In Ontario, employees who take medical leave are protected not only from discrimination, but also from reprisal by their employer. Under the Employment Standards Act, 2000 (“ESA”), an employer is prohibited from penalizing, intimidating, or terminating an employee because they exercised a workplace right, including the right to take a statutory medical leave.
Despite these protections, some employers attempt to justify termination following a medical leave by claiming the employment contract has been “frustrated” due to the employee’s absence or ongoing medical limitations. However, Ontario courts have repeatedly held that frustration is a high legal threshold and cannot be used as a shortcut to avoid accommodation or statutory obligations.
Frustration of contract occurs only where an employee’s illness or disability makes it impossible for them to return to work in the foreseeable future, even with reasonable accommodation. Temporary disability, uncertainty about recovery, or the need for modified duties is generally insufficient.
In Nason v. Thunder Bay Orthopaedic Inc., 2017 ONCA 641, the Ontario Court of Appeal addressed an employer’s attempt to rely on frustration after a lengthy medical leave. The employee had been on leave due to repetitive strain injuries for more than two years. The Court confirmed that an employer cannot unilaterally declare frustration without evidence that there was no reasonable likelihood of return. The employer failed to show that the employee could not return in a reasonable time, and terminated the employee without properly assessing his return prospects.
In Fraser v. UBS Global Asset Management, 2011 ONSC 5448, the Ontario Superior Court held that an employment contract can be frustrated where there is clear medical evidence that the employee will not be able to return to work within the foreseeable future and no contract term provides otherwise.
Employers cannot prematurely rely on frustration to terminate employment; they must obtain clear medical prognosis, explore accommodations, and document the process. Employees who are terminated shortly after returning from medical leave may have claims for wrongful dismissal, human rights violations, or reprisal if medical leave was a factor in the termination decision.
If you have been terminated during or shortly after a medical leave, or if your employer claims your job was “frustrated” due to your illness or disability, you may be entitled to compensation. Call us today, at no cost, to discuss potential next steps.