Contract Frustration
FRUSTRATION DEFENCE NOT AVAILABLE WHEN
EMPLOYER DOESN’T ACCOMMODATE EMPLOYEE
The doctrine of “frustration of contract” holds that if an
unforeseen event or circumstance arises that renders the
contract fundamentally different in character from what
the parties originally intended, through no fault of either
party, the parties will be relieved of their contractual obligations. In
the employment context, this could be, for instance, a sickness or
disability that arises and renders an employee no longer able to per-form
his or her job. When this happens, the employment contract
is terminated, and in Ontario, the employer is only required to pay
the employee his or her minimum entitlements under employment
standards legislation. However, as the Ontario Superior Court of
Justice has recently cautioned, employers need to be careful before
treating a contract as frustrated, especially when an employee could
potentially be accommodated in other roles.
legal words
ABSENTEEISM
In 2010, the Ontario Superior Court of Justice in Duong v.
Linamar Corporation confirmed that frustration of contract
can occur in the employment context where the employee can-not
return to work due to injury or illness. Each case must be
decided on its own circumstances, but when this issue arises, the
court will consider factors including the term of the contract,
how long the employment was likely to last in the absence of ill-ness,
the nature of the illness or injury, how long it has lasted and
the prospects of recovery. Where the employee is absent from
work for an extended period of time without an anticipated
return date, the employer will likely be in a position to treat the
contract as frustrated.
By Malcolm MacKillop and Hendrik Nieuwland
soniacri / 123RF Stock Photo
Milloy suffered a permanent
work-related injury to her right
shoulder as a casino table dealer
HRPROFESSIONALNOW.CA ❚ OCTOBER 2018 ❚ 15
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