I am often asked to explain the rules about employees who are off sick (including those who want to return to work). Unfortunately, the law in this area is unclear. There are far too many “interesting” questions – and we all know what it costs when your lawyer says “that is an interesting question”! Fortunately, two recent decisions – Boehringer Ingelheim (Canada) Ltd./Ltee v. Kerr, 2011 BCCA 266 and Pereira v. The Business Depot Ltd. cob Staples Business Depot, 2011 BCCA 361, clarify some of the fundamental rules.

Duty to inquire about the employee’s ability to return to work

In Boehringer Ingelheim (Canada) Ltd./Ltee v. Kerr, 2011 BCCA 266, the Court of Appeal confirmed that an employer must inquire about an employee on sick leave’s actual condition if the employee says he or she wants to return to work.

Lynda Kerr worked for Boehringer Ingelheim (Canada) Ltd. [“BICL”]. Her positions required her to drive and use computers. She had cataracts and was told in 1999 that she would have little or no sight within two years. She was going to resign, but BIC suggested she go on disability, which she did.

On November 25, 2002, Ms. Kerr made it clear that she wished to return to work. However, BICL made no effort to inquire about her condition. As it transpired, her prognosis was wrong and by July 2006, the Human Rights Tribunal found that she could meet her job’s demands with minimal restrictions. Ms. Kerr was eventually offered a return to work program in 2006. She rejected it because she had not participated in the plan and it would have required her to work during the human rights hearing. She resigned on September 20, 2006 during the hearing of her human rights complaint.

The Human Rights Tribunal upheld her complaint, finding that BICL had an obligation to inquire into Ms. Kerr’s condition and accommodate her as of November, 2002. It ordered BICL to pay her 3 years wages (at $90,000 per year) plus bonuses. It also awarded legal expenses and pension loss. A $30,000 award for hurt feelings was awarded because, “despite the fact that Ms. Kerr was a high performing employee, she was ultimately treated like a person with little or nothing to contribute to the workplace because she was disabled”. The total award was over $400,000.

BICL’s appeal was unsuccessful. The Court of Appeal affirmed the test for establishing a prima facie case of discrimination. All an employee has to prove is that: (1) he or she has (or is perceived as having) a disability; (2) he or she received adverse treatment in the workplace; and (3) his or her disability was a factor in the adverse treatment.

The disability need not be the sole or overriding factor in the adverse treatment; it merely needs to be a factor. Neither is there a requirement to show that the treatment was arbitrary or based on stereotypical assumptions.

BICL had argued that if an employee on disability leave requests a return to work, she must show that there is a material change in the job or the employee’s medical condition or an advance in technology that would enable the employee to work before the employer has any duty to accommodate.

The Court of Appeal rejected that approach and found that there was no such obligation on Ms. Kerr. As the Court stated:

…it is simply a common sense proposition: if a previously disabled employee says that they wish to return to work and the employer claims to have only information that suggests the employee cannot perform the jobs available, the employer can reasonably be expected to seek clarification as to the employee’s actual condition. To fail to do so and refuse to return the employee to work constitutes arbitrary conduct.

The size of the award reminds us that employers must determine the actual status of the employee’s health if he or she says they want to return to work. When clients ask whether they should make these inquiries, I ask them, “why wouldn’t you?” There are

usually no valid reasons not to. For most small and medium-sized employers, an award this size and the attendant legal fees would make a huge dent in their bottom line – or even put some out of business. Asking these questions is crucial. Remember – you only need one employee to have a potential human rights problem.

Employee on medical leave for drug addiction/depression did not abandon his job

Pereira v. The Business Depot Ltd. cob Staples Business Depot, 2011 BCCA 361.

Staples hired Paul Pereira as a sales manager for its Nanaimo store. In 2003, he went on LTD for his drug addiction and depression and moved to Kamloops to get treatment. On September 1, 2004 he told Staples he wanted to return to Nanaimo on completion of his treatment program on September 7. He communicated with Staples on September 10 and again on September 16. He returned to Nanaimo and sought a room and assistance from a mental health support group.

On September 24, the benefits insurer, Sun Life, terminated Pereira’s LTD benefits because he had neither returned to work nor contacted his rehab consultant. Staples decided that Pereira had abandoned his position because it had no way of contacting him. Staples sent Pereira a letter on September 28, confirming that he had abandoned his position, which reviewed the history of the file and Sun Life’s termination of the benefits.

The trial judge held that it was unreasonable for Staples, on an objective basis, to have concluded that Pereira had abandoned his position because he had not reported for work September 21. The Court of Appeal upheld this finding and provided a succinct summary of the law and the test for abandonment:

The parties agree that it is an implied term of every employment contract that an employee must attend work. They also agree that, when an employee fails to comply with that term, he or she will be taken to have abandoned (i.e., repudiated) the contract, entitling the employer to treat the contract as being at an end. Lastly, the parties agree that the trial judge properly stated the test for determining whether an employee had abandoned his or her employment, namely whether, viewing the circumstances objectively, would a reasonable person have understood from the employee’s words and actions, that he or she had abandoned the contract.

The Court upheld the trial judge’s decision in finding that Staples’ letter to Pereira was inaccurate and, furthermore, that Staples could have contacted Pereira by email. It was not satisfied on an objective basis that the facts known to Staples were “capable of supporting its conclusion that Mr. Pereira’s failure to report for work by September 21, 2004 (or September 28, 2004 at the latest) signified an intention on his part to abandon his employment.” Therefore, Staples had wrongfully dismissed Pereira.

Pereira’s good news ended there, since the Court of Appeal took away his damages award. Pereira had sued and settled with Sun Life. The trial judge didn’t allow Staples to deduct any portion of the Sun Life settlement from the wrongful dismissal award, letting Pereira keep both awards. The Court of Appeal disagreed, stating that Pereira had to prove what portion of the settlement related to the payment of LTD benefits. Having failed to do so, the entire settlement amount was deducted, leaving no damage award. The Court of Appeal assumed that deducting the LTD benefits was appropriate and refused to consider whether the payments should not have been deducted because they were paid under a third party insurance agreement. Had Pereira paid the LTD premiums, the Court might not have deducted the Sun Life settlement (although the terms of the policy might have let Sun Life claw back the damage award from Perira in any event).

In summary, employers must be very cautious in terminating employees on sick leave, regardless of whether or not they receive LTD. Pereira highlights the importance of ensuring that communication with employees is accurate – the Court was obviously displeased with Staples’ inaccurate portrayal of the facts. The costs of a mistake can be enormous, so prudent employers must be cautious. Managing disabilities in the workplace will become an ever increasing and costly problem for employers with the demise of mandatory retirement.

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    The content in the Michael Weiler Employment + Labour newsletters is for your general information and should not be taken as legal advice.  If you have a specific problem, please contact Mike Weiler to discuss your situation.