Frustration of Contract BC: Employee Rights Explained

What Is Frustration of Contract in BC?

In British Columbia, frustration of contract happens when an unexpected event — outside either party’s control — makes it impossible to continue the employment relationship.

It’s not the same as being fired or laid off. Frustration means the contract ends automatically because it can’t realistically be performed anymore.

Common examples include:

• A permanent illness or injury that prevents you from ever returning to work
• A disaster (like a fire or flood) that destroys your workplace
• Loss of a required license or permit that makes it illegal for you to do your job

Under the BC Employment Standards Act (ESA), frustration is recognized in limited cases — and it must truly make work impossible, not just inconvenient.

When Can an Employer Claim Frustration of Contract?

Employers can’t declare frustration just because you’ve been away for a while.
To legally apply, three conditions must be met:

1. The event must be beyond both parties’ control.
   It can’t result from employer negligence or deliberate action.
2. The change must be permanent or indefinite.
   Temporary absences or recovery periods usually don’t qualify.
3. The job must truly be impossible to perform.
   If accommodation or modified duties are still possible, frustration doesn’t apply.

Courts in BC take a strict approach, often siding with employees when employers rely on frustration too quickly.

Frustration of Contract and Disability or Medical Leave

Many BC employees first hear the term “frustration” while on long-term disability in BC (LTD) or extended medical leave.

Employers sometimes use it to justify ending employment — but this is often premature.

Ask yourself:

• Has your doctor said your condition is permanent?
• Are you still under treatment or receiving LTD benefits?
• Did your employer gather updated medical information before ending your job?

If not, the contract likely wasn’t frustrated — and ending your employment may amount to wrongful dismissal in BC.

How Frustration Affects Severance Pay in BC

If a contract is truly frustrated:

• The employer may not owe common-law severance, since the employment contract ends through no one’s fault.
• However, under the BC ESA, employers may still need to provide termination pay or other benefits unless the frustration results directly from the employee’s own illness or injury.

Because every situation is fact-specific, it’s best to get legal advice before accepting any explanation.

Even when frustration is cited, you could still be entitled to months of severance pay in BC depending on the circumstances.

Frustration vs. Termination Without Cause

Here’s how the two differ:

If your employer cites “frustration” but you suspect they just want to avoid severance, the termination could legally be considered without cause in BC.

Examples of Frustration of Contract in BC

✅ Possible Frustration:

• A worker becomes permanently disabled and cannot return to any suitable job.
• A required trade certification is permanently revoked.
• The worksite is destroyed, and relocation isn’t feasible.

❌ Not Frustration:

• A temporary medical leave or LTD absence with potential recovery.
• A layoff or restructuring due to business reasons.
• An employer’s failure to consider modified duties or accommodation.

What to Do If Your Employer Ends Your Job for “Frustration”

1. Request written details.
   Ask for the reason and supporting documents.
2. Check your LTD or medical status.
   If you’re still under treatment, the claim may be invalid.
3. Don’t sign any severance paperwork right away.
   Employers sometimes rely on “frustration” to minimize payouts.
4. Speak to an employment lawyer.
   We can determine whether the contract was truly frustrated — or if you’ve been wrongfully dismissed.

Talk to a BC Employment Lawyer About Frustration of Contract

If your employer ended your job and claimed the contract was “frustrated,” don’t assume it’s final.

At Samfiru Tumarkin LLP, our Vancouver employment lawyers help employees across British Columbia challenge improper frustration claims and recover full severance pay.

Our team has:

• 👥 Successfully represented 50,000+ Canadians
• 💰 Secured millions in severance payouts
• ⚖️ Settled over 99% of cases out of court
• 📱 Free Termination Consultations — in some, but not all, cases
• ⭐ Earned 3,000+ 5-star Google reviews
• 🏆 Named on of Canada’s Best Law Firms

Call 1-855-821-5900 or request a consultation online.