CRA's duty to accommodate comes to end

“There's this battle between an employee's duty to attend work and an employer's duty to accommodate sick employees, and so they have to recognize when the standard for frustration comes in. At some point, they have to recognize that it's undue hardship for an employer to keep an employee on when there's no foreseeable return to work.”

So says Nathaniel Bowles, an employment lawyer at McLennan Ross in Calgary, after the Federal Court of Appeal upheld the dismissal of the Canada Revenue Agency’s (CRA’s) firing of a worker following three years of unpaid sick leave.

David Babb was a processing clerk who had been employed with CRA since 2002. His job involved working in an office using equipment to retrieve documents upon request from tax offices.

In 2006, Babb developed environmental sensitivities to his workplace that started causing health issues. He went on short-term sick leave in early 2007, which became a leave without pay (LWOP) in April 2007.

On Feb. 15, 2008, Babb provided a doctor’s note stating that he wasn’t fit to return to work and his return date was unknown.

Babb was a member of a bargaining unit, but the collective agreement didn’t provide for a medical LWOP – although it allowed for other types of LWOP that allowed for up to five years of leave.

In May 2009, the CRA sent Babb a letter under its Illness and Injury Policy because he had reached the policy’s limit of two years of unpaid leave. The letter outlined three options, of which he had to choose one – returning to duty; resignation or retirement on medical grounds; or termination for reasons other than discipline or misconduct. If he didn’t choose an option by July 10, the CRA would terminate his employment.

Babb was waiting for an appointment with an environmental health physician, so he requested an extension of his LWOP. The CRA granted an extension until September.

Babb provided a medical note in late August stating that he was unable to return to work due to his ongoing medical condition. He was referred for another assessment, so the CRA granted another extension until February 2010. Babb followed up with another medical note indicating his return date was still unknown and the specialist report from his next assessment would come in January. The CRA again extended the LWOP until March 31, 2010. With each extension, the CRA reminded Babb that a failure to submit requested medical information could result in termination of employment.

Babb received the specialist report in January 2010 and told the CRA that it stated he was “currently fully disabled.” He added that it was unclear when he would be able to return to work, although he didn’t provide the report.

“The medical information in this circumstance was very definitively on the side that the employee would not be able to return for the foreseeable future,” says Bowles. “The physician’s certificate stated specifically that the [employee] was not fit to return to work, and there were no specific accommodations or anything that would be appropriate to allow them to return to work in any capacity.”

In March, Babb requested a further LWOP extension to allow his physician to review the report, but the CRA refused. Babb’s physician provided a note saying that he wasn’t able to work under any conditions.

On April 13, the CRA terminated Babb’s employment for reasons of incapacity. Babb filed a complaint of discrimination, claiming that the CRA failed to accommodate him.

Read more: An Ontario employer’s termination of a disabled worker who had no prospect of returning to work didn’t act in bad faith but owes statutory termination and severance entitlements.

Reasonable standard

The Federal Public Sector Labour Relations Board found that Babb suffered from a disability under the Canadian Human Rights Act and he suffered an adverse impact in which his disability was a factor. However, it upheld the termination because the CRA’s two-year limit for unpaid leave was reasonably necessary to accomplish the performance of the job and it would be undue hardship for the CRA to keep Babb on sick leave for an unknown period of time. This satisfied the Meiorin test to justify the CRA’s standard and that it met its duty to accommodate, said the board.

Babb appealed to the Federal Court of Appeal, arguing that the board’s finding was unreasonable and the CRA applied its policy “automatically and mechanically” without considering his circumstances – the duty to accommodate required flexibility in applying such standards.

The court agreed with the board that the lack of any extended sick leave provisions in the collective agreement left the CRA open to apply its Illness and Injury Policy. The court found that the CRA was flexible in applying its policy, as it granted multiple extensions to Babb’s LWOP so he could provide medical information on his limitations and restrictions to better help his return to work.

“The employer actually went above and beyond and they made sure they fulfilled their duty to accommodate by extending the leave period to allow the employee to get a specialist report that ended up being almost a full year beyond when the initial leave was scheduled for,” says Bowles. “And the physician who summarized the report to the employer indicated that [Babb] was fully disabled and it was unclear how and when he would be able to return to employment.”

Read more: An Ontario worker’s pregnancy and medical condition led to a three-year absence, but her termination two weeks before her scheduled return was wrongful and discriminatory.

The court also found that Babb’s three years of absence with no indication of a possible return-to-work date – including the most recent medical note stating that no return to work would be possible under any conditions – made it reasonable for the board to determine that the CRA’s duty to accommodate was “at an end.”

The court also determined that it was reasonable for the board to find that that Babb’s termination for reason of incapacity was made by the CRA in good faith. The appeal was dismissed.

Bowles notes the importance the CRA’s flexibility in applying the unpaid sick leave policy in it being able to prove that its duty to accommodation had ended.

“The employer should remember to be flexible in their application of any kind of strict standards they might have – usually they're not paying [the worker] due to long-term disability benefits or an unpaid leave, so there's really not a significant cost necessarily for an employer to make sure that the employee is being fully accommodated and that a flexible standard is being applied – to make sure that the best medical information is available to evaluate the decision,” says Bowles.

“Employers should ensure that employees are given enough time to provide medical information and then they need to assess that medical information on a fair standard that really looks at whether or not it's reasonably foreseeable that they can return to work.”

See Babb v. Canada (Attorney General), 2022 FCA 55.