A recent arbitration decision clarifies employer's obligations when terminating employees who are off work for disability leave.
A recent decision of Arbitrator Randy Levinson found that the Employment Standards Act, 2000 (“ESA”) does not require an employer to pay termination pay to disabled employees if the employer wishes to provide written notice of termination instead. In Quality Meat Packers Limited and the United Food and Commercial Workers Canada, Local 175 (as yet unreported), Arbitrator Levinson based his decision on the fact that the disabled employees did not provide any services to the employer and were therefore not entitled to any compensation.
While this may seem straightforward, this issue has been a source of debate for some time within the legal community. On one side of the debate, employee representatives and advocates (whether unionized, as in this case, or otherwise) have argued that, where an employee is not at work due to a disability they must be provided with termination pay when their employment is terminated, on the premise that to do otherwise is to discriminate on the basis of disability which runs afoul of the Human Rights Code.
On the other side of the debate, the argument focuses on the strict interpretation of the ESA which states that the employer has the option of providing either notice of termination or termination pay. It should be noted that in any instance of working notice, all regular wages must be paid to the employee, and there is much discussion in the decision with respect to how “regular wages” are determined.
In this instance, Arbitrator Levinson determined that in fact the choice of notice of termination or termination pay is not discriminatory. This determination was based on the purpose of the termination provisions of the ESA. Arbitrator Levinson found that the specific reason for providing notice of termination was to allow the employee to begin his or her search for alternate employment before the end of his or her current employment.
The reason for termination pay instead of actual notice is to cushion the transition where that notice period is not provided, and the pay is commensurate with the amount of notice the employee should have received; it is not an additional or separate entitlement.
Thus, the purpose of the ESA is achieved when an employer provides actual notice of the termination, and the employee will earn their regular wages during that notice period in accordance with whatever their contract of employment (in this case, a collective agreement) requires.
Notwithstanding the fact that a disabled employee may not in fact earn any money during this notice period, an employee who receives working notice but does not provide any services (and therefore does not earn any compensation) is in exactly the same position as an employee who receives working notice and does provide services (and does receive compensation) vis-à-vis the purpose of the statutory termination provisions. Please contact one of the lawyers at CCP if you have any questions concerning this decision or to discuss your obligations as an employer at the point of dismissal.
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