Frustration of Contract of Employment

If you are employed in the province of Ontario and the company falls under its jurisdiction, you may be covered under the Employment Standards Act, 2000. The Act sets minimum standards a company must comply with. If it does not, you have a right to file a claim with the Ministry of Labour. If you are currently working for the company, you may be able to file a claim with a request that your name not be disclosed. The Act protects you when you are exercising your rights under it.
 
If you have worked for the company for at least 3 months, the Act requires you must be given a written notice before your employment can be terminated. The maximum notice required is 8 weeks, if you have worked for more than 8 years with the company and the minimum is 1 week, if you have worked for less than 1 year but more than 3 months.
 
The employer is not required to give notice of termination of employment where the employee’s contract of employment becomes impossible of performance or is frustrated by a fortuitous or unforeseeable event or circumstance.
 
This exemption recognizes that the employer cannot give advance notice of termination where it is caused by events which the employer cannot reasonably be expected to anticipate or foresee.
 
Following criteria may be considered in determining the application of this exemption:
 
1.         Impossibility
            If the contract of employment has been frustrated or if it become impossible of performance. – such as, employee becomes paraplegic subject to Human Rights Code.
 
2.        Frustration and Fault
          A contract cannot be considered to be frustrated if the employer is the one responsible for the allegedly frustrating event.
 
3.       Frustration and the terms of the contract
          A contract cannot be considered to have been frustrated if the contract states what effect the allegedly frustrating event will have on the survival of the contract.
 
4.      Frustration and Sick Benefits 
         If the employee is receiving short-term, employer paid sick benefits, there can be no frustration of contract so long as such benefits continue. The payment of such benefits by the     employer indicates an intention to keep the employment relationship alive.
 
        If the employee is on a long-term disability benefits paid by an insurer, it is possible that the contract of employment was frustrated.
        As long as there is a slight possibility of returning to work, there will not be frustration. If the prognosis changes then there may possibly be frustration. 
 
5.     Frustration and Workers’ Compensation Benefits
       An employee off work due to workplace injury has certain rights to reinstatement.    
       An employee who has been employed continuously for at least one year as the date of the injury, has the right of re-employment to his/her former job (or a comparable
       one) when able to perform the essential duties of that job.
       An employee who is unable to perform the essential duties of his/her former job, but is medically able to perform suitable work, must be given the first opportunity to
       perform suitable work that may become available with the employer.    
       The contract of employment should not be considered frustrated as long as the employee has a reasonable chance of re-employment under the Workplace Safety          
       and Insurance Act.
 
6.   Miscellaneous Factors Relevant to Frustration
      the length of employment – the longer the employee has been employed by his/her current employer, the longer the absence required to result frustration.         
      how long has the employee been absent – the longer the absence the stronger the case is for frustration.
      is the employee a key person – if so, the contract is more easily frustrated in that the employer cannot make do by resorting to temporary help.
      how long would the employment have been expected to last had the employee not become ill or disabled – if the employment would have lasted only for a short time  anyway, then  the  contract is more easily frustrated than would have otherwise been the case.
      past practice of the employer in similar cases – if the employer in similar cases in the past has not considered the contract of employment as at an end, the employer may  not be able to demonstrate frustration now.
      extent of the employee’s disability in relation to his/her actual job – if the employee could perform some of his/her job duties there is less likelihood that the contract was
      frustrated, especially if the employee could perform the essential duties of the job.
      what are the prospects for recovery – the more optimistic the prognosis and the earlier the expected date of return to work, the weaker the case for frustration.    
     
This information is provided for guidance only and should not be considered as a legal advice.

This article is provided by Rajinder K. Batra, who is a retired Employment Standards Officer with the Ministry of Labour with 15 years experience in these matters.

If you have any questions regarding your employment, please contact the writer by e-mail at esaconsulting@hotmail.com

If you don’t have access to e-mail; you can fax your question at 905 331-1805

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