Is Someone On Unpaid Sick Leave Entitled To Pay In Lieu Of Notice?

Written on behalf of Arbesman Hamilton LLP

Unpaid leaves of absence from work can complicate people’s lives, contributing financial stress as well as worry about a person’s health. Another way that unpaid medical leave complicates people’s lives is when they lose their job while on leave. The Ontario Superior Court of Justice recently issued a decision on an appeal that addressed whether someone who is on unpaid sick leave is able to benefit from payment in lieu of notice when they are unable to work.

The facts

The employee worked as a driver/mover for the employer for approximately 17 years. The employer gave six months’ notice to all of its employees on January 31, 2016, stating it would be shutting down operations on July 31, 2016. At that time, the employee had been on an unpaid leave of absence as a result of injuries sustained in a motor vehicle accident on September 18, 2015. He was eventually able to return to work, though for just a few hours before the employee ceased operations.

The motion judge’s decision

At trial, the motion judge ruled that the employee was entitle to 12 month’s pay in lieu of reasonable notice of termination. The ultimate pay ended up being nine months since he had already been paid some money and had also been able to find new employment. The trial judge’s decision was that an employee on an unpaid medical leave of absence could not be made to take working notice if they are unable to work. While the employer doubted whether the employee was really unable to work, the court ultimately agreed with the medical evidence put before it. The court held that when someone is unable to work, for medical reasons, during a notice period, they are entitled to the pay they would have received had they been able to work.

Appealing the decision

The employer appealed the decision on two grounds. The first was that the motion judge failed to draw an adverse inference from the employee’s failure to provide adequate medical evidence to establish he was unable to reasonably mitigate his damages due to his medical condition. The second grounds was that the motion judge erred by applying an incorrect legal standard on the employer when it attempted to establish that the employee failed to take reasonable steps to mitigate.

The court first addressed the claim that the motion judge failed to draw an adverse inference to the employee’s failure to mitigate his damages. In stating that the medical evidence provided was sufficient, the court wrote,

“The (employee’s) medical condition was such that he could not be expected to undertake a serious job search until he was able to return to work on July 27, 2016.  There was considerable medical evidence to support this finding, including the Functional Abilities Questionnaire provided by (his doctor) on June 20, 2016.  His covering letter set out the nature of the (employee’s) medical condition and the further treatment needed, and he specifically stated that the (employee) was unable to work until he received more treatment.  The plan was for a reassessment in one month, which occurred, resulting in the (employee’s) return to part-time restricted duties on July 27, 2016.

“Further, the motion judge reasonably found on the evidence that the (employer) accepted the medical evidence provided by the (employee).  As found by the motion judge at para. 25 of his reasons, the (employee) was on an agreed medical leave of absence and ‘when asked for more medical information, (the employee) provided it.  The information must have satisfied [the Appellant] each time it was provided because (the employer) chose not to terminate (the employee) for cause.’”

The court also found that the motion judge did not apply too high an onus on the employer. The court noted that the only evidence provided by the employer was a printout of available jobs from an online job search. The court determined the motion judge had appropriately given the evidence little or no weight.

At Arbesman Hamilton LLP we understand that employment law issues can take up a lot of time, cost a lot of money, and produce a great deal of stress. That’s why we work with both employers and employees involved in workplace disputes, including those related to termination. In addition, we help employers draft contracts and make decisions designed to avoid litigation in the future. We also help employees understand their rights and responsibilities under an employment contract. If you are an employer or employee involved in an employment law matter, please call us at 416-481-5604 or reach us online to talk today.