Seniority and benefits for a worker on disability leave

Does a worker's seniority and regular benefits have to continue while off work on disability?

Question: Do sick leave credits, seniority and benefits continue uninterrupted while an employee is on workers’ compensation or disability leave, or can they be frozen until the employee’s return?

Answer: One of the emerging issues in human rights law is the determination of what benefits an employee is entitled to retain while off work because of disability or injury. The key question is whether the duty to accommodate extends so far as requiring an employer to accommodate the disabled employee by giving him the same rights and benefits as employees who are at work.

Arbitrators and courts have recognized accommodation requires a balance between two underlying considerations: The right of an employee with a disability to equal treatment and the right of an employer to operate a productive workplace. An employer is not required to accommodate where undue hardship would result. Undue hardship can be an unreasonable cost, a significant disruption to productivity or the workplace, a health and safety risk or a disruption to the collective agreement.

In a unionized context, employers and unions can agree whether or not certain benefits are continued or frozen by negotiating benefits granted to absent employees within the collective agreement. In the case of health benefits, a collective agreement may provide that employees who are actively working obtain full coverage, whereas those who are not working or who have been absent for a length of time receive only partial, time-limited or no coverage until they return to work.

This was seen in Versa Services Ltd. v. Milk & Bread Drivers, Dairy Employees, Caterers & Allied Employees, Local 647 and more recently in O.N.A. v. Orillia Soldiers Memorial Hospital, where the Ontario Divisional Court found provisions of a collective agreement denying accrual of certain benefits for nurses on workers’ compensation and long-term disability for more than a year did not violate Ontario’s Human Rights Code.

Even though unions and employers are free to negotiate limitations or conditions for the provision of certain benefits for employees on disability leave, the collective agreement itself could violate human rights legislation. Even if the union and the employer agree to limitations, these restrictions may nevertheless be viewed as discriminatory and in violation of human rights legislation.

In Thorne v. Emerson Electric Canada Ltd., a collective agreement said an employee would not accumulate seniority if absent due to personal illness or accident for more than one year. The board found the parties were not permitted to contract out of the provisions of the Human Rights Code, which provides that every person has a right to equal treatment at work without discrimination because of a disability.

Nonetheless, the prevailing view of many arbitrators is that it is not discriminatory for an employer to negotiate and apply limitations to benefits as long as it is applied consistently to all employees or a comparator group. Determining whether discrimination exists in such situations requires establishing the appropriate comparator group to see whether, in relation to that group, the employee has been discriminated against. In Versa, there was no discrimination when an employee on disability was given the same treatment in benefits coverage as other employees who were absent for other reasons.

A collective bargaining agreement can also determine if sick leave credits, seniority and other benefits continue while an employee is away on workers’ compensation or disability leave. Although an employer and a union can agree to limitations and conditions on such benefits, if the result is to treat disabled employees differently from other employees, the provision could be seen as discriminatory. On the other hand, such provisions have survived challenge in a number of cases where the disabled employee’s limited access to benefits and other terms of the collective agreement is no different than that which applies to other employees who are absent for reasons unrelated to disability.

For more information see:

Versa Services Ltd. v. Milk & Bread Drivers, Dairy Employees, Caterers & Allied Employees, Local 647, 1994 CarswellOnt 1247 (Ont. Arb. Bd.).
O.N.A. v. Orillia Soldiers Memorial Hospital, 1999 CarswellOnt 28 (Ont. C.A.).
Thorne v. Emerson Electric Canada Ltd., (1993), 18 C.H.R.R. D/510 (Ont. Bd. of Inquiry).

Brian Kenny is a partner with MacPherson Leslie and Tyerman LLP in Regina. He can be reached at (306) 347-8421 or [email protected]

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