Employers
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Frustration of Contracts
When an employee’s absence becomes indefinite or a medical condition makes a return to work unlikely, employers may be entitled to treat the employment contract as frustrated. A frustrated employment contract due to some external circumstance or a serious illness makes it impossible for the employment relationship to continue.
In these cases, the contract ends through no fault of either party, and the employer may not be required to provide common law notice or severance, depending on the cause of the frustration and the employee’s benefit entitlements.
However, Alberta employers must proceed with caution. Frustration cannot be used to avoid accommodating an employee’s disability or return-to-work needs. Employers must show that the employment relationship can no longer continue despite reasonable accommodation.
Our firm assists employers in assessing whether frustration has legally occurred and in navigating the transition carefully to minimize exposure under employment and human rights law.
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