Frustration of Contract Ontario

Do I Have An Employment Case?

Do you have a frustration of contract claim? This can occur when unforeseen circumstances make it impossible for either you or your employer to fulfill the terms of your employment contract, rendering it no longer viable.

If you find yourself in this situation, reach out to our experienced frustration of contract lawyers to discuss your rights and potential next steps.

Frustration of contract occurs when an unforeseen event makes it impossible for either the employer or employee to fulfill the terms of their employment agreement. This could be due to situations like illness, disability, or unexpected economic changes, which make the contract impossible to perform as originally agreed.

For example, if an employee becomes permanently unable to work because of a disability, it could lead to frustration of contract. In these cases, the employment relationship may end, and the employer wouldn't need to provide the usual notice or pay in lieu of notice.

However, frustration of contract is a complex legal concept and often depends on the circumstances. Both employers and employees should seek legal advice to understand their rights and responsibilities under Ontario employment law.

In cases of frustrated contracts, neither party is "at fault," so the employer isn’t required to offer the usual notice or pay in lieu. However, employees could lose a significant amount of compensation, so the courts will carefully examine whether the contract was truly frustrated. The employer has the burden of proof in these cases.

Even when a contract is frustrated due to an employee's disability, employers may still have to provide termination and severance pay under employment standards.

There’s a common misconception that employment contracts are automatically frustrated after an employee receives long term disability benefits for two years, as that's often the point at which long term disability insurance policies change their criteria. However, this two-year mark does not determine whether a contract has been frustrated. Relying on this assumption can lead to costly mistakes.

Whether an employee can return to work in the near future depends on several factors, including the severity and permanence of their illness, the likelihood of recovery, medical evidence, and the nature of their job and role within the company.

When it comes to frustration of an employment contract, experienced lawyers can be a key ally in navigating the legal complexities and ensuring that both the employer’s and employee’s rights are protected. Here’s how an employment lawyer can help:

• Experienced Guidance in Employment Law - Employment law can be tricky and differs from one jurisdiction to another. An experienced workplace lawyer familiar with Ontario's laws, including human rights cases, can provide advice tailored to your specific situation.
• Legal Evaluation - A legal expert can review the situation to determine if the contract has truly been frustrated and if that justifies termination. They'll assess the facts and evidence to give you an informed legal opinion on whether frustration is a legitimate option.
• Clarifying Legal Responsibilities - Frustration of contract requires a careful look at the circumstances. A lawyer will explain the legal obligations for both the employer and employee in this scenario, covering topics like notice periods, termination pay, and potential severance.
• Negotiation Support - If frustration of contract is the right course of action, an employment lawyer can negotiate on behalf of their client to reach a fair and reasonable outcome. This may include discussing termination terms, severance, and other related issues.
• Drafting Documents - An employment lawyer can help prepare important legal documents, such as a termination letter due to frustration of contract, ensuring everything is properly documented and meets legal requirements.
• Dispute Resolution - If there’s a disagreement about the validity of frustration or the terms of termination, an employment lawyer can represent their client in legal proceedings, including potential disputes or lawsuits.
• Mediation & Settlement - In some cases, frustration-related issues can be resolved through mediation or settlement discussions instead of going to court. An employment lawyer can advocate for their client’s best interests during these negotiations to reach a fair and acceptable resolution.
• Court Representation - If the issue escalates to litigation, an employment lawyer will provide legal representation in court, presenting arguments and evidence to support their client’s case.

In short, an employment lawyer is there to offer legal advice, advocate for their client, and ensure that the frustration of contract process complies with Ontario’s employment laws.