Frustration: No Dismissal Damages for Serious Illness

If an employee becomes totally disabled and cannot return to work, the employer may be able to end the employment relationship without any further obligations.  This doctrine of “frustration” was recently analyzed in the case of Fraser v. UBS Global Asset Management, a decision of the Ontario Superior Court of Justice.  If an employer successfully argues “frustration,”  the employee loses in a wrongful dismissal case.

Linda Fraser had worked for UBS for more than 20 years.  She became ill after a holiday and was off work for six months on short term disability leave.  She tried to return to work but was unable to do so due to her illness, which had become more severe.  She went off again on short term disability leave for another six months.  After her second leave, Ms Fraser was off for a two year period on long term disability leave.

Most LTD policies change after two years.  For the first two years, Ms Fraser was required to show that she could not perform the duties of her employment, meaning the specific job that she had with UBS.  After two years, she was required to show that she could not perform the duties of any gainful occupation.  The insurer cut Ms Fraser off benefits when the definition changed and Ms Fraser sued the insurer to challenge that decision.  The lawsuit was totally separate from her wrongful dismissal case.

From UBS’ perspective, Ms Fraser’s disability coverage ended even though she was suing the insurer.  She was off work and no longer in receipt of benefits for a period of five months.  She did not keep UBS informed about her status.  After five months, UBS wrote to Ms Fraser and stated that her employment was being terminated.  It paid her out 8 weeks’ notice pay and 22 weeks’ severance pay under the Ontario Employment Standards Act and continued her extended health benefits for three more months.  Ms Fraser did not accept this decision and sued for wrongful dismissal.

At trial Justice Wein of the Ontario Superior Court reviewed the law of “frustration” and concluded that it applied in this case.  Ms Fraser was found to be “permanently disabled.”  The Court held that she is “totally disabled and her disability is permanent such that she will never be able to work again.”  As a result, the employment contract had ended and UBS was not required to provide any further payments.  The wrongful dismissal lawsuit was dismissed.

For employees in Ontario, the case is a reminder that employees have an obligation to keep their employers updated as to their status when they are off on a sick leave.  If disability benefits are cut off, they must provide information to their employers about their proposed actions.  If it becomes clear that the employee will not be able to return to work again, the employer may be able to conclude that the employment relationship has ended.  This will not necessarily lead to a viable wrongful dismissal lawsuit.

For employers, this type of decision is rare.  If the employee can show that he or she simply required more time to recover and kept the employer informed, the employer will not necessarily be able to rely on “frustration.”  The situation may also be different where the employee continues to receive LTD benefits.  Employers looking to rely on “frustration” will need to be reasonably sure that the employee will not be able to return to work for the foreseeable future.

Should Canadian Employees Have Faith in Workplace Accommodation of Religion?

Canadian employers are required to accommodate the needs of religious employees in the workplace.  This requirement can extend to a number of different issues including weekly Sabbath Observance, religious holy days, daily prayer breaks, religious dress and, sometimes, disputes relating to employer requirements.  I will be speaking about this issue at the Law Society’s Annual Six Minute Employment Lawyer Conference on June 13, 2013.

This is a short list of a few of the main topics that I will be covering and some of the key points:

1.  Workplace  Accommodation: Sabbath Observance:  Many Canadian employees of different faiths observe a weekly Sabbath.  Since the Canadian Charter of Rights and Freedoms (the “Charter”) came in effect in 1985, the Canadian Supreme Court has, on a number of occasions, recognized the importance of accommodating minority religious requirements, including a weekly Sabbath.  Canadian employers are required to accommodate the Sabbath observance of their employees by permitting employees to take the day off unless doing so would create “undue hardship” for employers.  In unionized workplaces, unions are also responsible for cooperating with this duty to accommodate these needs.  There are very few cases in which Canadian courts, tribunals or arbitrators have actually found that it would create “undue hardship” to permit an employee to observe his or her weekly Sabbath, although there have been some.  One recognized exception would be if the employer was looking to hire a person specifically to work on the Sabbath day.  Another would be if work on the Sabbath could be shown to be an essential requirement of the position.  For the most part, however, even small workplaces have been required to permit employees to observe their weekly Sabbath breaks.

2.  Workplace Accommodation: Religious Holy Days:  As with weekly Sabbath observance, Canadian employers have also been required to permit employees to take time off to celebrate or observe religious holy days, subject to “undue hardship.”  This may include a significant number of days in a calendar year.  However, the legal question has been whether employers are required to pay for these observances.  The short answer, for the most part is “no.”  If employers provide “discretionary days off” or “personal days” or most other types of paid days, employees are permitted to use these days, as paid days off, to observe holy days.  Employees are not required, and cannot be required, by their employers to use up paid vacation time for these days. Moreover, if there is a way to make up the days through scheduling time, extra hours, or time shifting, employers are required to permit their employees to use these methods.   Many employers do provide two or three paid annual “personal” or “discretionary” days which employees can use for these purposes.  But, in most cases, employers are not required to pay for religious holy days even though they must permit employees to observe these days by not attending at work.   If employees elect not to use their vacation time for these observances, they can take unpaid holy day time – or try to make up the time otherwise.

3.  Workplace Accommodation: Daily Prayer Breaks: There are fewer cases involving daily prayer breaks.  However, Canadian law recognizes that employers must accommodate these requirements to the point of undue hardship.  Employers may put rules into place to ensure that a workplace or a post is not left vacant while an employee takes a prayer break.  For example, a system of notifying a superior, obtaining approval or “signing out” at the required time may be reasonable.  Employers are not necessarily required to pay for this prayer break time and can ask employees to work extra time to make up this break time – unless the employees are simply using break time that is otherwise available to all employers.  Employers are not necessarily required to provide designated prayer areas, though if this is something that can be arranged, it may be preferable over having the employees leave the workplace.

4.  Workplace Accommodation: Religious Dress: Canadian employers are required to permit their employees to wear various forms of religious dress unless doing so would create undue hardship (which usually means safety concerns in this area).  Thus employees may wear turbans, kippahs (yarmulkes), hijabs, crosses, kirpans and other forms of religiously required headgear or attire to work.  Employers, in most cases, cannot require employees to shave their beards or other facial hair that is grown for religious purposes.  Clothing that is not religiously required but is a cultural practice may be permitted as well, though this may be open to question.  Clothing worn for religious or cultural reasons which completely covers a person’s face such as a niqab or a burka may also create issues if the employee works, for example, in a customer service environment.  Employers may argue that it is an essential requirement of the position that the employee’s face be visible while working.  It is unclear how courts and tribunals will decide these cases.  In 2012, the Supreme Court determined that women who wear niqabs may be required to remove them when testifying in court in some circumstances.  However, this has not yet been applied to workplaces.

4.  Workplace Accommodation: Employer Requirements:  If employees are asked to do something that would violate their religious beliefs, practices or customs, they may be able to get an exemption from these requirements for religious reasons.  The test would be whether the issue can be accommodated without creating undue hardship.  In one case, for example, some 407 employees refused to participate in a new security system that involved biometric hand scans, for fear of having the “Mark of the Beast” imprinted on their hands.  An arbitrator accepted this argument and exempted the employees from the biometric hand scan program, finding that this was something that could be accommodated.  Employers are not required, however, to accommodate religious requirements that would affect the human rights of other employees.  So if, for example, an employee requests that he or she not be required to work with members of the opposite gender, that request need not be accommodated in a Canadian workplace since it would affect the equality rights of other employees.

Other issues may arise that relate to religious freedom in the workplace.  The Supreme Court of Canada has established that employees seeking any of these accommodations for religious purposes are not required to prove that they are religiously required by a particular religion or religious leader to observe such practices.  Rather, they need only prove that they are sincere in their belief and observance of a particular practice.  In other words, employees must show that they believes that they are required to observe a particular practice and actually follow it, sincerely.  If this can be demonstrated, Canadian employers are required, in most cases, to accommodate the practice to the point of undue hardship.

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