Termination While in Receipt of LTD

A decision made by the employer to terminate when the employee is in receipt of LTD benefits, again rightly or wrongly, will present many issues to both parties. The employer would be imprudent to take such action as it will expose itself to serious potential liability. ¹

The issue of the recurrent disability coverage will now be at risk. In addition, many employers have a policy allowing for the continuation of the other benefit plans to the disabled employee. Many pension plans allow for pension accruals to disabled employees. Both these entitlements will be lost, given a termination of employment.

Human rights cases awarding reinstatement are certainly available, but this is a discretionary remedy. It is very likely that a termination of a disabled employee in the above circumstances is prima facie discriminatory.

The defence to such an assertion is typically accommodation to the point of undue hardship. This defence arises when the employee asserts that they are able to return to active employment. A case may be made that the employee seeks only to retain their employment status without active employment in order to maintain benefit and pension coverage, in addition to the protection of the possibility of returning to active employment to maintain the insurance coverage upon such a return to work. While no cases have presented this argument to date, it remains a viable argument.

Counsel should be mindful of human rights limitation periods which are different from the general time period of two years from discoverability for civil actions.

B.C. once had the shortest limitation period of 6 months.  It is now 12 months. It allows for a possible extension where in the public interest and no substantial prejudice is shown. Nunavut is similar although the period is set at 2 years and also allows an extension where the delay was occasioned in good faith and again no prejudice has been suffered.

Manitoba sets a 1 year proscription period and allows for a similar extension where there is no prejudice and it is an individual who seeks the extra time and not the Commission.

New Brunswick allows for a 1 year period and a general discretion to extend without any set guidelines on the face of the statute, as does Saskatchewan.

P.E.I fixes a 1 year absolute period, as does Newfoundland and Alberta. Quebec’s Charter requires the case be commenced within 2 years and similarly there is no provision for an extension.

Nova Scotia and Ontario set a 1 year period and each allow for extensions where there is no prejudice. Ontario requires the applicant to also show good faith. N.W.T. has a 2 year period with extensions available on the same terms as Ontario, which is the same law as the Yukon, apart from the set time period which is 18 months.

The federal law sets the filing period as 1 year and allows for a residual discretion to extend to the Commission.

It is to be recalled that Ontario allows for a human rights claim with a companion civil action by statute in which case the limitation period is 2 years from discoverability.