Automatic termination clauses may clash with accommodation (Legal View)

Recent Supreme Court ruling strikes balance between negotiated clauses and individual circumstances
By Jodi Gallagher
|Canadian HR Reporter|Last Updated: 02/22/2007

Accommodating disabled employees who are absent from the workplace for extended periods of time can be one of the most challenging issues an employer faces. The courts have repeatedly emphasized that the employer’s obligation to accommodate disability extends to the point of “undue hardship,” yet this somewhat amorphous concept can be difficult to apply.

To provide some element of certainty around the duration of the obligation to accommodate an employee’s absence, many unionized employers have negotiated “deemed termination” clauses into collective agreements. Following years of conflicting arbitration decisions about the enforceability of such clauses, the Supreme Court of Canada recently issued a decision on this issue.

In

McGill University Health Centre (Montreal General Hospital) v. Syndicat des Employés de l’Hôpital Général de Montréal

, released on Jan. 26, the Supreme Court ruled the parties’ negotiated automatic termination clause is relevant to, but not determinative of, the employer’s duty to accommodate a disabled employee’s absence from work. The reasoning behind this decision will be of great interest to unionized employers grappling with workplace accommodation issues.

The facts of the McGill University Health Centre case

The

McGill University Health Centre

case involved a unionized secretary who was absent from work for three years after she suffered a nervous breakdown. After several unsuccessful attempts at a gradual return to work, the secretary was scheduled to return to full-time duties in the fall of 2002. However, a serious car accident in July 2002 rendered her totally disabled for an indeterminate period and unfit to work. After learning she had no expected return-to-work date, the employer terminated her employment on the basis of the collective agreement’s deemed termination provision. That clause stated that an employee absent for more than three years due to illness would lose seniority rights and employment.

The employee grieved her termination, relying on Quebec’s human rights legislation, the

Charter of Human Rights and Freedoms

. In a 2003 decision, arbitrator Jean Sexton dismissed the grievance, ruling the employer had discharged its duty to accommodate the employee and had treated her properly by applying the collective agreement’s automatic termination provision. The union challenged this ruling, and eventually the Quebec Court of Appeal quashed the arbitrator’s award on the basis that the employer had mechanically applied the terms of the collective agreement without assessing its obligation to provide reasonable accommodation on an individual basis.

The Supreme Court’s reasoning

On appeal to the Supreme Court of Canada, the key issue was the relevance of the collective agreement’s automatic termination provision to the employer’s duty to accommodate. The union argued the employer could not rely on the collective agreement to limit its human rights obligation. The employer’s position was that the collective agreement could validly establish the scope of its duty to accommodate and could establish the “undue hardship” threshold by articulating the maximum period of time it would be expected to accommodate an employee’s absence from work.

The Supreme Court allowed the employer’s appeal and restored arbitrator Sexton’s award. The court noted the parties to a collective agreement have a right to negotiate, in good faith, clauses to ensure the attendance of employees and to ensure they do their work. The establishment of a maximum period of time for absences is a form of negotiated accommodation available to disabled employees. Notably, the Supreme Court accepted that the time period specified in the collective agreement was a “significant factor” in determining the duration of the employer’s duty to accommodate the employee’s absence. In the Supreme Court’s view, such clauses are significant because they are negotiated by parties that represent different interests and that are most familiar with the particular circumstances of the enterprise. The maximum absence period agreed to by the union and employer may serve as evidence of the point at which the particular employer will face “undue hardship” in accommodating an employee’s absence.

These comments were balanced against the idea that automatic termination clauses cannot definitively determine the specific accommodation measure to which a particular employee is entitled because each case must be evaluated on the basis of its particular circumstances. An employer and union would have no way of predicting future scenarios at the time of negotiating the deemed termination provision into the collective agreement.

Consistent with the existing line of human rights case law, the Supreme Court also emphasized the right to equality in employment is a fundamental right and the parties to a collective agreement cannot agree to a level of accommodation that is lower than the protection an employee is entitled to receive under human rights legislation. A collective agreement clause imposing too short a period of accommodation with respect to any individual employee, based on the individual circumstances, would have no effect against that employee. In such a situation, the employer would be obligated to offer further accommodation despite the express provision of the collective agreement.

Applying these principles to the grievor

In the Supreme Court’s view, arbitrator Sexton had not automatically or improperly applied the collective agreement provision. The arbitrator had been aware of the employer’s duty to accommodate and concluded it was not required to continue to employ someone who had been absent for three years and was declared disabled for a further indeterminate period.

In concurring reasons, three judges of the Supreme Court ruled the employee had not established that the automatic termination provision was even

prima facie

discriminatory, so the employer was not even required to justify its actions.

The

McGill University Health Centre

case will provide unionized employers with some comfort that a negotiated automatic termination clause is not necessarily discriminatory and can be a significant factor in assessing the employer’s duty to accommodate. While individual assessment will be required in relation to each disabled employee’s particular circumstance, the Supreme Court’s decision provides a degree of balance to the onerous nature of the duty to accommodate.

Jodi Gallagher is a Toronto-based associate in the labour and employment law group at Heenan Blaikie. She may be reached at (416) 360-3555 or at jgallagher@heenan.ca.

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