While not taking sides in this argument... the fact is that Johnson IS in breach of his contract, due to him not being able to meet his side of the contract.
While his injury is unfortunate, that does not stop the club being entitled to cancel his contract as a result of a "frustration" of the contract... that Johnson is incapable of being fit enough to play.
The reality is that football clubs just don't do this. They bite the bullet and accept that paying players who are injured is part and parcel of the deal. The PFA would be up in arms if a club did do this, but I predict that the day is not very far off when a club does decide to cancel the contract of a long-term injured player and go to court if necessary.
I assume City think he'll either get back fit again and be part of the squad, or get fit enough to sell him on, or get any insurance for him if he fails to recover.
But I find it strange that in my job I have to routinely sack people with illnesses such as cancer, heart problems or even bad backs ... and they get 6 months to recover or they're out!
Yet millionaire footballers are given far, far more flexibility in their recovery.