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When There is No Return to Work
An Ontario court has set a limit on employers’ return-to-work obligations

This summer’s ruling from the Ontario Superior Court of Justice in the case of Katz et al. v. Clarke has been widely reported in benefits management circles as (finally) providing a legal baseline for an employer’s duty to accommodate a worker’s desire to return to work.

But, frankly, as a non-lawyer, I see the court ruling as being so narrowly based on key facts in that specific case – particularly the fairly unusual fact that none of the medical evidence was disputed – that it will have little effect on most cases.

The headline from that case is basically that the Court ruled that the employment contract ended when it became clear that there was no reasonable prospect that the employee would ever be able to fulfil the basic functions of his job. (They relied on the long-accepted principle of “frustration of contact” – when one party can no longer hold up his end of the deal, the other party is no longer bound by it.)

The case dates back to 2008, when the employee suffered a serious knee injury (not related to his work). By 2013, he had been on short- and long-term disability for five years. At that point, the benefits provider cited undisputed medical information that the employee was totally disabled and therefore unable ever to return to work. The employer then invoked “frustration of contract” and took steps to terminate the employee, with six months’ notice.

Following this move, the employee did not submit any new or updated medical information, despite repeated requests from the employer. (I read this as the employee’s opportunity to present evidence that he would, in fact, one day be able to return to work, with accommodations.) Instead, the employee took legal action seeking human rights damages.

When the case first came to court, the motion judge ruled, essentially, that the employee’s stated desire to return to work, with or without evidence that this would ever be possible, was enough to trigger the employer’s duty to accommodate. The motion judge wrote that it was “arguable” that there had been a rush to judgement, and that the employer has not sufficiently consulted the employee on possible rehabilitation and accommodation. A trial on the issues was ordered.

The employer then went to the Superior Court of Justice and asked for a summary judgement motion dismissing to employee’s case. That court, citing undisputed evidence that the employee was totally disabled, and a complete lack of evidence to the contrary, granted the motion under the frustration of contract doctrine.

Now, this has been interpreted by many experts as meaning that an employee on disability has to do more that just express a desire to return to work in order to trigger the employer’s legal duties to accommodate. He or she must also demonstrate a realistic possibility of a successful return to work that includes the basic functions of the job.

I may be on shaky ground here – not a lawyer, remember – but in reading everything I could find on the case, here’s what I think it means. If, and only if, the employer has explored every possible route back to work with the employee, and has not been able to come up with a realistic plan, and the employee also cannot demonstrate any likelihood that he or she will ever be able to perform the basic functions of the job, the contract is frustrated. At this point the employer can terminate the employee (in line with employment law regarding notice and severance).

As employers and benefits managers, our goal in any case of short- or long-term disability is to get the employee back to work as quickly and as smoothly as possible. And that is, in fact, the outcome in a large majority of cases. Still, partly in line with what we have learned from this ruling, and partly because it’s just the right thing to do, I would suggest that employers review their return-to-work procedures with particular emphasis on the following:

  • Actively demonstrating good will. We can’t look at any return-to-work situation as a “case,” and much less as a “legal case.” We need to demonstrate that we are focused on the employee’s well-being and working toward a successful return.
  • Staying in contact. We need to stay in regular contact with employees on disability, even when it goes on for extended periods of time.
  • Keeping the conversation going. It is one thing to request medical information when it is required, but we should also enquire on a less formal level about the employee is feeling, how he or she is coping, whether anything can be done to help, and so on.
  • Providing information. It’s important to keep the employee in the loop with changes and developments on the job.
  • Actively exploring all options. We have to demonstrate an openness to ideas and possible options, and regularly ask if there have been any developments that alter our understanding of the situation.

Ending the employment relationship with a disabled employee is literally the last thing we ever want to do. But sometimes, as in the case we are discussing, it just ends by itself – despite our best efforts and through no real fault of either party.

If there is a topic that you would like me to write about, please email me at bill@penmore.com

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The Buzz Bits
Miscellaneous links to interesting benefits information

Canadian Leadership Council: What’s Cooking? (Lio Spagnuolo, Chairman of the Board of The Benefits Alliance Group, contributes his views on growing use of technology.)

Canadian Leadership Council: Partnering for Drug Plan Sustainability (Bill Zolis contributed as an invited expert.)

How to Manage Conflict in the Workplace

Ontario Employment Law Q&A

Alberta court rules against double-dipping in disability payments, lost wages

Can an employee be terminated while on disability?

Telemedicine expanding into public realm?

Community Ethics, Big City Expertise

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