In the 2014 decision of Bhasin v Hrynew, the Supreme Court of
Canada held that the duty of good faith requires that an insurer
deal with its insured's claim fairly, both with respect to the
manner in which it investigates and assesses the claim, and the
decision whether or not to pay it. This decision has and will be
the subject of much interpretation by our courts (see my partner,
Bill Armstrong's, recent post
In Bonilla v Great-West Life Assurance Company et
al, the Ontario Superior Court applied the Supreme Court
of Canada's reasoning in Bhasin v Hrynew to
determine that an employer did not breach its duty of good faith by
refusing to fund a $72,750 rehabilitation program requested by the
insurer of an employee on long term disability.
The employee worked as a call centre specialist at a large
Canadian bank but was injured in a car accident causing ongoing
health difficulties. The employee went on long term
disability for nearly 13 years and was unable to return to
work. The insurer who administered the employer's income
protection plan requested that the employee undergo an expensive
and difficult rehabilitative program, but required the
employer's consent under the terms of the plan. The
employer refused to fund the program, citing concerns that the
program was onerous and the employee had participated in similar
programs in the past without success. Immediately after this
treatment program was rejected, the employee submitted a further
rehabilitation plan at roughly 10% the cost of the first, but the
employer refused to fund it citing the same concerns.
The Court held that the employer's decision to refuse to
implement the treatment program was not carried out in bad
faith. The terms of the income protection plan required any
rehabilitation program to be approved by the employer. There
was no evidence that the employer exercised its discretion to
refuse the program in bad faith. The employer was entitled to
reject the second plan because it was based and premised upon the
first treatment plan and the employee was "attempting to
obtain a result through the back door which it could not through
the front door." Finally, the employer did not breach
its duty of good faith by withholding payment of one month's
long term disability benefits during a period that the employee had
travelled abroad without notifying the employer—as required
under the terms of the plan.
Written with the assistance of Danny Urquhart, articling
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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.
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.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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