The Ontario Divisional Court has upheld that the employer may terminate an employee with a disability when there is undisputed medical evidence that an employee will be unable to fulfill the essential obligations of the employment relationship for the foreseeable future and there are no accommodations that would allow the employee to work.  In other words, when there has been a frustration of contract.  With this decision, the standards to establish frustration of contract due to disability remain high, but more clearly set out. Stacey Reginald Ball – Employment Lawyer in Toronto can help you in such cases.

Background Facts

The employee had been working for the employer since 2000.  In 2008 he went off work due to disability and was approved for short-term and subsequently, long-term disability.  By 2013 the employee had been away from work for five years.  At this point in time, the disability carrier advised the employer that based on the medical information available, the employee was unable to perform the essential duties of his position and that there was no reasonable expectation that he would be capable of performing them in the foreseeable future.  As a result, the employer informed the employee that his employment and benefits would cease on December 31, 2013.

Counsel for the employee responded, saying that the employee “has been working very hard to get well so that he can return to his former employment and perform the essential duties of his position.”  However, despite being given an opportunity by the employer to provide medical information regarding an estimated date of return to work and prognosis for recovery, the employee did not provide such information.

Court History

The employee filed a suit claiming wrongful dismissal and damages under the Ontario Human Rights Code (the “Code”).  The employer defended the action on the basis of frustration of contract and moved for summary judgement.  The motion judge denied the summary judgement, deciding that there were genuine issues the required a trial.  The employer appealed to the Ontario Divisional Court.  The Divisional Court overturned the motion judge and dismissed the employee’s action.

Key Take-Aways from Divisional Court Decision

  1. The duty to accommodate requires more than just an expression by the employee that they desire to return to work. There must also be evidence that they can return to work, including potential reasonable accommodations.
  2. The employer’s duty to accommodate ends when the employee is no longer able to fulfil the essential obligations of the employment relationship. The doctrine of frustration of contract applies and the employer’s obligations are discharged when the performance of the employment contract is impossible.
  3. A Summary Judgement may be granted on the basis of frustration of contract when there is no dispute to the underlying facts.

Important Notes and Conclusion

This decision clarifies that the duty to accommodate has limits and that frustration of contract can be applied to situations involving disability.  However, it is also important to note a few key factual points in this case.  Specifically, there was undisputed medical documentation that indicated that the employee’s disability completely prevented him from doing work in any occupation for the foreseeable future.  If there had been disputed medical evidence, about ability or the potential to return to work in the foreseeable future, then the employer may have had further obligations in regards to the duty to accommodate – either procedural, substantial, or both.

Further, it is unclear exactly how long an employee needs to be given between going on disability leave and there being a frustration of contract due to an inability to work for the foreseeable future.  In this case it was five years, but there is the potential that a shorter period of time would be sufficient.

This case makes it clear that the duty to accommodate can be discharged and frustration of the employment contract is applicable in certain situations, and that a summary judgement on the matter can be made when the facts are undisputed and unambiguous.

Stacey Reginald Ball is an experienced Toronto employment lawyer with the Ball Professional Corporation.  Our office handles various employment law matters, including wrongful dismissal.  If you have questions about an employment law matter, please consult a lawyer for advice.

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