Frustration of Contract and Long Term Disability Benefits

| November 2nd, 2017 | No Comments »

Employers should be familiar with the concept of frustrated contracts in employment law. Frustration considers what the parties (employer and employee) could reasonably contemplate at the time the employment agreement was made. Put simply, when an event occurs that prevents a worker from performing the essentials of their job, then the contract may become frustrated since this was unforeseen at the time the employment contract was agreed upon.  If so, the employment relation can end with no severance owed to the employee.

When an employer offers long term disability benefits (LTD), this may create a situation where the employer should have seen the possibility of a disability preventing an employee from working at some point in the future. This is because the employer could have reasonably contemplated this as a possibility when employment offers or subsequent entitlement contain LTD benefits. Essentially, LTD benefits offered by an employer will create a situation where an employer will find it more difficult to argue an employment contract has ben frustrated, which was the case in Antonacci v. Great Atlantic & Pacific Co. of Canada.

 In this case, the court stated that the provision of LTD benefits shows that the employer was able to contemplate the possibility of a lengthy leave of absence during the course of employment. In particular, the employee here was a long term worker that eventually had to take an extended leave. The fact that the employee had been with the employer for a long period of time and the provision of LTD benefits made the employer’s argument of frustration harder to prove.

When faced with an employee on an extended leave it is necessary to take a holistic analysis of each fact. Proving frustration is a high burden, and having an employee on a long term leave lasting 2 or more years does not necessarily frustrate the employment contract. It is advisable to seek the advice of an employment lawyer when faced with such a situation.

Q&A: Do you have the right to a harassment-free work environment?

| June 1st, 2015 | 1 Comment »

QUESTION

I have decided that my experience with my boss is in fact harassment and bullying. My performance is over managed, and performance reviews are used as a form of discipline, not coaching. I’m unjustly criticized and made to feel unwelcome. It’s humiliating. I have a doctor’s note detailing the high levels of anxiety and panic I developed. What options do I have? 

ANSWER

Legislation and a Harassment-Free Work Environment

Under Ontario’s occupational health and safety legislation, you have a right to a harassment-free work environment. The actions to which you are subjected must amount to something more than just a personality conflict, and rise up to something along the lines of malicious treatment. You may want to review your company’s anti-harassment policy (if one exists) and file a written harassment complaint. Your employer is obligated to investigate the allegations, and make a good faith determination as to the best course of action to address them.

Participating in an Investigation

You have a right to participate in the investigation and learn the outcome. You also have a right to be free from reprisals (i.e. punishments) for exercising your right to file the complaint. If this happens or the complaint is mishandled, you may have the right to treat your employment as terminated and seek a severance from the company.

Stepping Away From the Situation 

Given your health situation, it would make sense for you to be away from the workplace while this is happening. You can send your doctor’s note to your manager or HR, and inquire about your company’s short-term disability benefits – and if necessary, long-term disability benefits – for income replacement while you’re off work. If the company does not offer these benefits, you may be eligible for Employment Insurance medical benefits for up to 15 weeks. That will give you some time to regroup and consider further options going forward. You have the right to a harassment-free work environment and can step away from a situation that is affecting your health and well-being.

A Loophole in Employment Law that May be Closed

| June 10th, 2011 | No Comments »

Dismissal of long-term employees is never easy.  Usually, it will go one of three ways:

  • Employers will find a reason to fire you “with cause” and no severance will be paid;
  • No cause is found and a severance package must be paid out;
  • The company tries to get away with paying only the bare minimum.

Unfortunately, companies try to fit employees into the third category, but things may change after a recent ruling in Ontario.  Here is a brief summary of Daniel Lublin’s take on the decision, that you can read about in the Metro *here*.

Luis Romero Olguin spent 24 years of his life working for Canac Kitchens before he was laid off during a downsizing.  Many corporations make a practice of doling out the minimum requirements for severance and benefits, and Canac was no exception.  Mr. Lublin says that this is “possibly the biggest loophole in workplace law”.   For Olguin, this meant that he was on his own when he was later diagnosed with throat cancer.

The judge was unimpressed by Canac’s “hardball approach” and ruled that Olguin was entitled to have his benefits and pay for a reasonable amount of time, rather than the “bare minimum”.   Surprisingly, the judge also awarded him punitive damages, which are typically reserved for cases in which the employer has behaved so poorly that they deserve a slap on the wrist.  Technically, Canac did nothing illegal, so this case sends a strong signal to employers that they are no longer safe in following the letter of the law.  Employers now have more incentive to offer greater severance packages in order to avoid potentially large legal costs.  Whether or not this precedent will have a conventional effect or result in changes to the Employment Standards Act waits to be seen.

If you are curious about what your severance might look like, consider contacting Whitten & Lublin for an assessment.  It couldn’t hurt to know what you deserve before being told what you are worth.