Ontario Court Orders Employer to Pay Termination and Severance Pay to Deceased Employee’s Estate

Written on behalf of Peter McSherry

A recent decision from the Ontario Superior Court, Estate of Cristian Drimba v. Dick Engineering Inc. [Dick Engineering], reminds us that, under certain circumstances, employers may be liable to a deceased employee’s estate for termination and severance pay.

Christian Drimba began working for Dick Engineering Inc., an engineering firm, in 1996. In June 2013, Drimba was diagnosed with terminal cancer. As a result, he commenced a leave of absence from work on June 7, 2013. On August 27, 2013, the employer informed its insurance provider that Drimba was in the process of filing a claim for long-term disability and a critical illness claim. Shortly thereafter, the employer confirmed in writing to Drimba that his employment would continue until he was well enough to return to work. On September 17, 2013, Christian Drimba passed away without ever having returned to his position with Dick Engineering Inc.

Following his passing, Drimba’s estate brought an action against Dick Engineering Inc., claiming that the employer owed Drimba termination and severance pay under the Ontario Employment Standards Act, 2000 (ESA).

Sections 61(1) of the ESA requires employers to pay termination pay to employees who are terminated without notice. Along similar lines, section 64(1) of the ESA requires an employer to pay severance pay to employees in certain circumstances. Pursuant to Ontario Regulation 288/01, these requirements do not apply if an employment contract has become impossible to perform or has been frustrated by unforeseeable circumstances. However, Ontario Regulation 288/01 also stipulates that employers are not entitled to rely on this exception if the contract is frustrated as a result of illness or injury suffered by the employee.

In Dick Engineering, Justice Douglas Gray held that Drimbia’s employment was frustrated by illness and ordered the employer to pay termination and severance pay to Drimba’s estate. Although the employer offered to keep Drimbia’s position open for him, Gray concluded that the employment relationship had effectively been frustrated when Drimbia took leave. Gray reasoned:

In my view, it must have been apparent that, as a result of the severity of Mr. Drimba’s illness, it was highly unlikely that he would ever return to his employment, notwithstanding the generosity of his employer to keep his position open for him in the event that he recovered.  This was likely a false hope after he was diagnosed with terminal cancer, and it ultimately proved to be the case.

While it is obviously not possible to pinpoint the precise date at which Mr. Drimba’s contract of employment became frustrated, it was undoubtedly at some point between June 7, 2013, and September 17, 2013, his date of death.

To find out more about severance pay and termination pay entitlements, contact employment lawyer Peter McSherry online or at 519-821-5465.

To read the full decision, click here