Northern Exposure

When Can You Terminate a Disabled Unionized Employee in Canada?

McCarthy Tetrault

Canadian discrimination laws, like those in the United States, generally require employers to make accommodations for employees with disabilities. By law, employers must accommodate to the point of “undue hardship,” but undue hardship is difficult to define and is assessed on a case-by-case basis.

What happens when employee rights come up against your rights as an employer under a union agreement to terminate an absent employee after a specified period? Just how far must you go in accommodating an employee who is considered totally disabled and unable to work for the foreseeable future?

A Canadian Supreme Court case decided early this year sheds some light on the situation.

In McGill University Health Centre (Montreal General Hospital) v. Syndicat des employés l’Hôpital général de Montréal, the Supreme Court clarified the law by ruling that such a “deemed termination” clause in a collective agreement didn’t breach the employer’s duty to accommodate an employee’s disability.

The court concluded that the terms of a collective agreement should be taken into consideration when assessing an employer’s duty to accommodate. At the same time, the court made it clear that an employer must take into account a disabled employee’s individual circumstances when applying a deemed termination clause.

Some background

In 2000, a unionized employee of the McGill University Health Centre was off work for three months after suffering a nervous breakdown. For the next two years, she tried unsuccessfully to return to work and the health center provided her with periods of rehabilitation leave.

In 2002, she was injured in a car accident and became totally disabled. In 2003, McGill advised her that she would be terminated under the deemed termination clause in the collective agreement. That clause stated that “an employee shall lose his or her seniority rights and his or her employment” in the event of “absence by reason of illness … after the thirty-sixth (36th) month of absence.”

The union filed a grievance contesting McGill’s decision. It asked the health center to negotiate a reasonable accommodation with the employee.

Arbitrator dismisses grievance

The arbitrator who heard the case concluded that McGill had treated the employee justly. The arbitrator pointed out that the health center already accommodated her by allowing rehabilitation periods that were more generous than those provided for in the collective agreement.

In the arbitrator’s view, “it is difficult to imagine an … additional duty to accommodate an employee whose attending physician considers her to be totally disabled.”

Courts review decision

The Québec Superior Court dismissed the union’s application to quash the arbitrator’s decision. The Québec Court of Appeal, the highest court in the province of Québec, however, reversed that decision. The court of appeal found that the arbitrator hadn’t assessed the reasonable accommodation issue on an individualized basis. It held that the arbitrator had mechanically applied the deemed termination clause in the agreement with the union.

But the Canadian Supreme Court reinstated the arbitrator’s decision. It concluded that the parties to a collective agreement are entitled to negotiate clauses concerning employees’ attendance at work.

The majority of the court stated that the time period negotiated by the employer and the union when crafting a deemed termination clause is a factor to consider when determining if an employer has met its duty to accommodate. The majority also held, however, that such deemed termination clauses aren’t in themselves determinative and can’t be applied automatically.

The Supreme Court found that the arbitrator hadn’t applied the deemed termination clause mechanically. Rather, he had taken into account:

  • all of the events leading up to the termination;
  • the steps the employer had taken to accommodate the employee’s absence from work;
  • the employee’s current state of health; and
  • the lack of evidence that the employee would be able to return to work in the foreseeable future.

Most importantly, the court held that if the employee felt that the accommodation provided in the collective agreement wasn’t sufficient and that she would be able to return to work within a reasonable time, she was required to provide that evidence.

Interestingly, the minority judgment of the court expressed the view that the employee had failed to prove any form of discrimination, and therefore the issue of the employer’s duty to accommodate didn’t arise. The minority judgment didn’t accept the view that deemed termination clauses inevitably discriminate against employees on the basis of stereotypical or arbitrary assumptions about persons with disabilities.

Lessons for employers

This case reconfirms that Canadian employers can bargain deemed termination clauses in union agreements. Such clauses can be relied on, in part, to terminate an employee who has been absent from work for a considerable time because of disability. The court also has made it clear, however, that such deemed termination clauses must provide for a reasonable period of absence from work, and cannot be applied mechanically.

The employer’s duty to accommodate must be assessed in terms of each employee’s individual circumstances. To get around a deemed termination clause, an employee must prove that she is entitled to continued accommodation. She must provide evidence that there’s a reasonable prospect she will be able to return to work in the foreseeable future.