No reasonable likelihood of employee returning to work in reasonable time, contract was frustrated

Labour and Employment Law - Employment Law - Interpretation of employment contract

Medical disability. Employee was employed by employer for 12 years, but was on medical disability for nearly last four years. Employer advised employee it was changing providers of health care benefits so employee would no longer be eligible for benefits, but he could still receive them on plan of his wife, who was still employee of defendant. Employee’s physician completed form that stated employee could not return to work. Employee contacted employer about benefits eligibility and employer replied that employment contract had been frustrated. Employee accepted his employment was at end and asked for payment of termination entitlements and then brought action against employer. Employee did not accept employer’s offer of re-employment. Employee brought motion to amend statement of claim and for summary judgment. Motion granted in part. On consent, statement of claim was amended to plead frustration of contract instead of wrongful dismissal. Frustration of contract was matter of law that occurred once circumstances existed to frustrate contract, and did not require any act from either party. There was evidence employee's disability moved from being temporary to permanent, rendering him incapable of performing employment duties and his physician opined she could not return to work. As there was no reasonable likelihood of employee returning to work in reasonable time, employment contract was frustrated. Employee was entitled to termination and severance pay under Employment Standards Act.

Hoekstra v. Rehability Occupational Therapy Inc. (2019), 2019 CarswellOnt 2671, 2019 ONSC 562, A.K. Mitchell J. (Ont. S.C.J.).

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