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Employment contract frustrated by disability
November 24, 2005

An employer did not wrongfully dismiss an employee who had been on a lengthy disability leave and whose recovery was uncertain, the B.C. Supreme Court has held.

The employee had worked for the employer for about 28 years when he was dismissed as a result of a sale of the employer’s business . At the time of termination, he had been on disability leave for 21 months, and his prospects for recovery were described as “uncertain at best”. The employee died three-and-one-half months after his dismissal and his estate brought an action for wrongful dismissal.

Based on the evidence before it, the court found that at the time of dismissal, the employee’s disability was likely to continue for such a period that further performance of his obligations in the future would be either impossible or radically different from the employee’s obligations under his employment contract. The court concluded the employment contract had been frustrated and dismissed the wrongful dismissal action.

Employers should continue to be wary of dismissing an employee with a disability. However, this case demonstrates that clear evidence of an employee’s continued inability to perform the duties of his or her occupation can constitute frustration of the contract.

Wightman Estate et al v. 2774046 Canada Inc. et al, 2005 BCSC 1393