Workers' Compensation Act, ESA prohibit terminating injured workers for two years
“When you're dealing with employment issues, there are several avenues for an employee to get redress, and employers are seeing a multiplicity of claims that are coming out of a single employment issue.”
So says Chris Pelkey, an employment and labour lawyer at McInnes Cooper in Fredericton, after a New Brunswick worker successfully sought an order for reinstatement under the province’s Employment Standards Act (ESA) – for her employer’s breach of a workers’ compensation rule.
The 37-year-old worker was hired by Sobeys Distribution Center in 2008 and worked as a selector, lift operator, auditor, and shipper in a warehouse in Oromocto, NB.
On July 20, 2019, the worker was operating a reach truck. When she stepped down from the truck, her right knee buckled and bent. The worker reported the injury to her team lead and Sobeys accommodated her with light duties.
About three months later, the worker was diagnosed with a tear or fracture in the cartilage of her knee. The worker continued to perform light duties until an arthroscopic exploration of her knee on Oct. 25, which revealed that the worker needed surgery. She went on medical leave to recover and attend physiotherapy and received workers’ compensation benefits from WorkSafeNB.
In January 2021, the worker completed her rehabilitation plan and was deemed to have reached maximum medical improvement. However, she had permanent physical restrictions.
Informed of termination
The worker remained off work and, on April 5, 2021, the worker met with her manager and an HR business partner. According to the worker, they told her that she was being terminated because her physical disability made her incapable of performing the full duties of her former position.
Two weeks later, on April 20, the worker met again with the HR business partner, who told her that she was being terminated because of her workplace injury and Sobeys couldn’t accommodate her anywhere in retail or the warehouse. She was offered a part-time, temporary position, but WorkSafeNB had already deemed that position to be inappropriate.
That same day, the worker received her termination letter stating that WorkSafeNB had concluded that Sobeys didn’t have suitable employment based on the worker’s medical restrictions.
The worker filed an employment standards complaint that Sobeys had violated s. 42.3 of the New Brunswick Workers’ Compensation Act (WCA), which prohibits employers from dismissing, disciplining, or discriminating against a worker because of a workplace injury that is deemed compensable by WorkSafeNB for two years if the employer has 20 or more employees. Section 42.3 of the WCA is also incorporated into the province’s Employment Standards Act (ESA).
Sobeys argued that it was not required to keep the worker employed because she had permanent limitations and it didn’t have suitable employment. It also noted that when she was terminated, she returned to full benefits with WorkSafeNB.
Violation of WCA
In April 2022, an employment standards officer (ESO) determined that Sobeys violated the WCA by terminating her employment less than two years after her injury. In a decision letter, the ESO found that Sobeys was required to reinstate the worker to suitable work and compensate her for the loss of her salary from April 20, 2021, to the end of the WCA’s two-year reinstatement period on July 10, 2021. If the company didn’t pay the requested compensation, the ESO would recommend that the Director of Employment Standards issue an order.
Sobeys agreed to try to find a suitable position for the worker and requested information on her physical limitations. It also paid the worker the amount of compensation calculated by the ESO.
In the fall of 2022, Sobeys only found one position to offer the worker, but the worker declined because it wasn’t equivalent to her pre-injury position.
Sobeys had a good approach from a human rights perspective by providing modified duties and looking for other suitable positions, says Pelkey.
“When it became clear that continuing down the modified path wasn't going to work anymore, they expanded their search to look for other jobs – from an accommodation standpoint, they were doing things right,” he says. “However, where I think things went south for them is that they missed or maybe forgot about the requirements under the WCA - the worker was injured at work and, whenever that happens, the employer should consult the WCA because that’s what’s going to apply.”
Employer didn’t reinstate worker
The worker informed the ESO that Sobeys had failed to comply with the recommendation to reinstate her, arguing that Sobeys’ refusal to make the modified position permanent was a breach of its duty to accommodate.
The ESO advised that she was closing her file because Employment Standards did not have jurisdiction over the accommodation and re-employment sections of the WCA, which were not part of the ESA. The Director issued a notice stating that Sobeys had not failed to comply with the ESA.
The worker challenged the Director’s notice before the New Brunswick Labour and Employment Board, insisting that there should have been an order to reinstate her, as Sobeys violated s. 42.3 of the WCA – and thus the ESA - by terminating her before the end of the two-year period.
The worker also maintained that her date of termination was April 5, 2021, not April 20, as she had already been placed off work and was not paid after that point. She requested reinstatement to her former position retroactive to the termination date.
The board noted that it was clear Sobeys terminated the worker’s employment prior to the expiry of the two-year period and the termination was because of the workplace injury.
Compensation didn’t consider benefits
The board also noted that Sobeys voluntarily agreed to compensate the worker for her economic loss from the termination, so there was no reason to issue an order requiring such payment. However, it appeared that the ESO didn’t consider the economic loss from the loss of benefits, said the board.
The board found that s. 42.3 of the WCA only prohibits termination of a worker for a workplace injury. As that section was part of the ESA, the Director had the authority to order reinstatement to the position held at the time of dismissal, the board said, adding that neither the ESA nor s. 42.3 of the WCA reference the physical capability of the employee to perform work.
The WCA sets out two different protections for workers related to termination and re-employment, but only one is part of the ESA, says Pelkey.
“There are these two different ideas of reinstatement [in the WCA] - s. 42.4 refers to re-employment and takes into account the worker’s limitations, and you only have to re-employ them if they’re medically fit to do their job or any suitable work that they can be accommodated in,” he says. “The term ‘reinstatement’ under s. 65 of the ESA is broader than the definition under the WCA – the court said s. 65 of the ESA means reinstatement to the position at the time of termination and doesn’t require an assessment of whether the employee is medically fit to perform the work.”
Reinstatement to position at termination
The board found that the Director should have exercised its authority under the ESA to issue an order requiring reinstatement of the worker. It also found that the worker was entitled to additional compensation starting on April 5, 2021, as the evidence indicated that was the date of termination.
“The board determined that the remedy under the ESA applied because Sobeys violated s. 42.3 of the WCA - it doesn't require the employer to start suitable employment, all it says is that you can't dismiss an employee who may be entitled to workers’ compensation for at least two years,” he says. “Once it was found that Sobeys violated that section and the ESO found that the appropriate remedy was reinstatement, that was required - regardless of whether Sobeys was able to accommodate the worker.”
Sobeys was ordered to reinstate the worker to the accommodated position she held prior to her termination and compensate her for any economic loss suffered between April 5 and July 10, 2021, resulting from the loss of wages and benefits, less what Sobeys had already paid.
When an employer is dealing with an injured worker, it needs to think about whether it happened at work, because as soon as it's a work-related injury it will be within the ambit of the WCA, says Pelkey.
“When a worker is injured at work and makes a workers’ compensation claim, you’re going to have to look at holding that employee's position or an equivalent position for one or two years, depending on how many employees you have,” he says.
“It doesn't prevent employers from terminating employees for reasons that are unrelated to their injury,” he adds. “If you're looking at downsizing where some employees are terminated, just make sure you have a well-documented file so you can show that the decision to remove that employee had nothing to do with their injury.”
See Watters and Sobeys Capital Inc., Re, 2023 CarswellNB 534.
