Does a downturn in business due to COVID result in a frustration of employment?

Over the course of the pandemic, many employers (particularly those in retail, hospitality and tourism) experienced a significant downturn in business. As a result, some made the difficult decision to either lay-off or dismiss staff. A recent court decision from British Columbia considers whether an employer’s dramatic loss of revenue (which informed the decision to end employment) should properly be considered a “frustration of employment.”

A frustration of employment generally describes circumstances where an ongoing employment relationship has been rendered impossible due to factors beyond the parties’ control. It also relieves an employer (unless otherwise prescribed by statute) from having to issue any payments to the individual at the time the relationship ends (i.e. the individual has no severance entitlement).

In a recent contribution to First Reference Talks (a collaborative HR and employment law advisory blog), Paul Willetts reviewed this decision and offered some thoughts for employers navigating similar situations. Click here to read the full article.

Vey Willetts LLP is an Ottawa-based employment and labour law boutique that provides timely and cost-effective legal advice to help employees and employers resolve workplace issues in the National Capital Region and across Ontario. To speak with an employment lawyer, contact us at: 613-238-4430 or info@vwlawyers.ca