Decision ties concept of frustration of contract with undue hardship: lawyer
“’Undue hardship’ can be a complicated term, and different decision-makers will emphasize different things.”
So says Rick Dunlop, an employment lawyer and partner at Stewart McKelvey in Halifax, after the Nova Scotia Labour Board found that an employer did not fulfill its duty to accommodate a worker who could no longer work in his regular job due to a disability.
“It appears that this board adopted the relatively high standard for the undue hardship threshold that the Ontario Human Rights Commission Policy suggests – namely, the hardship would have to be so great that it would change the essential nature of the organization's operation or substantially impact the employer’s financial viability,” he says.
“That's a high standard and I think there are other cases that may suggest the standard isn't quite that high.”
Welder unable to weld
Lunenburg Industrial Foundry & Engineering (LIFE) is a shipyard in Lunenburg, NS, that provides maintenance, repairs, and refits of marine vessels. LIFE hired the worker as a welder in 1999.
In 2009, the worker was seriously injured when he fell more than 20 feet. He broke multiple bones in his right arm and injured his hand, knee, and back.
Ten years later, the worker’s right arm gave out and he was unable to weld with it. He underwent physiotherapy to try to regain his ability to work.
The worker returned to work on an ease-back plan that involved working four hours per day performing light duties while practicing welding with his left arm.
LIFE conducted a job-site analysis to determine if it was possible for the worker to return as a welder. However, the analysis indicated that it was unlikely that he could return to his welder position, as it involved heavy work while the worker was limited to light duties.
LIFE determined that it didn’t have enough light duty work to accommodate the worker permanently. As a result, it terminated his employment on April 14, 2021.
The worker filed an unjust termination complaint. A labour standards officer found that LIFE could not accommodate the worker without experiencing undue hardship. The officer also found that LIFE met its duty to accommodate, the worker was unable to carry out the duties of his employment, and the employment contract between the worker and LIFE was frustrated because of the worker’s inability to perform his welder position.
Moving an injured employee to another shift where she would be a surplus employee would be undue hardship, an arbitrator ruled.
Other accommodation options: worker
The worker appealed the decision, arguing that there were positions such as welding supervisor or painter in which he could have been accommodated. He also said LIFE posted a quality control position and administrative assistant position shortly after his termination and the company could have bundled several light duty jobs into an accommodated position.
LIFE argued that it could not accommodate the worker without undue hardship, as it was a small company and most jobs involved heavy duty work. The painter position required climbing and painting in high locations and required fall-arrest training and the welding supervisor job included welding “from time to time,” the company said. As for the quality control and administrative assistant positions, they didn’t exist at the time of the worker’s dismissal and he wasn’t qualified for them, said LIFE.
The proximity of the new job postings to the worker’s dismissal could have been problematic to LIFE’s argument of frustration of contract, says Dunlop.
“You have to establish frustration at the time that you allege it, not the time of the hearing,” he says. “It appears the [new positions] came up relatively contemporaneously with the time that the employer alleged frustration, and that caused the [board] to take a harder look.”
As for combining various light duties, LIFE contended that there wasn’t enough for a full-time position and it could only accommodate him for so long with temporary jobs. Since the worker wasn’t able to return to his welder position, the employment contract was frustrated, the company said.
The duty to accommodate involves substantive and procedural elements, so merely saying “We can’t do that” won’t be sufficient, says an employment lawyer.
Employer took steps to accommodate
The board found that it was undisputed that the worker suffered from a disability that would require accommodation.
The board also found that LIFE took some steps to accommodate the worker’s disability by allowing him to work a few hours per week in order to ease back into his welder position. He was allowed to practice welding while performing light duties, which indicated that LIFE was aware of its duty, the board said.
The board noted that the job-site analysis showed that it was unlikely that the worker would be able to continue as a welder, so the only option was to accommodate him in another position, if possible.
However, although LIFE said that the worker could not do any of the other jobs, the company did not provide any evidence support its assertion. There was no job analysis report indicating that light duties could not be bundled or that the worker couldn’t perform the supervisor position. As for the administrative assistant and quality control jobs, the fact that they were posted shortly after the worker’s dismissal raised the question of whether their availability was foreseeable, said the board, adding that no job evaluation was provided to show that the worker didn’t possess the necessary skills – such an evaluation would be part of the procedural component to the duty to accommodate.
Employers are not required to hire extra staff or create “make-work” assignments to satisfy the duty to accommodate, according to an employment lawyer.
Show your accommodation work
It was apparent that LIFE was able to satisfy the board that the worker couldn’t be accommodated in the welder position, but it didn’t follow through with its efforts after that, says Dunlop.
“Where the employer went wrong is it appeared that there were these alternative jobs which happened to have been posted shortly after the [worker] was terminated on the basis of frustration, and they simply said, ‘He can't do these jobs,’ and they didn’t back up that assertion,” Dunlop says.
The board determined that LIFE did not meet its burden of proving undue hardship since the company didn’t adequately assess the worker for other positions or explore other possibilities. Since LIFE didn’t meet its duty to accommodate, it unjustly dismissed the worker.
The board set aside the labour standards officer’s decision and ordered LIFE to pay the worker 12 months’ salary in lieu of notice, totalling more than $48,000.
LIFE was put in a difficult position as the alternative jobs were significantly different from the welder position and the company didn’t believe the worker was a fit for them, says Dunlop.
“I'm hesitant to be critical of the employer at all, but you wonder if they should at least offered the positions to the employee,” he says. “And if the employee rejected those positions, would they have been on a stronger footing?”
“But sometimes, if the employer thinks for good reason that the employee just doesn't have the wherewithal or the skill set – I can understand why an employer may say, ‘Why would a welder want to do those jobs?’ – but it does show that you've got to show your work,” Dunlop adds.
The prevalence of remote and hybrid work could affect what constitutes accommodation and undue hardship, says an employment lawyer.
Be thorough before claiming frustration
Dunlop notes that the decision ties the concept of frustration of contract with undue hardship, particularly with regards to the two positions that LIFE posted shortly after the worker’s dismissal.
“What the tribunal latched onto was the fact that the alternative positions became available around the time that the employee was terminated for frustration,” says Dunlop. “If those positions didn't become available, then there would just be the welder position.
“One of the questions employers should ask themselves at the time [of termination] is: ‘Are there going to be any other positions available and should we evaluate whether or not this individual could do those or be interested in doing them?/”
See Dauphinee v. Lunenburg Foundry & Engineering Limited, 2023 NSLB 12.