The applicant hotel suffered a fire that caused significant damage, leading to its closure and the layoff of its employees.
The respondent union grieved the employer's failure to pay termination pay.
The arbitrator found the employees were entitled to termination pay, rejecting the employer's argument that the employment contracts were frustrated under s. 2(1.4) of Ontario Regulation 288/01, because the employer always intended to reopen the hotel.
On judicial review, the Divisional Court held that the arbitrator reasonably applied the test for frustration of contract and reasonably concluded that the temporary break in operations did not render the contracts radically different.
The application for judicial review was dismissed.
