Where an employment contract is frustrated, it comes to an end by operation of law rather than at the initiative of the employer. Frustration of employment may occur, for example, as a result of the death or imprisonment of an employee. However, employers should be aware that the courts and tribunals are generally reluctant to find that a contract has been frustrated.

See Frustration of employment contract.

In abandonment of employment situations, the employer’s acceptance of the employee’s repudiation (constituted by the abandonment) is generally considered to be the act that terminates the employment contract. This is significant for the purposes of the unfair dismissal provisions under the Fair Work Act 2009 (Cth) which depend for their operation upon termination of employment being at the initiative of the employer.

See Abandonment of employment.

Bankruptcy or insolvency of an employer does not automatically terminate the employment contracts of employees of the bankrupt or insolvent entity. The appointment of receivers and managers may have the effect of terminating employment contracts, although this is not necessarily the case. Whether it does so or not will depend on the terms of their appointment.

Employees whose employment is terminated due to the insolvency or bankruptcy of their employer and who are unable to recover outstanding employee entitlements from the employer or another source may be entitled to a payment under the Commonwealth-funded Fair Entitlements Guarantee (FEG) scheme.

See Bankruptcy or insolvency of employer.