Report No. 58

Contract of service under common law

8.10. Under the law of master and servant, a contract of service may be for a fixed period of time, or it may be for work without fixing any period of time. In either case, a contract may contain a provision enabling it to be terminated by notice. If the contract does not provide for its termination by notice and is not for a fixed period, then, in the absence of custom, the law implies an obligation to givv9 reasonable notice, the reasonableness of the notice being a question of fact.1 If a contract is terminated without giving the requisite notice, the aggrieved party can claim damages for wrongful termination of the contract.

If the contract is for a fixed period without any power to terminate it by notice, the termination of the contract, before the expiry of the fixed period, is again, a wrongful termination, the aggrieved party can claim damages for its breach,2. However whether the contract is for a fixed period or not, the contract can be terminated by the master if the servant is guilty of misconduct, or conduct which is inconsistent with his duties as a servant. This is the position as regards private employment.

1. Halsbury, 3rd Edn., Vol. 25, pp. 489 et seq.

2. Halsbury, 3rd Edn., Vol. 25, p. 520.