Preserving the relationship

Abstract

Chapter Seven examines the law on termination from a relational perspective. One would expect the law to function in a manner that was supportive of the relationship continuing and serve as a restraint on ease of exit. It would be consistent with relational contracting if the default rules of the common law insisted that there be good cause before a power to terminate was invoked or that there be a right to a hearing; such a development has of course been blocked in the UK by Johnson v Unisys. Had the common law been allowed to develop naturally the position taken by the courts would almost certainly have been different. Thus we find that in some jurisdictions, where coherence with statute has not been in issue, the courts have restricted the capacity to terminate other forms of relational contracts (such as a franchise) by the creation of default rules of the fair dealing type. Those rules mean that preservation of the relation is furthered by insisting upon propriety of means. Nevertheless, Johnson aside, it is apparent that common law developments are supportive of the relationship being maintained; the approach to regulation of suspension has advanced to be more understanding and protective of the interests of employees. The decision in Geys v Societe Generale confirms the validity of modern developments that allow for interlocutory orders to help support the continuation of the relationship in a range of situations. The law of wrongful dismissal has been very much in the shadow of the statutory remedy of unfair dismissal ever since the latter was enacted. There are some signs (albeit somewhat tentative) that the law may be beginning to modernise. Canadian developments are looked to as an indicator of how the position might change. Chapter Seven also discusses other issues such as the possible emergence of a right of cure. At first glance, the creation of such a right would seem to be firmly in line with relational contracting. A relationship should not be cast aside where the matter in contention between the parties can be readily addressed and there is a willingness to do so. The chapter suggests that a development of this sort would be problematic given the nature of employment relationship; other forms of contract may call for different solutions. This helps serves as a reminder that relational contract scholarship is in effect a critique. Appropriate doctrinal development requires a highly critical lens to be applied.