Staying on LTD after termination can be evidence of frustration
In this case, Pollak J. had a situation where a 10-year employee went on STD and then LTD in 2012. In 2014, the insurer found that the employee was permanently disabled from performing both his own and any occupation. One year later, the employer reviewed the file and concluded that the contract had become frustrated, terminated him and paid him his ESA minimums.
The plaintiff sued for wrongful dismissal but even at the time of the trial in 2018 he was still on LTD and had never taken the position that he was able to return to work. He had been disabled at that time for six years.
The court decided that an employer could rely on post-termination evidence of frustration not in their possession at the time of the termination as long as it related to the nature and extent of the employees’ condition at the time of termination.
This evidence can support a finding that at the time of termination there was no reasonable likelihood that the employee could return to work within a reasonable time.