FRUSTRATION OF EMPLOYMENT CONTRACTS FOR EMPLOYEES

Frustration of contract occurs when an unforeseen event makes it impossible for you or your employer to fulfill the terms of your employment contract. This event must be outside the control of both parties and make continuing the employment relationship fundamentally different from what was originally agreed upon.

Common examples include:

• Serious illness or injury: A long-term disability that prevents you from performing your job duties indefinitely.
• Incarceration: If you are imprisoned and unable to work.
• Changes in the law: A new law that makes your job illegal or impossible to perform.
• Destruction of the workplace: A fire or natural disaster that permanently closes your workplace.

If your contract is frustrated, it is automatically terminated. This means the employment relationship ends, and neither you nor your employer are required to fulfill the remaining obligations of the contract.

This depends on the province where you work.

• In some provinces (like Ontario), you are still entitled to statutory pay even if your contract is frustrated due to illness or injury. This means your employer must provide the minimum amount of notice or pay in lieu of notice (and Severance Pay, if applicable) required by provincial employment standards legislation.
• In other provinces, frustration of contract may relieve the employer of the obligation to provide notice/pay in lieu of notice and severance pay.

It’s important to check the employment standards legislation in your province or consult with an employment lawyer to understand your entitlements.

Yes. If you disagree with your employer’s claim that the contract is frustrated, you can challenge it. An employment lawyer can help you assess your situation and determine if the frustration claim is valid.

• Consult an employment lawyer: Contact Us!
• Review provincial employment standards: Check the website of your provincial Ministry of Labour for information on employment standards, including termination pay.
• Employment and Social Development Canada (ESDC): The ESDC website provides information on federal labour standards.