A medical disability raises important issues with respect to the employer’s duty to accommodate and possible right to terminate employment. The law has undergone important changes in recent years.

The Early Cases

The general law on “frustration” of contract allows either party to consider itself released where an unforeseen event makes the performance of the contract impossible. In the employment context, this could be, for instance, a sickness or disability that prevents an employee from being able to work or to perform the essential duties of their job.

The early case law on this subject set out the test used to determine when an employment relationship had ended due to such a medical disability.

Factors such as the length of the employment, the nature of the position held, and the medical diagnosis were all seen as important elements needed to answer this question.

These decisions all led to the determination of whether the termination was justified based on the principle of frustration. If the employer succeeded in establishing frustration of contract, there was no claim.[1] If the employee won, a damage claim based on reasonable notice applied.

Duty to Accommodate

However, in recent years, courts and human rights tribunals have added the employer’s duty to accommodate the apparent disability to the analysis, something which had been completely absent in the early cases.

Modern employment law is not so simple as to allow for a termination, without repercussions, due to what is perceived at that time or proven to be later, a serious, even permanent, disability.

In fact, the decision to terminate based on an apparent medical disability will allow for an apparent “prima facie” case of adverse treatment due to disability.

There will then arise a need to show accommodation to the point of undue hardship. Failing this, the employer will be vulnerable to potentially significant liability in a human rights claim.

This breach of the duty to accommodate has led to significant amounts of lost income awarded by human rights tribunals. Some of the remedies for an employer’s failure to accommodate are nothing short of gargantuan.

An Ontario case^[2]  set the lost income sum as 8.5 years back pay of $420,000 plus reinstatement due to the employer’s failure to accommodate the applicant’s disability by allowing for a return to work following her disability. The time clock for the lost income claim continued to tick pending the unsuccessful appeal made by the employer allowing for a final lost income claim of some 12 years.

A similar lost income claim of 10 years in addition to a prospective income loss of an additional 5 years totaling $280,000 due a perceived disability was granted by the federal human rights tribunal.^[3]

The B.C. Tribunal awarded 6 years lost income to a medical doctor who had been delayed entry into a specialist program due to a mental disability. The lost income award amounted to $385,000.^[4]

Accommodation to the Point of Undue Hardship

By now, it is a well-established fact that employers must accommodate employees to the point of “undue hardship”.

An employer’s duty to accommodate goes beyond investigating whether an employee can perform an existing job. It involves investigating whether something can be done to existing jobs to enable the employee to perform a job.^[5]

The duty to accommodate is a mutual obligation, requiring cooperation from the employee. The employee also has a duty to fulfill her own obligation to participate in the process.^[6] Such an obligation of the employee is not to originate a solution, but rather to facilitate the implementation of the employer’s proposal.^[7]

The employee should provide timely advice as to any medical restrictions and should prudent consideration of any accommodation offers made.

All this being said, it has been held that the employer may discharge with impunity where there has been reasonable accommodation and the employee will not be able to resume work in the reasonably foreseeable future. What is required is not proof of accommodation as being impossible, but rather proof of undue hardship.^[8]

The test for undue hardship was stated as something less than “total unfitness for work” in the foreseeable future. It would be met where excessive harm has been shown or alternatively, the employee has been accommodated and the employer has proven that that the employee is unable to work in the reasonably foreseeable future.

The Court has stated, however, that authorizing staff transfers would be part of such a duty where such may be done without due hardship. The duty to accommodate hence does not stop with consideration being given only to the employee’s existing job.^[9]

The disabled employee should be qualified for the alternate position considered, but need not be the most qualified candidate.^[10]

This issue was again reviewed^[11] in a case in which the tribunal reviewed conflicting arbitral authorities and concluded that the employer was required to “bundle” or “take various tasks from existing positions and create a new one.

The Board of Inquiry reviewed the employer’s argument that it did not have a legal obligation to create a position for the applicant by offering to her general clerical work. The Board, without deciding this issue,^[12] determined that the past practice of the employer in offering general clerical work to disabled workers who had received short term disability benefits, exposed it to an argument that it was obliged to continue this practice in this instance in the assessment of the “undue hardship” defence.

This is all subject to the defence of undue hardship and the requirement that the newly created position is useful and productive.

The defence of frustration in a human rights context is “the basis upon which an employer may be able to justify a prima facie discriminatory termination of the employment of a disabled employee as a BFOR.^[13] That is, there may be a point at which, due to frustration, the employer’s obligation to continue to accommodate the disabled employee will come to an end”.

Complex Issues Require Clear Advice

The law on this subject is regrettably difficult and it is prudent for workplace parties on both sides of a disability or accommodation issue to obtain advice from a knowledgeable employment lawyer.

If you are an employee and have experienced adverse workplace consequences due to a serious medical issue or disability, it is important to obtain legal advice to help protect your rights.

If you are an employer facing a complicated employee management issue involving disability and accommodation, we can advise you on the proper steps to avoid and/or defend such a case.

Contact the offices of Toronto employment lawyers Grosman Gale Fletcher Hopkins. We regularly advise employees and employers on legal workplace issues. Contact us online or by phone at 416 364 9599 to schedule a consultation.

[1] Ontario law since has allowed for statutory severance pay even if there is a permanent disability which amounts to frustration.

[2] City of Hamilton,

[3] Turner v Canada Border Services CHRT

[4] UBC v Kelly

[5] Metsala v Falconbridge (McKellar)

[6] The decision of Madam Justice Lax in Conte v Canada Life,

[7] The court referenced in support of this proposition the 1992 Supreme Court of Canada decision in Renaud v Central Okanagan,

[8] Also as cited in the Alberta Court of Appeal in Bish v Elk Valley

[9] B.C. Supreme Court in Emergency Health Services v Cassidy, a decision made in October of 2010 by Madam Justice Gray, sitting on a judicial review application

[10] Hamilton-Wentworth v Fair OCA at para 74

[11] Ontario Human Rights Tribunal decision of Vanegas v. Liverton Hotels International Inc, made in April of 2011. The Tribunal agreed with Arbitrator Kydd’s decision in Gables Lodge c CUPE, Local 1315.

[12] in Metsala v Falconbridge (McKellar), a 2001 decision

[13] Bona fide occupational requirement