What happens if an employee is sentenced to a term of imprisonment? The first and most important question to ask is whether or not the employee will be serving their sentence. If an employee is convicted of a crime and will be serving their sentence then an employer may look to terminate the employee’s contract on the basis that its terms have been ‘frustrated’ depending on the length of imprisonment Essentially the contract of employment has been frustrated because the employee is no longer in a position to complete their side of the bargain (i.e. the employee cannot perform work under the contract in return for remuneration). If the prison sentence is suspended, however, and the employee will not physically serve any time in prison then an employer must thread more carefully. As such, in cases where the employee’s term of imprisonment has been suspended then the main considerations if considering dismissal should be the nature of the employee’s position with the company and whether the offence is one which makes the employee unsuitable for his or her type of work or unacceptable to other employees.