Frustration By Non-Vaccination: Employee Termination On The Basis Of COVID-19 Vaccination Status Upheld

Earlier this month, the Ontario Court of Appeal released its decision in Croke v VuPoint System Ltd., 2024 ONCA 354, upholding the appellant's employment termination on the basis of his COVID-19 vaccination status and his non-compliance with the mandatory vaccination policy implemented by the employer's primary client.

Mr. Croke was a technician employed by VuPoint Systems Ltd., which installs residential satellite TV and smart home internet services. VuPoint's main customers are Bell Canada and Bell ExpressVu (collectively, "Bell"), which accounted for over 99% of VuPoint's income and 100% of Mr. Croke's work.

In 2021, Bell implemented a mandatory vaccination policy applicable to all vendor personnel and contractors who interact with Bell customers. VuPoint consequently implemented its own vaccination policy, which required all installers to be vaccinated against COVID-19 and provide proof of vaccination, failing which they would be prohibited from performing work for certain customers and may not receive job assignments.

Mr. Croke refused to disclose his vaccination status, putting him in non-compliance with the vaccination policy. He therefore became ineligible to provide services to Bell customers for the foreseeable future. VuPoint warned Mr. Croke that, as a result of his refusal to comply with the policy, his employment would terminate on two weeks' notice. Mr. Croke expressed that he did not intend to become vaccinated. VuPoint proceeded to terminate Mr. Croke's employment. Mr. Croke commenced an action for wrongful dismissal and moved for summary judgment.

The motion judge dismissed the motion and the action, finding that Mr. Croke was not entitled to any damages for wrongful dismissal because the employment contract had been frustrated. Bell's implementation of its vaccination policy constituted a supervening event that was neither contemplated nor foreseeable at the time the employment contract was signed in 2014. As a result of that supervening event, Mr. Croke lacked the necessary qualifications to perform his employment duties. Mr. Croke had no intention to become vaccinated, so this was unlikely to change for the foreseeable future. This constituted a radical change that struck at the root of the employment contract, thereby frustrating the contract.

The Court of Appeal upheld the motion judge's finding that the doctrine of frustration applied, rejecting a number of arguments advanced by Mr. Croke. In particular:

1. The court rejected Mr. Croke's argument that the doctrine of frustration could not apply because the frustration stemmed from his voluntary conduct (not complying with the vaccination policy), rather than an event not caused by the parties. The "supervening event" was not Mr. Croke's refusal to comply, but Bell's implementation of its mandatory vaccination policy, which was akin to a new regulatory requirement that would make VuPoint's employees ineligible to work on Bell projects absent vaccination. Mr. Croke's response to that policy only impacted how radical the resulting change was to his employment contract: had he intended to become vaccinated, for example, the policy may not have constituted a radical change, but this was not the evidence.
2. The court rejected Mr. Croke's argument that Bell's mandatory vaccination policy was a business exigency and a foreseeable event due to Bell's ability to implement new health and safety requirements under a 2021 supply agreement between Bell and VuPoint. The court instead afforded deference to the motion judge's finding that the vaccination policy was an unforeseen circumstance. In any event, the cited supply agreement post-dated the signing of Mr. Croke's employment agreement.
3. The court rejected Mr. Croke's argument that the relevant "supervening event" was VuPoint's choice to terminate his employment, which was not mandated by Bell's vaccination policy. By the time of the summary judgment motion, VuPoint's only basis for the termination of Mr. Croke's contract was frustration resulting from the Bell policy. Frustration having been established, at that point the employment agreement was discharged and the parties were released from any further obligation to perform. Mr. Croke's argument that other non-disciplinary action may have been taken therefore had no application. Further, Mr. Croke was aware of Bell's policy, refused to comply, knew that termination could result, and did not signal an intent to become vaccinated, leaving VuPoint with no basis to believe that Mr. Croke's ability to work on Bell projects would be impeded only temporarily or briefly.
4. The court rejected Mr. Croke's argument that he did not receive adequate warning that non-compliance with the vaccination policy would result in termination. There was sufficient evidence supporting the motion judge's finding that Mr. Croke knew this. In any event, due to the finding of frustration, VuPoint had no fixed legal requirement to give advance notice that the employment relationship had been frustrated or to give Mr. Croke an opportunity to rectify his non-eligibility to work.

The court therefore dismissed the appeal, and upheld the dismissal of the action.

This case joins a growing body of case law with respect to the consequences of employee failure to follow COVID-19 policies implemented by their employer, and particularly the line of decisions favouring employers that implemented such policies. Employers in non-unionized environments may be justified in terminating employees based on non-compliance with a COVID-19 vaccination policy where the policy arises from an unforeseeable and uncontemplated event outside of the employer and employee's control that results in a radical alteration of the parties' obligations under the employment contract.