In McLeod v. Frontier Sales, 2018 ONSC 1866, the Divisional Court of Ontario dismissed the appeal by an employer who provided working notice to an employee on disability leave and in turn, sought to reduce the amount of reasonable notice that it was required to provide. The case confirms that working notice provided during a period of time when an employee is on disability leave would not reduce the overall damages that the employee would be entitled to wrongful termination.
In the case, the employee had been employed for a period of 17 years when the employer advised all employees that it would be ceasing operations in 6 months’ time and terminating all employees. At the time of the notice, the employee was on an unpaid leave of absence recovering from injuries suffered in a non-work related motor vehicle accident. The employee returned to work just a few days prior to the employer closing its doors.
The Court’s Decision
At a summary judgment motion to determine the reasonable notice required, the court held that when the notice of termination was received by the employee, he was physically incapable of working and he was entitled to damages representing the salary he would have earned had he worked during the notice period. Relying on the British Columbia decision, Sylvester v. British Columbia, 1997 CanLII 353 (SCC), “the fact that he could not work was irrelevant to the assessment of these damages.”
Here the court drew a distinction between an employee on disability who is receiving LTD or STD payments from that of an employee on disability who is not receiving any remuneration from the employer or a benefits provider. In the latter, the employee was incapable of returning to work so as to earn a salary as part of the working notice would not be obtaining a double recovery by collecting LTD or STD during the notice period. Accordingly, the time where the employee is on unpaid leave the reasonable notice would only begin to run as at the time the employee was again able to work.
In this case, the court held that the employee was entitled to 12 months’ notice, largely in part to his lengthy work history and the fact that the employee was an unskilled labourer who may find it more difficult to secure alternative employment. That being said, the employee secured work after only 3 months when he was medically able to return to work, so ultimately, the employee received a windfall with reasonable notice that the court had sought to avoid in the first place with its analysis of the unpaid disability period. Had the employer provided the employee with working notice to the employee when he returned to work then the employer would have only been liable for 3 months of damages, rather than the 12 months awarded.
Based on this decision, if an employee is on a leave of absence without pay and medically unable to work, then employers need to be cognisant that notice only commences once the employee returns to work. This may not apply in every circumstance, but employers need to be aware that a leave of absence for a disability may change the requirements for reasonable notice.
Scott Chambers is an Employment and Human Resources lawyers at Doak Shirreff Lawyers LLP. Scott can be reached at [email protected] or 250-979-2527. You can also follow Scott on Twitter at @DSEmploymentLaw and on LinkedIn at www.linkedin.com/in/scottdchambers.