Returning from disability

One of our employees, who has been on long-term disability for 12 months, now wants to return to work with doctor’s approval. We've lost trust in him and no longer have a position for this employee.

Question: One of our employees, who has been on long-term disability for 12 months, now wants to return to work with doctor’s approval. This employee has been with the company for six years. The company, located in Ontario, has lost trust in the employee’s ability to perform in his position and does not have a position for this employee. Can the company refuse his return to work? Can he be given a notice without paying severance?

Answer: An employer should proceed cautiously before dismissing an employee who is on a disability leave or who wants to return to work from a disability leave.

In all Canadian jurisdictions, including Ontario, employers have a duty under human rights legislation to accommodate disabled employees to the point of undue hardship. It is not enough for an employer to believe an employee will not be able to perform in his former position because of his disability — the employer must have cogent and substantive evidence this is the case.

Even if an employer can show an employee cannot perform the core duties of his position because of a disability, the onus rests with the employer to prove “undue hardship” by showing it is not reasonably practicable to modify an employee’s duties or reassign the employee to another job.

As a result, an employer cannot refuse the employee’s return to work without demonstrating the employee cannot be accommodated short of undue hardship.

You have also mentioned that even if the employee could perform his duties adequately, you do not have a position available for him. Again, this is a circumstance where an employer must proceed carefully and with cogent evidence. In the face of a human rights complaint, you must be prepared to demonstrate with substantive evidence that you have a bona fide business reason, such as a reduction in business or a technological change, for not continuing to employ a disabled employee.

It is important to remember that in most jurisdictions in Canada, human rights tribunals have the authority to reinstate an employee if they determine the employer has discriminated by failing to accommodate an employee, or otherwise. In addition the Supreme Court of Canada has held that, absent a bona fide reason, dismissing an employee while he is on a disability leave is an example of bad faith dealing in the manner of dismissal: Wallace v. United Grain Growers Ltd. Employees who are dismissed in bad faith are entitled to increased damages for wrongful dismissal.

Assuming you can demonstrate a bona fide business reason for refusing the employee’s return to work, you asked whether the employee can be dismissed without paying severance. We assume your intention here is to give the employee reasonable notice his employment will be terminated before he returns to work, while he is still on disability leave.

In every jurisdiction in Canada, employers are required to provide employees with reasonable notice of the termination of their employment unless they are dismissed for cause. Notice may be given by providing “working notice” and allowing an employee to work during the notice period, or by providing payment in lieu of the wages and benefits an employee would earn if he worked during the notice period.

Case law throughout Canada is quite clear that the contractual right of an employee to reasonable notice of termination is separate and distinct from an employee’s right to disability payments under either a short-term or long-term disability plan. While a disability period and a notice period can run at the same time, courts in Canada have held that an employer cannot expect an employee to work out the notice period while on a disability leave: see for example Bohun v. Similco Mines Ltd. As a result, an employer can not give an employee “working notice” of termination while he is on disability leave. Payment in lieu of notice must be provided instead.

Thus, if you want to dismiss the employee without bringing him back to work, you must provide severance in lieu of working notice in order to satisfy your obligation to provide reasonable notice of termination. The amount of severance payable depends on employment standards minimums, in addition to the common-law factors which influence reasonable notice of termination.

These include age, seniority, level of responsibility with the company, and other circumstances, such as the employee’s health. In recent cases from Ontario, as well as other Canadian jurisdictions, courts have determined that the fact an employee had been ill when his employment was terminated justified awarding a longer notice period.

Brian Kenny is a partner with MacPherson Leslie and Tyerman LLP in Regina. He can be reached at (306) 347-8421 or bkenny@mlt.com.

Latest stories