This guide provides an overview of the doctrine of frustration where a supervening event renders performance of a contract impossible.
The doctrine of frustration can apply to contracts of employment; however frustration has been upheld in only a few circumstances.
Where a contract of employment governed by New Zealand law has been frustrated the Contract and Commercial Law Act 2017will apply.
Where an employee is frequently absent due to illness or injury, the employer should seek specialist medical advice about the employee’s prognosis and level of incapacity.
Employers should seek EMA Advice before considering dismissing an employee on the basis of unfitness or unavailability; the employment contract may not have been frustrated but there are other avenues that employers can pursue to terminate the employment relationship.

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