In the recent case of Croke v. VuPoint System Ltd., 2024 ONCA 354the Ontario Court of Appeal determined that an employment contract was frustrated by a failure by an employee of VuPoint to comply with a vaccination policy. In this case the vaccination policy had been adopted by the employer’s client.
Background Events
VuPoint System Ltd., the respondent, is a federally regulated employer who was contracted by Bell Canada and related entities to provide home installation services. VuPoint’s revenue was dominated by its contract with Bell, with nearly all income coming from Bell.
Around 2021 Bell imposed a vaccination mandate requiring all contractors that visit any Bell location or do work for any Bell customers to be fully vaccinated against COVID-19. Shortly thereafter, VuPoint also implemented a similar policy requiring that employees provide proof of vaccination. Employees failing to provide proof would not be able to work on Bell-related projects.
The Appellant, Croke, failed to provide proof of vaccination to VuPoint and given VuPoint’s nearly exclusive relationship with Bell, VuPoint had no other work to provide to Croke. VuPoint therefore advised Croke that it considered the employment agreement between it and Croke terminated for frustration. VuPoint provided the minimum pay required under the Canada Labour Code for termination of employment.
Lower Court
Croke sued for wrongful termination of employment and brought a motion for summary judgment. The motion for summary judgment was dismissed by Justice Pollak who found that Bell’s vaccination policy was an unforeseeable change in the employment relationship between VuPoint and Croke. The contract was therefore frustrated and Croke was not entitled to damages for wrongful dismissal.
Court of Appeal
The Court of Appeal agreed with the holding of the lower court and found that the contract was frustrated. The Court of Appeal considered a few arguments advanced by Croke, but ultimately concluded that the frustrating event was the adoption of the vaccination policy by Bell which was beyond the control of VuPoint. Frustration meant that the employment agreement was immediately ended, and no further liability flowed from the relationship between Croke and VuPoint. VuPoint had discharged its obligations by paying Canada Labour Code minimums.
Takeaways
The doctrine of frustration can be difficulty to navigate. A key portion of this case was the Court of Appeal’s confirmation that unforeseeable third-party requirements may have a significant impact on agreements between employers and employees.
At Bridge Legal & HR Solutions we can help you untangle and understand the web of obligations that applies to your employment relationships. To find out how we can help, contact us through our contact form or call us at 647-794-5442.
