Pound v. iWave, 2017 PECA 17, a recent decision by the Prince Edward Island Court of Appeal, is a cautionary tale for employers about the legal issues that may arise when standard form employment policies are adopted without management fully understanding their obligations to employees in practice.read more
Working Notice not Appropriate for Employees on Medical Leaves of Absence
A recent decision of the Ontario Superior Court, McLeod v 1274458 Ontario Inc., 2017 ONSC 4073, confirms that working notice does not apply where an employee is unable to work due to a medical leave of absence.
Keith McLeod was employed by 1274458 Ontario Inc. (“the Employer”) as a mover for a period of 18 years, from 1998 to 2016. In September 2015, McLeod was injured in a non-work-related car accident. He was consequently unable to work and, without objection from the Employer, was placed on an unpaid leave of absence.
In January 2016, McLeod’s treating physician provided him with a medical certificate stating that he would be unable to work until mid-March, which McLeod then forwarded to the Employer. Two days later, McLeod received a notice of termination stating that the Employer was ceasing operations effective July 31, 2016, at which time McLeod’s employment would be terminated. McLeod was also advised that the period from January 31, 2016 to July 31, 2016 was to comprise working notice, and that he would continue to receive his regular wages if he returned to work prior to July 31, 2016.
In March, McLeod visited his physician, who determined that McLeod’s condition had not improved. In mid-April, McLeod visited a new physician who advised the Employer that McLeod was unable to work until further notice. The Employer felt that this assessment was inadequate and requested further medical information from McLeod, noting that it reserved the right to terminate his employment for just cause should the information not be provided by April 22, 2016. Although the requested information was not provided until after this deadline, McLeod was not terminated. In both April and May, the Employer suggested that McLeod return to work in a less strenuous part-time position. On both occasions, McLeod’s physician confirmed that he was unable to return to work.
In late July, McLeod was cleared to work light duties on a part-time basis and returned to work for two three-hour shifts before the Employer ceased operations. McLeod subsequently obtained a comparable job at comparable pay and began to work in his new position on October 31, 2016.
The Ontario Superior Court found that because McLeod was incapable of working when he received the noticed of termination, he was entitled to damages representing the salary that he would have earned had he worked during the notice period. The Court rejected the Employer’s assertion that McLeod should have returned to work during the notice period, noting that McLeod remained on a medically supported leave of absence until late July. As the Employer had accepted the fact that McLeod was unable to work, it could not now argue that McLeod was obligated to prove his inability to work.
The Court then considered the Bardal factors, including McLeod’s 18 years of employment, his age (43), his position as a mover, and the fact he had no special training or qualifications. Notably, the Court recognized that the current job market is much different than it was when Bardal was decided, stating that it is more difficult for individuals without skills and specialties to find employment in today’s knowledge-based economy. As a result, the Court determined the appropriate notice period to be 12 months.
The Court also found that McLeod had mitigated his loss by finding new employment within a reasonable period of time, being 9 months after receiving his notice of termination and 3 months after his actual termination.
McLeod was awarded damages representing 9 months base salary for the period between January 31, 2016, when he received his notice of termination, and October 31, 2016, when he commenced his new employment, less the pay he received for the two shifts worked in late July and a sum paid by the Employer pursuant to the Employment Standards Act.
Lesson for Employers
The purpose of reasonable notice is to provide employees with an opportunity to secure new employment while still earning an income. This goal is defeated if the employee is unable to undertake a job search for medical reasons. Employers therefore cannot give working notice to employees who are incapable of working due to medical leaves of absence.
Similar circumstances exist with respect to the termination of employees on maternity leave. Employers whose operations are ongoing are advised to seek legal advice when terminating the employment of employees on sick leave or maternity leave.