Employers sometimes claim that an employment contract has been “frustrated” due to a long-term illness or disability. When frustration of contract applies, the employer may argue that the employment relationship has ended because it has become impossible for the employee to perform their job.
However, frustration of contract is often misunderstood and sometimes improperly relied upon by employers. The legal test for frustration is strict and requires clear evidence that the employee will not be able to return to work within a reasonable period of time.
When Frustration of Contract May Apply
In general, frustration may arise where a medical condition prevents an employee from performing the essential duties of their position for the foreseeable future and where accommodation is not reasonably possible. Courts will often consider the nature of the illness, the expected recovery timeline, the employee’s position, and the ability of the employer to accommodate the disability.
The Duty to Accommodate Still Applies
Before relying on frustration of contract, employers must still consider their obligations under the Ontario Human Rights Code. Employers must explore reasonable accommodation options before concluding that the employment relationship cannot continue. If accommodation was possible but not considered, the termination may be challenged.
Minimum Entitlements Under the Employment Standards Act
Even if frustration of contract is established, employees may still be entitled to statutory payments under the Employment Standards Act, including termination pay and severance pay where applicable. Employees should not assume they are entitled to nothing simply because an employer claims frustration of contract.
When to Speak With an Employment Lawyer
If your employer claims that your employment ended due to frustration of contract because of illness or disability, it is important to obtain legal advice. In many cases, employees may still have claims for wrongful dismissal or human rights damages.
Contingency Fee Representation
At Landy Marr Kats LLP, many employment law matters are handled on a contingency fee basis. This means that you do not pay legal fees unless we successfully recover money for you. Employees who are dealing with illness or loss of income can still pursue their legal rights without paying upfront legal fees. Contact us