Frustration of Contract

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. In a recent decision by the Ontario Court of Appeal in Croke v. VuPoint System Ltd., the Court of Appeal upheld the motion judge’s decision to dismiss the Plaintiff’s wrongful dismissal action on the basis that the employment contract had become frustrated. The Plaintiff was a technician employed by the Defendant. The Defendant contracted with Bell to provide installation services on its behalf; all of the Plaintiff’s work had been done for Bell’s customers.

Due to the Pandemic, Bell implemented a new policy requiring that all installers be fully vaccinated against COVID-19. As a result of Bell’s policy, the Defendant implemented a similar policy. The Plaintiff did not provide proof of vaccination and therefore, he was deemed unvaccinated. Given Bell’s policy requiring all technicians to be fully vaccinated, the Plaintiff could no longer perform any services for Bell customers. The Defendant gave the Plaintiff 2 weeks’ notice and $2392.03 for severance pay. At no time did the Plaintiff inform the Defendant during that 2 week notice period that he intended to get vaccinated and needed more time to do so. The Plaintiff sued the Defendant for wrongful dismissal damages. The Ontario Court of Appeal agreed that the Pandemic which brought about the new condition that everyone must be vaccinated constituted an unforeseen event that was not caused by either party and therefore the contract was frustrated. The Plaintiff was therefore not entitled to wrongful dismissal damages.