Length of long-term disability

Taking a lesser job while on LTD

Tim Mitchell
Question: Can an employee remain on long-term disability or sick leave if, as his condition improves, he can do a less demanding and lower paying job in the meantime?

Answer: Entitlement to long-term disability (LTD) or sick leave is a complex question that involves medical opinion, contractual or collective agreement rights, the terms of health insurance plans, statutory rights and obligations and express or implied duties under human rights legislation. Often, the question of an employee’s entitlement, if any, to resist a return to work until fully recovered is dealt with in the disability plan in place at her employment.

Long-term disability insurance will often define “disability” for a finite period as meaning an incapacity to perform the employee’s own occupation. Once the defined period has expired, “disability” will be more narrowly defined so that it only encompasses an inability to perform any occupation. The employee’s right to remain off work and in receipt of benefits would depend on whether the employee was considered disabled within the meaning of the particular policy.

Many LTD or sick leave plans encompass rehabilitative plans that provide for a gradual return to work as the employee’s condition improves such as assignment of light duties and reduced hours. Again, the employee’s entitlement to benefits would be based on the terms of the applicable plan.

As a matter of human rights law, an employer is obliged to accommodate a disabled employee to the point of undue hardship. This duty of reasonable accommodation is expressly set out in the legislation of some jurisdictions and is implied in others. If a disabled employee has the capacity to return to work, but is unable to perform the essential duties of her position, the duty of reasonable accommodation requires the employer to consider what can be done in the workplace to accommodate the employee’s return despite the disability. The employer’s obligation is dependent on the individual circumstances of the case but may include a requirement to modify the employee’s duties, the physical premises, the hours of work, the position held or whatever other aspects of the workplace are creating an obstacle to the employee’s return. The duty on the employer is not unlimited but does require significant efforts be made. Undue hardship is itself a flexible concept that depends on the particular facts.

The duty of reasonable accommodation encompasses an obligation on the part of the employee to accept an accommodation that is reasonable. In the absence of a contractual right to remain on disability or sick leave without returning to work until a complete recovery allows a return to the employee’s own position, an employee who has been medically cleared to perform some work might be considered to be under an obligation to accept the work as an interim measure. Whether it would be considered reasonable to require the employee to accept a temporary demotion would depend on the circumstances, including the length of time the employee would be precluded from performing the essential duties of her prior position.

Arbitral jurisprudence supports the concept that an employee can be placed permanently in a lower-paid, lower-ranked position as a form of accommodation, provided all other alternatives have been exhausted and no other viable accommodation is available. Cases approving such a course of action have noted an employer is not required to pay a permanently disabled employee differently from other employees who are performing the same work.

Tim Mitchell is a partner with Laird Armstrong in Calgary who practices employment and labour law. He can be reached at [email protected] or (403) 233-0050.

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