Why is My Employer Giving Me a Deadline? Frustrated Contracts and Disability Claims

Why is My Employer Giving Me a Deadline? Frustrated Contracts and Disability Claims

When you are forced to go off work due to illness or injury, it isn’t a happy time for you or your employer.   For employers having employees off on a disability claim creates a difficult situation where employers may have to scramble to ensure that your work gets done. If your claim is denied for short term or long-term disability benefits, an employer will often put pressure on you to return to the workplace or risk losing your job.  In order to reduce costs and minimize disruption in the workplace, employers may choose to try to end the relationship with their employee, by suggesting that they are undergoing a restructuring, while you feel that the real reason they have decided to let you go is because of your disability claim.

If you continue to pursue your disability claim, your employer may ultimately want to rely on your contract of employment having been frustrated by your illness or injury that prevents you from being able to perform your employment (or from performing your contract). A contract is frustrated where it is no longer possible to perform.    To illustrate, let us consider a non-employment example. A factory has a fire and has been destroyed making it impossible for the manufacturer to fill orders.    They would advise their customers that they are unable to fulfill the orders and therefore the contract has been frustrated, which may relieve them of the obligation to deliver the products that were ordered.   Similarly, in an employment contract, if you can’t do the work, the employment contract may have been frustrated and in such circumstances, the obligation to pay common law severance may be significantly reduced or eliminated (subject to statutory minimums).

An employer that is looking to set up a frustration of contract argument will usually send a letter threatening to terminate the employee if that employee is not able to return to work by a certain date. They will then follow through and terminate the contract on the basis that the employee is still unable to work due to health issues.

The law does allow an employer to end the employment of someone who is off due to illness. However, they can only do so in specific circumstances and must demonstrate that the employee’s illness makes it functionally impossible to complete the original contract. A rigid deadline is an attempt to create a level of certainty, since it is a concrete requirement that an employee is unlikely to be able to fulfill while on disability leave.

Thankfully, there are laws in place to protect people with disabilities. For one thing, Canadian courts have previously ruled that a contract may not become frustrated while an employee is receiving long-term disability benefits from their employer. The fact that the employee’s disability claim has been approved does not mean that the employee will never return to work but rather that they are not presently able to perform their job, and an employer attempting to terminate the employment based on a frustration argument may not be able to get away with that should the employee choose to take action to recover severance and other damages.

Various human rights legislation also makes it illegal for employers to discriminate against people with disabilities. That means that an employer must offer reasonable accommodations and that any attempt to fire an employee who is off due to a disability could run afoul of the law.

This is why it’s so important for employees to be aware of their legal rights. To avoid a potential dispute, some employers will try to terminate an employee before they file a disability claim, or force them to sign paperwork in which they waive their right to pursue legal action. Past court cases have established an employer’s obligation to extend benefit coverage into the notice period.  Failure to do so could result in the employer being directly liable for disability benefits where they have terminated coverage, rather than extending it to cover the notice period.

With that in mind, it’s always best to consult with a lawyer when facing disability or dismissal. They’ll be able to determine whether or not it makes sense to take further legal action against your employer or your insurance company to ensure that you get the benefits and compensation you are entitled to.

Has your long-term disability claim been denied? Contact Share Lawyers and put our experience to work for you. We have recently settled cases against Great-West Life, Desjardins, Manulife, RBC Insurance, Sun Life, and many more. We offer free consultations and there are no fees unless we win your case. Find out if you have a disability case.