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Court of Queen’s Bench of Alberta affirms that
employees receiving disability payments during the reasonable
notice period cannot also receive payment for lost
wages:Belanger v. Western
Ventilation Products Ltd.,
2019 ABQB 571
The Court of Queen’s Bench of Alberta recently rendered a
decision affirming that employees receiving disability payments
during the reasonable notice period cannot receive double
compensation for both disability payments and payments for lost
wages. The decision is based on the principle that employees are
entitled to damages based upon the amounts that they would have
been entitled to receive during the notice period. Since employees
receiving disability benefits would not be working, and therefore
would not collect salary, they cannot be awarded both salary
payments and disability payments in a wrongful dismissal
claim.
Facts
Mr. Belanger was terminated without cause from his employment
with Western Ventilation Products Ltd. (“Western”). He
was provided with approximately one year of working notice and
continued benefits for at least two years from termination. During
the working notice period Mr. Belanger became ill, was unable to
work, and started receiving disability benefits through
Western’s disability plan. Mr. Belanger was 64 years old at
the time of the claim, and pursuant to the benefit plan, he was
entitled to receive disability benefits until age 65, at which time
the disability insurance payments terminated.
Mr. Belanger brought a claim for wrongful dismissal and sought a
24 month severance payment. Western sought summary dismissal based
on the fact that Mr. Belanger would not have been able to work
during any notice period, regardless of its length. As such the
only payments he would have received during a 24 month notice
period would have been the disability insurance payments until age
65. Since he was already being paid disability insurance payments
until age 65, no further compensation was necessary.
Decision
A Master in Chambers dismissed Mr. Belanger’s claim on the
basis that there were no damages arising from the termination.
Employees are entitled to damages based upon the amounts that they
would have been entitled to receive during the reasonable notice
period. The foundational principle is that employees should be put
in the same position that they would have been in but for the
termination without reasonable notice.
In this case, the Master concluded that regardless of whether
Mr. Belanger received 12 months or 24 months of working notice, he
would have received disability benefits until the age of 65.
Therefore, he was already in the same position he would have been
in if he had received 24 months of working notice. The Master could
not award payment of lost wages that would not have otherwise been
received had Mr. Belanger not been terminated. The 12 months
working notice period and continued disability benefits that
Western had already provided placed Mr. Belanger in the same
position he would have been in but for the termination without
proper notice.
Key Takeaways
The Belanger decision affirms that if an employee
becomes disabled during the notice period, and starts receiving
disability benefits, he or she cannot seek double compensation
(both disability payments and payments to compensate for lost
wages). However, employees will only be prevented from
“double dipping” if they are actually receiving
disability benefits. Therefore, employers should be careful about
terminating disability benefits at the time of termination or
during the reasonable notice period. This is especially true
for older employees or those who have had prior health issues. If
disability benefits are discontinued, and the employee becomes
disabled during the reasonable notice period, the employer may be
required to step into the shoes of the disability insurer.
This means the employer may be on the hook for disability payments
until the employee reaches the age of 65 (or such other age at
which the disability benefits terminate pursuant to the terms of
the disability plan in place). This can be an unexpected and costly
surprise for employers. Such risk can be mitigated by
continuing benefits during the reasonable notice period or
providing a lump sum for payment in lieu of reasonable notice and
securing a release that eliminates claims for lost
benefits.
Each employee termination is unique and has its own facts. Prior
to making any decisions to terminate employees, employers are
encouraged to consult with experienced legal counsel to help
mitigate their exposure to litigation and human rights claims.
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.
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Chapter 4: Employees (Video)
