Monika Jensen, RPT Aviary Group

Terminating Employees on Extended Medical Leave
WHAT EMPLOYERS SHOULD KNOW

Q: I have an employee who has been on a medical leave of absence for years. When can an employer terminate a sick or disabled employee on the basis of frustration of contract?
 
A: Dealing with employees who are off work because they are sick or disabled is challenging at the best of times. However, when the absence continues for a prolonged period of time, employers naturally wonder at what point in time the employment contract becomes frustrated, and therefore concluded. 
 

Simon R. Heath Keyser Mason Ball LLP

When an employee is off on a medical leave of absence, the employer has a legal obligation to accommodate the employee up to the point of undue hardship. Undue hardship is assessed on a case-by-case basis. How long must an employer continue to accommodate an employee who is not at work and on a medical leave of absence before the employer can allege that the contract of employment has been frustrated and it no longer has a duty to accommodate the employee?
 
The Supreme Court of Canada recently commented on frustration of contract in the context of an accommodation of a medical absence in the Hydro-Quebec v. Syndicat des employees de techniques, professionelles et de bureau d'Hydro-Quebec, locale 2000 (SCFP-FTQ) c. Corbeil, 2008 CarswellQue 6436 (“Hydro-Quebec”) decision. In this case, the Supreme Court stated: “the employer’s duty to accommodate ends where the employee is no longer able to fulfill the basic obligations associated with the employment relationship for the foreseeable future.” The Court also stated it is necessary to assess the duty to accommodate globally in a way that takes into account the entire length of time the employee was absent.
 
Accordingly, the longer the time an employee is off from work and the longer he or she remains unable to work for the reasonably foreseeable future, the greater the chance an employer will have satisfied its burden of undue hardship and deem the employment relationship at an end.
 
It is important to note that while Hydro-Quebec is the leading decision regarding frustration of contract, every case must be assessed on a case-by-case basis. With that in mind, a recent Ontario Superior Court decision, Naccarato v. Costco Wholesale Canada Ltd., 2010 CarswellOnt 5127 (“Naccarato”), recently sought to shake things up and applied the principals in Hydro-Quebec to justify surprising results.
 
In Naccarato, the employee went on a medical leave of absence for approximately 5 years. His doctors did not provide a prognosis regarding his ability to return to work. The employer relied on Hydro-Quebec and terminated his employment on the basis of frustration of contract caused by his long and continuing absence. The employer made particular reference to medical notes citing that the employee’s return to work could not be predicted.

The Court referred to and distinguished the Hydro-Quebec decision, providing that in Hydro-Quebec there was evidence that the doctors were not optimistic regarding the possibility of improved attendance.  However, in Naccarato, the doctor provided no opinion with respect to a foreseeable return to work date. In addition, the doctors indicated that he was still receiving medication and weekly psychiatric treatment. Accordingly, the employer had not established that there was no foreseeable likelihood that he would be able to return to work.

While this is a lower court decision, the message of Naccarato is that prognosis, not length of absence, is what matters most.   Even after a relatively short absence, if there is medical documentation that states that the employee can never return to work, the employment agreement may be frustrated.  Likewise a very long absence (even 5 years) with an uncertain prognosis may not amount to frustration of the employment contract. 

In light of the foregoing, there is no magic period of time after which an employment contract is considered frustrated when an employee is on a prolonged medical leave of absence. That said, before employers consider terminating based on frustration, they should ensure that at the very least, they have updated medical information that clearly outlines there is little or no prospect of the employee’s return to work. A lengthy absence coupled with an uncertain prognosis for return may also persuade a Court that the employment contract has become frustrated.

Simon R. Heath, B.A., MIR, LL.B., is an associate in the law firm Keyser Mason Ball LLP and can be reached at sheath@kmblaw.com.

NOTE: Simon Heath will be presenting on "Today's Critical Issues in Employment Law" at the IPM Toronto One Day Conference on October 27, 2011. Click here for more details

Medical Notes for Time Off: Are You Getting a Clear Picture?
OBTAIN THE INFORMATION YOU NEED

Q: We seem to be getting more medical notes from doctors on behalf of our employees simply stating that they must be off for medical reasons. What can we as the employer do to get more information?

A: Unfortunately, this is often the case when doctor’s notes do not clearly define what the employee can or cannot do. The busy family physician often needs to get the patient out the door, not spend time determining what that person actually does in the workplace and try to match that information with the particular disability affecting this patient. This is a very time-consuming exercise and most family doctors simply don’t have that time.

Craig Karpilow MD, Workplace Medical Corp.

Keep in mind that the family physician is often presented with a large number of subjective complaints from the employee. The physician traditionally has to believe what the patient is telling him. The family physician is the patient’s advocate and therefore is trained to believe the patient. If for some reason the patient is more interested in taking time off than working, knows that they have sick days available and the weather is nice outside, a good story can make it hard for a busy physician to sort out the real from the invalid.

As an employer, if you get a note that says “Jane cannot return to work for medical reasons”, you do not know when Jane is going to return to work, why she is off, what the possibility of her return to work is, if there is going to be a problem regarding her return to work in the foreseeable future and if there is any accommodation that could be made for a work or non-occupational situation.

As the employer, you need to know if physical testing was done to determine if the reason Jane cannot return to work is for a physical reason, if there are medications that may affect her ability to work and if there are any treatments that could improve her condition and get her back to work sooner.

Sometimes, this has nothing to do with a medical condition but rather psychosocial problems. These can be family or marital issues, kid problems and underlying psychological/psychiatric problems. Is Jane getting psychological counselling? Has she been evaluated by a psychiatrist? Is she getting medication?

The best way of approaching a doctor’s note that does not give these parameters is to speak to the doctor. This can determine exactly what is going on and how to handle the consequences. Unfortunately, many physicians will not speak to HR departments, especially if the employee has not signed a medical release. There are numerous confidentiality laws in place that prohibit an employer from knowing the medical diagnosis. The employer does not need to know the exact diagnosis, but does need to know what restrictions are necessary for the potential return to work.

As an HR professional, you must get the employee to sign a Release of Medical Information. With this, you can write the doctor and ask some very specific questions that will assist in planning a return to work for this employee.

This request may end up on a pile of many other similar requests and may take months to get resolved. In the meantime, your employee is off work on your dime “for medical reasons”.

If you hit this blank wall with the physician or his office staff, an intermediary is the best bet. The most effective intermediary is your company physician. The Occupational Medicine physician can freely speak to another physician and determine the diagnosis and the ability of the employee to be able to return to the workplace, either in full duty or in modified duties.

Many organizations do not have the luxury of an in-house Occupational Medicine doctor. As the economy tightens, having a doctor on staff is a rarity even for large manufacturing plants. There are however companies that specialize in being the “company doctor” for smaller companies. These Occupational Medicine groups have Occupational Medicine doctors on staff and can provide the same services as if he or she was the in-house doctor for your organization.

An Occupational Medicine specialist can interpret the doctor’s note to determine if Jane needs time off work and the diagnosis. A doctor’s note needs the restrictions of the duties and if not provided, the Occupational Medicine doctor can provide to the HR department a modified job plan.

The Occupational Medicine physician is there to determine whether the complaints are purely subjective or there is truly an objective reason for their time off and if that time off is even necessary. It is the expertise of the Occupational Medicine physician that determines further investigation so that the employee can be appropriately returned to the workplace. The Occupational Medicine doctor works with the family doctor to make suggestions to the family doctor for further investigation. This saves both you as the employer and the family doctor time and effort.

In summary, when you receive a note from a family doctor “Jane has to be off work”, the best thing to do is to go to either your in-house company doctor or a group that has Occupational Medicine doctors who can act as your representative. Make sure that you have signed Release of Medical Information from the employee. Ask the Occupational Medicine doctor to contact the family physician to determine what needs to be done to get Jane back to work in an appropriate and timely manner.

Craig Karpilow, M.D. FACOEM, MPH, FCFP, MOR is Medical Director, Occupational Medicine with Workplace Medical Corp, Toronto-Hamilton and can be reached at 1-800-263-9340.