Employers cannot deny severance pay to workers who stop working because of their disabilities, court finds

The following article is taken from the Mental Health Works News Review page at:
http://www.mentalhealthworks.ca/general/news_review.asp#2

Employers cannot deny severance pay due to workers' disabilities, court finds

Disabled workers cannot be denied severance packages due to their disabilities, the Ontario Court of Appeals ruled, striking down part of the Employment Standards Act.

Some have called the May 4, 2005, decision a milestone. The court ruled as unconstitutional the provision of the Employment Standards Act that allows Ontario employers to refuse severance pay to employees whose illness or injury has "frustrated" their ability to work.

The court ruled in "Ontario Nurses' Association v. Mount Sinai Hospital." The hospital dismissed Christine Tilley in 1998, who had worked at the hospital for 13 years. In 1995, Tilley injured her knee in a water-skiing accident and later developed depression and bulimia. Tilley attempted to return to work several times, the decision notes, but experienced a relapse in 1996 and began receiving long-term disability benefits. Just prior to her termination, her doctor told her she would be able to return to work at some point but could not estimate when. The Employment Standards Act requires an employer with a payroll of $2.5 million or more to give severance pay to an employee who has worked for the employer for five or more years. The hospital did not give Tilley severance pay upon her termination because her contract had been terminated due to her disability, the court of appeals said.

An arbitration board upheld the hospital's position, but a divisional court quashed the board's order, finding the relevant passage of the act unconstitutional. That ruling led to the appeal.

The hospital and the attorney general, who argued in support of the legislation before the court of appeals, suggested that the main purpose of severance pay is to help employees find new employment, and since, they argued, employees whose contracts were frustrated due to illness or injury were unlikely to work again, denying them severance pay is not discriminatory. The Ontario Nurses' Association, arguing on behalf of Tilley, claimed that severance pay is meant to compensate long-serving employees for years of service, and that employees whose contracts were frustrated due to disability have made equally valuable contributions as employees; therefore, the association's lawyers argued, the denial of severance pay to these employees is discriminatory.

The court agreed with the nurses' association. "[I]t cannot be said as a matter of logic and common sense that employees whose employment has been frustrated are not likely to work again," the decision states. "Quite the contrary, the generalization that is offered as the rational connection reflects a stereotypical presumption about the adaptability, industry, and commitment to the workforce of persons with disabilities severe and enduring enough to frustrate their employment."

"The generalization can only have the effect of perpetuating and even promoting the view that disabled individuals are less capable and less worthy of recognition and value as human beings and as members of Canadian society."

The court noted that while an employer must "consider disabled employees' personal characteristics in accommodating them to the point of undue hardship, accommodation may not be possible for reasons unconnected to their personal characteristics, such as the range of other work available and working conditions in the workplace, and in the case of innocent absenteeism, the employer's ability to cope with the employee's prolonged absence. It follows that employees with severe and prolonged disabilities, while unable to be employed in one workplace, may be able to be employed in another."

"Second, things change," the court said. "Employees with permanent disabilities may undergo retraining and acquire new skills, and new devices and techniques of accommodating special needs may be developed. Employees with temporary disabilities may recover and be able to return to work, even if their conditions persisted long enough to result in the frustration of their former employment contracts." For example, the court noted, Tilley has since found new employment.

For the complete text of the decision, see "Ontario Nurses' Association v. Mount Sinai Hospital," Court of Appeal for Ontario, May 4, 2005, at www.ontariocourts.on.ca. For more on the case, see "Severance Law Overturned," Toronto Star, May 5, 2005.