Employers are often concerned about whether terminated employees
can claim entitlement to accumulated sick leave credits. This case
shows how important it is to scrutinize every word in termination
agreements; unclear language can come back to haunt the
The employee had been employed for 29 years with the County of
Haldimand and its predecessor municipalities. He was presented with
and accepted a severance package. He signed a Release and in
The severance agreement was incorporated into the Release and
allowed for a claim for "usual retiree benefits." The
employee relied on that language to claim payment of accumulated
sick leave pursuant to a section of the employer's Policy
Manual which stated:
"An employee hired prior March 12, 1981 and who has a
minimum of five (5) years of continuous service will be entitled to
a payment equal to the value of one-half (.5) of the balance of the
employee's accumulated sick leave credits to a maximum of one
hundred thirty (130) days pay at current salary, upon termination
of employment for any reason."
At trial, judgment was awarded to the plaintiff for payment of
accumulated sick leave credits. The employer appealed and argued
that the severance agreement did not specifically give entitlement
to sick leave credits, and the Release barred the employee's
The court decided that the only "retiree benefit" that
the employee had was the payment of accumulated sick leave pursuant
to the Policy Manual. As such, the severance agreement's
reference to "retiree benefits" must mean the accumulated
sick leave credits.
The court also held that the Release did not bar the claim
because the severance agreement was incorporated into the
Lastly, the court rejected the employer's argument that the
two-year limitation period started when the employee signed the
severance agreement. Instead, because sick leave credits are part
of retiree benefits, the court decided that the limitation period
should begin May 31, 2008, the day when he "retired".
FMC is one of Canada's leading business and litigation law
firms with more than 500 lawyers in six full-service offices
located in the country's key business centres. We focus on
providing outstanding service and value to our clients, and we
strive to excel as a workplace of choice for our people. Regardless
of where you choose to do business in Canada, our strong team of
professionals possess knowledge and expertise on regional, national
and cross-border matters. FMC's well-earned reputation for
consistently delivering the highest quality legal services and
counsel to our clients is complemented by an ongoing commitment to
diversity and inclusion to broaden our insight and perspective on
our clients' needs. Visit:
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
A former teacher at Bodwell High School has learned a valuable lesson from the B.C. Human Rights Tribunal— it is not discriminatory for an employer to offer child-related benefits to only employees with children.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).