In the case of Sandhu v. North Star Mills Ltd.,
the Court dealt with the issue of frustration in the context of a lengthy absence from work due to injury. The defence of frustration is a means by which an employer may be precluded from a finding of wrongful dismissal. The plaintiff, Kashmir Sandhu (“Sandhu”) had been employed as a forklift operator for nearly twenty years when he was injured in a car accident. He thereafter informed his employer (“North Star”) that he would as a result not be reporting to work for some time. A few days later, he obtained a Record of Employment from North Star so that he could apply for insurance benefits. Some six months later, Sandhu contacted the owner of the company and explained that the insurer needed a letter from the employer indicating whether there were positions available which involved light duties. The letter provided by the employer indicated that no such jobs were available. Up to that time, the employer covered for Sandhu by assigning his duties to other employees. However, North Star began to look for a permanent replacement for Sandhu and did in fact hire a replacement after Sandhu requested the letter and, according to the company, gave the impression that he was still in a lot of pain and was unable to perform the duties of his job. Sandhu however never told the company that he would not be returning to work. Nor was he told that his job was in jeopardy if he did not return by a certain date or that the owner would be looking for a replacement.
In or about 16 months following the injury, Sandhu contacted the company to advise that his condition had improved to the point where he was able to return to work full-time. When he did not hear back from the owner, he had his employment lawyer write to the company to inquire whether he would be returned to work, or in the alternative, would be deemed to be a wrongful dismissal. When the company did not reply, Sandhu went down to the North Star’s premises and confronted its owner in person. The owner was upset at what he took to be Sandhu’s belief that he could return to work after such a long absence and simply bump the person who had been hired as his replacement.
When subsequent discussions with his employment lawyer regarding damages for wrongful dismissal proved unsuccessful, the company offered Sandhu temporary work on special projects. When Sandhu refused to return on these terms, the company took the position that he had quit his employment. Sandhu’s employment lawyers then commenced an action for wrongful dismissal.
In coming to its conclusion that Sandhu was the subject of a wrongful dismissal and was entitled to reasonable notice, the Court rejected the argument that he resigned his employment. In the Court’s opinion, Sandhu had never advised the company that he would not be returning to work when he was physically able to do so. Nor did his request for a letter from the company regarding the availability of light duties indicate an intention to abandon his status as an employee. Therefore the conduct of the employer constituted wrongful dismissal.
The Court also dealt with the company’s alternate defence that Sandhu’s contract of employment had been frustrated by his 16-month medical absence. The Court acknowledged that if this was the case, North Star would have no obligation to re-hire him. If the facts would not warrant a frustration, it would constitute a wrongful dismissal.
The doctrine of frustration permits an employer to declare that the contract of employment is at an end and no further obligation is owing where it can be shown that the contract is no longer capable of performance. In the context of an illness or injury, the Courts have to consider whether an employee’s illness is of such a nature or is likely to continue for such a time, that further performance of their obligations would either be impossible or would be radically different from the obligations agreed to by the employee under the employment contract. If it does not meet the above threshold, the conduct would be a wrongful dismissal.
In deciding that his contract of employment had not been frustrated notwithstanding
Sandhu’s 16-month absence from work, the Court made the following observations:
“The nature of the illness was such that recovery could be expected. This was not a situation where the employee contracted an incurable disease or suffered a debilitating illness that would progressively worsen. He sustained soft tissue injuries in a car accident and it was reasonable to expect that he would recover in time. That is in fact what happened.
A further circumstance that is relevant, in my view, is that Mr. Sandhu was aware that in the past other employees had been absent from work for extended periods and were able to return to work. One of these persons was absent for about a year. It was reasonable for Mr. Sandhu to believe that his position would remain open, at last in the absence of any suggestion from North Star that he would be terminated unless he returned within a certain period of time.”
The Court concluded based on arguments of his employment lawyers that Sandhu was subject to a wrongful dismissal and entitled to twelve months’ notice less mitigation income received. For more information on frustration, one can refer to:
This article is intended for information purposes only and should not be construed as legal advice. As always, if you have an employment law question or question whether the facts of your particular case constitutes a wrongful dismissal, please consult with an employment lawyer. We can be reached at (416) 323-9395.