Previously printed in the LexisNexis Labour Notes Newsletter.
In Katz et al. v. Clarke, 2019 ONSC 2188, the plaintiff had been hired by the defendant in 2000 as a front store manager. He had gone on sick leave due to a disability in July 2008 and had not returned to work after that. He had been disabled by two falls which had occurred outside the workplace and injured his knee and leg. As a result of the injuries, the plaintiff required a crutch and brace on a permanent basis. He received both short-term disability ("STD") and long-term disability ("LTD") benefits.
In 2013, the defendant's LTD insurer indicated that the plaintiff was "unable to perform the essential duties of his position and there was no reasonable expectation that he would be capable of performing them in the foreseeable future". The LTD insurer was clear that the plaintiff was totally disabled and unable to work "in any occupation at the time or for the foreseeable future".
On July 1, 2013, the defendant notified the plaintiff that his employment would terminate effective December 31, 2013 based on frustration of contract.
The plaintiff responded to the defendant's letter in September 2013 with the involvement of legal counsel. He indicated that he was working hard to get back to work. On receipt of this information, the defendant requested medical documentation about the plaintiff's ability to return to work and estimated return date on two different occasions. The plaintiff did not respond or provide any updated medical documentation. His employment was terminated.
The plaintiff commenced an action claiming wrongful dismissal damages and damages under Ontario's human rights legislation.
The defendant applied for summary judgment, relying on the medical documentation which demonstrated that the plaintiff was totally disabled and unable to return to work.
The defendant's application for summary judgment was unsuccessful. The motion judge found the issue of whether the defendant fulfilled its duty to accommodate required a trial because the plaintiff had expressed a desire to return to work.
The defendant appealed to the Ontario Divisional Court. The Court agreed with the defendant and set aside the motion judge's decision. It granted summary judgment in favour of the defendant and dismissed the plaintiff's action.
The Divisional Court confirmed that frustration of contract applies where there is evidence that the employee's disabling condition is permanent and has rendered performance of the employment contract impossible.
The Divisional Court also found that the motion judge erred when he found there was a genuine issue for trial based on the view that the duty to accommodate was triggered simply by the plaintiff's expressed desire to return to work. The Court confirmed that an employer's duty to accommodate is only triggered when an employee informs the employer not only of his or her wish to return to work but also provides evidence of his or her ability to return to work. In other words, an employee must communicate the ability, and not just the desire, to return to the job.
Moreover, the Divisional Court confirmed that an employer's duty to accommodate will end "where the employee is no longer able to fulfil the basic obligations associated with the employment relationship for the foreseeable future".
Employer takeaways
Employers often question when it is legally appropriate to dismiss an employee who is off on long-term disability leave. This case provides helpful guidance and language for employers engaging in that analysis.
Once an employer is in receipt of medical documentation which indicates the employee's condition is permanent and has rendered performance of the employment contract impossible, terminating the contract for frustration may be appropriate. If the employee indicates he or she wishes to return to work, that alone may not be enough to trigger the employer's duty to accommodate. Decisions regarding the employee's continued employment and potential accommodation are made on the basis of any updated medical information received.
Danielle Scorda practises employment and labour law at Roper Greyell LLP in Vancouver. Acting on behalf of union and non-union employers, Danielle regularly assists employers with preparing and monitoring workplace policies, as well as drafting and enforcing employment contracts. She advises and represents clients in grievance arbitrations and court proceedings and before administrative tribunals, including the B.C. Human Rights Tribunal and Workers' Compensation Board. For more information about Danielle's practice and Roper Greyell, please visit www.ropergreyell.com.
While every effort has been made to ensure accuracy in this article, you are urged to seek specific advice on matters of concern and not to rely solely on what is contained herein. The article is for general information purposes only and does not constitute legal advice.
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