By: Stephanie McDonald and Baljinder (Bal) Singh Tiwana
What is Medical Frustration of Contract?
Medical frustration can happen when an employee becomes ill or disabled and is unable to return to work for a significant period of time.
In simple terms, an employment contract may become “frustrated” when circumstances outside the employee’s and employer’s control make it impossible for the employment relationship to continue as originally intended. Neither the employee nor the employer has to formally declare that the contract is frustrated. It is a legal conclusion based on the circumstances.
When an employee is off work because of an illness or disability, the key question is whether they are likely to return to work within a reasonable period of time. Several factors inform this assessment. These include the employee’s medical condition, prognosis, the nature of their job, and the circumstances of their case.
For example, an employee may develop a serious medical condition that prevents them from performing the essential duties of their job. If there is no reasonable prospect that they will be able to return to work within a reasonable period of time, even with appropriate accommodation, their employment contract may eventually become frustrated.
Importantly, there is no automatic deadline for medical frustration. An employment contract does not become frustrated simply because an employee has been off work for one year, two years, or any other fixed period. Every case must be assessed individually based on the employee’s circumstances and the medical information available.
Duty to Accommodate
The employer’s duty to accommodate to the point of undue hardship remains intact during the period of employment, to facilitate the employee performing their core duties. The employer is under an obligation to take reasonable steps to investigate accommodation and consider whether the employee can work with appropriate modifications.
The duty to accommodate may also require the employer to maintain the employment relationship while an employee is unable to work, up to the point that doing so would cause undue hardship.
High Threshold
The threshold for establishing medical frustration is high.
A serious illness or disability, or lengthy absence, does not automatically frustrate an employment relationship. An employer cannot simply rely on the length of employee’s absence and unilaterally declare that the contract is frustrated.
The circumstances must demonstrate that the employee’s incapacity has fundamentally altered the employment relationship.
The employer must carefully consider the available medical evidence, employee’s prognosis, essential duties, expected duration of illness, and whether accommodation remains possible without undue hardship.
Clear and cogent medical evidence is crucial, where the employer contends there is no reasonable prospect of the employee returning within a reasonably foreseeable period.
In Ontario, an employer may rely on ‘medical frustration’ only in limited circumstances. An employer that prematurely relies on medical frustration will expose themselves to significant legal liability.
Still Entitled to ESA Minimums
Medical frustration does not, by itself, remove an employee’s entitlement to minimum statutory entitlements under the (ESA)
Under Ontario Regulation 288/01 of the ESA, an employee whose illness or injury frustrates their employment contract still has the right to termination pay and severance pay.
Common Law Notice
If an employee’s illness or injury genuinely frustrates the employment contract, the employer generally does not have to provide common law reasonable notice.
However, if the circumstances do not meet the legal test for medical frustration, the employee may still be entitled to common law reasonable notice.
If a court finds that medical frustration did not occur, or that the employer failed to meet its duty to accommodate, the employee may have a wrongful dismissal claim and may claim common law reasonable notice.
Conclusion
Medical frustration is a high threshold to be met. Employers must first meet their duty to accommodate to the point of undue hardship. Where medical frustration is established, the employment relationship ends by operation of law, generally without common-law reasonable notice. However, the employee terminated in these circumstances are still entitled to ESA termination pay and severance pay.
Workplace Sage Legal can help you assess accommodation obligations, medical frustration, and your legal entitlements.
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Learn more about employment law through the articles below:
- Navigating Medical Leave in Ontario: Know Your Rights and Your Employer’s Limits
- Fired After Medical Leave in Ontario? Know Your Severance Rights
- Ontario’s Burnout Problem: Ignoring It Comes at a Cost
DISCLAIMER: This article/blog is provided for educational/informational purposes only. This blog does not constitute legal advice. Do not rely on any advice before speaking with a lawyer. This blog does not form a solicitor-client relationship.
