Differing Views

There is controversy in the case law as to the correct moment to determine whether the disability was permanent or otherwise. The conflicting views focus on whether the employer is limited to its actual knowledge at the date of termination, or whether the court may look to the actual medical circumstances as revealed by the passing of time beyond the time when the decision was made.

There is also a third option discussed, which involves an analysis of later discovered medical information and its potential to be used to support a retroactive decision made at the time of termination. It may suffice to say that the law is not clear.

View of Accommodation Cases

The duty to accommodate has been held to allow a more general view of the medical history, past and present. It will usually arise at a later point in time when the return to work issue is debated. Given that in most defences of a medical disability, there will be a need to show accommodation to the point of undue hardship, the common law cases may very likely not be the final word in defining the issues. This issue is reviewed on more detail here.

It remains true that the evidence to be used to determine whether such accommodation was effected was that evidence available at the time of the accommodation, not that which subsequently became available. ¹

Common Law Cases

In the common law frustration defence cases, there has developed a rigid objection, in asserting the correctness of the first position, that is medical evidence known as of the date of termination, to using after-acquired medical details. There would appear to be no rational basis for not allowing such evidence to determine the reality of the plaintiff’s medical state on termination.

In 1996, this issue was reviewed an appellate decision of the Newfoundland Court, ² which concluded that the trial judge was correct in “limiting his review of the permanency of the respondent’s disability and absence from the workplace, to the circumstances that existed at the time she was terminated”. The argument that the case law allowing after-acquired evidence of just cause to be admitted was advanced unsuccessfully.

Swinton J., then a trial judge, ³ in 1998, determined that the defence of frustration should be based on the medical prognosis then available at the time of termination and that subsequent facts showing the actual length of disability should be irrelevant.

The Nova Scotia Supreme Court in its 2007 decision  ⁴ also decided that the relevant time to assess the medical evidence was the date of termination.

The Alberta Court of Queen’s Bench in the November 2009 decision ⁵ also came to the same conclusion.

Such was also the view of the Ontario Superior Court ⁶  in the March 2011 case in which reliance was placed upon the same approach used in Marshall and also the more recent decision of the Nova Scotia Court of Appeal. ⁷

In this latter case, one factor propelling this conclusion was that the very loss of the position itself might contribute to the degree of disability as an incremental influence and hence the correct date must be the nature of the medical disability as of the date of termination.

Accordingly the test was determined to be based on the medical evidence available at the time of the termination. The resultant length of disability was held to be irrelevant to the issue.

The B.C. Court of Appeal considered this issue in its 2006 decision. ⁸ The court described the law as unsettled on this issue as to whether the test was the prognosis on the date of dismissal, as of the date of trial, or as of the date of dismissal but aided by the hindsight by the passing of time to the date of trial.

In the case at bar, the parties accepted that the first referenced test was the applicable one and the appellate court determined that there was, hence, no need to decide the point.

Hybrid View

A third alternative has been proposed in the case law. That is it may be possible to use medical evidence which was available, but unknown by the employer, at the time of termination

This concept then would allow post-termination evidence to be used to assess retroactively the propriety of the termination decision.

Mr. Justice Coultas of the B.C. Supreme Court considered this issue in his April 1990 decision. ⁹ The plaintiff was terminated and provided with six months working notice. The reason provided was not then a disability issue, but rather economic difficulties.

The trial judge found that on the date of termination that the plaintiff suffered from a permanent disability which prevented him from returning to his employment. The court agreed with and applied the just cause cases using the after-acquired concept. The case was dismissed.

A similar view was expressed in a 2005 decision of the British Columbia Supreme Court.¹⁰

The constructive dismissal submission of the plaintiff failed, but the court nonetheless added its views on this alternative defence, holding that this argument would also have succeeded. To this point, the trial judge offered her view of the issue of timing:

Further, in determining whether the contract was frustrated, the court is not restricted to the plaintiff’s prognosis as it existed at the time of termination; the court is entitled to consider evidence of the defendant’s condition after the termination occurred.

Wightman Estate was cited as authority. However, Wightman went to the Court of Appeal on this issue and hence this reference was not an accurate recital of the Court’s conclusion in Wightman. As stated then by the Court of Appeal, the law on this subject was unsettled and as counsel agreed on the date of termination as the correct test, the appellate court offered no view on this issue.

The Court in Wightman also observed that the Supreme Court of Canada in its decision ¹¹  used post termination evidence and that other cases had used such a hybrid approach ¹²  the ratio of which was summarized as follows:

These cases rely on a prognosis as it would have been assessed at the date of dismissal had relevant post-termination evidence been available to take into account at that time.

This statement needs some clarification. How a prognosis at the time of termination may possibly use later post-termination evidence remains a conundrum.

This concept was also reviewed in the Newfoundland Court of Appeal ¹³ which determined that the correct approach was to use the evidence known as at termination date.

Justice Saunders ¹⁴ looked to the Wightman Estate decision, which was cited as support for the proposition that there may be a distinction to allow post termination evidence, as it may be relevant to what was known as of the termination date. This view comes from the same reference above. This was considered and accepted conceptually, although not applied:

Evidence as to whether she was still disabled at the time of trial, i.e., “how she turned out” was not relevant to answering that question. Presenting and considering evidence which is acquired later, and which bears upon the person’s circumstances at the time of dismissal, is permissible, but not otherwise.

Perhaps an example of this could be a doctor’s clinical notes which were dated around the termination date, but not made available for whatever reason until sometime later. But what of evidence which occurred later and hence was acquired later? Could this somehow be admitted to interpret an objective state at the time of termination?

The case relied upon for this proposition is the 1995 Supreme Court of Canada decision ¹⁵  in which the issue before the court was whether the arbitrator was allowed to consider evidence which occurred post-termination, referenced as “subsequent-event evidence”.

The employee had been terminated due to a serious alcohol problem which had resulted in excessive absenteeism. The focal issue was whether his post-termination successful treatment could be considered.

The arbitrator found that the employer had been justified in termination, but in light of the later success in treatment, the termination should be set aside and ordered reinstatement accompanied by an unpaid period of suspension from termination date to the date of reinstatement.

The Supreme Court noted that the collective agreement did not define “just cause” for termination, but stated that the issue for the arbitrator was:

In particular, […] whether or not the Company had just cause for dismissing the employee as at the time when the employee was actually dismissed.

The issue on a termination for chronic absenteeism mandated the determination of the issue at hand; could post-termination evidence be considered?

The Court concluded that such evidence could be considered by the arbitrator, “only where it is relevant to the issue before him”. The Court continued:

In other words, such evidence will only be admissible if it helps to shed light on the reasonableness and appropriateness of the dismissal under review at the time it was implemented.

In this case, the subsequent-event evidence was disallowed.

The arbitrator had found that the company’s decision on termination was lawful. He had then allowed the subsequent-event evidence to rescind the termination. It was predictable that this decision would follow. Had he considered the subsequent-event evidence to somehow have influenced the reasonableness of the employer’s termination decision, particularly in a case involving chronic absenteeism due to alcoholism in which the future predictability is a factor, the result may well have been different.

The passage from Cie Miniere ¹⁶ cited by the Newfoundland Court of Appeal ¹⁹ a November 2011 decision, had before the court medical reports which were disclosed after termination, which related not only to the time of termination, but also to subsequent periods of time. The judge stated that the law allows post- termination evidence.

The court’s comments, however, while not speaking directly to this issue, appear to be more akin to the concept of both later discovered evidence and “subsequent-event evidence”, both of which, related to the time of termination.

The Ontario Superior Court in its 2019 decision ²⁰ agreed that the relevant time to apply the test of the medical evidence was at the date of termination, however, adding that "evidence subsequently disclosed" may be used to review the status of the medical impairment at this earlier moment of time:

As to what evidence can be relied on to establish frustration, in Ciszkowski v. Canac Kitchens, 2015 ONSC 73, Archibald J. stated at para. 156:

Frustration of an employee’s contract is always established with reference to the time of dismissal. In pleading frustration, an employer is entitled to rely on post-termination evidence not in its possession at the time of dismissal so long as it relates to the nature and extent of an employee’s disability at the time of dismissal. The “evidence subsequently disclosed” should shed light on the nature and extent of the employee’s disability at the time of an employee’s dismissal. An employer is not entitled to rely on evidence that relates to the post-termination nature and extent of an employee’s disability if that evidence is not relevant to the dismissal date. To allow an employer to succeed in pleading frustration on the basis of such evidence would be neither fair nor reasonable.

An employer would likely be wise to take the prudent course of delaying a termination decision for as long as possible and hence have then available the entirety of the history of medical absences to such date.

The synthesis of the case law remains that this issue is without a concrete determination.