Redundancy during disability leave

Question: If an employee is on disability leave but her job becomes redundant, what must an employer do to terminate the employee without risking discrimination?

Answer: An employer must always be careful when it is considering the dismissal of an employee who is on disability leave.

Human rights statutes in all Canadian jurisdictions prevent an employer from discriminating against or dismissing an employee on the basis of protected grounds, which include physical disability and mental disability.

To succeed with a human rights complaint, an employee must establish he was dismissed or otherwise treated adversely, he has a protected characteristic (a physical or mental disability), and there was a link or nexus between the adverse treatment and the protected characteristic.

Where an employee files a human rights complaint on the ground that she was dismissed while on disability leave, the evidentiary burden will usually shift to the employer to establish that the employee’s disability had nothing to do with the decision to terminate the employee’s employment.

If the human rights tribunal or commission finds the dismissal was connected in any way to the employee’s disability or disability leave, the employer will be found to have violated the statute.

Where an employer closes its operation and dismisses all of its employees, including those on disability leave, there should be no basis for a human rights complaint.

But in a redundancy situation, where an employer terminates only part of its workforce, it will be important for the employer to establish that its decision regarding the positions or employees who were declared redundant was not in any way influenced by disability-related considerations.

In Morris v. British Columbia Railway Co., the B.C. Human Rights Tribunal awarded significant damages to a former BC Rail manager, after finding the employer’s decision to terminate his employment as part of a restructuring was influenced in part by his disability.

The tribunal stated: “I accept BC Rail was, throughout the late 1990s, engaged in ongoing restructuring and downsizing. But at the same time, I find that at least some part of BC Rail’s motivation in choosing Mr. Morris as a target of that downsizing was the fact that he was disabled.”

“His disability played a role in BC Rail’s decision-making in at least three ways. One, it affected his performance, which led to Ms. Deveaux’s dissatisfaction with his performance and her desire not to have him as part of her team.

“Two, it played a role in his refusal to take on the SAP Project work which was offered to him in an attempt to provide him with some further employment.

“And three, the fact that his disability might recur and require him to make a future disability claim, thereby exposing BC Rail to future liability, was a factor in BC Rail’s decision to terminate his employment, rather than offer him continued employment in some other capacity.”

A similar conclusion was reached in McKenna v. Atlas Anchor Systems (B.C.) Ltd. There, the employer made a decision to reduce its workforce from 36 to 20 employees for economic reasons. The BC Human Rights Tribunal found that although the employer had some legitimate reasons for including the complainant — who was on disability leave — in the group selected for termination (which included the fact he was neither productive nor well-liked by his co-workers), the employee’s disability played a part in the employer’s decision to select him for termination and, accordingly, the employer had breached the Human Rights Code.

Employers must also be mindful of the risk that terminating an employee who is on disability leave may lead to a court action seeking punitive damages and aggravated damages, based on the principles outlined by the Supreme Court of Canada in Wallace v. United Grain Growers Ltd., Honda Canada Inc. v. Keays and, more recently, Bhasin v. Hrynew.

To avoid the risk of legal action, it will be important for an employer to ensure it will be able to prove the termination decision was not connected to the employee’s disability. The employer should be able to point to objective factors unrelated to the disability that led to its decision to select the employee for termination.

For more information see:

• Morris v. British Columbia Railway, 2003 CarswellBC 2002 (B.C. Human Rights Trib.).

• McKenna v. Atlas Anchor Systems (B.C.) Ltd., 2011 CarswellBC 3641 (B.C. Human Rights Trib.).

• Wallace v. United Grain Growers Ltd., 1997 CarswellMan 455 (S.C.C.).

• Keays v. Honda Canada Inc., 2008 CarswellOnt 3743 (S.C.C.).

• Bhasin v. Hrynew, 2014 Carswell-Alta 2046 (S.C.C.).