When the employment relationship becomes impossible to perform
because of a factor outside of the control of the employer or the
employee, the employee's employment can be terminated by virtue
of frustration of contact. When an employee will not be able to
return to work because of injury or illness, the same applies. But
not so for federally regulated employers such as the banks,
airlines, inter-provincial trucking companies, etc. According to
the recent decision of Kingsway Transport v. Teamsters, Local Union
91 (PDF), the frustration argument is no longer available
for those employers when the employee's inability to return to
work is because of a work-related injury or illness.
Mr. Sears was a 62 year old employee of a federally regulated
trucking business who had been off work for 21 years following
amputation of his arm resulting from a workplace injury. He
maintained his employment status over the years and the employer
made benefits and pension plan contributions on his behalf. The
employer communicated infrequently with Mr. Sears during the course
of his absence and no efforts were made to return him to work after
1994. However, in 2010, the employer requested medical confirmation
of Mr. Sears' functional restrictions and fitness to work. When
Mr. Sears responded, confirming that he was unable to work due to
the workplace injury, his employment was terminated. He was
paid no severance pay or pay in lieu of notice.
Mr. Sears grieved his termination on the basis of section 239.1
of the Canada Labour Code (the "Code"),
which contains wording that prohibits dismissal of an employee
because of absence for work-related causes, without any time limit
to the protection.
The Arbitrator concluded that section 239.1 of the Code
means exactly what it says. It requires federally regulated
employers to maintain employment status as well as benefit and
pension plan contributions, even for employees, like Mr. Sears,
absent for years with no prospect of ever returning to work.
In particular, he found that section 239.1 indicated "a
clear intention to protect the employment status and benefits of
workers who are injured on the job", and that those
protections are not subject to a time limit. This is in contrast to
the similar provision in the Code dealing with
non-work-related illness or injury, which limits protection to 12
"Simply put", the Arbitrator said, "the employer
cannot dismiss a worker because of absence from work due to
work-related illness or injury". He found further that
subsections 239.1(5) and (7) of the Code require
continuation of employer benefit and pension contributions during
the absence and override any restrictions in the collective
agreement, such as the requirement that employees be at work at
some time during the month for which contributions are made.
The Arbitrator rejected the employer's argument that the
employment agreement had been frustrated, an argument usually
available where an extended absence for illness or injury results
in no foreseeable chance of the employee returning to work. The
Arbitrator said that the language of the relevant provisions of the
Code operate to override the common law doctrine of
frustration and extinguish an employer's right to terminate
employment when the employee's absence is the result of a
work-related illness or injury.
Accordingly, the Arbitrator ordered Mr. Sears' reinstatement
to non-active status (unless cleared to return to work by a
physician), with corresponding reinstatement of his benefit and
pension plan contributions.
This decision will make it difficult for federal employers to
dismiss an employee off work for work-related causes, even when the
absence is prolonged and the prospect of the employee ever
returning to work is slim.
However, the decision makes it clear that section 239.1 is not
an open-ended guarantee of employment status and benefits. Where
circumstances change, for example where an employee is given
clearance to return to work and attempts are made to accommodate
the disability, any continuing absence could not be said to be due
to the work-related illness or injury and the requirements of
section 239.1 would not be met.
Accordingly, federally regulated employers should be reminded of
the importance of maintaining regular communication with employees
during extended disability leaves with a view to establishing a
return to work plan tailored to the employee's functional
restrictions. Although not subject to the same Code
provisions, provincially regulated employers should also maintain
regular communication with employees during extended leaves to
ensure they follow-up if the employment relationship becomes
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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