Can you fire an employee who has been away from work for a
lengthy period of time due to an illness or disability? If so,
when? These are difficult questions many employers face when
managing lengthy absences.
Sometimes employers may look to the doctrine of frustration of
contract. When a contract is frustrated, then the employer can
terminate the employee without providing any common law notice or
pay in lieu of notice.
The decision to dismiss an employee due to frustration is
fraught with risk. Not only will an employer owe common law
severance if a court decides that the contract is not, in fact,
frustrated, but could also face a claim that it has breached an
employee's human rights by failing to accommodate their
Last month, the Human Rights Tribunal of Ontario found an
employer did not discriminate against an employee who was fired
because of frustration of contract after missing two and a half
years of work due to an injury.
In Gahagan v. James Campbell Inc., the employer owned a
number of fast food restaurants. The employee worked at a grill
station. The employee injured her back lifting a pan and missed
nearly two and a half years of work before being dismissed. The
employer took the position that the employee could not return to
work, even with accommodation, and the employment contract had been
frustrated. The employee claimed she was discriminated against on
the basis of a disability.
The Human Rights Tribunal sided with the employer and dismissed
the complaint. The employee's own evidence was that her
physical restrictions impeded her ability to do her job on the
grill assembly-line. This evidence, her two and a half year absence
and receipt of both LTD and CPP disability benefits supported the
conclusion that the employee was not able to return to her job. The
employee argued that the employer could have had another employee
help her perform her duties, or created a job that existed in
another location but did not at this location because of the small
size. The Human Rights Tribunal rejected this argument and held
that the duty to accommodate does not require an employer to
provide "make work" or to create a job that is not
productive or that, in the employer's view, does not need to be
The Gahagan decision should not be taken to stand for
any hard and fast rule, but rather only as an example of a
successful application of the frustration of contract doctrine.
Other instances will always depend on the facts of the particular
case, including, the likelihood that the employee will return to
work in the reasonably foreseeable future and questions of
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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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.
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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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