Disabled employees…till death do us part? Maybe not

Inevitably, employers will face a level of frustration in effort to manage employee disability (injury or illness).  Often that frustration leads to the misconception that nothing can be done.  Employers are “hands off” and disabled employees are then left on sick leave…sometimes for years…till death do us part. 

However, in certain cases, it is the legal doctrine of “frustration” that may provide an employer with a path to end an employment relationship with a disabled employee at limited cost and with limited consequence. 

The doctrine of “frustration” applies when one party to a contract can no longer perform contractual obligations due to unforeseen circumstances beyond the control of the parties.  In that case, legally speaking, the contract comes to an end. 

To apply the doctrine in the context of an employment relationship, think about the “bargain” between employer and employee.  The employer provides pay and benefits and, in, return the employee provides work and service.  If an employee suffers from a protracted or permanent disability (injury or illness) that prevents the employee from providing work and service, the “bargain” breaks down and the employment contract is said to be “frustrated” in law.  In theory, the employment relationship ends without any common law obligation to provide the employee with notice or severance. 

Key Factors

The key factors to assess in determining whether an employment contract has been “frustrated” due to prolonged employee disability include the following:

    ●     the duration of the employee’s sick leave
    ●    the nature of the employee’s disability (illness/injury)
    ●    the employee’s period of service     
    ●    the nature of the employee’s position 
    ●    the nature of the workplace and, most importantly, 
    ●    the employee’s medical prognosis 

Key Considerations

1.    Process is Critical

Do not terminate prematurely based on assumption or speculation regarding the employee’s prognosis or inability to return to work.  You need to follow a carefully considered process which begins with a request for up to date and detailed medical information regarding the employee’s prognosis.  

2.    Employee Cooperation (Medical Information)

Yes, the employee has a legal obligation to cooperate in the process and provide necessary medical information.  A failure to do so can be the subject of discipline and/or adverse inferences. 

3.    Accommodation Obligations (Ontario Human Rights Code)

Once medical information has been obtained, the employer must comply with the duty to accommodate under the Ontario Human Rights Code.  Consider whether there is any reasonable likelihood that the employee will be able to return to work in the foreseeable future in:

    (a)    her/his own position (with or without modification); and 

    (b)    if not, in another available position (with or without modification).

4.    Statutory Obligations (Employment Standards Act)

While there is no common law obligation to provide notice or severance should the employment relationship end due to “frustration” there is an obligation under the Employment Standards Act to provide termination pay (with an extension of benefits) and statutory severance, if any.   

5.    Non-Unionized/Unionized Workplaces

Although the doctrine of “frustration” is a common law principal, the concept applies equally in the unionized workplace (innocent absenteeism).  However, in the unionized workplace consideration must be given to the terms and conditions of the collective agreement.     

The Take Away

Caution must always be exercised in dealing with or terminating a disabled employee.  If poorly handled, an employer could be exposed to a wrongful dismissal claim, a claim for moral damages for bad faith conduct and/or a human rights claim. 

Actively managing disabled employees though regular communication and periodic requests for medical information is a given.  However, consideration should also be given to the prospect of drawing the employment relationship to an end where the available medical evidence confirms prolonged or permanent disability. 

Till death do us part?   Not necessarily.