By Howard Levitt

Original Source: National Post

There has been recent legislative debate about introducing paid sick leave. It is not law anywhere in Canada and, without either a policy of paying for sick days or a short/long term disability benefit plan, employers need not pay employees for time away due to illness.  Oblivious to this legal reality, many employers pay for sick leave without having to.

But whether paid or not, ill employees are generally protected from dismissal under human rights legislation, sometimes even after years of absence. Accommodating even unpaid indeterminate sick leaves are costly, as employers replace the employees with more expensive contractors, as they can’t hire a permanent replacement. Such was the concern of Black & MacDonald which, after terminating Wendy Boucher after 33 months of sick leave, received a punishing retaliatory blow from Ontario’s Divisional Court.

When 46-year-old Boucher went on maternity leave, she was assaulted and verbally and emotionally abused. She  suffered depression and anxiety and underwent weekly psychotherapy.

She remained off work following her maternity leave after successfully applying for both short-term and then long-term disability. It wasn’t until 40 months after she first left the workplace that her LTD insurer proposed her gradual return to work following a hernia surgery. Upon receiving this news, Black & MacDonald terminated Boucher citing her “absence of several months.” In fact, it had permanently filled her position seven months earlier.

Don’t promulgate policies and then ignore them. They form
contracts with your employees. Create policies you can live by

Boucher sued for wrongful dismissal damages and on the basis that she was discriminated against because of disability, contrary to the Human Rights Code.

Black & MacDonald argued that Boucher’s contract was “frustrated,” that she was not entitled to damages because her job “needed to be done,” that her position was “unique” and that it could not accommodate a temporary employee or contract position for such a long period, and indefinitely, while she was on modified duties. Employers can terminate for “frustration” after a long medical absence when the prognosis calls for an indefinite continued absence.

But the trial judge found there was no frustration of contract, despite her 33-month sick leave, and that she was entitled to additional damages beyond her wrongful dismissal claim, since her termination was a result of  disability. The judge also awarded a punitive cost award in the amount of $11,500 for Black & MacDonald’s misconduct. This decision was upheld on appeal.

This case contains lessons.

A prudent employer should document both the attempts to accommodate employees’ leaves and any discussions seeking avenues to permit the employee’s return. Black & MacDonald’s failure to document such efforts seriously weakened its defence.

Employers will be required to abide by their own policies. Black & MacDonald’s policy contemplated accommodating employees following their sick leave. Yet the company did the opposite, attracting additional cost consequences. Don’t promulgate policies and then ignore them. They form contracts with your employees. Create policies you can live by.

It is a myth that an employee cannot be terminated while on sick leave. But don’t do so without legal advice. While temporary disabilities will require accommodation, there are certain occasions where permanent disabilities will not. Also, if a termination was already being considered as a result of poor performance, employee misconduct, a company wide restructuring or frustration, an employee can be dismissed without running afoul of the Human Rights Code.

The test to prove a contract has been frustrated is a high one that strengthens with the passage of time. Employers are generally unsuccessful in arguing frustration unless many years have passed. Counsel can assist you in navigating what remains a murky area of the law.