Canada: Termination Of Employment Of Employees On LTD In The Context Of A Plant Closure

In the recent case of USWA v. Weyerhaeuser, the British Columbia Human Rights Tribunal decided that the company had discriminated against four employees on long-term disability (LTD) when it terminated their employment just months before announcing the permanent shutdown of their place of employment.

What Happened?

Sometime in 2004, the employer initiated a program to terminate the employment of certain employees for non-culpable absenteeism. It was not until April 2007, however, that the employer implemented the program, which resulted in the dismissal of four employees who had been on LTD for periods ranging from four months to 13 years.

In determining which employees to dismiss, the employer considered how long each employee had been away from the workplace, their ability to return to the workplace in the foreseeable future, and their LTD classification. There was no contact with any of the employees prior to the termination to inquire about their condition, their ability to return to work, or their prospects of rehabilitation.

The termination letters gave each employee the opportunity to provide information about their medical condition and prognosis to the employer to demonstrate that they would soon be able to return to work. If they provided that information, or asked for a period of time in which to do so, their termination decision would be deferred. None of the employees exercised this option.

The terminations were not grieved by the Union, because the employees would "be taken care of" by the continuation of LTD benefits.

On September 17, 2007, the employer announced the permanent shutdown of the mill. However, there is evidence that the employer knew of the near certainty of the shutdown as early as January 2007.

Under the collective agreement, all mill employees were to receive severance pay at the time of shutdown. The Union brought a representative complaint on behalf of the four employees, alleging that the employer had terminated their employment to avoid paying severance and had thus discriminated against them on the basis of their respective disabilities.

What did the Human Rights Tribunal Decide?

The Tribunal accepted, generally, that if an employer has in place a bona fide termination program targeted at employees with extensive non-culpable absenteeism ─ and actually follows it ─ then the application of that program to an individual employee is not discriminatory, even if it results in the loss of entitlement to severance pay.

Although Weyerhaeuser had a bona fide termination program, the termination of the four employees' employment was not a bona fide application of that program because:

• no employee had previously been terminated for non-culpable absenteeism;
• the decision to close the mill was made before the implementation of the program;
• the HR manager who implemented the program was aware of the impending closure prior to the terminations; and
• the HR manager had conducted a cursory and rushed review of the employees prior to terminating their employment.

The Tribunal found that the only bona fide reason for terminating employment for non-culpable absenteeism is that the employment contract is frustrated because the employee can no longer provide the work for which he or she was contracted. The employer's knowledge of the impending closure meant that the employment relationship with the four employees would have soon ended in any event. Accordingly, the bona fide reason for termination of their employment was absent.

Under those circumstances, the Tribunal found, it was more likely than not that the employer had terminated the employees' employment to avoid paying them severance, thereby discriminating against them on the basis of their respective disabilities.

The Tribunal ordered the employer to reinstate the employees, credit them with the seniority they would have earned but for their termination, and pay them severance. Additional awards were made for injury to dignity, feelings and self-respect in amounts ranging from $5,000 to $20,000.

Lessons for Employers

This case reminds us of the need for caution when making the decision to terminate employment for non-culpable absenteeism. You should consider the following:

• Ensure you map and follow a sound process – the process you follow is as important as making the right decision.
• Create a program for terminating employment for non-culpable absenteeism that has: (i) automated reminders for following up with employees and medical professionals on a regular basis; (ii) a system for regularly and systematically exploring and documenting accommodation efforts; and (iii) a stand-alone review process of any decision to terminate employment.
• Implement the program in a timely manner, put someone in charge, and provide training to the administrators.
• Apply the program in a consistent way to all employees.
• Before making the decision to terminate employment: (i) ensure that up-to-date information on the employee's medical prognosis has been gathered; (ii) consult with the employee (and the Union, if applicable); and (iii) revisit whether the employee will be able to return to work in the foreseeable future.
• Do not rush to terminate employment regardless of the duration of the employee's absence, the severity of his or her medical condition, or any other circumstances ─ and do not give undue consideration to any one factor.
• Unless you have obtained legal advice, do not terminate employment for non-culpable absenteeism if the employment relationship is going to come to an end in any event, or if the termination will lead to some other adverse consequence (other than the loss of employment).

In the recent case of USWA v. Weyerhaeuser, the British Columbia Human Rights Tribunal decided that the company had discriminated against four employees on long-term disability (LTD) when it terminated their employment just months before announcing the permanent shutdown of their place of employment.

What Happened?

Sometime in 2004, the employer initiated a program to terminate the employment of certain employees for non-culpable absenteeism. It was not until April 2007, however, that the employer implemented the program, which resulted in the dismissal of four employees who had been on LTD for periods ranging from four months to 13 years.

In determining which employees to dismiss, the employer considered how long each employee had been away from the workplace, their ability to return to the workplace in the foreseeable future, and their LTD classification. There was no contact with any of the employees prior to the termination to inquire about their condition, their ability to return to work, or their prospects of rehabilitation.

The termination letters gave each employee the opportunity to provide information about their medical condition and prognosis to the employer to demonstrate that they would soon be able to return to work. If they provided that information, or asked for a period of time in which to do so, their termination decision would be deferred. None of the employees exercised this option.

The terminations were not grieved by the Union, because the employees would "be taken care of" by the continuation of LTD benefits.

On September 17, 2007, the employer announced the permanent shutdown of the mill. However, there is evidence that the employer knew of the near certainty of the shutdown as early as January 2007.

Under the collective agreement, all mill employees were to receive severance pay at the time of shutdown. The Union brought a representative complaint on behalf of the four employees, alleging that the employer had terminated their employment to avoid paying severance and had thus discriminated against them on the basis of their respective disabilities.

What did the Human Rights Tribunal Decide?

The Tribunal accepted, generally, that if an employer has in place a bona fide termination program targeted at employees with extensive non-culpable absenteeism ─ and actually follows it ─ then the application of that program to an individual employee is not discriminatory, even if it results in the loss of entitlement to severance pay.

Although Weyerhaeuser had a bona fide termination program, the termination of the four employees' employment was not a bona fide application of that program because:

• no employee had previously been terminated for non-culpable absenteeism;
• the decision to close the mill was made before the implementation of the program;
• the HR manager who implemented the program was aware of the impending closure prior to the terminations; and
• the HR manager had conducted a cursory and rushed review of the employees prior to terminating their employment.

The Tribunal found that the only bona fide reason for terminating employment for non-culpable absenteeism is that the employment contract is frustrated because the employee can no longer provide the work for which he or she was contracted. The employer's knowledge of the impending closure meant that the employment relationship with the four employees would have soon ended in any event. Accordingly, the bona fide reason for termination of their employment was absent.

Under those circumstances, the Tribunal found, it was more likely than not that the employer had terminated the employees' employment to avoid paying them severance, thereby discriminating against them on the basis of their respective disabilities.

The Tribunal ordered the employer to reinstate the employees, credit them with the seniority they would have earned but for their termination, and pay them severance. Additional awards were made for injury to dignity, feelings and self-respect in amounts ranging from $5,000 to $20,000.

Lessons for Employers

This case reminds us of the need for caution when making the decision to terminate employment for non-culpable absenteeism. You should consider the following:

• Ensure you map and follow a sound process – the process you follow is as important as making the right decision.
• Create a program for terminating employment for non-culpable absenteeism that has: (i) automated reminders for following up with employees and medical professionals on a regular basis; (ii) a system for regularly and systematically exploring and documenting accommodation efforts; and (iii) a stand-alone review process of any decision to terminate employment.
• Implement the program in a timely manner, put someone in charge, and provide training to the administrators.
• Apply the program in a consistent way to all employees.
• Before making the decision to terminate employment: (i) ensure that up-to-date information on the employee's medical prognosis has been gathered; (ii) consult with the employee (and the Union, if applicable); and (iii) revisit whether the employee will be able to return to work in the foreseeable future.
• Do not rush to terminate employment regardless of the duration of the employee's absence, the severity of his or her medical condition, or any other circumstances ─ and do not give undue consideration to any one factor.
• Unless you have obtained legal advice, do not terminate employment for non-culpable absenteeism if the employment relationship is going to come to an end in any event, or if the termination will lead to some other adverse consequence (other than the loss of employment).

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.