Canada: Undue Hardship: Supreme Court Of Canada Clarifies The Standard – Or Does It?

Last Updated: August 6 2008
Article by David Elenbaas

Absence makes the heart grow fonder.

While that proverb may ring true for anyone separated from a loved one, for a human resources manager struggling with a frequently absent and chronically ill employee, fondness is not necessarily the foremost feeling. Accommodating an employee's absences can be challenging at the best of times.

In an important decision for employers issued on July 17, 2008, the Supreme Court of Canada has attempted to clarify an employer's obligations with respect to the duty to accommodate a chronically absent employee to the point of undue hardship. A major question remains, however, as to what the decision means for provincially regulated employers in Ontario.

Factual Background

In Hydro-Québec v. Syndicat des employé-e-s de techniques professionnelles et de bureau d'Hydro-Québec, section locale 2000, the Court dealt with the case of a unionized employee of Hydro-Québec whose employment was terminated in July, 2001 following extensive periods of absenteeism. The employee had suffered from a number of physical and mental ailments including tendinitis, bursitis and epicondylitis (tennis elbow), hypertension, hyperthyroidism, depression and mixed personality disorder. The latter resulted in deficient "coping" mechanisms which made her working relationships with her supervisors and peers difficult. Over the years, the employer had accommodated her conditions. She missed 960 days of work between January, 1994 and July, 2001.

The employee's last active day of employment was in February, 2001 at which time her attending physician had recommended that she stop working for an indefinite period "until the work-related dispute is resolved". After the employer had obtained a psychiatric assessment which concluded that she would no longer be able to "work on a regular and continuous basis without continuing to have an absenteeism problem as in the past", the employer informed the employee of her administrative dismissal. The employee, who was represented by her union, filed a grievance.

The arbitrator appointed under the collective agreement dismissed the grievance on the basis that the employer had proven that when it dismissed the grievor, she was unable to work steadily and regularly for the reasonably foreseeable future.

Further, the arbitrator found that the conditions for the complainant's return to work as suggested by the union's expert would constitute undue hardship. The Quebec Superior Court dismissed a motion for judicial review of the arbitrator's decision. However the Quebec Court of Appeal set aside the Superior Court's judgment and held that the employer had not proven that it was impossible to accommodate the grievor's characteristics. It also held that the arbitrator should not have taken the previous absences into account, since the duty to accommodate must be assessed as of the time of the decision to terminate.

Supreme Court's Decision

In upholding the employer's appeal the Supreme Court addressed two issues: first, what standard applies to prove undue hardship when a clear duty to accommodate exists and second, at what time is the duty to accommodate to be assessed?

In assessing the standard of undue hardship, the Court stated as follows:

"The purpose of the duty to accommodate is to ensure that persons who are otherwise fit to work are not unfairly excluded where working conditions can be adjusted without undue hardship.

However, the purpose of the duty to accommodate is not to completely alter the essence of the contract of employment, that is, the employee's duty to perform work in exchange for remuneration.

... a case involving chronic absenteeism, if the employer shows that, despite measures taken to accommodate the employee, the employee will be unable to resume his or her work in the reasonably foreseeable future, the employer will have discharged its burden of proof and established undue hardship.

Thus, the test for undue hardship is not total unfitness for work in the foreseeable future. If the characteristics of an illness are such that the proper operation of a business is hampered excessively or if an employee with such an illness remains unable to work for a reasonably foreseeable future even though the employer has tried to accommodate him or her, the employer will have satisfied the test."

As for the timing of the assessment of accommodation the Court applied its previous decision in McGill University Health Centre (Montreal General Hospital) v. Syndicat des employés de l'Hôpital général de Montréal, released after the Court of Appeal's judgment in this case, and held that the decision to dismiss an employee because the employee will be unable to work in the reasonably foreseeable future must necessarily be based on an assessment of the entire situation. When the employee has been absent due to illness, the employer has accommodated the employee for several years and doctors are not optimistic regarding the possibility of improved attendance, neither the employer nor the employee may disregard the past in assessing undue hardship.

What This Means for Employers in Ontario

While this decision clarifies the standard of undue hardship in Quebec, in Ontario the decision must be considered in context with previous decisions of the Supreme Court. In the Montreal General Hospital decision the Court stated:

"The importance of the individualized nature of the accommodation process cannot be minimized. The scope of the duty to accommodate varies according to the characteristics of each enterprise, the specific needs of each employee and the specific circumstances in which the decision is to be made."

In Hydro-Québec, when the Court discussed the approach to accommodation first set out in its decision British Columbia (Public Service Employee Relations Commission) v. BCGSEU, [1999] 3 S.C.R. 3 (Meiorin), it cited its own comments on undue hardship as follows:

"Among the relevant factors are the financial cost of the possible method of accommodation, the relative interchangeability of the workforce and facilities, and the prospect of substantial interference with the rights of other employees...The various factors are not entrenched, except to the extent that they are expressly included or excluded by statute. In all cases, as Cory J. noted in Chambly [1994] 25 S.C.R. 525], at p. 546, such consideration should be applied with common sense and flexibility in the context of the factual situation presented in each case." (emphasis added)

It appears simple – right? Accommodation must be individualized and flexible. Undue hardship factors should be applied with common sense and undue hardship itself can be demonstrated if the proper operation of a business is hampered excessively or the employee remains unable to work for the foreseeable future notwithstanding accommodation.

However, provincially regulated employers in Ontario are governed by the provisions of the Ontario Human Rights Code (the "Code"). Section 17(2) of the Code addresses the duty to accommodate in the context of disability. It reads:

"No tribunal or court shall find a person incapable [of performing the essential duties of the job] unless it is satisfied that the needs of the person cannot be accommodated without undue hardship on the person responsible for accommodating those needs, considering the costs, outside sources of funding, if any, and health and safety requirements, if any." (emphasis added)

In Ontario the undue hardship factors are entrenched in the Code, as alluded to in Meiorin, and are much narrower. The Ontario Human Rights Commission takes the position that these are the only factors that can be taken into account. How has the Commission viewed cost as a factor in assessing undue hardship? Is the Commission's policy consistent with the Hydro-Québec decision? Will the Ontario Human Rights Tribunal, which now investigates and adjudicates all complaints, find reason to limit the application of the Hydro-Québec decision based on the language of the Code which addresses undue hardship?

Interestingly recent amendments to the Code may have a significant effect on this issue. Section 30 of the Code provides that the Commission may approve policies prepared and published by it to provide guidance in the application of Parts I and II, which set out the right to be free from discrimination and the interpretation and application of that right. Section 45.5 of the Code provides not only that the Tribunal may consider policies approved by the Commission, it mandates that the Tribunal "shall" consider a policy approved by the Commission under section 30 if a party to the proceeding or an intervener requests that it do so.

The Commission approved its Policy and Guidelines on Disability and the Duty to Accommodate in 2000. The Guidelines expressly provide that costs will amount to undue hardship if they are (1) quantifiable (2) shown to be related to the accommodation, and (3) so substantial that they would alter the essential nature of the enterprise, or so significant that they would substantially affect its viability. If the Guidelines are applied literally by the Tribunal, the latter factor alone would seem to take the standard of undue hardship in Ontario well beyond the standard articulated by the Supreme Court in Hydro-Québec.

All this remains to be seen. What is clear is that the Supreme Court is attempting to put some reasonable boundaries around the duty to accommodate.

The foregoing provides only an overview. Readers are cautioned against making any decisions based on this material alone. Rather, a qualified lawyer should be consulted.

© Copyright 2008 McMillan LLP

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