Croke v. VuPoint: A Frustrating Decision

The Ontario Court of Appeal recently decided that a COVID vaccine case: An employee of VuPoint worked exclusively on contracts for Bell; Bell implemented a vaccine policy; and the employee refused to get vaccinated. 

Justice Pollak decided that the contract was "frustrated" by the Bell policy. The Ontario Court of Appeal upheld the decision. 

This approach is problematic, with vast implications for employment and other kinds of contracts in various contexts. 

In short, frustration of contract contemplates that unforeseeable changes in circumstances (a "supervening event") outside the control of the parties may relieve the parties of their contractual obligations. 

The test has three elements: firstly, the supervening event must radically alter the contractual obligations; secondly the supervening event must not be foreseeable or one contemplated by the contract; thirdly the supervening event must be outside the control of the contracting parties. 

In this case, Croke argued that the third aspect of the test was not satisfied because whether or not he was vaccinated was within his control; therefore, this fact pattern should have been assessed in the matrix of just cause and not frustration.

The employer, by contrast, argued that the frustrating event was the implementation of Bell's policy. The court accepted this. 

On its face, this is awkward. It suggests that all of the employer's employment relationships were frustrated by the new Bell policy - and, in fact, by any client policy that imposes new obligations that a contractor must foist upon its employees - but that somehow the frustrating effect can be avoided by employees voluntarily complying with the Bell policy that they are under no contractual or other obligation to do.

I find it very troubling that an employer is relieved of its obligation to provide notice or pay in lieu of notice in respect to the termination of employment because an employee refused to do something that he was under no contractual obligation to perform. There are many analogous contexts to the scenario, where a worker's job is primarily or exclusively related to one client of the employer. To entitle the client to unilaterally require substantial changes to the obligations placed upon the employee without reference to employment law principles allows an end run around constructive dismissal and just cause regimes.

We see this at times in the oil patch: a site owner will determine that an employee of a given company is no longer welcome on site, effectively bringing the employment relationship between that employee and their employer to an end. Under the prevailing approach within Alberta's labour relations regime, there is effectively no recourse or grievance mechanism from such a determination. If an employer decided to discharge the employee, they would be obligated to prove just cause; however, if the decision comes down from the site owner, the employee has absolutely no protections of procedural fairness or substantive justice under employment law or labour law doctrines.

This brings me to, in my view, the real problem in the decision. I believe that the employee made the wrong argument. In my view, the third stage of the test was not satisfied, not because of the employee's own decisions, but because of the employer's.

Bell did not have a freestanding right to impose its vaccination policy on the employer; any right it has in this regard arises from its contract with the employer. If I enter into a contract allowing another party to impose an obligation upon me, it no longer lies in my mouth to say that the imposition of that obligation upon me was not foreseen or within my control. Voluntariness lies at the heart of contract law, and therefore the obligations assumed by the employer under its contract with Bell were inherently voluntary, despite whatever discretion the contract may have afforded Bell.

Let's file this under "something's gotta give". Either employers have to take accountability for the obligations they allow third parties to place on their employees, or third parties have to themselves assume liability when they effectively end an employee's employment. (This isn't entirely unprecedented, either, but it's not generally the better solution.)

I predicted before that the COVID era would drive evolution of the doctrine of frustration...but this ain't it.

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The author is an in-house lawyer for a not-for-profit organization in Alberta. Views expressed are the author's alone. This article does not contain legal advice, but only general legal information. If you require legal advice for a potential or actual legal matter, please contact a lawyer.