Case In Point

Court Finds Employee’s Contract Frustrated for Failing to Comply with Mandatory Vaccination Requirements

Case In Point

Court Finds Employee’s Contract Frustrated for Failing to Comply with Mandatory Vaccination Requirements

Date: March 10, 2023

In Croke v VuPoint Systems Ltd., the Ontario Superior Court of Justice recently found that an employee’s failure to comply with his employer’s vaccination requirements amounted to a frustration of contract, disentitling the employee to wrongful dismissal damages at common law.

The employer, VuPoint, provided installation services for Bell Canada. The employee exclusively worked for Bell, through VuPoint.

On September 8, 2021, Bell advised its subcontractors, including VuPoint, that it was imposing a mandatory vaccination requirement on all subcontractors who performed installation services. VuPoint then adopted a mandatory vaccination policy (Policy) requiring all installers to be vaccinated against COVID-19. The Policy stated that non-compliant employees would be prohibited from performing work from certain customers (including Bell), and may not receive the assignment of any jobs.

The employee refused to be vaccinated. On September 28, 2021, he was advised that his employment would be terminated effective October 12, 2021, due to his refusal to comply with the Policy. In response, the employee made it clear that he did not intend to become vaccinated. Upon termination, the employee brought a wrongful dismissal action. VuPoint argued that “being able to work for Bell and enter the home of Bell’s customers” was a fundamental part of the employee’s position, and the complete inability to perform that work was a frustration of contract.

The Court noted that the effect of a frustrated contract entitles the parties to treat the contract as being at an end, resulting in no obligation to provide notice of termination at common law.

The Court then endorsed the arbitration award of Fraser Health Authority v. Hospital Employees’ Union (Tracy London Termination), which found an employee’s contract to have been frustrated by the employee’s refusal to vaccinate pursuant to a mandatory vaccination policy introduced by the province.

The Court concluded that the complete inability of the employee “to perform the duties of his position for the foreseeable future constitutes a radical change that struck at the root of the employment contract, resulting in the frustration of the contract.” It stated:

[39]      …        I find that VuPoint’s vaccination policy was a supervening event that was beyond the parties’ control and was not contemplated by the parties when they entered into the employment contract. Over 99% of VuPoint’s business came from Bell, and it was required to comply with and enforce Bell’s policies pursuant to the supply agreement. This resulted in a radical change to the Plaintiff’s employment contract, as he was unable to perform any duties of his employment while he remained unvaccinated and he advised his employer in very clear terms that he would not become vaccinated. This supervening event and radical change to the employment contract was in place for the foreseeable future as there was no indication that the Bell vaccination policy would be lifted. As a result, I find that Bell’s vaccination policy frustrated the Plaintiff’s employment with VuPoint. The Plaintiff was provided with two weeks’ working notice and received all amounts owing to him, including severance, under the CLC. As Mr. Croke’s employment was frustrated, he is not entitled to any additional damages for wrongful termination related to reasonable notice.

This is a novel decision for non-unionized employers. It provides an example of when an employment contract may be frustrated pursuant to non-compliance with a COVID-19 vaccination policy.

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