Key Employment Law Issues for Disabled Employees

Posted September 1, 2004

By Robert Brent

In many cases, the injuries that someone suffers in a motor vehicle accident carry over to that person’s workplace, when their resulting disability means they cannot work or cannot perform their job in the same way.

What follows is a summary of some of the key employment law issues that may affect an employee (in a non-unionized workplace) who has become disabled.

Obviously, job security is a central concern for someone who cannot work after an injury. In general terms, any employee can be terminated at any time. The real question is whether the employer terminates that person’s employment for cause (i.e. some wrongdoing) or without cause. The difference between the two is that an employee who is terminated without cause is entitled to advance notice of the termination, or pay in lieu of that notice. The length of the notice period, in weeks, will depend on numerous factors but it primarily rests on the terms of the employment contract and the employee’s length of service. Section 57 of Ontario’s Employment Standards Act, 2000 establishes minimum notice periods based on an employee’s length of service.

Courts have concluded that conduct justifying dismissal for cause (i.e. without notice) must be wilful or deliberate. Because an absence from work due to illness or disability is not intentional, disability cannot be relied upon by an employer as cause to terminate a person’s employment. This does not mean that a disabled employee cannot be terminated without cause (i.e. by giving notice), it just means that the employer cannot rely upon the employee’s disability as cause to terminate his or her employment. Arguably, however, the notice period should run from the time that the employee is able to return to work and, where an employee becomes disabled during a notice period, passage of the notice period is suspended until the person could return to work. As well, all employee benefits must be maintained through minimum notice period under section 61 of the Employment Standards Act, 2000.

The notice period (i.e. compensation) afforded to any employee may be increased where the manner in which the employee is dismissed has breached the employer’s duty to act fairly and in good faith. Firing a disabled employee for cause has been held by the courts to be an example of bad faith, resulting in an extension of the notice period provided.

While an employer cannot rely on an employee’s disability in terminating his or her job, there is a separate legal doctrine that permits an employer to treat the employment contract as being at an end. This is called the doctrine of “frustration,” which applies to all kinds of contracts (not just employment contracts).

Under this doctrine, an employee is not considered to have been dismissed. Instead, the parties to the employment contract are seen as being incapable of performing the employment contract, putting their obligations at an end.

An employment contract is considered to be frustrated where the employee’s inability to work, looked at before the dismissal, was of such a nature or appeared likely to continue for such a period that further performance of the employee’s obligations would either be impossible or radically different from that to which the parties originally agreed.

This doctrine is not to be lightly invoked and, as a rule of thumb, an employee must have been disabled for 18 months to 2 years before the employment contract can be said to have been frustrated. A court will consider the following factors:

  1. The Terms of the Contract: i.e. when a contract provides for sick pay/LTD benefits, it cannot be frustrated so long as the employee returns to work, or appears likely to return, within the period during which sick pay is payable;
  2. How Long Employment was Likely to Last: i.e. long term or temporary employee?;
  3. Nature of the Employment: i.e. is employee one of many in same role, or fills a key post that cannot be left vacant;
  4. Nature and Duration of Disability/Prospects for Recovery: i.e. it is more likely the employment relationship has been destroyed where there is greater incapacity and/or longer period that disability has persisted or is likely to persist;
  5. Period of Past Employment: i.e. a longstanding relationship is not so easily destroyed.

All of this must be viewed in light of employer’s duty to accommodate a disabled employee under the Ontario Human Rights Code. In particular, an employer cannot discriminate against an employee on the basis of disability and has a duty to accommodate an employee’s disability to the point of “undue hardship”. (Various resources available on Ontario Human Rights Commission website: ). The legal issues surrounding the rights of a disabled employee are complex and, obviously, can arise at a time when an injured individual is at his or her most vulnerable.

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