We are often asked by our clients how long one of their
employees has to be off work before it can justifiably take the
position that an employment relationship has been
"frustrated". Employers often wonder this because when an
employment relationship is frustrated, the employee is not entitled
to common law notice or pay in lieu of such notice1. So,
how long does it take? 1 year? 18 months? 2 years? 5 years?
The Respondent James Campbell Inc. (James Campbell) operates a
number of McDonalds, one of which employed the Applicant Cathy
Gahagan (Gahagan). She worked at a grill station, making and
wrapping burgers. Gahagan alleged that James Campbell terminated
her employment as a form of reprisal.
In May 2009, Gahagan twisted her back while working. The
Workplace Safety and Insurance Board granted her loss of earnings
benefits. A possible return to work was looked at, but it was
ultimately determined that accommodation was not possible. In
October 2010 she was approved for a Canada Pension Plan (CPP)
By October 2011, Gahagan had not returned to work. James
Campbell terminated her employment, taking the position that she
could not return to work, with or without accommodation, and that
her employment was frustrated. Gahagan filed two complaints with
the Tribunal against James Campbell. One alleged that it had not
participated in her return to work process. The other alleged that
James Campbell had committed a reprisal when it terminated her
employment. The applications were consolidated.
The first allegation was dismissed. Responding to the second
allegation involving reprisal, James Campbell argued that it
terminated Gahagan's employment because it reasonably concluded
that she could not "return to work without or without
accommodation because of her permanent medical
Ultimately, the Tribunal agreed with James Campbell's
position that the employment relationship was terminated because of
frustration, not because of a reprisal. It noted that:
at the time of termination, Gahagan had not worked for James
Campbell for close to 2.5 years. Likewise, she had not worked
anywhere else since 2009 because of her physical restrictions;
Gahagan had been receiving a CPP disability pension from
October 2010 until the termination in October 2011. As the Tribunal
noted, "[to] obtain these benefits, she was professing
both an inability to perform her job and a severe and prolonged
disability. All of this evidence supports the conclusion that at
the date of termination, the applicant could not work with
Gahagan had no evidence that James Campbell intended to
retaliate against her.
Employers often face a tough decision when evaluating the risks
of taking the position that an employment relationship is
frustrated. These situations often involve complicated facts,
limited medical information and uncooperative employees. When
frustration occurs will ultimately depend on the particulars of
each case and employers will usually not have any real comfort that
their decision to claim frustration will ultimately be upheld by a
In this case, the Tribunal concluded that the employment
relationship was frustrated after nearly 2.5 years of the employee
first being injured. Of course, the employer had good facts in its
favour, including an employee who had not provided any service for
those roughly 2.5 years and who was receiving a CPP disability
pension. As such, this decision will not help an employer navigate
every situation that it faces. Nevertheless, it does provide some
guidance on when frustration will be found to have occurred,
especially for employers faced with a similar fact scenario.
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.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).