When Can Long-Term Disability Frustrate An Employment Contract?

Frustration of contract is a legal concept that allows the parties to end a contract where an unforeseen event occurs that fundamentally changes the parties' ability to perform the terms of the contract.

A contract of employment will be frustrated where the contract becomes impossible to perform, at no fault of either the employee or the employer. When frustration of contraction occurs, the employee is only entitled to minimum statutory entitlements under the Employment Standards Act, 2000, and not common law notice. To learn more about the difference between common law notice and statutory entitlements, read my previous article here.

A contract of employment may be frustrated where the employee is suffering from a long-term disability which has caused, or will cause, the employee to be medically unable to perform any role with their employer for an extended period of time.