Few cases consider the proposition that one possibly contemplated remedy may be the continuation of the employment relationship without active day to day employment. Many pension plans allow for credits to the employee while on disability, as also is the case with employment benefit policies. In addition, the insurance coverage to a disabled employee, who has recovered from his medical impairment and who has been terminated, will be denied continuing coverage for a future disability, save the modest recurrent protected period.
This may raise also the issue of a reinstatement remedy without the necessity of active employment, but simply to order that the employment relationship remains intact for purposes of such benefits. A foundation in the form of an employer policy document or a pension plan with such terms would likely be required to support such an argument.
This issue was raised in a human rights context in Hargrove v Phoenix Glass (Bernd Walter), a 2012 decision of the British Columbia Human Rights Tribunal in which the employer moved to dismiss on the submission of no reasonable prospect of success under section 27-1-c of the Code.
The complainant, due to a vision disability, was unable to work and had been absent from active employment from April 2007 until his eventual dismissal in September of 2011. It was accepted that his medical impairment was permanent and he would be unlikely to return to work. He continued to receive LTD benefits.
The employer also continued to provide MSP and extended health care premiums. The employer alleged that it offered to maintain his employment status until his 65th birthdate to maintain his group disability benefits, if the complainant paid the premiums, an offer which was declined and on which the evidence was disputed.
The complainant argued that it was not a BFOR that he report for active employment.
The claim was based on two arguments, the first being based on the threat of the termination of the MSP and health premiums, which was later rescinded and secondly, based on the termination of his employment.
The first argument was a non-starter, as the employer had withdrawn its threat and had continued the benefits.
As to the second submission, an issue arose as to whether continued active employment was a pre-condition to the entitlement to continued disability payments. The determination of the argument was delayed pending the response from the employer to this issue, one which ultimately had shown that continued active employment was not such a prerequisite to continued disability benefits.
The motion was successful and the claim was dismissed. It is clear, however, that the tribunal was prepared to consider argument on the issue of reinstatement to non-active employment if this was factually required to allow for disability coverage.
The tribunal did, however, to the point at issue, note that certain disability plans require employment status and observed arbitral authority for the conclusion that active employment, in such a circumstance, would not be required for reinstatement:
I am aware that some disability plans only cover workers while they remain employees, however as stated in West Fraser Mills Ltd. (Skeena Sawmill Division) v. United Steelworkers of America, Local I-1937, 2012 BCCA 50 (CanLII), 2012 BCCA 50.
[I]t seems clear that where such a plan is provided, it is not open to the employer to dismiss an employee for non-culpable absenteeism. The collective agreement in such cases militates against a finding that the ability to continue working is a bona fide occupational requirement, since it contemplates that workers on long-term disability will continue to be employees. (para. 78)
One case referenced by the British Columbia Court of Appeal in Fraser Mills was a British Columbia Human Rights Tribunal decision of MacRae v Interferon. In this case, the tribunal agreed that the ability to provide work is usually a BFOR.
MacRae was terminated for non-culpable absenteeism due to a serious medical issue eleven days before an agreement was reached with the union that allowed employees on lay-off entitlement to a substantial severance payment.
The Tribunal concluded that such a decision to terminate had the direct impact of causing the loss of such a right of severance pay and hence was a basis to show an “extraneous motive” which thus may establish a prohibited adverse discriminatory intent.
If such a decision was motivated by an intent to deprive disabled persons a severance payment that was available to all other employees, such would lead to a finding of discrimination.
The employer had closed its mill operation in Squamish with no likely possibility of re-opening it. It was not providing employment or compensation, including health and welfare benefits to any of the Squamish crew at the date of termination. For this reason, it was argued that MacRae was treated in the same manner as his colleagues.
The Tribunal found, however, where a plant shutdown was in the offing, that the ability to perform work was not a BFOR and that the complainant’s employment was terminated to prevent him from receiving severance pay and was hence a violation of the Code.
The British Columbia Court of Appeal in the concurring reasons of Mr. Justice Groberman specifically stated that he was not endorsing the decision in MacRae. The reasons of the Chief Justice did not speak to this issue.
Groberman J.A. did agree that it was arguable in this situation of a shutdown, that the employee need not have the capacity to work. This issue remained undecided was his view:
It may well be that a more detailed analysis of the collective agreement than was performed in MacRae would conclude that, notwithstanding a contemplated shutdown, the ability to return to work should be considered to be a bona fide occupational requirement of continued employment.
This Court has not, to date, considered the questions addressed in MacRae and the arbitral decisions that follow it. The arbitrator in this case did not analyze those questions in any detail, nor have they been argued on this appeal. As the issues are complex and the answers are far from clear, I would not want our dismissal of this appeal to be seen as an endorsement of the MacRae analysis adopted by the arbitrator in this case.
Such an order was made in the decision of the Yukon Human Rights Board of Adjudication in its December 2008 decision of Hayes v Yukon College 67 CHRR D/408 (Evans, Tkachuk and Riseborough) which found liability against the respondent due to its adverse treatment of the applicant who suffered from a debilitating liver disease. An order of reinstatement was made even when the applicant was unable to return to active employment.
The recent decision of Pharma Plus Drugmarts Ltd. v United Food & Commercial Workers Canada, Local 175 (William Marcotte) released in June of 2013 provides an excellent review of arbitral case law on this subject.
On the facts of this case, the employer terminated 29 employees, all of whom were on LTD benefits which resulted in five individual rights grievances and a policy grievance.
All employees were given notice as required by the ESA and paid the statutory severance sums. Apart from LTD benefits, which were not adversely effected, all other benefits terminated at the end of the ESA notice period.
One argument put forward by the union was that the interpretation of the collective agreement allowed for continuation of benefits during the period of the disability and hence the termination denied such benefits such as group life, accidental death and dismemberment and the prescription drug plan. Reinstatement should hence follow to allow for the continuation of such benefits became the submission.
The essential issue to be determined was whether the collective agreement contemplated the continuation of benefits beyond the basic LTD and hence precluded the company from termination due to innocent absenteeism.
To this end, arbitrator Marcotte examined many precedent cases which were factually driven and dependent on the interpretation made of the particular collective agreement in each instance.
One such decision was the 1982 award of Re DeHaviland Aircraft and UAW local 112  OLAA No. 123, 9 LAC (3d) 271 (Rayner) which was later referenced in another cited case of Re Harris Rebar and BSIOW local 734  OLAA No.107, 35 LAC (3d) 348 (Dunn) in which arbitrator Dunn stated:
It has been held that the existence of a disability plan under a collective agreement may limit the right of any employer to discharge a disabled employee, if the effect of such discharge deprives that employee of long-term disability and other benefits. The termination may constitute a breach of the employer’s obligation to provide the benefits….
…the termination of an employee’s continuous service and seniority … can not be read as termination of the total continuing employee [sic] relationship…
It [i.e., loss of continuous service and seniority as added by arbitrator Marcotte] means something less than that, or the provision of section 14[A] to provide L.T.D. benefits until a disabled “employee” recovers or reaches 65 years of age would be an insecure benefit indeed. By the same token, the general right to terminate an employee because of innocent absenteeism is modified by the provision that contemplates continued benefits that arise from the employee relationship.
Returning to the decision of Arbitrator Marcotte, he concluded that these past two cases that the collective agreement may limit the right of the employer to terminate for innocent absenteeism:
Relevant for our purposes, the Harris Rebar case suggests, as did the DeHavilland case, the provisions of the collective agreement which provide benefits to employees if absent for an extended period of time fetters the employer’s right to discharge the employee for reason of innocent absenteeism. Further, and as did arbitrator Rayner in DeHavilland, arbitrator Dunn found the employee was eligible for employment status, notwithstanding the loss of continuous service and seniority in the Harris Rebar case, and which status allowed the employee to continue to receive, in both cases, long-term disability benefits and specifically in the Harris Rebar case, health and drug benefits, albeit there is no reference to the period of time for such entitlement, but referred to by arbitrator Rayner in DeHavilland as entitlement during the “currency” of the benefits under the collective agreement.
The distinction was noted between benefits which arise directly from the illness or injury and those which are tied simply to employment. To argue that termination is not allowed due to a loss of benefits, such claim for benefits must be related to the former.
Arbitrator Marcotte summarized the arbitral jurisprudence as follows:
The above review of the submitted cases indicates that an employer may properly terminate the employment of an employee on the grounds of innocent absenteeism. It may also properly do so where the employee is in receipt of LTD benefits provided that the termination of employment does not interfere with the employee’s continued entitlement to LTD benefits. In the instant case, the employees who were terminated on the grounds of innocent absenteeism continue to be entitled to long-term disability benefits. Therefore, I do not find they were improperly terminated from employment.
The analysis does not, however, end here as there may be other benefits to which the employee on LTD may be entitled which a termination would disentitle:
However, it may be that entitlement to other insured benefits, for example extended health case or dental plans, properly prohibits discharge of employees on LTD for reason of innocent absenteeism. In that regard, in Re Port Colborne, supra, for example, arbitrator O’Shea found the employer was liable for the grievor’s dental expenses “…until such time as the grievor’s right to L.T.D. benefits has been vested and the company exercises its right to properly dismiss the grievance.” (para. 42). In the DeHavilland case, arbitrator Rayner found the grievor was entitled to sickness and accident benefits, “during the currency of the protection afforded” by that programme of benefits. That is, the jurisprudence seems to indicate that continued entitlement to benefits other than disability may prohibit dismissal for innocent absenteeism during the period of time when an employee continues to be eligible for those non-disability benefits. In contrast, the Atomic Energy and Maple Leaf Meats awards, both of which expressly dealt with benefits other than disability, concluded that the simple existence of such plans did not prohibit an employer from properly dismissing employees on LTD for reason of innocent absenteeism.
Essentially, this involves a review of the collective agreement to determine if additional benefits were intended to be provided to the disabled employee during the period of LTD eligibility, which, in this instance, were found to be lacking and hence the termination decision was upheld.
The Ontario Superior Court in the 2007 decision of Mr. Justice Perell of Dragone v Riva Plumbing considered the motion made by the plaintiff for declaratory relief that the employment relationship remained in tact to allow the plaintiff to claim coverage under medical, drug and dental insurance plans.
A dispute had arisen between the parties as to whether the employment relationship had ended due to the plaintiff`s resignation and hence the case is not demonstrative of a declaration to reinstate the plaintiff back to employment following a direct termination.
On this issue, the court found that the evidence demonstrated that there was no evidence of a clear and unequivocal intention to resign communicated by the plaintiff.
The plaintiff was not in active employment and in receipt of long term disability benefits when the application was made 14 months after her last active day of employment.
A declaration that the plaintiff remained employed was granted, in addition to an order that the employer continue to maintain medical, dental and drug insurance plans.
The Court also stated, albeit obiter, and without a definitive conclusion, that once the employer was made aware of the plaintiff`s medical disability of metastasized breast cancer, which preceded the evidentiary dispute surrounding her alleged resignation, any attempt made by it to amend the benefits coverage would have arguably been contrary to the Human Rights Code:
Employers may change terms of employment with reasonable notice, but that has not yet occurred in the case at bar. Moreover, Riva Plumbing is confronted with a problem if it were now to give Ms. Dragone reasonable notice of a change of employment because it would be arguable that such a change would violate s. 5 of Ontario’s Human Rights Code, R.S.O. 1990, c. H.19, which provides, amongst other things that every person has a right to equal treatment with respect to employment without discrimination because of disability. Section 17(2) of the Code provides that the needs of a person with a handicap must be accommodated unless to do so would cause the employer undue hardship “considering the cost, outside sources of funding, if any, and health and safety requirements, if any.”
 Ms. Dragone continues to be an employee. She is currently on long-term disability leave because of illness. It would appear to be arguable that it would be illegal for Riva Plumbing to change just Ms. Dragone’s terms of employment because of her disability. However, I do not need to decide what might be the consequences of what Riva Plumbing might do in the future; for present purposes, it is enough for me to decide that Ms. Dragone has not received reasonable notice that Riva Plumbing has changed her employee health benefits nor has Riva Plumbing given notice of an intention to end the employment relationship. Since no notice has been given, and perhaps cannot lawfully be given, I conclude that Riva Plumbing’s third argument fails.
There is much logic in these comments. There is every likelihood that a civil court would grant a similar order at the very least for the period of reasonable notice and where the evidence will support a connection of such benefits to long term disability insurance, for the period of disability.