In Ontario, if an unforeseen event (like a severe terminal illness or a factory burning down) makes it completely impossible to continue employment, the contract is “frustrated.” While a true frustration means you are not owed common law severance, you may still be entitled to minimum ESA payments for medical frustration. Filing a lawsuit to challenge a fake frustration costs $339 CAD at the Superior Court of Justice.
When an employment relationship ends, it is usually because the employer decided to terminate the worker, or the worker decided to quit. 📍 However, Ontario employment law recognizes a rare third scenario: Frustration of Contract. This occurs when an unpredictable, catastrophic event happens that is neither the fault of the employer nor the employee, making it radically impossible to fulfill the terms of the employment agreement.
Frustration is a highly specialized legal concept. If a workplace literally burns to the ground, or a massive change in the law suddenly makes your specific job illegal, the contract is frustrated by a “fortuitous event.” The most common form of frustration, however, involves health. If an employee suffers a severe, permanent disability and medical evidence clearly shows they will never be able to return to their job, the contract becomes frustrated. Employers love claiming frustration because it shields them from paying massive common law severance packages, which is why it is frequently heavily contested in court.
Step-by-Step Process in Ontario
Whether you work in Windsor, Brampton, or Toronto, if your employer suddenly hands you a letter claiming your employment contract is legally “frustrated,” you must proceed with extreme caution. 📚 Do not blindly accept their assessment.
Step 1: Identifying the Triggering Event
First, identify exactly what the employer claims is causing the frustration. Is it a severe physical illness, an unpredictable natural disaster, or a lost professional license? The event must be permanent and entirely unforeseen. A temporary downturn in the economy or a normal seasonal slowdown does absolutely not qualify as a frustration of contract.
Step 2: Assessing the “Impossibility” Threshold
Ontario courts set an incredibly high bar for frustration. 🔍 The job must be completely and permanently impossible to perform. If an employee is sick, the employer must first exhaust all avenues to accommodate them under the Ontario Human Rights Code. If there is even a small chance you could return to modified duties in the future, the contract is likely not frustrated.
Step 3: Reviewing the Medical Documentation
In cases of prolonged illness or Long-Term Disability (LTD), the employer cannot simply guess that you are never coming back. They must rely on concrete medical evidence from your doctors. Usually, an absence of two to three years, combined with a doctor’s note stating there is “no reasonable prospect of return to work,” is required to prove medical frustration.
Step 4: Calculating Your Statutory Entitlements
| Type of Frustration | ESA Severance & Notice | Common Law Severance |
|---|---|---|
| Medical Frustration (Illness/Injury) | Yes. Required by law. | No. |
| Fortuitous Event (Fire, Act of God) | No. | No. |
Many employers conveniently “forget” that while medical frustration erases common law severance, the Employment Standards Act (ESA) still strictly requires them to pay your minimum termination and severance pay based on your years of service.
Step 5: Consulting an Employment Law Firm
If your employer is attempting to use a minor injury or a temporary business closure as an excuse to claim frustration and fire you cheaply, this is a wrongful dismissal. You must have an Ontario employment lawyer review the correspondence immediately before you sign any releases.
Step 6: Filing a Civil Lawsuit
If the employer’s claim of frustration is legally invalid, your lawyer will attempt to negotiate a proper severance package. If the employer refuses, your legal team will file a Statement of Claim at the Superior Court of Justice, seeking full wrongful dismissal damages. 💼
How Much Does it Cost in Ontario?
Challenging a false claim of frustration involves the standard costs of civil litigation:
- Court Filing Fees: Initiating a wrongful dismissal lawsuit at the Superior Court of Justice requires a standard filing fee of $339 CAD.
- Law Firm Fees: Most employment lawyers will take a strong wrongful dismissal case on a contingency fee basis (retaining 25% to 35% of the settlement). If you pay hourly, expect $300 to $650 CAD per hour.
- Medical Reports: To fight a medical frustration claim, you may need to pay your doctors to provide detailed prognosis reports, which can cost between $150 and $500 CAD.
How Long Does the Process Take?
Timelines in frustration cases can be incredibly lengthy, especially when waiting for a medical prognosis. ⌛
- The Waiting Period (Medical): Employers usually must wait at least 2 to 3 years while an employee is on LTD before they can safely claim medical frustration without facing a human rights complaint.
- Limitation Period: If you believe the frustration was actually a wrongful dismissal, you have 2 years from the date of the termination letter to file a lawsuit.
- Litigation Process: If a lawsuit is filed, mandatory mediation and court processes generally take 12 to 24 months to resolve.
Frequently Asked Questions (FAQ)
If my employer claims frustration, do I still get my Long-Term Disability (LTD) benefits?
Generally, yes. Your LTD benefits are an insurance contract between you and the insurance provider. The frustration of your employment contract with your employer does not automatically cancel your ongoing monthly disability payments.
Is frustration of contract the same as being fired “for cause”?
No, they are completely different. A termination “for cause” implies you did something terribly wrong, like stealing. Frustration means the end of the contract is nobody’s fault. Unlike a termination for cause, medical frustration still entitles you to minimum ESA severance.
Can the COVID-19 pandemic be used as a frustration of contract?
In most cases, Ontario courts have ruled that the pandemic and government lockdowns were temporary disruptions, not permanent impossibilities. Therefore, employers generally cannot use COVID-19 as an excuse to claim frustration and avoid paying severance.
What if my employer goes bankrupt, is that frustration?
No. Bankruptcy is governed by specific federal laws (the BIA) and is not considered a “frustration of contract” under common law. If the company goes bankrupt, you become an unsecured creditor and must apply for the Wage Earner Protection Program (WEPP).
Leave a Reply