Fired While on Disability Leave in Ontario: Your Rights

In Ontario, your employer generally cannot fire you because you have a disability or because you took disability leave. These protections apply across Ontario. That said, some employers try to justify ending employment during a long disability leave by claiming the contract has ended due to frustration of contract. Whether that applies depends on the facts.

This page explains your rights in plain language, what employers should do before ending employment, what you may still be owed, and what steps to take if you’ve been terminated while on disability leave.

Can My Employer Terminate Me While I’m on Disability Leave?

Being on disability leave does not remove your legal protections. A termination can raise serious legal issues if disability is a factor in the decision or if the employer does not properly address accommodation.

At the same time, employers sometimes argue that a prolonged absence has made it impossible to continue the employment relationship. That is where the concept of frustration of contract may come up.

When a Termination May Be Illegal

A termination may be unlawful if it is motivated (even partly) by your disability, your need for medical leave, or your request for accommodation. Red flags can include:

• You were terminated shortly after disclosing a disability, requesting leave, or asking for accommodations.
• Your employer did not meaningfully discuss accommodations or return-to-work options with you.
• Your employer relied on assumptions instead of up-to-date information about your ability to return.
• The stated reason (for example, “attendance” or “restructuring”) doesn’t match the timeline or communications.
• You were pressured to return before you were medically able, then terminated when you couldn’t.

Even if a termination is labelled “without cause,” it can still be challenged if disability was a factor or if the employer did not meet its obligations.

What “Frustration of Contract” Means

Frustration of contract is a legal concept where a contract ends because circumstances make it impossible to continue, through no fault of either party. In the disability context, some employers argue frustration when an employee cannot work and there is no reasonable likelihood of returning within a reasonable period.

This is not automatic. Courts look at the full context, including the information available at the time and whether the employer acted reasonably in how it assessed the situation.

What Employers Should Do Before Ending Employment

Before an employer can reasonably claim frustration of contract (or justify ending employment during a disability leave), they should typically be able to show they acted in good faith and based decisions on reasonable information. That often includes:

• Requesting reasonable medical information (for example, functional limitations and expected timeline, where available — not private diagnosis details).
• Following up where information is unclear, incomplete, or out of date.
• Considering whether accommodations could support a return to work (for example, modified duties, gradual return, or other adjustments).
• Communicating clearly and documenting the accommodation/return-to-work process.

If the employer ends employment without a meaningful process, that can strengthen an employee’s position in a wrongful dismissal and/or human rights-related claim.

What You May Still Be Owed if You Are Terminated While on Disability Leave

Employees are sometimes told they are owed “nothing” because they were on disability leave. That is often not correct.

Depending on your situation, you may be entitled to some combination of:

• Employment Standards Act (ESA) minimum entitlements (for example, termination pay/notice, where applicable).
• Common law notice (often significantly more than ESA minimums) if frustration is not established.
• Human rights-related damages if disability was a factor or accommodation obligations were not met.
• Outstanding wages, vacation pay, and any other amounts owing.

Important: Each case depends on its facts, including the length of leave, the medical information available, the employer’s steps to accommodate, and what was said and documented at the time.

What to Do Next if You Were Fired While on Disability Leave

If you’ve been terminated while on disability leave, these steps can help protect your position:

1. Get the details in writing. Ask for the reason for termination and what is being offered.
2. Do not sign right away. Severance offers often include deadlines, but you may still have time to get advice.
3. Save your records. Keep emails, letters, accommodation requests, medical notes (functional limitations), benefit communications, and the severance package.
4. Write a timeline. Note key dates: leave start, medical updates provided, employer follow-ups, accommodation discussions, and termination date.
5. Confirm benefit status. Ask what happens to benefits after termination and whether coverage continues.
6. Get legal advice early. Early advice is especially important if there are human rights issues or a “frustration” claim.

Frequently Asked Questions

Do these rules apply across Ontario?

Yes, these rules apply across Ontario. Your rights are based on Ontario law (and, in some cases, federal law for federally regulated workplaces).

Can my employer fire me “without cause” while I’m on disability leave?

Employers may use “without cause” language, but they still cannot terminate you because of your disability or ignore accommodation obligations. A “without cause” termination can still be challenged depending on the facts.

How long do I have to be on leave before an employer can claim frustration of contract?

There is no single cutoff. The question is whether there was a reasonable likelihood of returning to work within a reasonable period based on the information available at the time, and whether the employer acted reasonably in how it assessed that issue.

If my employer claims frustration, do I still get severance?

You may still be owed ESA minimum entitlements, and an employer’s frustration position can sometimes be challenged. In some cases, employees may be entitled to more than the minimums, including common law notice and/or human rights-related damages.

Talk to an Ontario Employment Lawyer

If you were terminated while on disability leave, it’s important to understand whether your employer met its obligations and whether a frustration claim is actually supportable. Monkhouse Law Employment Lawyers represents non-union employees in Ontario, including Toronto.

We offer a free 30-minute phone consultation. If you have questions about severance, wrongful dismissal, or termination during disability leave, we can help you understand your options.