Employee on leave with terminal cancer still an employee: Court

Employee on long-term disability wanted to come back if she could; employer assumed she was gone for good

An Ontario woman’s disability leave didn’t frustrate her employment contract with a plumbing company and she should still be considered an employee, the Ontario Superior Court of Justice has ruled.

Sybille Dragone was an office clerk for Riva Plumbing Ltd. in Richmond Hill, Ont. She began working for the company in 1997 and her position included coverage under a health insurance plan and long-term disability benefits.

On March 2006, Dragone was diagnosed with terminal breast cancer. On June 26, 2006, she told Riva her illness was making it difficult to walk and do her job so she was going on sick leave and long-term disability. Riva believed Dragone was leaving the company for good because of the terminal nature of her illness and thought she would be on long-term disability permanently.

Riva threw a retirement party for Dragone at which she accepted a “substantial retirement gift” from her co-workers. She stopped working on July 21, 2006, and, one month later, the insurance provider told her she was on record as having left the company and was no longer part of the health plan. Dragone wrote to Riva saying she hadn’t left and made it clear she was an inactive employee on sick leave who was “trying hard to get well” and return to work.

Riva said Dragone had indicated she was leaving permanently and going on long-term disability. Because she had terminal cancer, the company argued, her disability was permanent, which frustrated the employment contract and she shouldn’t be considered an employee any longer. It also pointed to her acceptance of the retirement party and gift as evidence she didn’t plan on returning.

The court didn’t agree Dragone had no prospect of returning to work. She had indicated in her letter to Riva that she was trying to get better and wanted to come back if it became possible. It also found although she accepted “the generosity and commendable decency of her friends and colleagues” for a retirement party, it didn’t mean she was resigning. The fact the company had long-term disability insurance meant Riva was prepared for a longer absence and frustration of the employment contract may never occur.

“The presence of long-term sick leave and disability benefits indicates a greater tolerance for the duration of an employee’s absence before frustration occurs,” the court said. “A permanent illness that disables the employee is a frustrating event that will end the employment contract, (but) it has not been establsihed that Ms. Dragone has no prospect of returning to work.”

The court found Riva changed Dragone’s status without notice when it removed her from employee coverage. It ruled she was still an employee and entitled to be covered under Riva’s health insurance plan. See Dragone v. Riva Plumbing Ltd., 2007 CarswellOnt 6177 (Ont. S.C.J.).

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