Disabled Employees in Ontario Now Entitled to Statutory Notice of Termination and Severance Pay with the Passage of O. REG. 549/05 in October 2005

EP Update - December 13, 2005

An employee in Ontario whose employment has been frustrated because of injury or illness is now entitled to statutory notice of termination and severance pay under the Employment Standards Act, 2000, S.O. 2000, c. 41 (“ESA, 2000”).

Regulation 288/01 previously denied notice and severance entitlements to employees whose contract had been frustrated due to illness or injury, subject to any obligation of an employer under the Human Right Code. However, the Government of Ontario recently amended the regulation, eliminating those provisions that disentitle a disabled employee from statutory notice of termination and severance pay. The relevant section now reads as follows:

2. (1) The following employees are prescribed for the purposes of section 55 of the Act as employees who are not entitled to notice of termination or termination pay under Part XV of the Act:

4. An employee whose contract of employment has become impossible to perform or has been frustrated by a fortuitous or unforeseeable event or circumstance.

(3) Paragraph 4 of subsection (1) does not apply if the impossibility or frustration is the result of an illness or injury suffered by the employee. O. Reg. 549/05, s. 1 (2).

In summary, even though a contract of an employee has become frustrated due to illness or injury, the employee is entitled to statutory notice of termination and severance under the ESA, 2000 if the employer chooses to terminate the employment relationship.