Frustration of contract is a legal concept that means the original “employment contract” as agreed to can no longer be performed due to an unforeseen circumstance that neither party has control over. Where frustration of contract is proven, the employee is not entitled to wrongful dismissal damages at common law.
Claim For Loss Of Disability Benefits Awarded Against Prior Employer
The Ontario Court of Appeal upheld a trial judge’s decision that although an employee had secured alternative employment following termination, he was entitled to the loss of disability benefits until age 65 against his prior employer.
The prior employer had paid the employee his employment standards amounts only under the Ontario Employment Standards Act, 2000 and as such, the employee had not signed a release. The employee became disabled while working for a new employer. The employee’s remuneration package with his new employer did not include disability benefits.
Given that the employee’s disability arose during the reasonable notice period and he had not signed a release, he was successful in obtaining damages for the loss of disability benefits against his prior employer.
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