Disability Management Compliance. David Corry, Partner Calgary office. Loretta Bouwmeester, Associate Calgary office

Transcription

1 Disability Management Compliance by David Corry, Partner Calgary office Loretta Bouwmeester, Associate Calgary office Chris Sabat, Associate Calgary office Employment and Labour Law Seminar i -

2 TABLE OF CONTENTS INTRODUCTION...1 COMMON LAW...2 Innocent Absenteeism...4 Medical Versus Permanent Disability...7 DISABILITY BENEFITS AND TERMINATION OF EMPLOYMENT WORKERS COMPENSATION...8 OTHER BENEFITS...9 Deductibility of Workers Compensation Payments...10 Deductibility of Disability Benefits...10 HUMAN RIGHTS LEGISLATION...14 THE DUTY TO ACCOMMODATE...16 UNION EMPLOYEES...26 Frustration of Contract in a Unionized Setting...27 Excessive Absenteeism in a Unionized Setting...28 Impact of Human Rights Legislation in a Unionized Setting...28 Attendance Management Programs in a Unionized Setting...29 Mental Health Disability in a Unionized Setting...31 SUMMARY AND PRACTICAL CONSIDERATIONS...32 FITNESS TO RESUME EMPLOYMENT UNION AND NON-UNION SETTING...34 MISUSE OF SICK LEAVE AND SURVEILLANCE EVIDENCE...35 DOCTORS CERTIFICATES AND MEDICALS PRIVACY ISSUES...37 VIOLATION OF PRIVACY CASES HANDLING OF MEDICAL INFORMATION...40 PIPEDA Case Summary # PIPEDA Case Summary # PIPEDA Case Summary # PIPEDA Case Summary # NON-VIOLATION OF PRIVACY CASES...44 PIPEDA Case Summary # PIPEDA Case Summary # and # PIPEDA Case Summary # SUMMARY OF PRIVACY CONSIDERATIONS...46 CONCLUSION...47 Employment and Labour Law Seminar i -

3 INTRODUCTION The law pertaining to sick and disabled employees is complex and presents a number of significant challenges for an employer. In dealing with an ill or disabled employee and the business interests of a company, employers must consider the common law, human rights, privacy and other applicable legislation, in addition to the employee's entitlement to disability benefits. Where employees are subject to a collective agreement, the specific terms of the agreement must be considered. Overlooking even one issue could have significant legal consequences for an employer. Generally speaking, under the common law, 1 an ill or disabled employee may be terminated in much the same way as a healthy employee; that is, upon provision of reasonable notice or pay in lieu of notice. Illness or disability is not usually considered as cause justifying summary dismissal. There are instances, however, where the illness or disability of an employee is of such nature or duration that the courts have held that the employment contract is frustrated; meaning that through the fault of neither party, the contract cannot be performed. In that case, the employer need not provide notice or severance. Where frustration of the employment contract has not occurred, and reasonable notice must be provided to the sick and disabled employee who is to be terminated, interesting issues arise as to whether the reasonable notice period is suspended for the period of disability. Where severance is provided to such an employee, is an employer entitled to deduct sickness or illness benefits from the amount of severance otherwise payable? Given that most employers provide sickness or illness benefits and disability insurance, an employer must be careful to ensure that the disability coverage is not adversely affected upon termination of the disabled employee. The consequences of improperly terminating an employee's entitlement to disability benefits can have a very negative financial impact on an employer; the result being that the employer may have to itself pay out an amount equivalent to that which the employee would have been entitled to receive from the insurer. This obligation could last until the employee reaches 65 years of age, as this is when eligibility typically ends. Whether or not an employment relationship is governed by a collective agreement, it is generally unfair to discipline workers who are absent because of illness. However, in certain circumstances, union employees who are unable to perform their jobs due to illness or disability may be discharged on the basis that the employer is not receiving the work it bargained for. Under the common law, in order to justify dismissal on the grounds of excessive absenteeism, an employer must prove that an employee has not been able to perform his or her job duties or responsibilities because of the excessive absence and that the situation is not likely to improve in the future. Arbitrators, when dealing with this issue, have established a number of factors to be examined. These factors will be discussed in the section dealing with the unionized environment. Other issues that confront employers of unionized employees are the impact of sick leave and disability benefits on the termination of the employee, the effects of human rights legislation and the jurisdiction of the courts, to name a few. Regardless of whether the employment relationship is governed by the common law or subject to collective bargaining, an employer must consider the effects of human rights legislation on the employment relationship. Under both the common law and collective bargaining agreements, employers are subject to this legislation. As such, human rights legislation must be considered in both contexts before an employer takes any action concerning a disabled employee. 1 Legal duties on employers as a result of previous decisions made by judges, rather than duties imposed by legislation. Employment and Labour Law Seminar Page 1

4 Pursuant to human rights legislation, the termination of a disabled employee on the grounds of mental or physical disability is prima facie discriminatory. As such, the employer may have a duty to accommodate the return to work of a sick or disabled employee. The duty to accommodate will be discussed in detail. COMMON LAW Under the common law an employer can terminate an employment contract in one of three ways: Summarily for "just cause" Upon the "provision of reasonable notice of termination" when there is no cause By providing sufficient "compensation in lieu of reasonable notice" where there is no just cause for termination 1. "Just Cause" "Just cause" is very difficult to establish at law. In a wrongful dismissal case, progressive discipline or a single, sufficiently serious incident must occur before this basis for dismissal will be upheld by a court. This is especially the case when the employee is suffering from a legitimate illness or disability. In some instances, illness or disability may excuse misconduct. Even though this may be very frustrating for the employer whose business interests may have suffered as a result of an ill or disabled employee's actions, it is the reality at law in Canada. As conduct that would otherwise amount to "just cause" may be excused because of illness or disability, the employer must be very careful when terminating an employee that it knows, or ought to know, is disabled or ill. The types of conduct which, in such circumstances, have been excused due to illness by the courts and found not to amount to "just cause, have included: Unexplained absences from work 2 Inadequately performing one's duties 3 Threatening to kill oneself and another person 4 General neglect of duty 5 While stress-related illness is no doubt often genuine, it is not unknown for employers to receive a "doctor's note" from an individual whose conduct or performance has been called into question, stating that the employee is experiencing stress and needs some time off. This requires the employer to consider other obligations owed to employees, such as duties under the applicable human rights legislation. 2 Rivest v. Canfarge Ltd., [1977] A.J. No. 418, [1977] 4 W.W.R. 515 (Alta. S.C.(T.D.)). 3 Yeager v. R.J. Hastings Agencies Ltd., [1984] B.C.J. No (S.C.). 4 Redfearn v. Elkford (District), [1998] B.C.J. No. 419 (S.C.), affd [2000] B.C.J. No (C.A.). 5 Casey v. General Inc. Ltd., [1988] N.J. No. 382 (Nfld. S.C.). Employment and Labour Law Seminar Page 2

5 For instance, section 13 of the British Columbia Human Rights Code, 6 provides: Discrimination in employment 13(1) A person must not (a) (b) refuse to employ or refuse to continue to employ a person, or discriminate against a person regarding employment or any term or condition of employment because of the race, colour, ancestry, place of origin, political belief, religion, marital status, family status, physical or mental disability, sex, sexual orientation or age of that person or because that person has been convicted of a criminal or summary conviction offence that is unrelated to the employment or to the intended employment of that person. (2) An employment agency must not refuse to refer a person for employment for any reason mentioned in subsection (1). (3) Subsection (1) does not apply (a) (b) as it relates to age, to a bona fide scheme based on seniority, or as it relates to marital status, physical or mental disability, sex or age, to the operation of a bona fide retirement, superannuation or pension plan or to a bona fide group or employee insurance plan, whether or not the plan is the subject of a contract of insurance between an insurer and an employer. (4) Subsections (1) and (2) do not apply with respect to a refusal, limitation, specification or preference based on a bona fide occupational requirement. Each jurisdiction in Canada has substantially similar human rights protections for employees who are ill or suffering from a disability, or who are perceived to be so by their employers. 7 Given the heavy onus on an employer to establish just cause, even where performance is an issue, employers will often terminate employees and simply provide them with either reasonable notice of termination or compensation in lieu of notice. When compensation in lieu of notice is provided, it is first offered on a without prejudice basis. Common law notice is often higher than statutory notice. When an amount is offered that is higher than the statutory notice set out in the applicable employment standards legislation, an employer may legitimately request that a release be executed in exchange. To avoid a successful human rights complaint, the execution of a comprehensive release should be a condition of payment. 8 6 R.S.B.C 1996, c Human Rights Act, R.S.Y. 2002, c. 116 (Yukon); Human Rights Act, R.S.A. 2000, c. A25.5 (Alberta); Human Rights Code, S.M , c. 45 (C.C.S.M., c. H175) (Manitoba); Human Rights Act, R.S.N.B. 1973, c. H-11 (New Brunswick); Human Rights Act, R.S.N.S. 1989, c. 214 (Nova Scotia); Human Rights Code, R.S.N.L. 1990, c. H-14 (Newfoundland and Labrador); Human Rights Act, S.N.W.T. 2002, c. 18 (Northwest Territories); Saskatchewan Human Rights Code, S.S. 1979, c. S-24.1; Human Rights Code, R.S.O. 1990, c. H.19 (Ontario); Human Rights Act, S. Nu. 2003, c. 12 (Nunavut); Human Rights Act, R.S.P.E.I. 1988, c. H-12 (Prince Edward Island); Human Rights Act, R.S.C. 1985, c. H-6 (Canada). 8 Chow v. Mobil Oil Canada, [1999] A.J. No. 949, 72 Alta. L.R. (3d) 108, (Q.B.). Employment and Labour Law Seminar Page 3

6 The leading and most frequently cited case in the area of notice is Bardal v. Globe & Mail Ltd. 9 In that case, the Ontario court held that the amount of reasonable notice is a question of fact to be decided with reference to each particular case having regard to the character of employment, the length of service, the age of the employee and the availability of similar employment (in the determination of which, the experience, training and qualifications of the employee are taken into account). This list is not exhaustive. The court will assess the circumstances of each case. In assessing the period of reasonable notice, the court will look at both the circumstances from the point of view of the employee and from the point of view of the employer. This approach was affirmed by the Supreme Court of Canada in Honda Canada Inc. v. Keays [1960] O.J. No. 149, 24 D.L.R. (2d) 140 (H.C.J.). 10 [2008] S.C.J. No. 40, 2008 SCC 39. Employment and Labour Law Seminar Page 4

7 Subject to human rights legislation and any specific contract or collective agreement, the employer's right to terminate applies just as much to a sick or disabled employee as it does to an able-bodied one. Sickness or disability does not alter the common law rule. The question becomes whether the employer can terminate for just cause or whether a sick or disabled employee must be given reasonable notice or payment in lieu of notice. Innocent Absenteeism When reviewing the relevant case law in this area it quickly becomes apparent that "just cause" language does not fit the scenario of innocent absenteeism. Generally, it is difficult to see how an employee who becomes disabled is guilty of a wilful act to which blame should attach. This was recognized by the British Columbia Supreme Court in Yeager v. R.J. Hastings Agencies Ltd. 11 In that case, the court emphasized that an essential characteristic of conduct that justified summary dismissal without notice is the wilful nature of the conduct. Hence, absence from work owing to illness should not be recognized as just cause for dismissal as there is no wilful misconduct. The Court stated at para. 78: On all of the evidence, I find that as a result of the mental illness from which he was suffering, the plaintiff was incapable of appreciating that there was a steady decline in his ability to perform his job adequately from 1979 onward, and that accordingly such "misconduct" as resulted from that illness in the last few months before his dismissal was not willful in nature. That being so, it could not give rise to cause for summary dismissal. 12 Innocent absenteeism will therefore not allow an employer to dismiss an employee without provision of reasonable notice or pay in lieu of notice. As no fault is attributed to the employee, there can be no cause for summary dismissal. Consequently, unless the contract has been frustrated, an employer must provide reasonable notice or pay in lieu of notice to a disabled employee whose employment is terminated without cause. Frustration of the employment contract will not require the provision of reasonable notice or pay in lieu of notice as is established in Bishop v. Carleton Co-operative Ltd. 13 and McGarry v. Bosco Homes Edmonton. 14 While innocent absenteeism will not allow an employer to dismiss without provision of reasonable notice or pay in lieu thereof, the situation is different where an employee becomes permanently disabled. An employee's permanent illness has been held to frustrate the contract of employment and the obligations of both parties are said to be discharged or terminated without penalty. No notice or payment need be provided. 15 In the employment scenario, the employer's right to terminate the contract because of frustration is justified on the basis that the employee's incapacity due to permanent illness or disability undermines the very objective of the contract of employment. In other words, the mutuality of performance necessary for the existence of the contract has ceased. The parties can no longer both perform their obligations. 11 [1984] B.C.J. No (S.C.). 12 Ibid. 13 [1996] N.B.J. No. 171, 176 N.B.R. (2d) 206, 21 C.C.E.L. (2d) 1 (C.A.). 14 [1992] A.J. No. 1202, 42 C.C.E.L. 198 (Q.B.). 15 Dartmouth Ferry Commission v. Marks Estate, [1904] S.C.J. No. 4, 34 S.C.R See also Marshall v. Harland & Wolff Ltd., [1972] 2 All E.R. 715 (N.I.R.C.); Simpson v. Co-Operators, [1994] A.J. No. 703, [1995] 1 W.W.R. 591 (Q.B.), affd [1998] A.J. No. 311, [1999] 4 W.W.R. 83 (C.A.); Wightman Estate v Canada Inc., [2005] B.C.J. No (S.C.), affd [2006] B.C.J. No. 2164, [2006] 11 W.W.R. 577 (C.A.). Employment and Labour Law Seminar Page 5

8 The decision of the Supreme Court of Canada in Dartmouth Ferry Commission v. Marks Estate 16 is the leading case in the area. In that case, the captain of a ferry steamer became ill after nine months of employment and eventually died of cancer. His widow sued the company for seven months' wages, claiming that since the company had not given the captain one month's notice as provided under his contract, the contract had never been terminated. The widow's claim was not allowed by the Court. Writing for the majority of the Court, Justice Davies said: 17 It is quite true that the deceased and his medical adviser both hoped and believed, at first, that his illness was only temporary, but their belief or hope cannot alter the truth subsequently disclosed. That truth is now admitted and is beyond controversy that on and after the l5th of December, when Captain Marks ceased working, he was permanently disabled from doing his work he had contracted to do. In law, this disablement is termed the act of God. It not only, in my opinion, justified the Commission in formally determining the contract, if they had chosen to take that course, but by rendering it impossible that he could ever afterwards discharge his duties under his contract, the permanent disablement determined and ended the contract. The consideration which moved the Commission to promise wages was gone. The mutuality necessary for longer continuance of the contract ceased. Captain Marks could not be sued by the Commission for non-performance by him of his promise to serve them in the capacity of captain of one of their steamers. He could plead to any such action, disablement or incapacity by the act of God. The same result would have followed if he had become insane or had lost the physical use of his limbs. The fact of the disablement arising from occult internal troubles cannot make any difference. There is no analogy between such permanent disablement and temporary sickness. The law permits the latter on the ground of common humanity to be offered as an excuse for not discharging duty temporarily and suffers the disabled party to recover wages for the time he is temporarily away from his work. But while releasing the permanently disabled workman from damages for the non-performance of his contract, it does not permit him to recover wages without doing work. In Bohun v. Similco Mines Ltd., 18 a B.C. court doubted the application of Dartmouth Ferry Commission v. Marks Estate 19 to the modern employment relationship that contains short and long-term disability provisions. However, the Nova Scotia Appeal Division affirmed Dartmouth Ferry as valid law in Canada in Parks v. Atlantic Provinces Special Education Authority. 20 In essence it did so again in the case of Ulnooweg Development Group Inc. v. Wilmot 21, which specifically addressed the issue of post-termination (subsequent) evidence in terms of assessing whether or not a disability was permanent in the business sense. With respect to this issue, an employer may point to subsequent evidence to support its position that the disability (in the business sense) was permanent at the time of termination and was therefore frustrated. However an employee will not be able to rely on this type of evidence in an effort to show that the 16 Dartmouth Ferry Commission v. Marks Estate, [1904] S.C.J. No. 4, 34 S.C.R See also Marshall v. Harland & Wolff Ltd., [1972] 2 All E.R. 715 (N.I.R.C.); Simpson v. Co-Operators, [1994] A.J. No. 703, [1995] 1 W.W.R. 591 (Q.B.), affd [1998] A.J. No. 311, [1999] 4 W.W.R. 83 (C.A.); Wightman Estate v Canada Inc., [2005] B.C.J. No (S.C.), affd [2006] B.C.J. No. 2164, [2006] 11 W.W.R. 577 (C.A.). 17 Dartmouth Ferry Commission v. Marks Estate, [1904] S.C.J. No. 4, 34 S.C.R. 366 at [1995] B.C.J. No. 1229, [1995] 6 W.W.R. 552 (C.A.). 19 [1904] S.C.J. No. 4, 34 S.C.R [1992] N.S.J. No. 20, 87 D.L.R. (4th) 369 N.S.S.C. (A.D.). 21 [2007] N.S.J. No. 172, 283 D.L.R. (4th) 237 (C.A.). Employment and Labour Law Seminar Page 6

9 termination was either premature or not warranted. In the end, this case and others establish that it is what is known about the nature of the illness and the prognosis at the time of termination that is key. 22 Quite simply, where a contract is said to be frustrated, no reasonable notice or pay in lieu of notice need be provided. On the other hand, where frustration of contract has not been established, reasonable notice or payment in lieu of reasonable notice must be given. The issue becomes whether the employee's illness or disability can be classified as "permanent" rather than "temporary. It is often difficult to make a distinction between a permanent and a temporary illness or disability. For example, in Yeager v. R.J. Hastings Agencies Ltd. 23, the Court held that a two-year period of disability could not be regarded as permanent. In that case, the employee had worked for the employer for 40 years prior to his termination in He had worked his way up to become second-in-command and was a significant shareholder in the corporation. In 1980, he began exhibiting a number of unusual symptoms which were incorrectly diagnosed as an incurable form of organic brain disease. Over the last three years of his employment, Mr. Yeager's mental illness became progressively worse until the Court found that in 1982, he was occupationally disabled. The trial judge reviewed the nature of the employment relationship and some of the factors that must be taken into account when considering whether a contract has been frustrated. Whether or not the incapacity of an employee due to illness will result in the frustration of a contract of employment will depend, in each case, on the relationship of the term of the incapacity or absence from work to the duration of a contract itself. Justice Wood then went on to quote from the decision in Marshall v. Harland & Wolff Ltd. 24, which discusses the factors that the courts use in determining whether an illness is temporary or permanent: In the context of incapacity due to sickness, the question of whether or not the relationship has come to an end by frustration sounds more difficult than it is. The tribunal must ask itself: was the employee's incapacity, looked at before the purported dismissal, of such a nature, or did it appear likely to continue for such a period, that further performance of his obligations in the future would either be impossible or would be a thing radically different from that undertaken by him and agreed to be accepted by the employer under the agreed terms of his employment? In considering the answer to this question, the tribunal should take account of: (a) The terms of the contract, including the provisions as to sickness pay The whole basis of weekly employment may be destroyed more quickly than that of monthly employment and that in turn more quickly than annual employment. When the contract provides for sick pay, it is plain that the contract cannot be frustrated so long as the employee returns to work, or appears likely to return to work, within the period during which such sick pay is payable. But the converse is not necessarily true, for the right to sick pay may expire before the incapacity has gone on, or appears likely to go on, for so long as to make a return to work impossible or radically different from the obligations undertaken under the contract of employment. (b) How long the employment was likely to last in the absence of sickness The relationship is less likely to survive if the employment was inherently temporary in its nature or for the duration of a particular job, than if it was expected to be long-term or even lifelong. 22 Wightman Estate v Canada Inc., [2005] B.C.J. No (S.C.), affd [2006] B.C.J. No. 2164, [2006] 11 W.W.R. 577 (C.A.), and Demuynck v. Agentis Information Services Inc., [2003] B.C.J. No. 113, 2003 BCSC 96 (S.C.). 23 [1984] B.C.J. No (S.C.). 24 [1972] 2 All E.R. 715 (N.I.R.C.). Employment and Labour Law Seminar Page 7

10 (c) (d) (e) The nature of the employment Where the employee is one of many in the same category, the relationship is more likely to survive the period of incapacity than if he occupies a key post which must be filled and filled on a permanent basis if his absence is prolonged. The nature of the illness or injury and how long it has already continued and the prospects of recovery The greater the degree of incapacity and the longer the period over which it has persisted and is likely to persist, the more likely it is that the relationship has been destroyed. The period of past employment A relationship which is of long standing is not so easily destroyed as one which has but a short history. This is good sense and, we think, no less good law, even if it involves some implied and scarcely detectable change in the contract of employment year by year as the duration of the relationship lengthens. The legal basis is that over a long period of service the parties must be assumed to have contemplated a longer period of sickness than over a shorter period. These factors are interrelated and cumulative, but are not necessarily exhaustive of those which have to be taken into account... Any other factors which bear on this issue must also be considered [Emphasis added]. Medical Versus Permanent Disability Whether an illness is classified as permanent or temporary does not depend on the medical sense of the word but rather on the business efficacy of the relationship. An employee may not be permanently disabled in the medical sense in that a full recovery is to be expected and perhaps achieved. But the employee may be permanently disabled in the employment sense if the length of illness or disability is of such a length or nature that the business efficacy of the relationship is destroyed. Even where an employer terminates an employment contract for just cause, or for other reasons, no action will lie against the employer if it can be later shown that the contract was frustrated owing to permanent illness or disability. It is the permanence of the disability which determines the contract. In MacLellan v. H.B. Contracting Ltd. 25, an employee was terminated after 15 years of service. In 1980, the employee injured his ankle and had to quit work in October 1984, when he became disabled from the arthritis that had settled into the ankle. He was operated on in December 1984, and was off work for five months returning in the spring, Near the end of 1985, the employee took five weeks holiday leave and never returned to work after that time period. The Court found that as of February 27, 1986, the employee was suffering from a permanent disability. The Court held that the contract of employment had been frustrated because of the permanent disability. The courts have also held that an employee need not be disabled to the point where he or she cannot perform work of any kind before the employer is justified in terminating the contract of employment on grounds of permanent disability. As long as the illness or disability prevents the employee from performing the essential duties of his or her employment, it will constitute frustration. 26 In summary, when dealing with a sick or disabled employee, the question in every case is whether the employee's illness or disability constitutes a permanent disability in the business sense applying the tests set out in Marshall v. Harland & Wolff. 27 Is the illness or disability of such a nature that it ought to have 25 [1990] B.C.J. No. 935, 32 C.C.E.L. 103 (S.C.). 26 Layne v. Pullman Company, [1955] O.W.N. 219 (H.C.J.). 27 [1972] 2 All E.R. 715 (N.I.R.C.). Employment and Labour Law Seminar Page 8

11 been looked at before the time the employee was dismissed, or did it appear likely to continue for such a period that further performance of the employee's obligations in the future would either be impossible or be a thing radically different from that undertaken by him or her and agreed to by the employer under the agreed terms of the employment contract? The employer must consider the following in making the determination: The duration of the absence from work. Whether the term of employment was inherently temporary or rather of an indefinite term, where a longer period of absence from the job would be permitted. Whether other employees can perform the employee's job while he or she is gone. Whether the position can be characterized as a "key post" that must be filled on a permanent basis by another employee if the employee's absence from work is prolonged. Medical evidence as to the employee's prognosis for recovery, to assess the nature of the illness or disability and the projected period until recovery. The length of the period of past employment. A greater length of service will justify a longer period of absence for illness or disability. Where the courts have failed to find frustration of the employment contract even after a rather lengthy period of absence, the cases involve employees who have been employed for a much longer period of time. The terms of the employment contract. Given the approach of the courts to date, particular attention should be given to the provision of disability benefits. It may be that if disability benefits are provided by the employer for a period of two years, the contract cannot be frustrated prior to that time regardless of the seniority of the employee. If after considering all of the relevant circumstances, the employer concludes that the employee is suffering from a permanent disability or illness in the business sense, the employer can argue that the employment contract has been terminated without any further obligations on its part. Provided that the assessment is correct, the employer owes no further obligation to the employee. At that point in time, the employer can make more permanent arrangements with its replacement workers. In this sense, the employer is in the same position as when the employee is terminated for just cause and no further obligation is owed to the employee. Where there is no permanent disability in the business sense, an appropriate payment must be made to the employee. DISABILITY BENEFITS AND TERMINATION OF EMPLOYMENT WORKERS' COMPENSATION The objective of workers' compensation systems in Canada is to provide benefits to workers who are injured on the job, and as a result lose wages or have a permanent injury. Generally speaking, this system is in place to provide workers with automatic, no-fault benefits when they suffer a work-related injury. These benefits are statutorily provided in lieu of any right of action the injured worker may otherwise have against an employer or a co-worker. In other words, workers who suffer a work-related injury may be entitled to wage loss and other benefits, but they may not sue their employer or any worker of the employer arising out of the personal injury. Often referred to as a "statutory bar" against suing an employer or a fellow worker by an employee entitled to workers' compensation, this immunity underlies all workers' compensation systems in Canada and is Employment and Labour Law Seminar Page 9

12 part of the "social contract" between employers and employees. As a term of this social contract, employers fully fund the workers' compensation system. In general terms, the purpose of the various workers' compensation acts across the country is to: (i) (ii) (iii) (iv) Provide compensation and other benefits to workers and their dependants Facilitate recovery and provide return-to-work services for injured workers Facilitate workforce re-entry for injured workers and the spouses of injured or deceased workers who were dependent, in whole or in part, on that worker's earnings Promote worker health and safety and the reduction of worker injuries and diseases If an employee is absent from work due to a workplace injury or illness, his or her disability is managed by the relevant workers' compensation board or commission. The employer has a limited role to play in these instances. When an employer is confronted with this situation, the employer has a duty to meet its statutory obligations for reporting and accommodating an employee's return to work. The employer should make its best efforts to work with the board or commission that has carriage of the claim. It is also important to know that an employer is entitled to be kept reasonably informed with respect to the status of the claim so that it can effectively plan. Every jurisdiction in Canada has applicable workers' compensation legislation. 28 OTHER BENEFITS Benefits may also be payable to an employee that is disabled from a non work-related illness or disability from the following sources: Short-term or long-term disability insurance 29 Auto, home, or commercial liability insurance in a civil claim An employer-sponsored Employee (and Family) Assistance Program An Assistance Program through a Professional Association Employment Insurance The Canada or Québec Pension Plan While it is important for an employer to be able to refer an employee to the corporate or public resources that are available to him or her, civil remedies are best left to be advised on by employee-retained legal counsel. 28 See Workers' Compensation Act, R.S.A. 2000, c. W-15 (Alberta); Workers Compensation Act, R.S.B.C. 1996, c. 492 (British Columbia); Workers' Compensation Act, R.S.M. 1987, c. W200 (Manitoba); Workers Compensation Act, R.S.N.B. 1973, c. W-13 (New Brunswick); Workplace Health, Safety and Compensation Act, R.S.N.L. 1990, c. W-11 (Newfoundland and Labrador); Workers' Compensation Act, S.N.W.T. 2007, c. 21 (Northwest Territories); Workers' Compensation Act, S.N.S , c. 10 (Nova Scotia); Workers' Compensation Act, S. Nu. 2007, c-15 (Nunavut); Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, Schedule A (Ontario); Workers Compensation Act, R.S.P.E.I. 1988, c. W-7.1, as am. by S.P.E.I. 1994, c.67 (Prince Edward Island); Workers Compensation Act, R.S.Q., c. A-3 (Québec); Workers' Compensation Act, 1979, S.S. 1979, c. W-17.1 (Saskatchewan); and the Workers' Compensation Act, S.Y. 2008, c. 12 (Yukon). 29 See detailed discussion above. Employment and Labour Law Seminar Page 10

13 There are two main issues regarding short-term and long-term disability benefits and the discharge of disabled employees. Does the period of notice run concurrently with the period of long- or short-term disability leave? Should disability payments be subtracted from any severance payments made? Will the reasonable notice period be suspended until the employee recovers? The case law in this area is confusing and not easily reconcilable. 2. Deductibility of Benefits from Severance (a) Deductibility of Workers' Compensation Payments In Salmi v. Greyfriar Developments Ltd., 30 an employee injured at work became entitled to workers' compensation benefits. Two weeks later, the employee was dismissed. In an action for damages for wrongful dismissal, the Alberta Court of Appeal addressed the issue as to whether the Workers' Compensation benefits, which are statutory entitlements, should be subtracted from the severance paid in lieu of reasonable notice of termination. The Court held that the Workers' Compensation benefits should be deducted from any damages awarded as they were paid from a fund to which the employer was the sole contributor. The result was similar in the decisions of White v. Woolworth Canada Inc. 31 ; Dowsley v. Viceroy Fluid Power International Inc. 32 ; Antonacci v. Great Atlantic & Pacific Co. of Canada 33 ; and Kahsai v. Hitachi Canadian Industries Ltd. 34 (b) Deductibility of Disability Benefits The courts have wrestled with the issue as to whether disability payments are to be subtracted from the severance paid in lieu of termination. The Supreme Court of Canada addressed this muddled area of law in Sylvester v. British Columbia ("Sylvester") 35. The issue on appeal in that case was whether the disability payments received by Mr. Sylvester during the notice period from a benefit plan established solely by the employer, should be deducted from damages for wrongful dismissal. Justice Major, speaking for the Court, succinctly stated that the answer depends on the intention of the parties to the employment contract. The Court found that the parties did not intend that Mr. Sylvester receive both amounts. As a result, it was held that the disability benefits should be deducted. In reaching the decision, Justice Major held that the decisions involving statutory benefits were not helpful. Justice Major noted that the short-term and long-term disability benefits in the case before him should not be considered as contracts distinct from the employment contract, but rather should be considered as integral components of it. He determined that the employment contract did not contemplate provision of both disability benefits and damages for wrongful dismissal. Justice Major found that on the facts of the case before the Court, the simultaneous payment of disability benefits and damages for wrongful dismissal was inconsistent with the terms of the employment contract. Damages for wrongful dismissal are designed to compensate the employee for "breach" by the employer of the provision of reasonable notice, whereas disability benefits are payable when an employee is unable to work. In Sylvester v. British Columbia 36, the Court was concerned that if disability benefits were not deductible, employers who set up disability benefits plans would be required to pay more to employees upon termination than employers who did not set up plans. Justice Major noted that the deterrent to establishing disability benefits plans is not desirable. As 30 [1985] A.J. No. 1089, 17 D.L.R. (3d) 186, 36 Alta. L.R. (2d) 182 (C.A.). 31 [1996] N.J. No. 113, 139 Nfld. & P.E.I.R. 324 (Nfld. C.A.), leave to appeal to S.C.C. refused [1996] S.C.C.A. No [1997] O.J. No. 2360, 34 O.R. (3d) 57 (C.A.). 33 [2000] O.J. No. 40, 48 C.C.E.L. (2d) 294 (C.A.). 34 [2008] S.J. No. 568, 69 C.C.E.L. (3d) 147 (Prov. Ct.). 35 [1997] S.C.J. No. 58, [1997] 2 S.C.R. 315, 212 N.R [1997] S.C.J. No. 58, [1997] 2 S.C.R. 315, 212 N.R. 51. Employment and Labour Law Seminar Page 11

14 such, the disability benefits received by Mr. Sylvester were deducted from the damages for wrongful dismissal. The Court in Sylvester v. British Columbia 37 cautioned, however, that there may be cases where an employee may be entitled to disability benefits in addition to damages for wrongful dismissal on the basis that disability benefits are akin to benefits from a private insurance plan for which the employee has provided consideration. The Court specifically stated that the issue as to whether disability benefits should be deducted from damages for wrongful dismissal in cases where an employee had contributed to the disability benefit plan was not before the Court. It can be argued that as a result of this statement the court's approach to the issue of collateral benefits and torts may also be applicable to contractual situations. While the test in Sylvester v. British Columbia 38 appears simple, it is difficult for employers and workers to predict the outcome of its application. The determination of the intention of the parties at the time at which the parties contract for disability benefits is elusive. The reality is that most parties are focused on the other terms of the employment contract surrounding duties and compensation at the time the agreement is negotiated, and not on the possibility of the employee becoming disabled and terminated without cause, or whether disability payments are deducted from the amount payable in lieu of reasonable notice. The decision of McKay v. Camco Inc. 39 illustrates this issue. McKay was given written notice that his employment would terminate eight weeks from the date of the notice. During this period McKay was to receive full salary and benefits but he was not required to work. Approximately two weeks after receiving notice of termination, McKay suffered an eye injury while playing racquetball and ultimately lost the sight in his eye. McKay received short-term disability benefits for a period of 26 weeks and the issue became whether the disability benefits should be deducted from the severance. The Ontario Court of Appeal held that McKay was entitled to both disability benefits and the severance payments. The courts have addressed the issue of the deductibility of disability benefits paid both pursuant to statute and under the terms of a disability plan. Post Sylvester v. British Columbia 40, several cases have wrestled with the application of the Sylvester test. In the decision of Dowling v. TNT Logistics North America 41, ("Dowling"), the terminated employee had contributed a portion of his salary to both the short- and long-term disability [LTD] plans. The employer took the position that the terms of the LTD plan prohibited double recovery. The employee argued that because the employer was not a party to the plan and that because he had made contributions to the plan, there should be no deduction from damages for wrongful dismissal. The Court in Dowling noted that in Sylvester, the plan was funded entirely by the employer. In holding that LTD payments were not deductible, the Court accepted the arguments of the employee and cited the reasoning of the Ontario Court of Appeal in Sills v. Children's Aid Society of the City of Belleville ("Sills") 42 as being persuasive. In the absence of evidence as to the intention of the parties, the Court in Sills inferred that the intention of the parties was that the disability payments would not be deducted where the employee directly contributed to the plan, either paying the entire premium, or sharing it with the employer. The Court in Sills stated 43 : Absent an express provision precluding double recovery, in my view, the principles enunciated in Cunningham assist in determining whether an intention that there would be double recovery in the event of a wrongful 37 [1997] S.C.J. No. 58, [1997] 2 S.C.R. 315, 212 N.R [1997] S.C.J. No. 58, [1997] 2 S.C.R. 315, 212 N.R [1986] O.J. No. 2329, 24 D.L.R. (4th) 90, 11 C.C.E.L. 256 (Ont. C.A.). 40 [1997] S.C.J. No. 58, [1997] 2 S.C.R. 315, 212 N.R [2005] O.J. No (S.C.J.). 42 [2001] O.J. No. 1577, 53 O.R. (3d) 577 (C.A.). 43 Sills v. Children's Aid Society of the City of Belleville, [2001] O.J. No at para. 45, 53 O.R. (3d) 577 (C.A.). Employment and Labour Law Seminar Page 12

15 dismissal can be inferred. I consider it reasonable to assume that an employee would not willingly negotiate and pay for a benefit that would allow her employer to avoid responsibility for a wrongful act. I consider it reasonable to infer that parties would agree that an employee should retain disability benefits in addition to damages for wrongful dismissal where the employee has effectively paid for the benefits in question. While somewhat similar in their facts, two decisions from British Columbia reached different conclusions in relation to deductibility of disability payments from the amount owing in lieu of reasonable notice. In McKendrick v. Open Learning Agency ("McKendrick") 44, the Court reviewed the characteristics of the employment relationship and the terms of the disability plan, concluding that there was no evidence upon which to infer that the employee would receive both disability benefits and damages for wrongful dismissal. The Court in McKendrick concluded in applying the Sylvester test that a factor in determining deductibility includes whether the "benefits plan formed an integral component of the employment contract or whether it was a separate and distinct agreement. In Reid v. Specialty Motor Cars (1970) Ltd. 45, 1 ("Reid"), Justice Pitfield, in holding that disability payments were deductible, added to the comments of the Court in McKendrick 46 noting that "the fact that the employee pays all or part of the premium is but one of the factors in the determination. In the Alberta decision of Martin v. Children's House Child Care Society 47, the employee and employer had contributed equally to the payment of the premiums for disability benefits. Justice Langston noted that the reasoning of the McKendrick 48 and Reid 49 decisions was not persuasive and did not assist in the application of the test articulated in Sylvester v. British Columbia 50. In concluding that disability payments were deductible, Langston J. noted that the disability benefits were never an enticement for the employee to accept employment with the employer and that the conduct of the parties demonstrated that neither party considered the benefits to be anything other than a substitute for salary. As a result, in Alberta, it appears that the logic of Sills 51 has been rejected. Based on an analysis of the cases that have followed Sylvester v. British Columbia 52, it is apparent that the determination as to whether disability payments will be deducted from the amount payable in lieu of reasonable notice is a very fact-specific analysis, with little consistency to date. The weight placed by the courts on the various factors varies. At this point, it appears that Alberta and British Columbia are more likely to follow Sylvester. On the other hand, Ontario is less likely to follow it. 3. Wrongful Termination of Disability Benefits Another significant issue is whether the employer is liable for wrongful termination of disability benefits in the event an employee becomes disabled during the period of reasonable notice. An employer has the option to terminate an employee by providing reasonable working notice of termination or upon payment of an equivalent severance package for the period of reasonable notice. Where non-working notice of termination is provided, employees will generally still be entitled to all salary and benefits to which they are previously entitled for the equivalent working notice period. 44 [1997] B.C.J. No. 2763, 33 C.C.E.L. (2d) 48 (S.C.). 45 [2000] B.C.J. No. 287, 2000 BCSC McKendrick v. Open Learning Agency, [1997] B.C.J. No. 2763, 33 C.C.E.L. (2d) 48 (S.C.). 47 [2006] A.J. No (Q.B.). 48 McKendrick v. Open Learning Agency, [1997] B.C.J. No. 2763, 33 C.C.E.L. (2d) 48 (S.C.). 49 Reid v. Specialty Motor Cars (1970) Ltd., [2000] B.C.J. No. 287, 2000 BCSC 247 (S.C.). 50 [1997] S.C.J. No. 58, [1997] 2 S.C.R. 315, 212 N.R Sills v. Children's Aid Society of the City of Belleville, [2001] O.J. No. 1577, 53 O.R. (3d) 577 (C.A.). 52 [1997] S.C.J. No. 58, [1997] 2 S.C.R. 315, 212 N.R. 51. Employment and Labour Law Seminar Page 13

16 Most disability policies will still apply as long as the employee remains on payroll or is actively at work. As such, should an employee become disabled, the insurance coverage will apply and the employee will be entitled to receive disability benefits. The employer is then faced with the dilemma discussed earlier in this chapter, as to whether the notice period is suspended during the period of disability or is considered as part of it. The consequences to the employer of an employee becoming disabled during the working notice period are relatively minor. However, in cases where the employee is terminated and then becomes disabled, the consequences can be much more dramatic. In Prince v. T. Eaton Co. 53, an employee became totally disabled subsequent to the eight-week notice of termination but prior to the expiration of the reasonable notice period that the Court accepted at 42 weeks. The plaintiff sought compensation for loss arising out of occurrence of the contingency that he would have been insured again had he been required or permitted to work out the 42-week period of reasonable notice. The Court held that the plaintiff was entitled to compensation for disability benefits unless his claim was barred by express provisions in his contractual arrangements with his employer. In effect, the employer was liable for the long-term disability benefits that would have been paid to the plaintiff had he been allowed to work out the period of reasonable notice. Given that these benefits can last until age 65 under most policies in the case of total incapacity, an employer could be liable for a large lump-sum payment. Employers could also be liable for life insurance proceeds should an employee die within the reasonable notice period and in circumstances where the employee's estate would have received the life insurance benefits had the employee continued to work until the date of his death. 54 Consequently, the employer should be extremely careful when terminating an employee by providing a lump sum severance payment. Unless a general release is obtained from the employee releasing the employer from all obligations under the employment contract, including loss of benefits, there is a very real possibility that an employee who becomes ill/disabled during the reasonable notice period will be entitled to all disability benefits he or she would have been entitled to had he or she worked the period of reasonable notice. In Elliott v. Parksville (City) 55, the plaintiff alleged negligence on the part of the employer with respect to the manner in which it discontinued disability benefits otherwise available. The Court held that the defendant knew or ought to have known of the plaintiff's health condition at the time of the termination. However, because the employee was properly dismissed for cause, no action can lie in negligence against an employer in such circumstances. The British Columbia Court of Appeal agreed and held: "the answer to that contention is that the duty of care which the respondent may have owed to the appellant ceased once just cause existed for the dismissal of the appellant." 56 In Tarailo v. Allied Chemical Canada Ltd. 57, the Court held that an employer was responsible for the loss of disability benefits arising from an employee being dismissed due to mental illness. The Ontario High Court of Justice found that Allied Chemical had not wrongfully dismissed Mr. Tarailo despite the fact that his unacceptable conduct was due to mental illness. However, the Court held that Mr. Tarailo was entitled to disability benefits and that Allied Chemical could not avoid that obligation by dismissing him. The Court went on to hold that Allied Chemical was liable for payment of sickness benefits and for negligence in not assisting the employee in making a claim for long-term disability benefits. Moreover, since Allied Chemical 53 Prince v. T. Eaton Co., [1990] B.C.J. No. 2958, 34 C.C.E.L. 228 (S.C.), revd [1992] B.C.J. 1191, 91 D.L.R. (4th) 509, 41 C.C.E.L., 72 (C.A.); leave to appeal to S.C.C. refused [1992] S.C.C.A. No. 427, [1993] 2 S.C.R. xi, 101 D.L.R. (4th) vii. 54 Card Estate v. John A. Robertson Mechanical Contractors (1985) Ltd., [1989] O.J. No. 1129, 26 C.C.E.L. 294 (H.C.J.). 55 [1990] B.C.J. No. 4, 66 D.L.R. (4th) 107 (C.A.). 56 Ibid. 57 [1989] O.J. No. 489, 68 O.R. (2d) 288, 26 C.C.E.L. 209 (H.C.J.). Employment and Labour Law Seminar Page 14

17 was the agent for the long-term disability insurer, the insurer was also held liable for payment of these benefits. In Egan v. Alcatel Canada Inc. 58, the Ontario Court of Appeal affirmed the decision of the trial judge who held that "where an employee would otherwise have qualified for disability benefits during the reasonable notice period, but the application is denied on the basis that coverage was wrongfully discontinued by the employer, the employer must be liable for the value of the disability benefits that would otherwise have been payable." The decision was based on the conclusion that all types of compensation continue to be owed during the reasonable notice period. In summary, employers must be very careful in terminating the benefits of employees who are discharged and offered lump-sum severance packages. If the employee becomes disabled during the period of reasonable notice, the employer could be at risk for payment of disability and other benefits. Following a more prudent course of action, the employer should offer benefits continuance either during the period of reasonable notice or until the employee obtains alternative employment (whichever occurs first) where it is possible to do so. Alternatively, benefits should continue until the employee fully considers and accepts the lump-sum severance offer. However, most disability insurance carriers will not extend coverage beyond the statutory notice period. The employee should be required to sign a general release relieving the employer from any further obligations for benefits in exchange for the lump-sum severance. HUMAN RIGHTS LEGISLATION As previously discussed, human rights legislation prohibits employers from discriminating against physically or mentally disabled persons when hiring and during the employment period. As a general rule, adjudicators have defined "disability" or "handicap" broadly. A person is disabled under human rights legislation even when the symptoms of a disability are controlled or regulated by medication or other means. Furthermore, complainants may establish a prima facie case of discrimination where they do not actually suffer from some disease or disability, but the employer perceives that they do and has discriminated against the complainant on the basis of that belief. All Canadian jurisdictions prohibit discrimination in employment. Discrimination against prospective as well as present employees is prohibited. Discrimination in employment includes discriminatory conduct in hiring practices, including pre-employment injuries and refusal to hire as well as discrimination during employment, including refusal to continue to employ, license or promote, or subjecting employees to differential wage streams, job classification categories or terms of employment. All jurisdictions provide for exceptions to the prohibition against discrimination in employment. 59 The main types of exemptions are as follows: Those which allow for the supremacy of other legislation Where preferential treatment is authorized by human rights legislation some jurisdictions specifically authorize preferential treatment in certain instances, e.g., the Newfoundland 58 [2006] O.J. No. 34 at para. 26 (C.A.), leave to appeal to S.C.C. refused [2006] S.C.C.A. No See Canadian Human Rights Act, R.S.C. 1985, c. H-6 (Federal Jurisdiction Employees); Alberta Human Rights Act, R.S.A. 2000, c. A-25.5 (Alberta); Human Rights Code, C.C.S.M. c. H-175 (Manitoba); Human Rights Act, R.S.N.B. 1973, c. H-11 (New Brunswick); Human Rights Code, R.S.N.L. 1990, c. H-14 (Newfoundland and Labrador); Human Rights Act, S.N.W.T. 2002, c. 18 (Northwest Territories); Human Rights Act, R.S.N.S. 1989, c. 214 (Nova Scotia); Human Rights Act, S. Nu. 2003, c. 12 (Nunavut); Human Rights Code, R.S.O. 1990, c. H. 19 (Ontario); Human Rights Act, R.S.P.E.I. 1988, c. H-12 (Prince Edward Island); Charter of Human Rights and Freedoms, R.S.Q., c. C-12 (Québec); Human Rights Code, S.S. 1979, c. S-24.1 (Saskatchewan); and the Human Rights Act, R.S.Y. 2002, c. 116 (Yukon). Employment and Labour Law Seminar Page 15

18 Code provides for a broad general exemption from the legislation where preference is given to Newfoundland labour and goods Domestic employees all jurisdictions except the Federal, British Columbia, Alberta, New Brunswick, Ontario and Québec legislation exempt the application of the legislation absolutely in the case of domestic employees Organizations primarily serving the interest of persons in protected categories under human rights legislation most jurisdictions have similar sections exempting non-profit organizations that may discriminate in the process of serving the interest of those protected under the legislation Bona fide retirement, insurance or employee benefit plan all jurisdictions provide exemptions for such inherently discriminatory plans Examples of discrimination include: Instituting minimum medical standards that are not bona fide occupational requirements [BFORs] A poisoned work environment caused by an employer's failure to deal with the harassment of an employee because of his/her disability An alcohol and drug policy that requires employees to self-disclose prior alcohol or drug problems Not appropriately accommodating an employee in his/her return to work Terminating an employee because of absence or poor work performance caused by an illness or disability In all cases of discrimination, the first step is for the employee to satisfy the onus of proving a prima facie case of discrimination. If this is not proven, that is the end of the complaint. When a prima facie case of discrimination is established, the onus then shifts to the employer to defend its discriminatory acts. The employer must establish that a discriminatory employment practice is justified as a BFOR or "qualification. The legislation in all jurisdictions allows discrimination if the employment practice can be justified as a BFOR. BFORs are reasonable generalizations about who can perform the essential functions of the job and they provide a complete defence to a prima facie case of direct discrimination. The leading Supreme Court of Canada case providing guidance on the bona fide occupational requirement BFOR defence is British Columbia (Public Service Employee Relations Commission) v. British Columbia Government and Service Employees' Union) (Meiorin Grievance). 60 In that case, the Court held that a three-step test should be adopted for determining whether an employer has established, on a balance of probabilities, that a prima facie discriminatory standard is a BFOR: 1. The employer must show that it adopted the standard for a purpose rationally connected to the performance of the job. 60 [1999] S.C.J. No. 46, [1999] 3 S.C.R. 3. Employment and Labour Law Seminar Page 16

19 2. The employer must establish that it adopted the particular standard in an honest and good faith belief that it was necessary to the fulfillment of that legitimate work-related purpose. 3. The employer must establish that the standard is reasonably necessary to the accomplishment of that legitimate work-related purpose. To show that the standard is reasonably necessary, it must be demonstrated that it is impossible to accommodate individual employees sharing the characteristics of the claimant without imposing undue hardship upon the employer. It is important to note that discrimination, as prohibited in human rights legislation across Canada, is not a common law tort. In Honda Canada Inc. v. Keays 61, the Supreme Court of Canada accepted Honda's argument that discrimination is precluded as an independent cause of action pursuant to Seneca College of Applied Arts and Technology v. Bhadauria. 62 Applying its earlier decision in Seneca College, the Court held that a person who alleges a breach of the provisions of human rights legislation must seek the legislatively-prescribed remedy set out within the statutory scheme. That is, via complaint to the Human Rights Commission and adjudication by a Human Rights Tribunal. In other words, the courts have no jurisdiction, except upon either judicial review or appeal as set out in the applicable human rights legislation. THE DUTY TO ACCOMMODATE The following is a summary of the current law regarding the duty to accommodate disabled employees pursuant to the federal, provincial and territorial human rights legislation. 1. The Law with Respect to the Duty to Accommodate As stated above, an employer is basically allowed to hire and fire employees, as it desires, within the confines of the common law principles. Employers cannot be forced into employment contracts, and may terminate employees either for "just cause" or with "reasonable notice" when there is no just cause. However, these employer rights are restricted by the legislated human rights schemes. These schemes prohibit discrimination on listed grounds: generally, that no employer may refuse to employ, refuse to continue to employ or discriminate against any person with regard to employment or any term or condition of employment on the grounds of race, religious belief, colour, gender, physical disability, mental disability, marital status, age, ancestry, place of origin, family status or source of income of that person. Human rights panels will balance the rights of employees to equal opportunity of employment against the rights of an employer to run a safe and efficient workplace. Human rights legislation has been enacted to ensure that employees identified to be in one of the above minority groups are assessed on their individual merit in the employment context, and not on the basis of any pre-conceived notion of their personal characteristics, such as gender or disability. To give force to these goals, human rights legislation is interpreted in a broad and purposive manner (Canadian National Railway Co. v. Canada (Human Rights Commission)). 63 The Supreme Court has ruled that an employer has no duty to accommodate where a BFOR exists (Central Alberta Dairy Pool v. Alberta (Human Rights Commission)) 64. While there is still some authority for the view that if a BFOR exists then there is still a duty to accommodate, generally speaking, the courts 61 [2008] S.C.J. No. 40, 2008 SCC [1981] S.J. No. 76, [1981] 2 S.C.R Canadian National Railway Co. v. Canada (Human Rights Commission), [1987] S.C.J. No. 42, [1987] 1 S.C.R at Central Alberta Dairy Pool v. Alberta (Human Rights Commission), [1990] S.C.J. No. 80, [1990] 2 S.C.R. 489 at 514. Employment and Labour Law Seminar Page 17

20 have determined that there is no duty to accommodate when a BFOR exists. Husband v. Canada (Armed Forces) 65 and Fletcher Challenge Canada Ltd. v. British Columbia (Council of Human Rights). 66 The Supreme Court of Canada in the Large v. Stratford decision 67 stated unequivocally that there is no requirement to accommodate persons who are discriminated against because of a "BFOR. Such a requirement would be directly contrary to the concept of a BFOR, which is justified by the very fact that it cannot be individually applied because it is impossible or impractical to identify those who do not share the characteristics that the rule addresses. However, in practical terms, this does not lighten the burden on employers who seek to justify discriminatory occupational requirements. The duty to accommodate imposes a positive duty upon the employer to accommodate employees protected under human rights legislation with an equal opportunity to perform a job for which they are otherwise qualified. The right of the employee to be accommodated, however, is not limitless. The courts have determined that the right of an employee to be treated in a non-discriminatory manner must be balanced against the right of the employer to carry on business in a safe, economic and efficient manner. As such, the employer's duty to accommodate will not be carried past the threshold of "undue hardship. Where an employer has made reasonable and appropriate efforts to accommodate an employee, the employee has a duty to accept the accommodation and do their work. If an employee does not accept a reasonable accommodation, then their employment can be terminated without this resulting in liability for the employer pursuant to the applicable human rights legislation. However, the employer must give the disabled employee a reasonable opportunity to provide sufficient medical information before proceeding with a termination. In Alberta (Human Rights and Citizenship Commission) v. Federated Co-Operatives Ltd. 68, the Court found that the employer was not justified in requesting additional medical information, and further that the employee had not refused to provide the additional information. As a result, the Court determined that the employer had failed to properly accommodate the employee and ordered that compensation be paid to the employee. Termination because of frequent absences from work due to a chronic disability will only be justified if the employer proves that the employee's disability renders the employee unfit to perform essential duties of the job or any other job which the employer could offer as part of its duty to accommodate, as per the cases of Woolworth Canada Inc. v. Newfoundland (Human Rights Commission); 69 Newfoundland Human Rights Commission v. Woolworth Canada Inc. 70 ; and Newfoundland and Labrador Housing Corp. v. C.U.P.E., Local The most recent guidance from the Supreme Court of Canada on the duty to accommodate and undue hardship is the decision of Hydro-Québec v. Syndicat des employees de techniques professionnelles et de bureau d'hydro-québec, section locale 2000 (SCFP-FTQ). 72 In Hydro-Québec v. Syndicat des employees de techniques professionnelles et de bureau d'hydro- Québec, section locale 2000 (SCFP-FTQ), the Court was confronted with an extreme case of absenteeism related to a medical condition. The complainant had missed 960 days of work between January 3, 1994, 65 Husband v. Canada (Armed Forces), (1992), 15 C.H.R.R. D/197 (C.H.R.T.); affd [1994] F.C.J. No. 511, [1994] 3 F.C. 188, (F.C.A.) leave to appeal to S.C.C. refused [1994] S.C.C.A. No. 269, 118 D.L.R. (4th) vi. 66 Fletcher Challenge Canada Ltd. v. British Columbia (Council of Human Rights), [1992] B.C.J. No. 2293, 18 C.H.R.R. D/422, 97 D.L.R. (4th) 550 (S.C.). 67 [1992] O.J. No. 1185, 92 D.L.R. (4th) 565 (Gen. Div.), affd [1993] O.J. No. 3125, 110 D.L.R. (4th) 435 (C.A.), revd [1995] S.C.J. No. 80, [1995] 3 S.C.R [2005] A.J. No. 1023, 2005 ABQB [1995] N.J. No. 324, 135 Nfld. & P.E.I.R. 45 (Nfld. C.A.) C.H.R.R. D/227 (Nfld. C.A.). 71 [1995] N.J. No. 364, 137 Nfld. & P.E.I.R. 218 (Nfld. S.C.T.D). 72 [2008] S.C.J. No. 44, [2008] 2 S.C.R Employment and Labour Law Seminar Page 18

21 and July 19, Over the years, the employer had adjusted her working conditions in light of her limitations. Her attending physician had recommended that she stop working for an indefinite period, and the employer's psychiatric assessment stated that the complainant would no longer be able to "work on a regular and continuous basis without continuing to have an absenteeism problem as in the past. 73 Hydro Québec's efforts to adjust the complainant's working conditions were significant. They included modification of her workstation, part-time work and assignment to a new position. It is important to note that in this case, the complainant's medical condition was held to be a disability. In describing the concept of undue hardship the Court noted 74 : The test is not whether it was impossible for the employer to accommodate the employee's characteristics. The employer does not have a duty to change working conditions in a fundamental way, but does have a duty, if it can do so without undue hardship, to arrange the employee's workplace or duties to enable the employee to do his/her work.... rigid rules must be avoided. If a business can, without undue hardship, offer the employee a variable work schedule or lighten his/her duties or even authorize staff transfers to ensure that the employee can do his/her work, it must do so to accommodate the employee in a case involving chronic absenteeism, if the employer shows that, despite measures taken to accommodate the employee, the employee will be unable to resume his or her work in the reasonably foreseeable future, the employer will have discharged its burden of proof and established undue hardship. Thus, the test for undue hardship is not total unfitness for work in the foreseeable future. If the characteristics of an illness are such that the proper operation of the business is hampered excessively or if an employee with such an illness remains unable to work for the reasonably foreseeable future even though the employer has tried to accommodate him or her, the employer will have satisfied the test. In addition, two human rights cases provide some guidance in this area. In Anderson v. Alberta 75, Anderson was employed by the Solicitor General's Department as a legislative security officer. He had to be off work for a period of time because of back surgery. He was on disability insurance for nearly one year. The insurer decided that Anderson was capable of going back to work for limited modified work. The department searched for and found what it considered to be suitable employment and offered it to Anderson. Anderson rejected the offer on the basis that the proffered job was not suitable and that the employer did not look for suitable employment and he was being discriminated against as a result of his disability. Anderson applied for judicial review of the department's decision. The application was dismissed. The Alberta Court of Queen's Bench held that an employee is not entitled to a job of their own choice as long as the proffered job was one that was sufficiently inclusive to accommodate the person. Once the employer puts forward a job that reasonably accommodated the employee's disability, the employee had a legal obligation to accept it. The department satisfied its obligation to offer suitable modified work. 73 [2008] S.C.J. No. 44, [2008] 2 S.C.R Hydro-Québec v. Syndicat des employees de techniques professionnelles et de bureau d'hydro-québec, section locale 2000 (SCFP-FTQ), [2008] S.C.J. No. 44, [2008] 2 S.C.R. 561, at paras [2004] A.J. No. 1216, 372 A.R. 202 (Q.B.), revd [2006] A.J. No. 556, 384 A.R. 371 (C.A.). Employment and Labour Law Seminar Page 19

22 In Pisoney v. London Life Insurance Co. 76, the plaintiff insurance salesman became permanently disabled. The plaintiff received benefits from the company until he turned 65. The agreement provided that certain commissions were deferred and others were not paid during disability. The plaintiff brought an action for payment of his commissions. The action was dismissed. The Court held that the provision respecting the non-payment of commissions did not discriminate on the basis of disability. It was not discriminatory to not pay the plaintiff when he was not working. The plaintiff was unable to provide ongoing service to policy holders, which constituted the basis for unpaid commissions. Even if there was discrimination, it was bona fide and reasonable. It was rational not to pay commissions during disability when the plaintiff was receiving compensation in the form of benefits. Accommodation of the plaintiff's total disability was not possible. Several labour arbitration cases are also instructive. These cases might be applicable and persuasive to a human rights tribunal and the same general principles would likely be applied by an Alberta human rights tribunal and an Alberta court. In Toronto (City) and CUPE, Local 79 (Bodnar) (Re) 77, the arbitrator held that the revocation of a grievor's participation in a part-time work arrangement did not amount to discrimination on the basis of a medical condition because the medical evidence did not support a need for accommodation. The arbitrator found that the grievor refused medical treatment and chose to reduce the stress in her life simply by working parttime. The arbitrator further found that part-time work was not a medical accommodation requirement so much as a lifestyle choice and, as a result, the employer was not obligated to continue that program in the absence of a medical need. Several cases have held that "undue hardship" does not extend to the point of requiring an employer to create a job for the disabled employee. Therefore, in Alberta v. AUPE 78, there was no obligation on the employer to find the employee another job in the hospital. As the employee could not perform her old job, and all attempts to accommodate her in that position failed, the grievance was dismissed. Another Alberta arbitrator held that where the grievor was unable to continue full-time hours due to his disability, and the employer changed the grievor's status to part-time, such unilateral employer action was not discriminatory, nor was there any obligation on the part of the employer to compensate the grievor on the basis of the previous full-time hours of work. In Crossroads Regional Health Authority v. AUPE (Heritage Grievance) 79, the arbitrator held that changing the employee status from full-time to part-time, even if it was discriminatory, was justified where there was a requirement in the collective agreement to work full-time hours to maintain full-time status, and did not violate the Supreme Court of Canada's reasoning in British Columbia (Public Service Employee Relations Commission) v. British Columbia Government and Service Employees' Union (Meiorin Grievance). 80 In another decision, an arbitration board in Ontario held that the duty to accommodate may involve placement in a lower-rated position. In Ontario English Catholic Teachers' Assn. v. Office and Professional Employees' International Union (Beharry Grievance) 81, an employee injured her back at home. She was unable to work for a period of 18 months. After that, she was cleared to work with restrictions, however, she was not to be exposed to repetitive bending, pushing or pulling, or lifting over 5kg. The employer accommodated the employee in a lower-paid job classification that allowed the employee to work with the medical restrictions imposed. There was no dispute about the position. However, the union argued that the 76 [2003] B.C.J. No. 1691, 2003 BCSC [2000] O.L.A.A. No. 1005, 110 L.A.C. (4th) 403 (OLA). 78 [1987] A.J. No. 1409, 82 A.R. 19, 53 Alta. L.R. (2nd) 275 (Q.B.). See also IKO Industries Ltd. and U.S.W.A. (Timbers) (Re), [2004] O.L.A.A. No. 937, 129 L.A.C. (4th) 129 (OLA); United Steelworkers of America v. Aclo Compounders Inc. (O'Brien Grievance), [2005] O.L.A.A. No. 35, 136 L.A.C. (4th) 222 (OLA). 79 [2002] A.G.A.A. No. 11, 105 L.A.C. (4th) 78 (OLA). 80 [1999] S.C.J. No. 46, [1999] 3 S.C.R [1996] O.L.A.A. No. 9, 61 L.A.C. (4th) 109 (OLA). Employment and Labour Law Seminar Page 20

23 employee's right to accommodation pursuant to the Human Rights Code of Ontario, 82 entitled the employee to the same rate of pay as she had in her former position. The grievance was dismissed. The arbitration board held that the employer had met its duty to accommodate and was not obligated to pay the higher rate of pay of the employee's former position. In a similar vein, a grievor's eye condition prevented him from operating certain cranes in Stelco Inc., Hilton Works and U.S.W.A., Loc. 1005, Re. 83 In that case, the employer removed the grievor from crane operations and placed him in a lower-paying position in the company. The board held that as the grievor's handicap rendered him incapable of performing the essential features or requirements of this position, there was no duty on the company to accommodate the grievor in order that he may perform the work of the position in question. In a later decision involving the same parties, arbitrator Carrier relied on the prior decision of arbitrator Marcotte in order to evaluate the employer's duty to accommodate an existing employee who was seeking to fill temporary vacancies on several cranes in the plant. The employee/grievor was declared medically unfit to operate two of the cranes, but was qualified to operate eight out of the 12 cranes within the job classification. Given that the grievor's handicap rendered him incapable of rotating between all of the cranes, it was determined that he was incapable of performing an essential requirement of the position. As a result, the arbitrator found that the employer was not required to accommodate the grievor. The only decision that may be contrary to the above is Ontario Secondary School Teachers' Federation, Local 10 v. Peel Board of Education (Lambert Grievance). 84 However, this case appears to turn on its unique facts. That case involved a teacher who suffered from multiple sclerosis and was unable to teach a full day. Due to fatigue and bladder problems, the teacher was only able to teach two-thirds of the time. The school board therefore offered the teacher a part-time (two-thirds) employment contract. The board therefore proposed to change the teacher from full-time to part-time status. The teacher would then earn less and have less access to sick leave benefits and to the long-term income protection provided by the Teachers' Fraternal Fund. The teacher's pension would also be adversely affected. The teacher submitted that he should be entitled to retain his status as a full-time employee. It was submitted that he should be paid two-thirds of his wages for the work performed in a classroom and receive the remaining one-third as a benefit from the Teachers' Fraternal Fund. In granting the grievance, the arbitration board held that the employer's method of dealing with the grievor was a violation of the collective agreement because the teacher was denied access to sick leave for a portion of each day. The arbitration board also found that the employer violated the Ontario Human Rights Code 85 because it discriminated against the grievor. That is, the grievor was being treated less favourably than the other employees in equivalent or like situations because of his handicap. Therefore, the arbitration board held that the grievor was entitled to maintain his full-time status, and utilize his sick leave credits on a one-third basis, or as otherwise required, until they were exhausted. At that point, the arbitration board held that the grievor was able to rely on the fraternal society disability payments on the basis of one-third, or as otherwise required. In light of these cases, it is reasonable to conclude that an employee who is being accommodated with part-time hours has part-time status and should be paid as a part-time employee. If employees lose their full-time benefits as a result, then they are not being discriminated against. The employee is being treated exactly the same as any part-time employee in the workplace. If an employer is confronted with this issue 82 R.S.O. 1990, c. H [1995] O.L.A.A. No. 90, 50 L.A.C. (4th) 301 (OLA). 84 [1998] O.L.A.A. No. 410; 73 L.A.C. (4th) 183 (OLA); affd [1999] O.J. No. 809, 86 A.C.W.S. (3rd) 889 (Div. Ct.). 85 R.S.O. 1990, c. H.19. Employment and Labour Law Seminar Page 21

24 in a unionized setting, the collective agreement must also be examined to determine if this type of situation is specifically addressed. If it is not, then the analysis just completed is applicable. The following is a summary of the general principles applicable to the duty to accommodate. Included are some practical recommendations. 1. Accommodation is a matter of degree rather than an "all or nothing" proposition. Different ways of accommodating the needs of a person with a disability can be drawn along the lines of a continuum from those means that are most respectful of privacy, autonomy, integration and other human values to those that are least respectful of those values. 2. There is also a continuum with respect to how the accommodation may be accomplished. At one end of this continuum would be full accommodation that can be effected immediately. Next would be phased-in full accommodation, followed by full accommodation in another position. Alternative accommodation in another position (i.e., that which would be less respectful of the person's dignity), which could be accomplished immediately would be next on the continuum, followed by phased-in accommodation in another position. 3. Equality may sometimes require unequal or different treatment for persons with disabilities. This can require that adjustments be made, services provided or facilities built or adapted to accommodate individuals with disabilities so that they can be integrated into the workplace. 2. Standards for Assessing Undue Hardship The employer must inquire into the nature and extent of the illness or disability in order to determine what, if any, accommodation can be made. To do this, the employer may request that the employee execute a consent to release medical information, which is directed to all of the physicians who have treated the employee. Given the often complex medical issues involved, it is highly recommended that the employer's occupational health and safety medical staff deal directly with the employee's physicians. In some cases, it may be advisable to retain an outside occupational health and safety consulting firm to assist with this process. The first consideration is to determine whether the employee's regular job can be modified to accommodate the employee. Where this amounts to an undue hardship, it must be determined whether other positions are available to accommodate the employee. An employer does not have an obligation to create a new position to accommodate an employee, as is set out below. The next step is to determine whether the employee is capable of performing any of the available positions (this could include jobs outside of the bargaining unit, the plant or in other operations of the employer). If a position is available, and the disabled employee meets the minimum qualifications for the position, the employee should be offered the position in preference to a more qualified or senior candidate. The displacement of a "better" candidate is very unlikely to constitute an undue hardship in the eyes of a human rights tribunal. The employer is not required to redesign the workplace in order to create a new position. However, a few cases have held that if a number of existing tasks can be bundled into a job that an employee is capable of performing, then this is required. However, the job must entail productive work that is of value to the employer. The employer is not required to displace an incumbent in order to accommodate an employee. There is no requirement to continue to pay the employee his or her former salary in carrying out accommodated work. Determination of the salary and benefits can be commensurate with the type and Employment and Labour Law Seminar Page 22

25 quantity of work performed. Where the employee is only able to carry out part-time employment, then the employee's salary should be reduced accordingly. However, disability benefits may fill the gap in wages (depending on the policy). Where there are no vacant positions suitable to the employee's medical restrictions, termination of employment will be upheld. The following factors should be considered in deciding if undue hardship would occur: Interchangeability of the workforce and facilities Whether the employee's job itself exacerbates the disability The extent of disruption to a collective agreement, the employer's policies or other terms and conditions of employment The effect on the rights of other employees The effect on the morale of other employees The cost to the employer of the proposed accommodation, including impact on efficiency, wage increases and other direct financial cost to be incurred (e.g., renovations) The impact on the safety of the individual, the other employees, or the general public Absence alone will not amount to undue hardship. There has to be evidence of significant costs associated with the absence, disruptions to scheduling and operations, and it has to be established that there is a significant impact on the other employees. In order to establish that it has fulfilled the duty to accommodate, the employer may be required to offer rehabilitative employment, or a trial period, to give the employee a chance to perform a modified job or other jobs that are available. As a final point, it should be noted that if the employer meets its obligations under the above analysis, and those steps do not, or do not fully, meet the appropriate accommodation, the employee has a duty to communicate to the employer what the proper accommodation would look like. In this sense, the employee also has a duty to the employer in the context of the employer's duty to accommodate. Essentially, if the employee does not accept these reasonable accommodation measures, e.g. part-time work, then the employee will be found not to have accommodated the employer, and the employee could lose his/her job without any finding of discrimination. To accommodate the employer, the employee must accept an offer of a part-time position, even if it results in a reduction from full-time to part-time wages and a loss or reduction of employment benefits. However, physically and mentally disabled employees cannot be singled out through unfair treatment. Once employees have exhausted their STD benefits, the employer is under no obligation to continue any payments. At this stage, the employer may wish to offer a "return-to-work" plan. The plan may include any number of terms, including: The position offered The "return to work" time period Employment and Labour Law Seminar Page 23

26 The salary and benefits offered (these need not be limited to the pre-disability level) That "return to work" service does not apply to benefits, including the qualification period for STD and LTD That regular attendance is expected during the "return to work" period and consistently thereafter Review periods and standards of performance and any other terms deemed necessary The "return to work" agreement should be signed and agreed to by the employee and the employee's union or association where applicable 3. Drug Addiction and Alcoholism The most striking and environmentally devastating example of the problem of alcohol and drugs in the workplace in recent times is likely the Exxon Valdez oil spill in Alaska. The Ontario Court of Appeal in Entrop v. Imperial Oil Ltd. 86 noted that in that tragedy, alcohol and drugs were thought to be a contributing factor. Another recent example is the March 22, 2006 sinking of the Queen of the North ferry in British Columbia. In that incident, two passengers died and drug use was a contributing factor in the incident. These examples illustrate that alcohol and drug use and abuse are prevalent in our society, including in the workplace. There is no doubt that the inappropriate use of alcohol and drugs (prescription or illicit) can have serious negative effects on an employee's health, safety and overall job performance. This in turn negatively impacts other workers, customers and members of the public who come into contact with an employee impaired by alcohol or drugs. All employees should be provided a healthy, safe and reliable workplace in which to work. The extent of the duty to accommodate in cases involving alcohol and drug addiction varies depending on the circumstances of each case. This makes it extremely difficult to predict potential legal liability, or to provide guidance to employers in this area. Employee misconduct that results from alcohol or drug abuse justifies a disciplinary response from an employer, up to and including termination. However, recent decisions have recognized that alcoholism and drug addiction are disabilities. In determining these cases, arbitrators often shift their focus between the culpable conduct of the employee on the one hand, and the non-culpable nature of the disability on the other. This involves balancing the interests of the employee with those of the employer, considered in light of the degree and nature of the misconduct in question. Intoxication at work, or the breach of an alcohol and drug policy, is not necessarily enough to justify summary dismissal. However, where there are possible serious consequences, the conduct is injurious to the employer's interest or incompatible with due and faithful discharge of the employee's duties, it will amount to "just cause" for summary dismissal of employment [2000] O.J. No. 2689, 50 O.R. (3d) 18 (C.A.). 87 McEdwards v. Ogilvie Milling Co. (1886), 4 Man. R. 1 (C.A.); Marshall v. Central Ontario Railway Co., [1897] O.J. No. 97, 28 O.R. 241 (H.C.J); Cox v. Canadian National Railway Co., [1988] N.S.J. No. 127, 84 N.S.R. (2d) 271 (N.S.S.C.(T.D.)); Medeiros v. Forest Lane Properties Inc. (1986), 2 A.C.W.S. (3d) 129 (Ont. Dist. Ct.); Pearce v. Foster (1886), 17 Q.B.D. 536 (C.A.); R. v. Arthurs, [1967] O.J. No. 972, 62 D.L.R. (2d) 342 (C.A.), revd [1968] S.C.J. No. 82, [1969] S.C.R. 85, (sub nom. Port Arthur Shipbuilding Co. v. Arthurs) 70 D.L.R. (2d) 693 (S.C.C.); Visentin v. Shell Canada Ltd., [1989] A.J. No. 1154, 29 C.C.E.L. 65 (Q.B.). Employment and Labour Law Seminar Page 24

27 This said, consideration must be given to the extent of the employee's intoxication and whether the employee's intoxication is prejudicial to the employer's business interest and whether the misuse of alcohol or drugs prevents the employee from performing his or her essential duties. It has been suggested that progressive discipline is necessary prior to upholding a finding of "just cause. However, depending on the particular circumstances, there are instances where a single incident of misconduct justifies dismissal. If the single incident repudiates the employment contract, or an essential condition thereof, or manifests an intention to no longer be bound by the agreement, the employer is entitled to dismiss the employee summarily. 88 Alleged intoxication will not support a dismissal with "just cause" in the absence of evidence. 89 This evidence should come from a test that can indicate current, as opposed to past, impairment (unless residual negative effects can be demonstrated, such as with high levels of cannabis). While drug addiction has been recognized as a disability that warrants human rights protections and triggers the duty to accommodate, recreational drug use has not. In the case of Alberta (Human Rights and Citizenship Commission) v. Kellogg Brown and Root (Canada) Co. 90, the Court of Appeal found that the complainant's recreational use of marijuana did not constitute a disability. His employer was not found to have discriminated against him when he was fired for failing a pre-employment drug test for a safetysensitive position. The same result would almost certainly occur in the case of a person who consumed alcohol on a recreational basis, was not an alcoholic, but was intoxicated by alcohol in the workplace contrary to an employer's policy and filed a human rights complaint after being dismissed. In summary, in a non-union environment, the following are the relevant factors in determining whether an employee's intoxication at work justifies summary dismissal: Whether the employee's intoxication has been prejudicial to the employer's business interests or reputation Whether the employer has condoned the behaviour in the past, and whether the employee's behaviour was in breach of the implied condition of future good conduct Whether the incident was an isolated incident, or part of a pattern of misconduct that was not condoned by the employer Whether the employee's behaviour endangered him/herself or other employees, or gave rise to other serious consequences Whether there is a clear term of the employment contract, or an enforceable company policy, against the misconduct in question Whether the employee's performance was affected in a demonstrable way Whether there are any other mitigating factors, such as the employee's long and dedicated service to the employer 88 Randall Scott Echlin & Matthew L.O. Certosimo, Just Cause, The Law of Summary Dismissal in Canada, looseleaf (Toronto: Canada Law Book, 2008). 89 Tabone v. Midas Canada Inc., [1986] A.J. No. 1418, 46 Alta. L.R. (2d) 238 (Q.B.). 90 [2007] A.J. No. 1460, Sub nom. Chiasson v. Kellogg Brown & Root (Canada) Co., 2007 ABCA 426, leave to appeal to S.C.C. refused [2008] S.C.C.A. No. 96, 291 O.L.R. (4th) vii. Employment and Labour Law Seminar Page 25

28 Whether the employee has a "disability" pursuant to relevant human rights legislation, and whether the employer's decision to dismiss the employee amounts to discrimination, or instead results from misconduct and prejudices the employer's business In 1995 the Supreme Court of Canada released its decision in Cie minière Québec Cartier v. Québec (Grievances arbitrator). 91 In that case involving an alcoholic employee, the employee was dismissed for excessive absence. The employee was late for work twice and missed work without authorization or justification, 11 times over a 13-year period. After each incident, the employee was disciplined. However, the sanctions were reduced in exchange for promises by the employee to seek treatment for his alcohol problem. The employee consistently failed to seek such treatment. After a further absence from work, the company wished to dismiss the employee. However, the decision was rescinded on the condition that the employee would submit to a treatment program. He was granted a leave of absence to do so. Despite this, he did not undergo treatment. He returned to work 17 days later and again missed work without authorization as a result of his alcohol problem. The company terminated his employment for cause. Four months after the termination of employment, and prior to the arbitration hearing, the employee underwent a 20-day treatment program for alcoholism. The program was apparently successful and the employee had fully recovered from his alcohol problem. The arbitration board held that the company had been justified in dismissing the employee at the time it had done so, but that, in light of the subsequent successful treatment of the employee's alcohol problem, it would be appropriate to order the employee's reintegration into the company. On judicial review, the Québec Superior Court overturned the arbitrator's decision and dismissed the grievance. The Court of Appeal restored the arbitrator's decision and ordered reinstatement. The company successfully appealed to the Supreme Court of Canada, which upheld the dismissal. The Court stated: alcoholism must be envisaged as an illness, and that the absenteeism it likely will entail must be treated as being innocent. Consequently... in reviewing a decision by an employer to dismiss an alcoholic employee for chronic absenteeism, the determination of whether or not just and sufficient cause has been established should be made by considering both whether the employee's ability to fulfill his workplace duties was impaired by his alcohol problem and whether any improvement in this respect was likely in the foreseeable future. Such an analysis, if performed as at the time the employee was dismissed, is reasonable and is entirely within the jurisdiction of the arbitrator. In this case, the Company passed this test. In this respect, I note that the arbitrator found that the Company was justified in dismissing Mr. Beaudin at the time that it did so. The Court went on to hold that the arbitrator should not have admitted subsequent-event evidence of the employee's rehabilitation program which took place some four months after the termination of employment. The Supreme Court of Canada found that the arbitrator exceeded his jurisdiction and the decision was quashed. The Alberta Court of Appeal applied the above analysis in the case Whitford v. Agrium Inc. 93, which dealt with an employee who had multiple absences related to his alcoholism. The Court stated: 94 I conclude that Whitford was not given sufficiently clear and detailed warnings about his misconduct, was mislead by approvals granting him leave, and was not told that failure to prepare a return-to-work plan could result in his dismissal. Further, he was not caught drinking on the job, other than one occasion when he made no attempt to 91 [1995] S.C.J. No. 65, [1995] 2 S.C.R Cie minière Québec Cartier v. Québec (Grievances arbitrator), [1995] S.C.J. No. 65, at para. 12, [1995] 2 S.C.R [2006] A.J. No. 1235, [2007] 1 W.W.R. 621, 2006 ABQB [2006] A.J. No. 1235, at para. 50, [2007] 1 W.W.R. 621, 2006 ABQB 726. Employment and Labour Law Seminar Page 26

29 hide his condition, and he did not jeopardize the safety of others. I have thus concluded that Agrium has not met the first part of the two-part test, and therefore it is not necessary to address the second part of the test whether any improvement was likely in the foreseeable future. The following is a summary of the considerations and principles that have been applied in grievances and human rights cases involving alcoholism or drug addiction in a unionized workplace: 1. Misconduct resulting from alcohol or drug abuse often justifies discipline from the employer up to and including discharge. 2. Alcoholism and drug addiction are recognized as disabilities. Like other types of illness and disability, the same test is applied to determine the extent to which the employee's condition has prevented and will prevent him/her from fulfilling his/her employment obligations. In that regard, employees will be reinstated in their employment where it is established, on the basis of their rehabilitative potential, that it is reasonably likely that a positive and productive employment relationship may be re-established. An arbitration board will examine the rehabilitative progress made by an employee, including that which takes place subsequent to an employer's decision to demonstrate that he/she has been successful in dealing with the alcoholism or drug addiction. 3. Arbitrators will modify the discipline imposed by an employer only in "exceptional circumstances. That is, only where an employee has shown genuine prospects for recovery and there is reasonable likelihood that a productive employment relationship can be restored. 4. The employer is entitled to insist that an employee perform the work for which they are paid. The employer is not obligated to bear all of the costs and consequences associated with an employee's inability to perform his duties as a result of alcoholism or drug addiction. 5. The arbitration board or tribunal will examine the degree to which the employee has been prevented from performing his/her employment obligations, the duration of the rehabilitation program, and the employee's prognosis for the future. The focus of the inquiry will be to determine the past and potential impact that the alcohol or drug abuse will have on the employee's ability to perform his/her employment obligations. 6. Where such "exceptional circumstances" exist and the arbitrator orders reinstatement in substitution for discharge, it is usual to attach conditions. Arbitrators and tribunals have recognized that alcohol and drug addiction are not curable illnesses and can only be successfully treated through total abstinence. The main condition attached to reinstatement is the requirement that the employee remain drug and alcohol free. UNION EMPLOYEES The common law of wrongful dismissal does not apply to union employees. When a majority of employees in the workplace selects a collective bargaining agent to bargain on its behalf, it delegates to the union the authority to bargain all of the terms and conditions of employment. Once agreed to, these terms and conditions are set out in a collective agreement between management and the union. The collective agreement, as mandated by the applicable labour relations legislation, must contain provisions for the resolution of disputes by way of grievance and arbitration. Therefore, the rights of disabled employees are determined by the provisions of the applicable collective agreement. If there is a dispute regarding these rights, it is resolved initially through the grievance procedure on agreement by the union and management. Employment and Labour Law Seminar Page 27

30 Ultimately, if the grievance is not resolved, or withdrawn, the dispute can be determined by a Board of Arbitration. The existence of a collective agreement, which contains clauses for the final resolution of disputes as mandated by labour relations legislation, ousts the jurisdiction of the courts over most aspects of the employer-employee relationship as per the cases of St. Anne Nackawic Pulp & Paper Co. v. C.P.W.U., Loc and Weber v. Ontario Hydro. 96 Employees who are absent from work due to a bona fide illness or disability cannot be disciplined by their employer. However, because the employer is no longer getting what was bargained for in the employment relationship, arbitrators have long recognized the right of an employer to discharge employees who, due to some medical disability, illness or other reason, are unable to report to work. Frustration of Contract in a Unionized Setting The general law governing absence due to illness is summarized by Chairman Paul Weiler in U.A.W. v. Massey Ferguson Ltd.: 97 The first basic principle is that innocent absenteeism cannot be grounds for discipline, in the sense of punishment for blame-worthy conduct. It is obviously unfair to punish someone for conduct which is beyond his control and thus not his fault. However, arbitrators have agreed that, in certain very serious situations, extremely excessive absenteeism may warrant termination of the employment relationship, thus discharge in a non-punitive sense. Because the relationship is contractual, and the employer should have the right to the performance he is paying for, the employer should have the power to replace an employee on a job, notwithstanding the blamelessness of the latter. If an employee cannot report to work for reasons which are not his fault, he imposes losses on an employer who is also not at fault. To a certain extent, these kinds of losses due to innocent absenteeism must be borne by the employer. However, after a certain stage is reached, the accommodation of the legitimate interests of both employer and employee requires a power of justifiable termination in the former. The right to terminate an employee who is absent due to illness or disability emanates from the doctrine of frustration. A contract is frustrated when circumstances beyond the control of either party to the employment contract create a situation whereby it becomes impossible for either or both parties to perform the contract as originally contemplated. In the case of the employment relationship, the employee agrees to perform the duties of his/her job. The employer agrees to provide salary and benefits. However, disease or disability may prevent employees from discharging their duties. When the nature of the disease or disability is such that the employment contract has been irreparably altered, the underlying employment contract between the parties has become frustrated. That is, since the employment contract has become impossible to perform, and neither of the parties is at fault, the contract ends and is no longer enforceable. In determining whether the employment relationship has become frustrated, arbitrators have held that the employer must satisfy a two-fold test: 1. It must be established that the employee's illness or disability has prevented the employee from fulfilling his/her employment obligations up to the point of termination 95 [1986] S.C.J. No. 34, [1986] 1 S.C.R. 704, 28 D.L.R. (4th) [1995] S.C.J. No. 59, [1995] 2 S.C.R. 929, 125 D.L.R. (4th) [1969] O.L.A.A. No. 2, at para. 4, 20 L.A.C. 370 (OLA). Employment and Labour Law Seminar Page 28

31 2. The employer must show that the employee's absenteeism is not likely to improve in the future In most cases, the employer is able to meet the onus of the first part of the test. However, this merely establishes that the employee has not been able to perform the job for a temporary period of time. To amount to frustration, the onus is on the employer to establish that the illness or disability is of a more or less permanent nature. That is, the likelihood that the employee is able to return to his/her job in the foreseeable future is remote. Excessive Absenteeism in a Unionized Setting Where an employee is discharged owing to excessive absence, it cannot be justified on disciplinary grounds. That is, since the absence is due to illness or disability, it occurs through no fault of the employee. Discipline, under such circumstances, would be entirely inappropriate. The discharge is properly characterized as an administrative one on non-culpable grounds. In a unionized setting it is also deemed to be innocent absenteeism. Subject to the applicability of human rights legislation, an employer has the right to terminate employment following a lengthy absence due to illness or disability where the prognosis at the time of discharge suggests that the employee is unlikely to resume work in the reasonably foreseeable future. There is considerable debate among arbitrators as to whether absence will be considered to be excessive when an employee has sick leave credits remaining at the time of termination. Arbitrator Ponak in Queen Elizabeth II Hospital and C.U.P.E., Loc. 924, Re 98 held that remaining sick leave credits was not an absolute bar to termination of employment, although it was among the factors to consider in determining whether the absence was excessive. The employer argued that the absentee rate of 13 per cent over a two-year period was higher than coworkers, and was getting worse rather than better. Furthermore, according to the employer, the pattern of frequent short-term absences was especially disruptive to the workplace. The Board agreed with that submission, but found against the employer because it had not been established that no improvement was likely. Although the absenteeism rate was found to have been verging on excessive, there were some modest signs of improvement. Applying the "one last chance" doctrine, the Board held that the grievor should be granted one last chance to demonstrate that she could attain a more acceptable attendance level. In the result, she was reinstated to her former position with certain conditions. In contrast, the majority of arbitrators are generally loath to uphold a non-culpable dismissal where sickness and long-term disability benefits have not been exhausted. This is particularly true where the termination of employment will affect eligibility for long-term disability coverage. 99 Impact of Human Rights Legislation in a Unionized Setting In more recent years, the arbitration jurisprudence in the area of non-culpable dismissal has expanded to consider the impact of human rights legislation. This has given rise to a "duty to accommodate. This duty, however, more readily applies in cases of long-term absence as opposed to irregular intermittent absences. Employers and arbitrators must review the applicable provisions of human rights legislation and recent relevant jurisprudence in determining whether the discharge of a disabled employee is appropriate. 98 [1992] A.G.A.A. No. 9, 28 L.A.C. (4th) 379 (AGA). 99 See UAW, Loc. 112 and De Havilland Aircraft of Canada (Re) (1965), 16 L.A.C. 126 (OLRB), per Laskin [please note corrigendum at vii], Newfoundland Farm Products Corp. and NAPE Re, [1992] Nfld. L.A.A. No. 5, 27 L.A.C. (4th) 1 (NAB), Queen Elizabeth II Hospital and CUPE, Loc. 924 Re [1992] A.G.A.A. No. 9, 28 L.A.C. (4th) 379 (AAB), and Alberta and AUPE (Re) (1988), 8 A.C.W.S. (3d) 271 (C.A.). Employment and Labour Law Seminar Page 29

32 A collective agreement must be interpreted in a manner that is in compliance with the applicable human rights statute. Both management and the union are subject to it. 100 Consequently, in cases involving ill or injured employees, where a provision in a collective agreement is discriminatory, it may be struck down, or at least interpreted in a way which is consistent with the applicable human rights legislation. Secondly, both management and the union have a shared duty to accommodate ill or injured employees. In summary, arbitrators may be obligated to apply human rights legislation to a grievance involving ill or disabled employees if there is express legislative jurisdiction to do so, or if there is a provision in the collective agreement incorporating the human rights legislation. However, without express legislative authority, the arbitrator is limited to those remedies within its jurisdiction under the collective agreement or the governing labour relations legislation. Many collective agreements contain anti-discrimination provisions that prohibit discrimination on the ground of a physical or mental disability. In that case, the arbitrator has jurisdiction to determine whether there has been discrimination and to remedy the situation. Human rights jurisprudence will be relevant in making that determination. However, even in the absence of express legislative authority to apply human rights legislation, an arbitration board is under an obligation to interpret the collective agreement in "harmony" with human rights legislation. The application of human rights legislation requires both employers and unions to avoid discrimination against mentally or physically disabled employees. Even where the employee may not be capable of performing all of the duties of their job, an employer and the union have a duty to accommodate the employee to the point of undue hardship. This may entail allowing the employee to perform modified aspects of his/her own job or alternatively, making certain adjustments in the workplace to accommodate the employee. However, it does not require the creation of a new job for the sick or injured employee, nor does it require displacement of an employee with seniority, where the employer can establish that this results in undue hardship. In order to eliminate the uncertainty associated with an indefinite period of absence due to sickness or injury, employers and unions have agreed to "deemed termination" clauses as part of a collective agreement. A number of collective agreements contain provisions that stipulate that an employee is deemed to be terminated from their employment if he or she is continuously absent for a given period of time. However, such provisions have been held to be discriminatory and contrary to human rights legislation. They are therefore unenforceable. Attendance Management Programs in a Unionized Setting A number of employers have established attendance management programs in order to encourage regular work attendance. The details of these programs may be stipulated as express provisions of the collective agreement. Alternatively, they may be implemented through the employer's inherent "rule-making powers. If such programs focus on rehabilitation, they will likely be upheld by an arbitrator. However, where they are disciplinary in nature, such programs will often successfully be challenged through the arbitration process on one or more of the following grounds. Firstly, collective agreements usually contain provisions stipulating that an employee cannot be disciplined without cause. Where an employee is absent due to illness or disability, it is generally through no fault of his/her own. Employees cannot be disciplined for something that is not their fault. When the absence is excessive and there is a poor prognosis for recovery, it may justify a dismissal of an administrative nature because the employer is not getting the work that was bargained for. Secondly, if the employer falls under federal jurisdiction, a rehabilitative program that is disciplinary in nature may violate section 239 of the Canada 100 Central Okanagan School District No. 23 v. Renaud, [1992] S.C.J. No. 75, [1992] 2 S.C.R. 970, 95 D.L.R. (4th) 577. Employment and Labour Law Seminar Page 30

33 Labour Code. 101 Lastly, a disciplinary program would probably violate applicable human rights legislation. However, if it is rehabilitative in nature, and contemplates the duty to accommodate ill and injured employees to the point of undue hardship, such a program is likely to be upheld. In a number of cases, a particular illness or disability may give rise to safety concerns. That is, given the inherent hazards in the duties to be performed, the employee may be at risk of injury to him/herself, to other employees or to the general public. Typically, this may include jobs operating, or working in the vicinity of, heavy equipment or motor vehicles, or working with or around other hazardous machinery, materials or energy sources. These are "safety-sensitive positions. It may also involve occupations where the employer is required to maintain a current level of fitness, including in the armed forces, and in police and fire services. Arbitration cases in this area typically include persons with diabetes, epilepsy or heart disease. In most cases, following a period of total absence from work, the employee usually recovers to a point where he/she is able to resume employment, but because of safety concerns, is restricted or discharged by the employer. In reviewing the safety cases, arbitrators examine all of the circumstances of the case to determine the following: The employee's capability and whether there are significant limitations on what the employee can and cannot do, i.e., the nature of the disability, the physical limitations of the employee, the medical records and reports, and the medical prognosis. Specific duties to be carried out and whether any of the activities to be performed are deemed to be dangerous. Whether the safety concerns of the employer are reasonable. Whether the employer has complied with the duty to accommodate to the point of undue hardship, i.e., has the employer made certain adjustments to enable the employee to perform his or her job despite the disease or disability? If the employee cannot perform his or her job safely, has the employer made efforts to accommodate the employee in another position? Termination of employment, demotion or transfer will not be justified on the mere speculation that the employee may experience difficulty in carrying out the duties of the job in the future. In the case of some jobs, an employer must maintain a certain standard of medical fitness in order to perform all of its duties safely and competently. This includes physically demanding jobs, inherently hazardous activities and jobs requiring specialized skills. Examples include police, firefighters, paramedics, armed forces personnel and pilots. Such medical requirements will be justified if the employer is able to establish that: The medical standards are reasonable for the safe and competent performance of the job. The medical requirements are a bona fide occupation requirement or qualification and therefore do not violate applicable human rights legislation The employer is unable to make reasonable accommodations and adjustments to the workplace or the job without undue hardship 101 R.S.C. 1985, c. L-2. Employment and Labour Law Seminar Page 31

34 In order to justify the removal of an employee or the imposition of certain restrictions based on medical requirements, the onus is on the employer to establish the following: That the general medical requirements are essential for the safe and competent performance of the job There is a real and significant risk of injury to the employee, fellow workers or the general public, or damage to the employer's property, if medical standards are not imposed The employee's inability to meet the medical standards will significantly limit the number of job assignments that the employee is capable of carrying out, and therefore will significantly restrict him/her in his/her job performance It is not practicable to conduct an individualized assessment to determine if, despite the illness or disability, the employee is capable of performing the essential requirements of the job in a safe and competent manner There are no modifications to the job that can be undertaken or alternative positions that would enable the employer to accommodate the employee Mental Health Disability in a Unionized Setting In some cases, work-related misconduct or behavioural problems may be attributable to stress or mental illness. In that case, a disciplinary discharge may not be appropriate and similar principles to those applied in the case of a physical disability must be applied to determine whether the employer's actions were warranted. For example, in St. John Shipbuilding Ltd. and Marine and Shipbuilding Workers, Loc. 3, Re 102 an employee was terminated after threatening his supervisor with a gun. The evidence established the grievor had a number of personal and emotional problems resulting in panic attacks that explained the employee's inappropriate behaviour. Even though the evidence before the arbitration board was that there was no certainty that similar circumstances would not produce a similar incident or worse, conditional reinstatement was ordered. Other cases have involved poor work performance or mistreatment of customers resulting in the dismissal of the employee. Subsequent evidence established that this was due to underlying mental problems or brain damage that was unknown to the employer at the time. In both cases, the arbitration board held that discharge was excessive in the circumstances and that the employer was required to accommodate the grievor's mental disability. 103 Therefore, even in cases of serious misconduct, or work-related behavioural problems attributable to mental illness, the onus is on the employer to establish that discharge is appropriate. The employer will have to show that the mental illness is likely to recur in the future, making it impossible for the employee to continue his or her employment. Given the duty to accommodate under human rights legislation, the employer will also have to establish that any modifications to the job or reassignment to other employment will result in undue hardship. This duty also arises even where the underlying mental disability is not known to the employer at the time of dismissal but is subsequently established through medical evidence. 102 [1992] N.B.L.A.A. No. 4, 26 L.A.C. (4th) 361 (NBLAB). 103 See Canada Safeway Ltd. and U.F.C.W., Loc. 401, Re, [1992] A.G.A.A. No. 6, 26 L.A.C. (4th) 409 (AGA); affd [1993] A.J. No. 292, 10 Alta. L.R. (3d) 51 (Q.B.), affd [1995] A.J. No. 71, 26 Alta. L.R. (3d) 196 (C.A.), and Calgary Co-operative Assn. and Calco Club, Re, [1992] A.G.A.A. No. 4, 24 L.A.C. (4th) 308; supplementary reasons 28 C.A.L.S. 466 (AAB). Employment and Labour Law Seminar Page 32

35 SUMMARY AND PRACTICAL CONSIDERATIONS The following is a summary of the general principles and practical considerations pertaining to disabled employees in the union sector: The common law of wrongful dismissal does not apply to union employees. The rights of ill and disabled employees are determined by the provisions of the applicable collective agreement. Disputes are resolved through the grievance and arbitration process set out in the collective agreement and mandated by the applicable labour relations legislation. Employees who are absent from work due to bona fide illness or disability cannot be disciplined by their employer. However, arbitrators have long recognized the right of an employer to discharge employees who, due to some medical disability, illness or other reason, are unable to report to work. In order to establish that the employment relationship has become frustrated, the employer must satisfy a two-fold test. Firstly, that the employee's illness or disability has prevented the employee from fulfilling his or her employment obligations up to the point of termination; and secondly, that the employee's innocent absenteeism is not likely to improve in the future. Although arbitrators' decisions go both ways, the general view is that the employer has no right to dismiss the employee for excessive absence until the employee exhausts all of their sick leave and other leave benefits. Also, where the dismissal will detrimentally affect short or long-term benefits, arbitrators are very unlikely to uphold a dismissal of the employee. Arbitrators have a duty to apply applicable human rights legislation that prohibits discrimination on the ground of a physical and mental disability. More recently, this has had a significant impact on arbitral jurisprudence. Even where the employer is able to establish a bona fide occupational requirement that justifies the termination of the sick or disabled employee, the employer has a duty to accommodate the employee to the point of undue hardship. This may require an offer of rehabilitative employment, modifications to the employee's own job or, in some cases, an offer of reasonable alternative employment. In addition to human rights legislation, the federal and provincial governments, including government boards, agencies and institutions, are subject to the Canadian Charter of Rights and Freedoms. 104 Section 15 of the Charter prohibits discrimination, including that which is based on mental or physical disability. Employers under federal jurisdiction are subject to the Canada Labour Code 105, which prohibits the dismissal, suspension, lay-off, demotion or discipline of an employee because of absence owing to illness or injury unless certain conditions as set out in the Code are met. Deemed termination provisions set out in a collective agreement, which stipulate that an employee is deemed to be terminated from his/her employment if he/she is continuously absent for a given period of time, are generally discriminatory and contrary to human rights legislation. They are therefore likely to be unenforceable. Attendance programs that focus on rehabilitation as opposed to discipline may be enforceable. However, if the attendance program is disciplinary in nature it may violate 104 Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982, (U.K.), c R.S.C. 1985, c. L-2. Employment and Labour Law Seminar Page 33

36 applicable human rights legislation, and if the employer is under federal jurisdiction, s. 239 of the Canada Labour Code. Where a collective agreement specifically provides for certain short- and long-term disability benefits, or the long- and short-term disability plans are incorporated by reference into the collective agreement, the employer has assumed the obligations of an insurer and must provide the promised benefits to the employee whether or not it is covered by underlying insurance. Any disputes with respect to short- and long-term disability coverage under such circumstances would be handled through the grievance and arbitration process. However, if a plan or policy is not mentioned in the collective agreement, or the collective agreement provides only for the payment of premiums, then the rights of the employee are governed solely by the group insurance plan. In that case, any dispute as to coverage and the amount of benefit should be resolved through litigation between the employee and the insurer. Many employers have established employee assistance programs and rehabilitation programs in order to assist sick and disabled employees in their transition back to the workplace. These programs are often effectively administered by joint union-management committees. Effective implementation of such programs will usually satisfy the requirements under human rights legislation, including the duty to accommodate. Certain illnesses or disabilities may give rise to safety concerns that the employee may be at risk of injury to himself or herself, other employees or the general public. Typically, this may include persons with diabetes, epilepsy, heart disease or other serious illnesses. In order to justify dismissal or career restrictions, the risk must be substantial and significant. Blanket rules requiring a certain level of physical fitness will only be justified where it is impracticable to carry out an individual assessment. Such restrictions in rules will also be subject to the scrutiny of human rights legislation and the duty to accommodate. Employee misconduct resulting from alcohol or drug abuse can justify discipline, including discharge. In these cases, arbitrators balance the culpable conduct of the employee with the potential for rehabilitation and recovery. Except in the most serious circumstances, employees will often be entitled to undergo a program of rehabilitation and probation subject to strict conditions before it will justify termination of employment. Discharge is more likely to be upheld in cases of illegal drug use. Mandatory alcohol and drug testing programs are becoming more commonplace, particularly in safety-sensitive positions. Given that most of these programs are relatively recent, the jurisprudence in this area is still developing. It may be open to employers to adopt such programs under management rights clauses through the promulgation of safety rules and policies in the workplace. Mandatory alcohol and drug testing is only justified where it is a bona fide occupational requirement or there is reasonable cause or suspicion for undertaking the program. Such programs will be subject to human rights legislation. Unless an employee specifically agrees to be subject to mandatory alcohol and drug testing, arbitrators are loath to require mandatory alcohol and drug testing as a condition of reinstatement of an employee who has been disciplined for alcohol or drug abuse. An employee returning to work following an illness or disability may be required to provide a medical certificate or report from his or her doctor justifying his or her absence and providing sufficient evidence that the employee is fit to resume employment. This may be mandated by express provisions in the collective agreement or, where the employer has a genuine concern as to safety or fitness of the employee, by specific request following the employee's return to work. Unless the collective agreement contains an express provision allowing for Employment and Labour Law Seminar Page 34

37 an independent medical examination, the employer does not have the power to require one. Therefore, any further medical information must be obtained by the employee's own physician after the consent of the employee has been obtained or from a physician mutually agreed to by the parties. Where the parties cannot come to an agreement in this regard it may justify a grievance by an employer. Keeping the above points in mind, employers face a difficult challenge in balancing all of the competing interests that must be considered in the case of ill and disabled employees. These are: ensuring that the workplace is safe as mandated by occupational health and safety legislation, exercising due diligence for the safety of the public and corporate property, operating the business efficiently, while at the same time considering the rights of ill and disabled employees. To meet all of these competing interests, consideration should be given to the following practical suggestions: 1. Offering an effective employee assistance and rehabilitation program with the objective of assisting employees to return to a productive employment in the workplace and fulfilling the duty to offer reasonable accommodation. 2. Establishing a joint union-management committee to supervise the EAP and rehabilitation program. The committee would have the authority to make recommendations with respect to ill and disabled employees. This would include the ability to override provisions of the collective agreement to attain the objectives of the program and comply with human rights legislation. 3. The joint union-management committee may also monitor short- and long-term disability plans to ensure that the most effective programs are available at the lowest cost, and that disability plans are co-ordinated with the EAP and rehabilitation program. 4. Establishing a work attendance program that is remedial and rehabilitative in its focus. This may be combined with positive incentives such as a bonus plan or a conversion of unused sick days to holidays to reward those employees who are able to attain an excellent attendance record. A program of positive incentives will also not unduly punish those employees who must take time off work through no fault of their own owing to illness or disability. 5. Ensuring that the termination of employees who are not fit to resume employment and who cannot be accommodated does not have a detrimental effect on disability insurance coverage. FITNESS TO RESUME EMPLOYMENT UNION AND NON-UNION SETTING Following an absence due to illness or disability, an employer may require a medical certificate to determine whether the employee is fit to resume employment. Alternatively, where the nature of the occupation demands a certain level of physical fitness, a medical report may be required to determine whether the employee is fit to safely resume the duties of their employment. An employer has a limited right and duty to demand that an employee undergo a medical examination if there are reasonable and probable grounds for suspecting that the employee is a source of danger to himself, to other employees, to company property or to the general public; or alternatively, is unfit to perform his/her duties. Generally, where an employee returns to work after a period of illness, an employer has an obligation to satisfy itself that the employee is fit to resume employment. Employers that have employees whose medical fitness is assessed by a federal or provincial/territorial governmental body are assisted to some Employment and Labour Law Seminar Page 35

38 degree in this regard, as the regulatory body determines whether or not the person meets the prescribed legislative requirements. For the most part, it has generally been accepted among arbitrators that the employee has the initial onus of substantiating his/her ability to return to work following a period of illness or disability. Although there is some onus upon an employee to prove their medical fitness upon returning to work from sick leave, that onus may be discharged by the employee presenting himself for work or by producing a medical certificate. Once the employee returns to work, if the employer had reasonable grounds for suspecting that an employee is a source of danger to himself, to others or to company property, or that the employee is unfit to perform their duties, the employer has a right and a duty to demand a medical certificate. If that is refused, then the employer has the right to discharge the employee for refusing a reasonable request and because the employee is an occupational health and safety risk. MISUSE OF SICK LEAVE AND SURVEILLANCE EVIDENCE Some employees misuse sick leave to avoid their obligation to attend work, or as an excuse for unauthorized tardiness or absence. In most cases, where an employer is able to establish misuse of sick leave, it will justify discipline or discharge. It is often difficult for an employer to establish misuse of sick leave because it is difficult to monitor the employee's activities while the employee is on sick leave. The employee's doctor most often must rely on the employee's subjective comments when diagnosing and treating illnesses. Furthermore, it is often difficult to distinguish true malingering and fraudulent claims from psychiatric complications secondary to legitimate illness and disability. In some cases, where an employer suspects that an employee may be abusing sick leave, the employer may retain a private investigator to gather surveillance evidence regarding the employee's activities. If the surveillance confirms the employer's suspicions, it often results in the dismissal of the employee. The employer will then seek to introduce the surveillance evidence at the subsequent arbitration in order to justify dismissal. In some cases, this evidence has been admitted. In other cases, the evidence has been ruled as inadmissible because it invades the employee's privacy. In the context of video surveillance, Arbitrator Ellis stated the following in Re Puretex Knitting Co. Ltd. and Canadian Textile and Chemical Union: 106 In the use of electronic surveillance, it is apparent that we confront conflicting social values of considerable significance. There is on the one hand the principle of the right to privacy and beyond that the more general idea... of the crucial importance of preserving and nurturing the historically fragile concept of human dignity.... On the other side of the issue are simply considerations of efficiency in dealing with social problems. PIPEDA Case Summary # was a case involving the use of covert video surveillance by an investigations firm hired by an insurer that was sceptical of a claim for disability benefits. Following the refusal by the individual to submit to an independent medical examination, the investigations firm was retained. The investigator had used deception to photograph the individual as he answered the door at his home. At the time that the covert photo was obtained, all of the evidence gathered by the investigator was 106 [1979] O.L.A.A. No. 1, at para. 56, 23 L.A.C. (2d) 14 (OLA). 107 Office of the Privacy Commissioner of Canada: online < Employment and Labour Law Seminar Page 36

39 consistent with the reported disability, and it is apparent from the decision that the Assistant Commissioner was of the view that the covert photograph was not reasonable on the facts of this case. Section 7(1)(b) of the Personal Information Protection and Electronic Documents Act 108 was relied upon to collect private information without consent on the basis that "it is reasonable to expect that the collection with the knowledge or consent of the individual would compromise the availability or the accuracy of the information, and the collection is reasonable for purposes related to investigating a breach of an agreement or a contravention of the laws of Canada or a province." 109 The insurance company argued that it had reasonable grounds to believe that the individual would initiate a claim against it. This argument was not accepted. The Assistant Commissioner noted that although the individual had initiated an internal appeal of the decision to terminate his benefits, formal legal action had not been commenced until several months following the date of the covert surveillance. The Assistant Commissioner rejected the argument that the "pre-litigation contested phase" cannot be distinguished from the initiation of a lawsuit. The Commission stated that the following conditions must be met as a justification for the use of covert surveillance: The collection of personal information must be only for purposes that a reasonable person would consider appropriate in the circumstances There must be substantial evidence to support the suspicion that a relationship of trust has been broken or a law contravened The organization must have exhausted all other means of collecting the information in less privacy-invasive ways The collection must be limited to the purposes as much as possible Where an employer suspects an abuse of sick leave, the following steps should be taken prior to retaining private investigators to conduct surveillance on the employee: 1. The employee should be asked to sign a consent form that allows the employer to request medical information. Medical information should be obtained through the employee's own physician to assess the nature of the illness and disability, the treatment, the prognosis, and the possibility of returning to work in the future. 2. The employee should be confronted with the employer's suspicions and warned that the abuse of sick leave will not be tolerated. Specifically, employees should be told that if they are found to have abused sick leave, it will result in immediate cause for dismissal. 3. The employee should be asked to submit to an independent medical by a physician chosen by the employer. (This will require the employee s consent.) 4. After all of the above steps have been followed, if there is no reasonable alternative, the employer may then resort to covert surveillance in order to determine whether the illness or disability is legitimate. The surveillance should be approved by very senior levels of 108 S.C. 2000, c Office of the Privacy Commissioner of Canada: online < Employment and Labour Law Seminar Page 37

40 management and not be undertaken lightly. The following test must be considered: is the information sought relevant to the purposes advanced for the surveillance? 110 Specifically,: Is the measure demonstrably necessary to meet a specific need? Is it likely to be effective in meeting that need? Is the loss of privacy proportional to the benefit gained? Is there a less privacy-intrusive way of achieving the same end? DOCTORS' CERTIFICATES AND MEDICALS PRIVACY ISSUES The requirement to provide a medical certificate or a report from a doctor, in order to justify an absence due to illness or disability, may be expressly required pursuant to a collective agreement. Alternatively, it may be required under rules or a policy imposed by an employer. Where the employee refuses to provide a medical certificate or report as required, this may justify some measure of discipline. Where the medical information or certificate provided by the employee's doctor is inadequate, a number of court and arbitration decisions have held that the employer may request additional information. In the Federal Court of Appeal decision of Garvey v. Meyers Transport Ltd. 111, the Court found that the employee had a positive obligation to provide his employer with information about the specific restrictions or limitations on his duties. This went beyond a description of his symptoms. As this information was not provided, the duty to accommodate was not triggered. This is evident in the following excerpt from the case: 112 But, more importantly, even if the investigator had acted upon the offer made by the appellant and even if a written medical assessment had been forwarded to the investigator by the appellant after the receipt of the investigator's report, the fact of the matter remains that the appellant never gave his employer, at the time of his employment, a medical assessment evidencing a disability. The appellant never requested accommodation on account of his disability nor did he advise the respondent of any limitations or restrictions he had in the performance of his work on account of his disability (Central Okanagan School District No. 23 v. Renaud, [1992] 2 S.C.R. 970 at ). Therefore, assuming without deciding that it could be said that the investigator failed to obtain "obviously crucial evidence" (as per Nadon J. in Slattery), the effect of this failure, in the case at bar, would be close to nil. The employer, although aware of the sudden headaches and insomnia of the appellant, was never made aware of any kind of disability which required accommodation. The information requested may include the date seen by the physician, the nature of the illness, the type of treatment recommended, the dates absent from work due to the illness and the prognosis for improved attendance if applicable. In doing so, the arbitration boards note the legitimate but competing interests of 110 See PIPEDA Case Summary # (later heard in the Federal Court of Canada as Eastmond v. Canadian Pacific Railway, [2004] F.C.J. No. 1043, 2004 FC 852; PIPEDA Case Summary # and Alberta PIPA Investigation Report [2005] F.C.J. No. 1684, 2005 FCA [2005] F.C.J. No. 1684, at paras , 2005 FCA 327. Employment and Labour Law Seminar Page 38

41 the employee's right to privacy as against the employer's right to information in cases involving absenteeism. The employer's right of access to this information is more readily granted where the information from the doctor is treated as confidential by the occupational health and safety department of the employer and is not available to managers or supervisors. These arbitrators have held that the employer has a valid interest in determining the likelihood of absenteeism problems continuing, the cause of the problem and the steps that may be taken to assist the employee to overcome the cause of it. As a general rule, employers are not entitled to conduct an independent medical examination in order to verify the accuracy of a medical certificate produced from the employee's own doctor, or to verify an illness or disability. However, an independent medical examination is permitted if either the employee consents to it, or if a collective agreement expressly provides for this. In a leading common law case, Thompson v. Oakville (Town) 113, two police constables were disciplined for refusing to submit to a medical examination by a doctor of their employer's choice. McRuer C.J.H.C. held that this was a reasonable refusal given that it amounts to a personal trespass. He held that the right of employers to order their employees to submit to an examination by a doctor of choice of the employer must depend on either contractual obligation or statutory authority. As none existed in that case, the employer was not justified in ordering the compulsory medical examination. The collection of medical information is "personal information" within the meaning of privacy legislation across the country. In Alberta and B.C., the Personal Information Protection Act [PIPA] 114 governs how personal information may be collected, used and disclosed by provincially-regulated private sector employers. When implementing a disability management policy, the collection of medical information must be privacy-compliant and conform to PIPA. The Personal Information Protection Act 115 has been declared to be substantially similar legislation to the Personal Information Protection and Electronic Document Act (PIPEDA) 116. However, PIPEDA still protects the privacy interests of employees of federally regulated employers in Alberta. The Privacy Act 117 establishes obligations on federal government departments and agencies as public sector employers. 118 Each jurisdiction in Canada has applicable private sector privacy legislation, be it substantially similar legislation like the Personal Information Protection Act 119 (PIPA) or Personal Information Protection and Electronic Document Act 120 (PIPEDA) itself. (However, PIPEDA only applies to employees who work in the federal sector and federal undertakings.) In Alberta and B.C., under PIPA, an employer may collect, use or disclose employee personal information without consent, provided that it is reasonably necessary to manage the employment relationship. The following is a summary of the general principles under the provincial privacy legislation applicable to provincially-regulated employers in Alberta and B.C.: 113 [1963] O.J. No. 804, 41 D.L.R. (2d) 294 (H.C.J.). 114 S.A. 2003, c. P S.A. 2003, c. P S.C. 2000, c R.S.C. 1985, c. P For more information including the Freedom of Information and Protection of Privacy Act, R.S.A. 2000, c. F-25 (which protects the personal employee information held by public bodies, municipalities, health care bodies, and boards committees and councils as designated in the regulations, including the Worker's Compensation Board) and the Health Information Act, R.S.A. 2000, c. H-5 (which protects employee information held by public health service providers, pharmacies, provincial health boards and nursing home operators among others). Please see the website of the Information and Privacy Commissioner of Alberta: online at < 119 S.A. 2003, c. P S.C. 2000, c. 5. Employment and Labour Law Seminar Page 39

42 Organizations require the consent of individuals to collect, use and disclose their personal information. Employers have the deemed consent of employees to collect, use and disclose their personal information that is reasonably related to establishing, managing, administering or terminating the employment relationship. In most cases, employers must notify employees in advance prior to collecting, using and disclosing employee personal information. This notice must specify the purpose for which the information is collected, to whom the information is disclosed and how long it will be retained. Employees can request access to their personal information and ask the employer to correct inaccuracies. Employers must safeguard the confidentiality of personal information and take reasonable steps to prevent unauthorized access or disclosure. All organizations must adopt a privacy policy consistent with applicable legislation. All organizations must appoint a privacy officer. Employees may file a request to the Privacy Officer to access personal information, and may complain if they believe their privacy rights have been violated. Where not resolved to the employee's satisfaction, an employee may complain to the Provincial Privacy Commissioner. Whether or not it is reasonable to request medical information from an employee is a question that will be decided on its facts. If the requested information is for health and safety purposes, the request is more likely to be determined to be reasonable. However, the information should only be disclosed to employees "who have a need to know this information for the purposes of their duties. Medical information should be handled in accordance with the applicable privacy legislation to avoid a complaint being filed with the relevant Privacy Commissioner. Based on Investigation Report #P2007-IR , an interesting case under the Personal Information Protection Act 122, the employer's obligation to safeguard personal information may apply to information in the possession of the third-party benefits provider. In this decision, the complainant alleged that the benefits provider, Wilson Banwell, disclosed personal information in contravention of the provisions of the Personal Information Protection Act 123. Following a referral to Wilson Banwell, this organization disclosed, both to the employee's employer and Union, details about the employee's wife and the details of a previous personal use of the benefits program. The Alberta Construction Labour Association ("CLR") had contracted with Wilson Banwell to provide to its members services as part of an Employee and Family Assistance Program. The Office of the Information and Privacy Commissioner determined that while it was appropriate that CLR did not have custody of or access to the personal information required by Wilson Banwell in the delivery of 121 Office of the Information and Privacy Commissioner of Alberta: online < Reports.aspx?year=2007&month=11>. 122 S.A. 2003, c. P S.A. 2003, c. P-6.5. Employment and Labour Law Seminar Page 40

43 its services, it was potentially still accountable for the breach by Wilson Banwell. This was due to the fact that while CLR did not have physical custody of the information, it still had, through its contract with Wilson Banwell, some measure of control over the information. The result was that CLR was responsible for ensuring that its contracted service provider complied with the provisions of the Personal Information Protection Act. 124 In this case, CLR had fulfilled its obligations by including provisions in the contract that: Restricted or regulated the use of information to only the provision of the contracted services Required compliance with applicable privacy laws Required the development and maintenance of certain policies and procedures Provided for a third-party audit of service delivery, with audit results (not personal information) reported back to the purchaser Terminated the agreement where a service provider has not complied with laws, regulations or expected standards of service delivery The law in this area is still developing, but is important to consider when a privacy policy is being developed, implemented and administered. Ultimately, the right to privacy is not absolute. 125 It must be balanced with safety concerns and an employer's right to manage. This is the case, whether or not there is a collective agreement in place. VIOLATION OF PRIVACY CASES HANDLING OF MEDICAL INFORMATION The following is a discussion of instances in which the Commissioner has found that the complaint was well-founded and that there was a violation of the employee's privacy, and cases in which the Commissioner found that there was no violation of privacy. PIPEDA Case Summary # In PIPEDA Case Summary # , after being examined at a hospital, an employee submitted a sick leave request to his employer. He gave the medical certificate to his supervisor. A few days later, his supervisor informed him that the leave request had been turned down since the length of time of the request exceeded the length of time for the medical examination. The employer's Occupational Health and Safety Advisor called the hospital where the medical examination had been done, without authorization from the employee. The request was for information about the examination. The Assistant Privacy Commissioner held that it was a violation of the federal legislation for the employer to contact the hospital to ask about the employee's medical examination without the prior consent of the employee. In PIPEDA Case Summary # , a former employee of a telecommunications company complained that: 124 S.A. 2003, c. P See discussion in Communications, Energy and Paperworkers Union, Local 707 v. Suncor Energy Inc. (Alcohol and Drug Policy Grievance), [2008] A.G.A.A. No. 55 at para and 92, 178 L.A.C. (4th) 223 (AGA). 126 Office of the Privacy Commissioner of Canada: online < Employment and Labour Law Seminar Page 41

44 1. The company was unnecessarily collecting personal employee medical information for the purpose of administering its long-term disability [LTD] plan. 2. It did not have appropriate security safeguards in place to protect sensitive personal medical information from unauthorized access. With respect to the employee's LTD claim, the company had instructed the employee in writing to return the requisite forms and other relevant information, including a birth certificate, to the company itself rather than directly to the insurance company that managed the plan. The company's intention was to facilitate the application process by ensuring that the applicant had included all necessary information and that it was promptly sent to the insurance company. The complainant had a number of concerns regarding the company's security safeguards. First, the employee objected to the fact that the employer was instructing its employees to send medical reports by facsimile to its human resources office a form of transmission that does not afford an adequate degree of privacy for personal medical information, particularly where the reports contain medical diagnoses. In addition, the complainant was worried that employees who do not have a legitimate need to handle this information, such as human resources staff, might view it. Second, the employee was concerned about a rumour to the effect that managers were routinely permitted to receive specific information about the medical conditions of employees who were on sick leave. Human resources staff reviewed the medical information that was submitted and administered the company's short-term disability plan. The fax machine was located in the human resources area only. However, all employees had access to the location using security cards. It was possible for employees who were not human resource professionals to access the file room and fax machine while the room was unlocked. If the human resources staff collected the medical information, they would in turn submit it to the insurance carrier, inform managers of the projected dates of return to work and keep track of dates for cut-off of the short-term disability benefits and eligibility for LTD. If the employees sent the reports directly to the insurance carrier, the local human resources office only received a summary indicating the first date of absence, the projected return-to-work date, whether the disability was new or recurrent, any modifications or accommodations required and an opinion on whether the absence was supported or unsupported by the medical evidence. No diagnostic information was included. However, it was noted that the unit was composed only of human resources personnel and did not include qualified medical specialists. In finding that the company violated the federal privacy legislation, the Assistant Privacy Commissioner held the following: 1. Since the company was not required to collect the employee medical information to administer the LTD plan, but was rather doing it to assist with the process, the issue was whether such a purpose was one that a reasonable person would consider appropriate in the circumstances. 2. In this case, the company notified employees that they "must" submit their information packages to the company rather than directly to the insurance company. 3. Medical information is considered to be sensitive information and specific diagnoses among the most sensitive of medical information. Therefore, the safeguards that the company had in place were not appropriate. 4. It was not appropriate to keep a fax machine that receives sensitive medical information in an unlocked, accessible room. 127 Office of the Privacy Commissioner of Canada: online < Employment and Labour Law Seminar Page 42

45 5. It was not appropriate for a company to make the practice of receiving medical reports by fax, whether at the local human resources office or the head office. 6. The company's practice of having human resources people receive and process medical reports containing diagnostic medical information about individual employees was inappropriate. 7. The Privacy Commissioner's Office has long recognized the employer's legitimate need to collect certain medical information in order to verify an employee's absence for genuine medical reasons and to meet the employer obligation to accommodate an employee under Canadian human rights legislation. The Office has also recognized that collecting specific diagnoses may be appropriate for certain purposes in certain circumstances. 8. However, the Assistant Privacy Commissioner stressed that the Office is strongly of the view that any organization that collects medical diagnoses about employees for any purpose must only do so with strict safeguards in place; that is, shared only among qualified medical practitioners. 9. In this case, it was determined that it was mainly medically unqualified human resources personnel, both in local offices and at corporate headquarters, who received, noted, interpreted and processed highly sensitive medical diagnoses for the purpose of administering the company's disability plans. While the purpose may have been appropriate, the Assistant Privacy Commissioner considered this to be an unacceptable situation on the whole. As a result, the Assistant Privacy Commissioner concluded that the complaints were well-founded. The Assistant Privacy Commissioner therefore made the following recommendations: 1. The company should revise its policy and procedures for collecting and handling employee medical reports, with particular emphasis on the purposes and practices regarding diagnostic information. 2. The company should: Take appropriate steps to ensure that employees obliged to submit a medical report were explicitly informed that they had the right to ensure that diagnostic information be kept in strict confidentiality, that they had the option of sending the form in strictest confidence directly to medical staff and health services and that the alternative to this means that human resources staff would receive this information Ensure that managers, if presented with a medical report, refused to accept it and instructed the employees to send it as recommended above Ensure that the corporate human resources office no longer received diagnostic information about individual employees 3. The company should revise its letters of notification to employees on short-term disability so as to clarify that the employees have the option of sending LTD information directly to the insurance company. Employment and Labour Law Seminar Page 43

46 PIPEDA Case Summary # In PIPEDA Case Summary # , a number of individuals complained that their employer required that medical diagnoses be included on their doctors' certificates for sick leave absences. The employees acknowledged that their employer had a right to inquire, upon their return to work, whether they had been under a doctor's care and what restrictions, including any medications they might be taking, might prevent them from doing their job safely. However, they felt that supplying medical diagnoses was excessive. They also felt that the employer was unreasonable to require such diagnoses as a condition for their sick leave credits. According to the employer's sick leave policy, employees involved in safety-sensitive positions were required to provide information on medical certificates that included: A medical diagnosis A list of treatments received, including prescribed medications that might affect the employee's ability to work safely Information about functional limitations The employer was also concerned about "suspicious" absences. The Privacy Commissioner noted that the employer had both the right to satisfy itself that an employee's absence from work was justified and the obligation to determine whether an employee returning to work after sick leave was fit to resume assigned duties or must be otherwise accommodated. The Commissioner therefore held: It was entirely appropriate and reasonable for the organization to require medical certificates when the employees' absences exceeded the allowable limit for uncertified sick leave. However, the word of the employees' physicians should have been sufficient. The corporation was entitled to request and receive certification that the complainants were ill but, as the organization itself acknowledged, it was not necessary to require employees to provide diagnostic information in cases of suspicious absences. The organization did not demonstrate that it needed to inquire into the nature of the complainants' illnesses in order to ensure their fitness to resume their regular duties. Although such a purpose was legitimate and diagnostic information may in some cases have been necessary to its fulfillment, it was both unnecessary and inappropriate for the organization to have demanded medical diagnoses in the circumstances. The Commissioner recommended: 1. That the organization drop its requirement for mandatory inclusion of diagnoses in the medical certificates of the employees designated "at risk, and henceforth limit its collection of employees' diagnostic information to cases of clear necessity in the fulfillment of legitimate purposes 2. That the organization revisit its decision to deny medical leave to individuals who refused to provide medical diagnoses 128 Office of the Privacy Commissioner of Canada: online < Employment and Labour Law Seminar Page 44

47 PIPEDA Case Summary # In PIPEDA Case Summary # , the Commission came to a similar conclusion where a transportation company requested that a medical diagnosis be included in a doctor's certificate for sick leave that was forwarded to the occupational health and safety advisor. In this case, the Commissioner determined that the collection of the information was abusive inasmuch as the employer did not prove that it was necessary. PIPEDA Case Summary # In this case, a rehabilitation officer for a benefits administrator believed that she had the employee's verbal consent to advise the employer that the employee was ready to return to work. In the sent to the employer, the rehabilitation officer quoted directly from the medical report prepared by the employee's specialist. The employee had provided only a limited consent to the release of personal information and the rehabilitation officer misunderstood the scope of the consent, which did not permit providing medical information to the employer. The Commissioner recommended: Written consent for the disclosure of medical information is required in most cases. Verbatim excerpts from a specialist's report constitute personal information. Employees of benefits administrators need to understand how to obtain proper consent for the release of medical information. NON-VIOLATION OF PRIVACY CASES The following is a discussion of the cases in which the Federal Privacy Commissioner found that there was no violation of privacy. PIPEDA Case Summary # In PIPEDA Case Summary # , the Privacy Commissioner held that the employer's use and disclosure of health information was considered appropriate. The employer was self-insuring for both shortand long-term absences due to illness or disability. Once an employee's absence exceeded a specified period, the employee was required to have her physician complete a doctor's report containing information about the individual's diagnosis, treatment and ability to return to work in a full or modified work capacity. On the doctor's form, the employee signed an authorization allowing the physician to release information to the company's health unit. All medical information was sent directly to that unit, where it was assigned a case manager who reported to the director. The director was a physician and the case workers all had medical training. The health unit's mandate was to assess the employee's eligibility for benefits and ability to return to work, and to determine the company's obligations to the employee under human rights legislation. Diagnostic information was held by the medical unit in strictest confidence. The only information shared with the employee's manager was information relevant to the employee's eligibility for benefits, workplace accommodations necessary to support a return to work and/or the individual's prognosis. As a result, the 129 Office of the Privacy Commissioner of Canada: online < 130 Office of the Privacy Commissioner of Canada: online < 131 Office of the Privacy Commissioner of Canada: online < Employment and Labour Law Seminar Page 45

48 Assistant Privacy Commissioner found that there had been no violation of the employee's privacy and the complaint was dismissed. PIPEDA Case Summary # and # In PIPEDA Case Summary # , an employee on extended sick leave complained when his employer requested that he complete a consent form authorizing his physician to release medical information about his illness to the company's occupational health staff. According to the company's policy on extended sick leave, the employee was requested to sign a consent form authorizing his or her physician to disclose medical information relating to the employee's illness to the company's occupational health professionals and to discuss the matter directly with them. The form stated the company's purposes for collecting the information, this being consideration for eligibility for benefits and establishment of fitness to work. The form asked for information about the employee's medical condition, treatment and prognosis. The company's occupational health and safety staff were doctors and nurses who were bound by their respective codes of ethics. They reviewed the form and provided managers only with information relating to the abilities and limitations of the employee. Detailed information about the company's policy was available to all employees via its website and in a brochure. The company had policies and procedures in place to safeguard employee medical information. Hard copies of documents containing health information were kept in a separate file and stored in secure areas. Computerized health information was also protected. The complainant also expressed concern that his manager knew the details about his condition. However, the individuals in question, as well as the occupational health professional, denied having spoken to each other about the complainant's illness. The Commissioner held that the company's purpose for collecting the personal information of the complainant was legitimate and in keeping with federal legislation. The Commissioner was further satisfied that the company limited its collection to that information that was reasonably necessary for those legitimate purposes. He also held that the company had in place policies and procedures that outlined these purposes, how the personal information was handled and by whom, the respective roles of the parties involved and that the parties were available to all employees. The Commissioner could find no evidence to conclude that the company's employees had disclosed the complainant's personal information without his consent. As a result, the complaints were dismissed. 134 PIPEDA Case Summary # In PIPEDA Case Summary # , the Commissioner held that the employer's practice of collecting personal medical information to support a transfer request was appropriate. The employee was requested to sign a consent form authorizing his physician to disclose medical information related to the employee's illness to the company's occupational health professionals and to discuss the matter directly with them. The form contained the company's purposes for collecting this information, namely consideration for eligibility benefits and establishment of fitness to work. The form also asked information about the employee's medical condition, treatment and prognosis. If the employee's absence continued beyond the projected date of return indicated on the form, the manager would ask the employee to fill out a second form. 132 Office of the Privacy Commissioner of Canada: online < 133 Office of the Privacy Commissioner of Canada: online < 134 A similar complaint was dismissed in PIPEDA Case Summary # , ibid. 135 Office of the Privacy Commissioner of Canada: online < Employment and Labour Law Seminar Page 46

49 The form was only reviewed by the doctors and nurses who were part of the occupational health staff. They were bound by their respective code of ethics and only provided managers with information relating to the abilities and limitations of the employee. Detailed information about the company's policy was available to all employees via its website and also set out in a brochure. After a medical leave, the employee's doctor wrote to the company, indicating a diagnosis and that the complainant could return to work on a part-time basis. The doctor supported the employee's request that he be transferred to a different work environment, one involving operational duties instead of office-related duties. The company requested additional medical information because there was nothing in the report that would restrict the complainant from working in an office environment. The company therefore refused the request for a transfer and advised that it would need to consult a specialist before it could reconsider the request. The Privacy Commissioner held that the company's request for medical information was reasonable and that it met the requirements of the privacy legislation. As a result, the complaint was dismissed. SUMMARY OF PRIVACY CONSIDERATIONS Medical information is highly sensitive. In most cases, it should only be collected, used and disclosed with the specific and express written consent of employees on a case-by-case basis. Even with the employee's consent, medical information should only be disclosed to authorized personnel on "a need to know basis": Reasonably necessary medical information should only be collected, used and disclosed to medically trained personnel Managers only need to know sufficient information to confirm that an employee is legitimately absent, when the employee will be able to return to work, what restrictions the employee may have and other information needed to properly accommodate the employee Specific consent by employees should be built into the various forms that the employee completes for accident-reporting purposes and claims for short- and long-term disability benefits Under provincial and federal privacy legislation, an employer may collect, use and disclose employee personal information without consent, provided that it is reasonably necessary to manage the employment relationship. However, the more prudent approach is to ensure that the employee provides specific consent whenever any medical information about that employee is collected, used or disclosed. This consent could be included in the relevant form. The consent statement must indicate what the information is being used for and who will have access to it. Although a general consent to disclosure may be appropriate with respect to personal information that is not sensitive, it is not recommended that general consents be used with respect to sensitive personal information. Medical information is always sensitive, particularly where it relates to medical diagnosis and prognosis. Therefore, when it comes to consent to release medical information, it is best to obtain it on a case-by-case basis. Employment and Labour Law Seminar Page 47

50 CONCLUSION In conclusion, the termination of a sick or disabled employee is much more complicated than the termination of a healthy employee. In addition to a determination of what constitutes reasonable notice where such notice is required by law, an employer must consider the requirements of human rights and other legislation on any termination, and the effect of termination on the continued provision of any disability benefits. Each of these considerations raises various issues that must be analyzed in the particular context of the employee involved. Failure to thoroughly analyze and consider each of the issues involved in this aspect of disability management can result in significant legal consequences for an employer Gowling Lafleur Henderson LLP This publication contains material of a general interest only and is not intended to provide legal advice or to replace a consultation with a legal professional on any particular matter. Employment and Labour Law Seminar Page 48