists at common law (if this is the case): Bartlett v Australia & New Zealand Banking Group Ltd.