Employee Constructively Dismissed By Being Forced To Take Disability Leave
April 9, 2014
In a recent decision of the Manitoba Court of Appeal, the Court found that an employer car dealership that forced an employee to take an indefinite leave of absence due to vision related symptoms of diabetes, had constructively dismissed him.
The employee, a 19 year senior managerial employee, was diagnosed with diabetes in 2005 after experiencing deteriorating eyesight. By 2007, he was blind in one eye. In May of 2009, the employer called a meeting with the employee to discuss his eyesight and its impact on his work. After the meeting the employee left the dealership and never returned other than to retrieve his personal items. Two days later the employer circulated a notice to all staff that the employee was taking a leave of absence due to his health. The employer thereafter paid the employee for two weeks and filed forms with its disability insurer in support of an application for long term disability benefits for the employee. The employee never made the application. The next month, the employer promoted another individual to the employee’s position.
The employee commenced an action for wrongful dismissal against the car dealership in August 2009. In October 2009, the employee obtained employment with another car dealership as a salesman and his former employer removed him from its employee list. The employee’s new employment only lasted 8 months.
The employee asserted that at the May 2009 meeting, he was told to go on long-term disability or he would be terminated. The trial judge found as a fact that the evidence of the employer was more probable; being that the employee was advised to take time off, convalesce and apply for disability insurance and that when he recovered, his job would be waiting for him.
The judge also held that the employee’s health had deteriorated to the point that he was unable to perform his employment duties and that the employee was in a state of “self-denial”. The judge commented upon the lack of any medical evidence being called at the trial to support the employee’s contention that he was medically able. In conclusion, the trial judge found that the employee had quit and dismissed the action.
The Court of Appeal held that the trial judge erred in failing to address the issue of constructive dismissal; being “any act on the part of an employer which repudiates the essential obligations imposed on it by the contract of employment”.
The Court of Appeal noted that “a forced leave of absence may constitute a constructive dismissal, particularly where it is an unpaid leave of indefinite duration, with no guarantee of eventual employment”. It also stated that the onus is on an employer to show that an employee is medically incapable of performing his job (i.e. to show that the employment contract has been frustrated); and that frustration due to illness depends upon a number of factors, including the terms of the contract, how long the employee is likely to remain ill, the nature of the employment, the nature of the illness, the availability of sick leave and pay, the length of employment, and how long the employer should reasonably be expected to await the employee’s return.
The Court of Appeal held, on the facts as found by the trial judge, that the employer imposed a forced leave of absence at the May 2009 meeting without first investigating the employee’s prognosis and filled his position within one month and that therefore, on any objective assessment, the employer had imposed a “fundamental change in the employment relationship going to the root of [the employee’s] employment contract.” The Court further found that the employer did not satisfy its onus to prove frustration based upon a permanent disability. The employee was held to be entitled to damages in excess of $340,000, together with interest and costs.
This decision is a caution to employers when dealing with an employee’s medical issues. Inquiries should be made of the employee’s medical prognosis to determine, on an objective basis, whether the employee is permanently disabled or as stated in other decisions, whether there is any reasonable expectation that the employee will recover in the foreseeable future. Only armed with that evidence will an employer be able to assess whether, after careful consideration of all other relevant factors, frustration is a viable ground for termination.