Frustration of Contract — Ontario Employment Law

H. v. 1359768 Ontario Inc. (B&B Towing)

Wrongful Dismissal: Frustration & Company Asset Damages

This is an appeal from a wrongful dismissal decision where the Court of Appeal for Ontario dismissed the appeal regarding the issue of frustration of contract. The court found that the employment contract was not frustrated because the employee's essential duties were accommodable and there was a reasonable likelihood of return to work. Additionally, the court reduced the damages award by disallowing compensation for the loss of use of a company tow truck and cellphone, determining these were work tools rather than perquisites.

D. v. Transasian Fine Cars Ltd.

ESA Termination & Severance: Frustration of Contract

This is an interlocutory application concerning the calculation of termination pay and severance pay under the Employment Standards Act, 2000, following a frustration of contract due to disability. The court addressed whether 'regular wages' for these statutory entitlements should be based on pre-injury earnings or the accommodated reduced-rate earnings from the last 12 weeks worked. The application was dismissed, with the court applying a plain reading of the statute and precedent from Hoekstra v. Rehability to calculate payments based on the last 12 weeks worked.

C. v. VuPoint System Ltd.

Appeal dismissed: Contract frustrated by vaccine policy

This is an appeal to the Court of Appeal from a motion judge's decision dismissing a wrongful dismissal action over a mandatory COVID-19 vaccination policy. The employee, a technician, sued his employer after being terminated for refusing to comply with a vaccine mandate imposed by the employer's dominant client. The motion judge dismissed the action, finding that the employment contract was frustrated by the client's policy. The Court of Appeal dismissed the appeal, holding that the third-party policy was an unforeseeable supervening event that radically altered the employment obligations by rendering the employee ineligible to work. As a result, the finding of frustration stands and the employee is awarded no damages.

C. v. VuPoint Systems Ltd.

Frustration of Contract: Vaccination Policy Termination

The plaintiff's employment was terminated after they refused to comply with a mandatory COVID-19 vaccination policy required by the employer's primary client. The court found that the employment contract was frustrated due to the employee's inability to perform their duties. As a result, the court granted summary judgment and ruled the employee was not entitled to damages for wrongful dismissal.

Clarion Lakeside Inn v. UFCW Local 175

Judicial Review: Termination Pay & Frustration of Contract

This is a judicial review application concerning a labour arbitrator's award of termination pay to employees whose employment was deemed frustrated by a fire causing temporary closure. The Divisional Court reviewed whether the arbitrator's interpretation of the Employment Standards Act and the common law test for frustration was reasonable.

N. v. IBM Canada Ltd.

Appeal dismissed: No resignation or frustration

This is an appeal from a motion judge's decision in a wrongful dismissal case involving an employee with mental health issues. The central issue was whether the employee's failure to appeal a denial of short-term disability benefits or return to work constituted resignation, abandonment, or frustration of the employment contract. The Court of Appeal dismissed the appeal, finding the employer failed to prove resignation, abandonment, or frustration.

N. v. IBM Canada Ltd.

This case addresses whether a long-term employee's failure to return to work after denial of short-term disability benefits constituted resignation, abandonment, or frustration of contract.

H. v Rehability Occupational Therapy Inc.

Frustration of Contract: Medical Leave Termination

This is a merits decision regarding the frustration of an employment contract due to the plaintiff's prolonged medical leave. The court found the contract frustrated as of October 19, 2016, based on medical evidence, and determined the plaintiff was entitled to termination and severance pay under the Employment Standards Act, 2000. The court rejected claims for aggravated and punitive damages, finding the defendant's conduct was not malicious, and awarded the plaintiff $15,000 in costs on a partial indemnity basis.

R. v. RONA Inc.

Frustration of Contract: Disability Termination After 13 Years

This is a summary judgment motion addressing whether an employer properly terminated an employee with 13 years of service due to permanent disability under the doctrine of frustration of contract. The court examined whether the employer acted reasonably in relying on available medical evidence without further inquiry and whether post-termination evidence could be used to establish frustration at the time of dismissal.

M. v. Complex Services Inc.

Wrongful Dismissal: Disability Accommodation Appeal

The Divisional Court dismissed an appeal from a trial judge's decision in a wrongful dismissal case where the employer alleged frustration of contract due to the employee's permanent disability. The trial judge had rejected the frustration defence, finding the employer failed to accommodate the employee or provide alternate employment opportunities, and the appellate court upheld these findings. The appeal was dismissed, confirming the employer's liability for wrongful dismissal.

L. v. Lowerys Inc.

Wrongful Dismissal Appeal: Frustration of Contract

This is an appeal to the Court of Appeal from a trial judge's decision in a wrongful dismissal action. The employee sued the employer for constructive dismissal, claiming workplace harassment and the termination of his employment benefits. The trial judge dismissed the action, finding the employment contract was frustrated because there was no reasonable likelihood the employee could return to work within a reasonable time. The Court of Appeal for Ontario dismissed the employee's appeal, agreeing that the contract was frustrated as of the date the benefits ended. The dismissal of the employee's action stands.

N. v. Thunder Bay Orthopaedic Inc.

Wrongful Dismissal: 15 Months Notice Upheld After Disability Termination

This appeal concerns a wrongful dismissal claim where an employee was terminated after being placed on medical leave due to disability. The trial judge awarded 15 months' pay in lieu of notice and damages under the Human Rights Code, finding the employer satisfied its duty to accommodate but did not prove the contract was frustrated. The Court of Appeal upheld the trial judge's decision, finding no palpable and overriding error in the assessment of undue hardship or the refusal to award additional damages for loss of income.

M. v Complex Services Inc.

Wrongful Dismissal: Frustration of Contract and Notice

This is a wrongful dismissal case involving an employee with 10 years of service who was terminated citing permanent disability. The court addressed whether the doctrine of frustration of contract applied, finding it was self-induced by the employer's failure to accommodate, and determined the appropriate notice period and damages owed.

L. v Lowerys Inc.

Constructive Dismissal Claim Dismissed; Contract Frustrated

This case involved a plaintiff alleging constructive dismissal due to workplace harassment and the termination of health benefits, alongside claims for human rights violations regarding disability accommodation. The court dismissed the constructive dismissal and human rights claims, finding no substantial alteration of the employment contract or failure to accommodate, and ultimately found the employment contract frustrated due to the plaintiff's ongoing disability. The court assessed 10 months' notice for wrongful dismissal only in the alternative, while dismissing claims for punitive and aggravated damages.

B. v. Black & McDonald Ltd.

B. v. Black & McDonald: Human Rights & Wrongful Dismissal Appeal

This is an appeal from a Small Claims Court decision addressing both human rights and wrongful dismissal claims. The Divisional Court dismissed the appeal, upholding the lower court's findings that the employer breached the Ontario Human Rights Code by failing to accommodate the employee's disability and rejecting the employer's frustration argument. The court also upheld the costs award and the determination that long-term disability benefits were not deductible from damages.

Estate of C.D. v Dick Engineering Inc.

Frustration of Contract: Termination & Severance Pay

This case addresses whether an employment contract was frustrated by an employee's terminal cancer and whether the employee's estate was entitled to termination and severance pay under the Employment Standards Act. The court determined that the illness frustrated the contract but held the estate entitled to statutory termination and severance pay. Additionally, the court addressed a separate issue regarding a sale of business, finding no termination or constructive dismissal occurred when the purchaser did not offer employment to the employee on sick leave.

F. v. UBS

Frustration of Contract: Permanent Disability Termination

This case addresses whether an employer's termination of an employee's contract, citing frustration due to permanent disability and long-term absence, was legally justified. The court examined whether the employee's inability to return to work rendered the contract impossible to perform and whether the employer had sufficient medical evidence to rely on the doctrine of frustration despite the availability of long-term disability benefits.

A. v. Steve’s Music

Wrongful Dismissal: 30-Year Employee Awarded 22 Months Notice

This wrongful dismissal case involved a 59-year-old employee with 30 years of service who was terminated without notice. The court rejected the employer's argument that the contract was frustrated by the employee's cancer diagnosis, finding he was capable of performing his duties at the time of dismissal. The court awarded 22 months' salary in lieu of notice, $35,000 in moral damages for bad faith conduct, and $20,000 in punitive damages for statutory breaches, while ruling that long-term disability benefits were not deductible from damages.

N. v. Costco

Wrongful Dismissal: 17-Year Employee Awarded 10 Months Notice

This wrongful dismissal case involved a plaintiff employed for 17 years as a return-to-vendor clerk who was terminated following a prolonged illness. The court rejected the employer's argument that the contract was frustrated by the employee's absence, finding insufficient medical evidence of permanent incapacity. Applying the Bardal factors, the court determined the plaintiff was entitled to 10 months' notice of dismissal.

D. v. Linamar Corporation

Frustration of Contract: Long-Term Disability Termination

This case addresses whether an employer was entitled to terminate an employment contract on the grounds of frustration when the employee had been unable to work since 2005 due to a chronic medical condition. The court applied the test for frustration to determine if the employee's incapacity rendered further performance radically different or impossible, and clarified that long-term disability benefits do not preclude the application of the common law doctrine of frustration.