Caution Required When Settling an Employment Dispute

Last month local newspapers reported the case of a McDonald’s employee in Kanata who was dismissed after receiving poor performance reviews. The employee received more than $100,000.00 in court. Why?

‍The short answer is that the judge in this case found that although the employee’s performance was not perfect the employer did not have “just cause” to terminate her employment contract. If a business chooses to dismiss an employee the employer has to first decide if they have just cause to end the contract or not. Just cause exists when an employee has committed a serious breach of contract such as theft or continually missing work without reason. If the employer does not have just cause then in most cases they have to provide compensation which can equal up to a month of salary for every year of the employee’s service.

Many employers have staff who they believe are poor performers. Performance reviews are often done to encourage better performance but may also be an attempt to build a case for a just cause dismissal. After several poor performance reviews an employer may choose to dismiss an employee for just cause. However, a decision to terminate an employee for just cause can be challenged in court where employers often find it difficult to prove that the alleged breach of contract was serious enough to warrant a just cause dismissal. Poor performance reviews may show that an employee was less than perfect but this alone is usually not enough to disentitle them to some compensation when they are dismissed. Because compensation is typically based on the number of years the employee has worked, the amount owing to dismissed employee can be significant which is what occurred in the case of the former McDonald’s employee.

Work at my business has slowed down quite a bit this year. I currently have 11 employees but there is not enough work to go around. I should be getting a set of new contracts that will keep everyone busy this spring, but I’d like to make some temporary layoffs in the meantime to avoid having to let anyone go for good. I’ve discussed this with business colleagues who told me that temporary layoffs are not permitted for non-unionized employees. What are my options?‍

The law applicable to temporary layoffs in Ontario can be confusing. The Employment Standards Act does allow temporary layoffs of up to 13 weeks in a 20 week period. In certain seasonal industries, such as construction, temporary layoffs over the winter months are fairly common. However, in other workplaces courts in Ontario have treated temporary layoffs as constructive dismissals and have ordered employers to provide termination and severance pay.

In recent years, some Ontario court decisions have allowed temporary layoffs provided employers comply with both the Employment Standards Act and the terms of the employee’s contract. Depending on the nature of the work, such layoffs may even be permitted when an employee is working with an unwritten contract. A temporary layoff is also more likely to be permitted if an employee remains entitled to benefits and can access Employment Insurance during their time off. During any such layoff it is important to inform the employee that the layoff is temporary and to provide them with a return to work date. Finally, a temporary layoff should not be used as a form of discipline to punish an employee for misconduct – that will most certainly result in a claim for constructive dismissal.

I have been off work since May 2016 and have been trying to obtain short-term disability insurance since then. My doctor has provided me with three sick notes since then and at our last appointment she told me not to work. However, my application for short-term disability insurance has been denied. I’ve given the disability insurer the notes from my doctor and I’ve gone through the appeal process but have been denied again. My employer is now asking when I will return and I’ve booked an appointment with my doctor to see what she thinks. What should I do?

‍It is not uncommon for disability insurers to deny an initial application for short-term disability benefits. Often the reason cited for the denial is a lack of medical evidence of a disability. If the only documentation you have provided to the insurer are sick notes from your doctor it is usually of assistance to obtain further medical records from your doctor including something documenting your diagnosis. Often, after receiving such additional documentation an insurer will approve an application for disability benefits. If you continue to be denied benefits, it is likely time to consult with legal counsel. Also short-term disability benefits typically end within 6 months even if you are approved. Ensure you know when these benefits end and decide with your doctor whether you should be applying for long-term disability benefits if they are available to you.

With respect to returning to work you are entitled to rely on your doctor’s advice. If your doctor tells you not to work this should be documented in a doctor’s note and provided to your employer. Forcing you to return to work when your doctor says you’re sick is in breach of human rights legislation and it’s unlikely that your employer will insist on your return to work in the face of your doctor’s advice.