Can an employer treat an employment relationship as over when an employee has been away for 19 months because of a disability?
Not necessarily.
InHill v. 1359768 Ontario Inc. (B&B Towing), 2026 ONCA 577, the Ontario Court of Appeal upheld a finding that a 17-year employee had been constructively dismissed after returning from a 19-month disability leave. The Court upheld a 22-month reasonable notice period, although it substantially reduced the damages awarded at trial.
The decision contains important lessons for Ontario dental practice owners dealing with long-term disability, accommodation, frustration, mitigation and wrongful dismissal damages.
When Does Disability Frustrate an Employment Contract?
Hill was the company’s “road boss.” His duties included managing drivers, arranging repairs and maintenance, hiring and terminating employees, collecting documents and performing administrative and managerial functions. Physical towing duties represented a relatively small part of his position.
Following emergency surgery, Hill went on disability leave in May 2020. His physicians subsequently contemplated a gradual return to work, with restrictions including no lifting above 30 pounds and a preference for administrative work.
The employer nevertheless argued that Hill’s disability had frustrated his employment contract.
The Court of Appeal explained the test at paragraph 20:
“Frustration will be established only when, at the time of frustration, there is no reasonable likelihood of the employee being able to return to work within a reasonable time.”
Importantly, the employer bears the onusof proving frustration.
The Court then provided an especially useful summary at paragraph 23:
“A contract may be frustrated, then, by a serious, lengthy and ongoing condition that cannot be accommodated by the employer without imposing hardship and that prevents the employee from carrying out the position’s essential duties within a reasonable time.”
But the Court immediately emphasized the other side of that test: “a temporary sickness does not amount to frustration nor does an employee’s inability to perform minor parts of their position.”
In other words, the question is not simply: How long has this employee been away?
The employer must determine whether the disability is sufficiently enduring that the employee cannot perform the essential duties of the job within a reasonable time, even after reasonable accommodation.
Nineteen Months Wasn’t Enough
This is where Hill becomes particularly interesting for dental employers.
The trial judge expressly stated at paragraph 27:
“[The respondent] was off work for 19 months, a relatively short period in comparison to the facts in the cases set out above.”
Why?
The business had continued operating while its owners assumed Hill’s responsibilities. The employer had not asked Hill’s doctor whether he was likely to return in the foreseeable future. His doctors were discussing a trial return. He actually returned to work in January 2022, and the evidence showed that accommodations could be made.
The Court of Appeal also observed at paragraph 36 that there was “no indication in any of the medical documentation” that Hill could never return to work or could not perform the essential duties of his road-boss position within a reasonable time.
For a dental practice, the analogy is straightforward. A hygienist, assistant or office manager being away for 19 months does not automatically terminate the employment relationship. Before alleging frustration, the practice should have current medical evidence, identify the employee’s genuine essential duties and properly investigate accommodation.
Then Comes Mitigation
If the employee is ultimately wrongfully dismissed, however, the analysis changes.
A dismissed employee has a duty to mitigate by making reasonable efforts to obtain replacement employment.
And mitigation actually worked in Hill.
Hill obtained lower-paying sedentary employment as a dispatcher in July 2022. The trial judge expressly deducted the compensation Hill earned from his new employer when calculating his wrongful dismissal damages.
That fits neatly with the Ontario Court of Appeal’s other recent decision in Williamson v. Brandt Tractor Inc., 2026 ONCA 272.
In Williamson, the employer argued that the employee had failed to mitigate because he admitted that he did not pursue comparable sales positions. The employer nevertheless lost that part of its argument because it failed to prove that comparable jobs were actually available. The Court held that an employer must establish not merely that the employee failed to pursue comparable employment, but that comparable employment was available and could reasonably have been obtained.
But the employer still achieved an important mitigation victory. Williamson had earned $32,881.43 in a lower-paying, lower-ranking job during the notice period. The Court of Appeal held that those earnings had to be deducted. As the Court confirmed, employment income earned during the notice period is generally treated as mitigation of loss.
That gives dental employers a practical lesson: When terminating a hygienist, assistant, receptionist or office manager, immediately search for comparable jobs and preserve the evidence. Save dated Indeed, LinkedIn and other job postings showing the employer, location, duties, qualifications, hours and compensation where available.
If litigation begins a year later, saying “there were lots of hygiene jobs available” may accomplish very little. Williamson shows why you want the actual advertisements.
The $110,523.77 Result
The trial judge awarded Hill $236,163.77 for his 22-month notice period, after deducting the earnings from his new job.
But that award included $123,000 for the alleged lost use of a company tow truck and $2,640 for a cellphone.
The Court of Appeal rejected both amounts. At paragraph 53, Justice Roberts put the tow-truck claim rather memorably:
“It defies belief that the tow truck was intended as a personal benefit.”
The Court deducted $125,640, leaving: $236,163.77 − $125,640 = $110,523.77 in wrongful dismissal damages.
And then came the legal costs: $50,000 plus HST in trial fees, $3,431.29 in corrected trial disbursements and $10,000 in appeal costs.
That produces approximately $180,455 in damages, costs and disbursements, before applicable interest.
The Lesson for Dental Employers
Hill provides two important warnings.
First, 19 months off work does not automatically equal frustration. Employers need evidence about prognosis, essential duties and accommodation.
Second, if termination occurs, start building the mitigation file immediately. Hilldemonstrates that actual replacement earnings can reduce damages. Williamsondemonstrates that an employer alleging a failure to mitigate should be prepared to prove that comparable jobs were actually available.
Today’s saved job posting may become tomorrow’s best mitigation evidence.
