Home Employment Contracts Contract frustrated: Ontario’s top court upholds termination of unvaccinated worker at VuPoint Systems

Contract frustrated: Ontario’s top court upholds termination of unvaccinated worker at VuPoint Systems

by HR Law Canada

The Ontario Court of Appeal has upheld a lower court ruling that dismissed a wrongful dismissal claim brought by a worker who was terminated by VuPoint Systems after refusing to comply with a COVID-19 vaccination policy.

The court found that the employment contract was frustrated by the implementation of a mandatory vaccination policy by Bell Canada, the main client of VuPoint.

A.C., the appellant, was a technician for VuPoint, a company that provides satellite TV and smart home internet services, primarily for Bell. In 2021, Bell introduced a mandatory vaccination policy, requiring all technicians from VuPoint working on its projects to be vaccinated against COVID-19 by September 20, 2021.

VuPoint adopted a similar policy, and when A.C. refused to disclose his vaccination status — which was deemed to mean he was unvaccinated — he was ineligible to continue working under the Bell contract. This led to the termination of his employment, prompting A.C. to file a wrongful dismissal lawsuit against VuPoint.

‘Supervening event’

The Ontario Superior Court of Justice initially heard the case and concluded that A.C.’s employment was frustrated due to the new policy, a decision that was contested on appeal. The Court of Appeal, however, agreed with the lower court’s assessment.

“The motion judge found that the implementation of the Bell Policy was a supervening event, not contemplated by the parties, that neither VuPoint nor the appellant could have foreseen when his employment contract was signed,” it said.

The court detailed that the mandatory vaccination policy introduced by Bell was an unexpected and radical change to the terms of employment that could not have been anticipated when A.C. was hired in 2014.

“(A.C.’s) complete inability to perform the duties of his position for the foreseeable future constituted a radical change that struck at the root of the employment contract.”

The Court of Appeal further elaborated on the doctrine of frustration in the contract, citing the Supreme Court of Canada’s 2001 ruling in Naylor Group Inc. v. Ellis-Don Construction Ltd.: “Frustration occurs when a situation has arisen for which the parties made no provision in the contract and performance of the contract becomes ‘a thing radically different from that which was undertaken by the contract.’”

This legal principle was pivotal in affirming that the termination of A.C.’s employment was legally justified.

No alternative work to offer

The decision delved into the specific facts of the case, noting that VuPoint had no alternative work to offer A.C., who exclusively serviced Bell’s clientele. The court also dismissed the appellant’s claim that he had received an unclear warning regarding the consequences of non-compliance with the vaccination policy, highlighting that the evidence showed he was fully aware of the policy and its implications.

The Court of Appeal pointed to this passage from the lower court’s ruling: “I find that there was no default in the employment agreement by either (A.C.) or VuPoint. VuPoint was required, by contract, to comply with Bell’s policies. The fact that the Plaintiff could have chosen to be vaccinated does not mean that he was in default as the circumstance which caused the frustration was the result of a decision by Bell, not the Plaintiff or the Defendant,” it said. “VuPoint also had no control or knowledge over the timeline of Bell’s Policy and was given no indication that the policy was implemented as a temporary measure.”

The court thus concluded that the Bell Policy, as a supervening event, was outside the control of VuPoint and radically altered the contractual obligations, supporting the company’s decision to terminate the employment based on the doctrine of frustration.

It also noted that VuPoint’s Policy required employees to advise it of their vaccination status. There was no evidence that A.C. “ever told VuPoint that he was either fully or partially vaccinated, despite the fact that he was aware of the policy,” it said. As a result, VuPoint did not know if A.C.’s ability to work on Bell projects would only be temporary and relatively brief.

“VuPoint’s counsel acknowledged that the situation would have been different if the appellant had indicated that he wished to become vaccinated, but that he needed more time. However, there was no evidence that he ever made such a request,” the Court of Appeal said.

A.C. was ordered to pay $16,000 in costs to VuPoint.

For more information, see Croke v. VuPoint System Ltd., 2024 ONCA 354 (CanLII).

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