Appellate Court Affirms that Employee’s Contract Was Frustrated by Mandatory Vaccination Requirement
Although the COVID-19 pandemic may now seem like a distant memory, many employers are still grappling with the effects of the pandemic, including legal disputes relating to mandatory vaccination requirements. Fortunately, in the recent decision of Croke v. VuPoint System Ltd. [Croke], the Ontario Court of Appeal (“ONCA”) upheld a motion judge’s decision to dismiss an employee’s wrongful dismissal claim after he was dismissed for refusing to get vaccinated. This was because the court found that his contract had been frustrated by a mandatory vaccination requirement implemented by his former employer’s largest customer, absolving the employer from liability.
Although Croke does not mean that an employee refusing to abide by a mandatory vaccination policy will always establish frustration of contract, it does stand for the proposition that frustration of contract will generally be established where a third party implemented a mandatory vaccination requirement preventing an unvaccinated employee from performing their job.
Background
VuPoint provides in-home satellite television and smart home installation services to Bell Canada’s (“Bell”) customers on Bell’s behalf, and this accounts for 99% of VuPoint’s business. Mr. Croke was employed by VuPoint as an installation technician since 2014, and his fundamental duties involved entering the homes of Bell customers to perform installation work.
In September 2021, Bell informed VuPoint that it had implemented a COVID-19 vaccination policy requiring all contractors and subcontractors who interact in-person with Bell customers to be fully vaccinated against COVID-19. VuPoint implemented its own mandatory vaccination policy in response, which required employees to disclose their vaccination status and stated that unvaccinated employees would not be permitted to perform work for Bell customers and may not be assigned any work.
Mr. Croke initially refused to disclose whether he was vaccinated against COVID-19, in breach of VuPoint’s policy, despite that 100% of the work that he performed was for Bell customers. Consequently, VuPoint provided him with two weeks’ notice of his dismissal. During that period, Mr. Croke advised VuPoint that he had no intention of becoming vaccinated against COVID-19, and he subsequently filed a wrongful dismissal claim against VuPoint.
Mr. Croke’s wrongful dismissal claim was dismissed on a motion for summary judgment because the motions judge found that his contract had been frustrated by Bell implementing a mandatory vaccination requirement, such that VuPoint was not liable. Mr. Croke appealed this decision to the ONCA.
The ONCA’s Decision
The ONCA dismissed Mr. Croke’s appeal because it found that the motion judge was correct in ruling that his employment contract had been frustrated by Bell’s mandatory vaccination policy.
In reaching this conclusion, the ONCA held that frustration of contract is a “no fault” termination of contract that is established where there is a “supervening event” which: (i) was not foreseeable and which the parties did not contemplate when entering into the contract; (ii) was not caused by either of the parties; and (iii) “radically altered” the contractual obligations of the parties. The ONCA then addressed Mr. Croke’s arguments that the motion judge applied this test incorrectly and that there was no frustration of contract.
First, Mr. Croke argued that the alleged frustration in this case stemmed from his voluntary decision to not get vaccinated, and that the supervening event was therefore caused by him and cannot constitute frustration of contract. The ONCA rejected this argument because it found that the motion judge was correct in ruling that the supervening event was Bell implementing the mandatory vaccination requirement which prevented Mr. Croke from performing his job, not Mr. Croke’s decision not to get vaccinated.
That said, the ONCA also stated that if Mr. Croke had chosen to become vaccinated or indicated that he simply needed more time to become vaccinated, then this would be relevant to whether the implementation of Bell’s policy radically altered the parties’ contractual obligations. Regardless, the ONCA found that motion judge was correct in finding that Bell’s policy did radically alter the parties’ contractual obligations because Mr. Croke refused to get vaccinated, and Bell’s policy prevented him from performing his job for the foreseeable future.
Finally, the ONCA also held that the motion judge was correct in finding that Bell implementing a mandatory vaccination policy was not foreseeable or contemplated by the parties when Mr. Croke was hired. In doing so, the ONCA ruled that Bell’s introduction of its policy was an extraordinary response to the extraordinary circumstances accompanying the COVID-19 pandemic, and that neither party could have foreseen this unprecedented global pandemic in 2014.
In the result, the ONCA affirmed that Mr. Croke’s employment contract had been frustrated and it dismissed his appeal, such that VuPoint was not liable for dismissing him.
The Bottom Line
It is crucial to note that the ONCA found that Mr. Croke’s contract was frustrated because the mandatory vaccination requirement was initially implemented by Bell, rather than VuPoint, such that VuPoint had not caused the supervening event. The upshot is that an employee refusing to comply with their employer’s mandatory vaccination requirement may not be a frustration of contract if the employer unilaterally implemented the requirement on its own accord.
Similarly, the ONCA’s finding that Mr. Croke’s employment contract was radically altered was largely due to the fact that he exclusively performed work for Bell customers, such that the policy completely prevented him from doing his job. If VuPoint had a significant number of other customers which did not have mandatory vaccination policies who Mr. Croke could have continued performing work for, then it is likely that Bell’s policy would not have radically altered Mr. Croke’s employment contract (which would mean no frustration of contract).
As a result, an employee refusing to abide by a mandatory vaccination requirement may or may not constitute frustration of contract, depending on the circumstances. Nonetheless, Croke is still a positive decision because many Ontario employers were in a similar situation where a third party implemented a mandatory vaccination requirement which applied to their workers and completely prevented them from performing their jobs.
If you have questions regarding potential frustration of an employment contract, whether related to a mandatory vaccination requirement or not, please do not hesitate to contact us for expert legal advice and representation.
