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Digest of the Week | Frustration of Contract

Digest of the Week | Frustration of Contract

Employee took leave of absence for a medical condition and was advised that he was terminated from employment as a result of frustration of contract


Roskaft v. RONA Inc. | 2018 ONSC 2934 | Ontario Superior Court of Justice


Labour and employment law --- Employment law — Termination and dismissal — Defences — Frustration of contract


Employee worked for employer for ten years before taking leave of absence for medical condition — Insurer approved employee's claim for short-term disability and long-term disability (LTD) benefits as result of his disability and inability to work — Based on letter it received from insurer and absence of other documentation to contrary, employer decided that employee was permanently totally disabled from employment in any occupation and that it was unlikely that he would be able to return to work within reasonable time — Employee was advised that he was terminated from employment as result of frustration of contract — Employee brought wrongful dismissal action — Employer brought motion for summary judgment dismissing action — Motion granted; action dismissed — Employer was not entitled to conclude, on basis of letter from insurer, that insurer had determined that employee was permanently disabled — There was no reference to "permanent" disability in correspondence — There was enough evidence at time of termination of employment to reasonably conclude that there was no reasonable likelihood that employee would be able to return to work within reasonable period of time based on decision of insurer that employee was sufficiently disabled to qualify for LTD benefits, continued representations of employee that his medical condition had not improved and he was totally disabled from performing duties of any occupation, and his continued receipt of LTD benefits — On totality of evidence it was reasonable for employer to conclude at time of termination of employment that there was no likelihood of employee returning to work within reasonable period of time.
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