Employees on medical leave for a decade with no contact with employer
Question: We have two employees who have been on a medical leave of absence for 10 years and five years respectively. We have no record of contact for them but they are still paying into and receiving benefits. What can I do to get them off of our benefits?
Answer: The general principles that govern termination of an employment contract for excessive innocent absenteeism are based on the common law doctrine of frustration of contract. Under this doctrine, a contract is discharged where the parties have not contemplated the circumstances that arise and performance of the contractual obligations becomes impossible through no fault of either party. Where an employment contract is frustrated, it is not a dismissal or resignation that brings it to an end, but the circumstances themselves.
In the context of employee disability, the question of frustration lies in whether the employee's incapacity is of such a nature that performance will either be impossible or radically different from the terms of employment.
Factors to take into account include the terms of the contract, including any provisions for illness and disability benefits; the nature and expected duration of the employment; the nature of the illness or injury, how long it has continued and the prospects for recovery; and the length of past employment. These factors are not exhaustive or conclusive in any particular case, although it has been suggested duration of the employment is a factor that may be accorded considerable significance.
Clearly, absences of five and 10 years are lengthy absences that would support a conclusion the employment relationship of these individuals has run its course. However, before taking action to officially terminate, it is crucial to look to the terms of the relevant employment contracts to ascertain what obligations the company has assumed with respect to disabled employees.
There is a division of judicial opinion on the question whether employment contracts that provide for disability benefits can be frustrated by employee incapacity. In Wightman Estate v. 2774046 Canada Inc., the British Columbia Court of Appeal held that the critical question was whether the parties had provided that their contractual relationship would continue despite the radical change in circumstances brought about by the disability. If the parties have not contemplated continuation of the contract, extended illness could discharge the contract if the necessary elements of frustration are established.
In Dragone v. Riva Plumbing Ltd., the Ontario Superior Court of Justice found the presence of long-term sick leave and disability benefits indicates the parties have agreed to a greater tolerance for employee absence and may postpone the time of frustration until their expiration.
Dragone found no frustration arising from an employee's 14-month absence and was cited by the Alberta Court of Queen’s Bench in Lippa v. Can-Cell Industries Inc., where a five-month absence was insufficient to frustrate the employment relationship without evidence the absence interfered with the employer's business needs.
Arbitral jurisprudence routinely rejects the existence of a management right to terminate a unionized employee for excessive innocent absenteeism if the termination deprives the employee of vested benefits or benefits based upon the disability itself.
Accordingly, if employee status is required to maintain such benefits, a right to terminate will not be recognized. However, arbitrators may also recognize the receipt of employee benefits unrelated to the disability does not preclude termination for innocent absenteeism.
In addition any contractual barriers to terminating an employee on medical leave, the ability of an employer to end an employment contract for innocent absenteeism is limited by human rights considerations. An employer is required to accommodate a disabled employee up to the point of undue hardship. As it is not clear whether any efforts have been or could be made to accommodate these employees' disabilities, it would be rash to terminate without first investigating this issue. While it may be there are no accommodations that could allow the employees to return to work, such a result cannot be assumed from the duration of the absences.
A decision to terminate the contracts of the two employees absent on medical leave should only be made after consideration of contractual or collective agreement terms and the company's previous and potential accommodation efforts based on medical information current to the time of the intended termination. If, at that time, there is no reasonable prospect of these employees returning to work and the employees' right to disability-related or vested benefits is not dependent upon employee status, termination may be appropriate.
For more information see:
•Wightman Estate v. 2774046 Canada Inc., 2006 CarswellBC 2376 (B.C. C.A.).
•Dragone v. Riva Plumbing Ltd., 2007 CarswellOnt 6177 (Ont. S.C.J.).
•Lippa v. Can-Cell Industries Inc., 2009 CarswellAlta 1900 (Alta. Q.B.).
