We have been blogging a lot about how COVID-19 vaccine mandates have impacted workplace law, and now we can add one more context to our catalogue. The Ontario Superior Court of Justice has just rendered its decision in Croke v. Vu Point Systems Ltd. [not yet reported – decision available upon request] in which the plaintiff's employment was deemed "frustrated" by their refusal to get vaccinated.
The employee was a service technician with VuPoint Systems Ltd. from 2014 until 2021. VuPoint is a designated installer and service provider for Bell Canada and Bell ExpressVu. About 99% of VuPoint's revenue comes from its contracts with Bell. On or around September 8, 2021, Bell told VuPoint that its installers would be required to receive two doses of an approved COVID-19 vaccine. As a consequence, VuPoint adopted its own mandatory vaccine policy stipulating that unvaccinated installers would not be able to work for Bell customers, and may not receive any job assignments. This was particularly significant because the employee was only paid for jobs completed, rather than receiving a regular wage or salary.
The employee did not comply with VuPoint's vaccine requirement, and so it gave him two weeks' notice of termination and severance pay, compliant with the Canada Labour Code which applies to federally-regulated employers such as telecommunications providers. During his two-week working notice period, the employee told his employer that he would "not consent to any type of COVID-19 vaccine" that Bell was mandating, and that he was resolute "not to take ANY vaccine including the COVID-19 experimental injection". His employment ended three days later on October 12, 2021, and he brought a claim against VuPoint for wrongful dismissal.
VuPoint denied that it had wrongly dismissed the plaintiff, and instead relied on the doctrine of frustration. As the Court reviewed: "[f]rustration occurs when a situation has arisen for which the parties made no provision in the contract and performance of the contract becomes 'a thing radically different from that which was undertaken by the contract". The legal result of a frustrated contract is that the parties are entitled to treat the contract as being at an end, with no obligation to continue the contract and no entitlement to either party as a result of the contract. This means that where an employment contract is frustrated, the employer has no obligation to provide the employee with notice of termination at common law.
VuPoint's position was that in this case, Bell's vaccination mandate resulting from the global pandemic was an unforeseen supervening event that frustrated the employment contract. Ultimately, the Court agreed.
The Court ruled that Bell's implementation of its mandatory vaccine condition on all subcontractors in order to be eligible to perform installations services was the unforeseen occurrence, not contemplated by either party to the employment agreement. There was no default in the employment agreement by either the plaintiff or the employer. The plaintiff's complete inability to perform the duties of his position for the foreseeable future constituted a radical change that struck at the root of the employment contract, resulting in the frustration of the contract. The plaintiff was not owed any notice of termination pursuant to the common law.
Employers should know that while this outcome is unprecedented, it is not entirely without analogy. In its reasons, the Court referred to a British Columbia labour arbitration decision in Fraser Health Authority v. Hospital Employees' Union summarized here. In that case, the employee refused to become vaccinated under a mandatory vaccination policy that was required for employees of a public health organization in the province. The arbitrator in that case compared the context to employees whose employment was deemed frustrated by losing their security clearance required for the job. In essence, each case featured employees "lacking a necessary qualification to perform any of [their] duties".
Employers should understand that it is rare that an employment agreement is frustrated rather than breached. Frustration most commonly occurs where the employee is too ill or injured to carry out their duties any more. Even in those cases, employers are still required to provide employees with their minimum entitlements to notice of termination and severance pay (where applicable). The Lawyers for Employers are CCPartners can help you understand that status of your employment contracts, and whether they are frustrated, breached, or very much in force. The answer is not always as obvious as you might think.
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