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Employment Law and Disability Insurance
Ava Kanner David Cherepacha Davies Howe Partners LLP
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Employment Law: Terminating an Employee
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Termination of Employment
• Sources: Contract Employment Standards Act (“ESA”) Common law
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Termination of Employment
Employment Standards Act • Must give notice of termination or pay in
lieu thereof • Notice period: 1 week for every year, up to
8 weeks • No notice if an exception applies (e.g. wilful
misconduct, refusing reasonable alternative work, reaching retirement age)
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Termination of Employment
Employment Standards Act • Severance of 1 week for every year of
employment if: Employed 5 or more years, and Employer has 50 or more employees or payroll
of $2.5 million or more To a maximum of 26 weeks
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Termination of Employment
Common Law • Notice or pay in lieu due at common law, unless
contract says otherwise • Length of notice factors include: Length of employment Nature of position Age Prospect of finding alternative work
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Termination of Employment
Common Law • If there is just cause for termination, no
common law notice required
• “Just cause” not necessarily same as “wilful misconduct, disobedience or wilful neglect of duty” under ESA
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Employees with Injury or Illness
Human Rights Code • Discriminatory to terminate employee
because of a disability (even with notice) • “Disability” is broadly defined • Employer must accommodate up to point of
“undue hardship”
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Employees with Injury or Illness
• Accommodation: modify terms of employment or duties to assist employee in overcoming limitations
• Factors for undue hardship: Financial costs Size of the employer’s operations Risks to health and safety Morale of other employees Impact of accommodation measures on other
employees’ rights
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• Can terminate employee due to disability under Human Rights Code only if: Employee is incapable of performing essential
duties, and Employee’s needs cannot be accommodated
without undue hardship
Employees with Injury or Illness
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• Common law: cannot terminate for injury or illness without notice, unless it rises to level of frustrating employment contract
• Employer must hold job until contract frustrated
• Frustration: contractual obligation becomes incapable of being performed, making contract fundamentally different from what was originally contemplated
Frustration of Contract
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Impact of frustration on Notice • ESA: employer not exempt from notice
requirement
• No common law notice
Frustration of Contract
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Frustration of Contract
• Duong v. Linamar Corp., 2010 ONSC 3159 Employee injured at work and was diagnosed
with fibromyalgia LTD benefits ceased after 30 months Employment terminated Contract frustrated: • employee was totally disabled •no reasonable, foreseeable date for his return
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Frustration of Contract
• Naccarato v. Costco Wholesale Canada Ltd., 2010 ONSC 2651 Employee began receiving LTD benefits in 2002 Terminated in 2006 - paid ESA minimums Contract not frustrated: •no known return date • lack of evidence of no reasonable likelihood of return
to work in reasonably foreseeable future •no evidence of hardship or disruption to business by
holding position
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Frustration of Contract
• Altman v. Steve's Music Store Inc., 2011 ONSC 1480 Employee of 30 years diagnosed with lung
cancer Terminated following 8 months of reduced
hours and 6 months of medical leave Health deteriorated after termination Contract not frustrated: • assessment of health as of date of dismissal
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Frustration of Contract
• Altman v. Steve's Music Store Inc., 2011 ONSC 1480 Factors for whether contract is frustrated: •terms of the contract •length of past employment •how long employment was likely to last in the
absence of illness •nature of the employment •length of illness or injury •prospect of recovery
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Errors in Administering Group Disability Policies
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Disability Insurance
Case 1 • Employee worked as dispatcher for coach
line • Employee requested enrolment in group
LTD plan • Employer allegedly failed to enroll employee
or deduct benefits • Employee became ill and made LTD claim,
which was denied
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Disability Insurance
Case 2 • Employee worked as security officer • Employee left work due to illness • Through an oversight, employer had never
enrolled employee in group LTD plan • Employer attempted to enroll employee after
claim for LTD benefits • LTD benefits denied
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Disability Insurance
Case 3 • Employee worked as welder and
participated in a work sharing program • Employee became ill • LTD claim denied on basis that policy
required employee work at least 25 hours per week
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Disability Insurance
Case 4 • Employee worked as office services clerk • Employee stopped working due to work-
related stress • Employer allegedly told employee she had
no LTD coverage • As a result, employee filed LTD claim 8
months late and claim was denied
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Thank You
David Cherepacha Davies Howe Partners
416.263.4506
[email protected] www.davieshowe.com
Ava Kanner Davies Howe Partners
416.263.4503
[email protected] www.davieshowe.com