Employer’s Claim of Frustration Becomes Frustrated: Award of 22 Months, Moral and Punitive Damages

Accommodation -- Upset business woman

In Altman v. Steve’s Music Store Inc. the Court rejected the employer’s defence of frustration of contract, and awarded the employee 22 months notice, $35,000.00 in moral damages and $20,000.00 in punitive damages due to the employer’s inappropriate conduct in terminating an employee suffering with a disability.


The employee, Shelley Altman, worked for the employer, Steve’s Music Store, for just over 30 years. In December of 2007, Ms. Altman was diagnosed with lung cancer. She underwent surgery in February of 2008 and chemotherapy in April of 2008 followed by six and a half weeks of radiotherapy. Ms. Altman’s treatments were completed on September 17, 2008. Between February and September of 2008, as a result of her surgery and treatments, Ms. Altman took a medical leave of absence for one month and upon her return worked reduced hours.

The employer was aware of Ms. Altman’s illness and treatments and supported her upon her return to work by paying her regular salary despite her working reduced hours. However, on October 15, 2008, approximately one month after Ms. Altman completed her treatments, the employer sent a letter to Ms. Altman by bailiff from the employer’s law firm indicating that unless Ms. Altman begins working regular hours the employer would have no alternative but to terminate her employment.

On October 16, 2008, out of fear of losing her job, Ms. Altman attended work. However, on October 17, 2008, Ms. Altman began a three month medical leave of absence, which was extended for a further three months on January 9, 2009.

On April 1, 2009, Ms. Altman informed the employer that she would be returning to work on April 8, 2009. However, on April 6, 2009, Ms. Altman informed the employer that her return to work would have to be delayed until April 20, 2009 as she had fractured her back.

Despite Ms. Altman informing the employer that she would be returning to her employment on April 20, 2009, the employer’s legal counsel, at the instruction of the employer, sent Ms. Altman another letter by bailiff which informed her that she was terminated and was not being provided with any notice or pay in lieu. In response, Ms. Altman brought an action for wrongful dismissal.

Ontario Superior Court of Justice’s Decision

In defence to Ms. Altman’s allegation of wrongful dismissal, the employer claimed that Ms. Altman’s employment was frustrated due to her illness being permanent in that she was no longer able to perform her work duties.

Despite the employer’s defence of frustration, the Court determined that the employer “has not established that on April 7, 2009 Ms. Altman’s illness was of such a nature that she was unable to perform the duties of her job” and based this decision on the following factors: that there was uncontradicted evidence from Ms. Altman’s treating physicians that she was able to work on April 7, 2009; the employer never complained of Ms. Altman’s quality of work, or advised that she was not performing her duties as required; the October 15, 2008 letter only commented with respect to the number of hours Ms. Altman was working and not her ability to complete her duties; the April 7, 2009 termination letter was in response to Ms. Altman’s April 1, 2009 letter wherein she indicated that she was able to return to work; and, the employer terminated Ms. Altman without inquiring about her ability to fulfill her employment duties.

The Court determined that Ms. Altman was entitled to 22 months notice, as well as moral damages in the amount of $35,000.00 “as a result of [the employer’s] breach of its duty to deal with Ms. Altman in good faith and with fairness in the manner in which they terminated her employment”, and punitive damages in the amount of $20,000.00.

Points of Note

The above decision demonstrates the Court’s lack of tolerance towards employers who mistreat employees, especially an employee who is already in an unfortunate situation due to an illness or recent disability. It is for this reason that the Courts require an employer to meet such a high onus when attempting to establish that the employee’s employment has become frustrated due to either an illness or disability.

Generally speaking, in order for an employer to determine whether an employee’s employment has become frustrated, the employer may have to go beyond what is normally required of them in a typical termination without cause situation, such as contacting the employee to inquire about their ability to fulfill their employment duties, as demonstrated in the above decision. Such additional requirements placed upon the employer may be a result of the fact that an employee whose employment has become frustrated is not entitled to any form of common law notice as they are not actually considered to be terminated by the employer, which places additional burdens upon the employee while they are trying to cope with either an illness or disability.

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