Nurse’s bad back a pain for consultant (Legal view)

Employer on the hook for bad-faith actions of attendance management consultant
By Jeffrey R. Smith
|Canadian HR Reporter|Last Updated: 02/03/2010

An Ontario hospital is on the hook for the bad-faith actions of its attendance management consultant after it refused to allow a nurse to return to work from a sick leave when she claimed she was ready.

Barbara Shuster, 45, was a registered nurse at the Hamilton Health Sciences Centre (HHSC) who was diagnosed with herniated discs in her back in 2004. She received treatment and was off work, receiving long-term disability (LTD) benefits, from March 2004 to May 2005.

She returned to work with modified duties in May 2005 and worked her way up to regular duties, except for heavy lifting restrictions. In October 2005, Shuster suffered from more back pain as well as another medical condition and she went on short-term disability (STD).

Shuster’s doctor cleared her to return to work in November with a letter restricting any lifting and prolonged standing, walking or bending.

Cowan Wright Beauchamp, a consulting firm that handled HHSC’s attendance management, was concerned about Shuster’s ability to return since, during her previous leave, HHSC felt she would not be able to perform the duties of a registered nurse because of her restrictions. Cowan’s file said Shuster would likely only be able to perform desk work.

Cowan was also concerned about the fact the collective agreement stipulated employees back from LTD could not go back on the benefit if they had been back at work for more than three months. Instead, a new STD claim was filed.

Cowan raised the issue that Shuster “suddenly” had no restrictions after returning to modified work in May 2005 and then ended up back on STD in October, after the window to return to LTD had closed.

By January 2006, HHSC had not allowed Shuster to return to work and she supplied a doctor’s note stating she could return, with heavy lifting restrictions.

In the meantime, Shuster was advised to apply to the hospital’s pension plan, which would give her free pension accrual during her leave without having to make contributions.

The pension provider approved her because of partial disability, but Cowan made the assumption Shuster was “totally incapacitated from her own job” and she planned to retire. Though Cowan had accepted the restrictions in Shuster’s medical note, it referred to the pension application as a “golden opportunity” to solve the problem once and for all.

On Feb.7, 2006, Shuster filed a grievance, claiming HHSC had violated the collective agreement by not returning her to work. The following week, Cowan accepted her STD claim, which had already run out. She told HHSC she could return to work with modified duties but Cowan was skeptical of the doctor’s note that fit her request. Cowan recommended to HHSC that Shuster’s treatment and modified duties were “only a temporary relief measure,” her condition was “a chronic, unremitting problem” and she would be better off on LTD.

Another doctor’s note in April 2006 stated she had completed treatment for her back pain, but she was still denied a return to work. She filed a second grievance on May 8, saying Cowan was “callous and high-handed” in denying her the opportunity to return.

Cowan’s approach to Shuster’s claim was suspect from the beginning, found the arbitrator. The consultant handled the situation as if it suspected both Shuster and her doctor of fraud, as evidenced by Cowan’s comment that Shuster “all of a sudden” was fit to return to work when her three-month LTD recurrence limit expired.

Cowan had originally agreed to Shuster’s return to work under the same limitations as her previous LTD but changed its mind when it learned of — and misinterpreted — her application for pension continuance. Cowan’s actions demonstrated an eagerness to get rid of Shuster, said the arbitrator.

“From the very outset, Cowan’s consideration of the approval of benefits and (Shuster’s) return to work are clouded with the basest of suspicions,” said the arbitrator. “The obligation of good faith and fair dealing are nowhere to be found in (Cowan’s) handling of the file either before or after (learning of the pension application).”

HHSC was also at fault for not questioning Cowan’s methods, found the arbitrator. It delegated the duties and responsibilities of evaluating the claim to Cowan without assessing how its employee would be treated.

Cowan showed it was unfit to properly perform the duties it was contracted to do — fair and impartial evaluations of disability claims — and HHSC acted recklessly by not participating, found the arbitrator. HHSC had a duty to accommodate Shuster but failed by going along with Cowan’s recommendations, said the arbitrator.

There was a significant delay in the approval of Shuster’s STD benefits, during which Shuster didn’t know if she would be denied and forced to pay them back — a delay caused by Cowan’s inaccurate understanding of both the pension application and the collective agreement’s LTD limits that HHSC could have clarified.

“(HHSC) was aware of Cowan’s malicious and unsupported accusations and (it) was content to ride along with Cowan’s behaviour. In the final analysis, it is for (HHSC) to make the decisions in matters such as these. Those decisions must be informed,” said the arbitrator.

Shuster was entitled to damages for the unnecessary emotional suffering and financial disadvantage she suffered because of Cowan’s bad-faith behaviour, ruled the arbitrator. HHSC and the union were instructed to negotiate the amount of damages, though the arbitrator acknowledged the union’s suggestion of full compensation plus punitive damages was appropriate.

For more information see:

Hamilton Health Sciences Corp. v. O.N.A., 2009 CarswellOnt 6209 (Ont. Arb. Bd.).

Jeffrey R. Smith is the editor of Canadian Employment Law Today. For more information, visit

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