Northern Exposure

Accommodation Doesn’t Prevent Corporate Reorganization

By Jennifer Shepherd and Gulu Punia

It’s a common question. A Canadian employer is restructuring and an absent employee is affected. Can the employer fire the employee if he or she is on disability or other leave? A recent Federal Court of Canada decision, Tutty v. MTS Allstream Inc., has confirmed that the answer is “yes.”

While employed with MTS, Charles Tutty suffered from a stress-related illness for which he took disability leave for a number of months. He was initially cleared to return to work on a gradual basis under the supervision of his treating physician and an independent return-to-work coordinator paid for by MTS. Eventually he was cleared to return to work on a full-time basis at full salary — although his ability to work overtime hours or travel had yet to be assessed.

Before the assessment was completed, Tutty’s position was eliminated through a corporate reorganization. MTS offered him another position at the same salary, although with reduced responsibilities. He declined the position. Not only did he not like what he called a demotion, he also assumed that the alternate position would require extensive overtime and travel, which he believed he wasn’t able to do in light of his disability. When he refused the alternate position, he was dismissed.

Human rights complaint

Tutty filed a complaint with the Canadian Human Rights Commission. He claimed that MTS failed to reasonably accommodate his disability. Further, he claimed he was fired because of his disability.

The commission dismissed Tutty’s complaint. In doing so, the commission said MTS had made reasonable efforts to accommodate his disability. Further, his termination didn’t appear to be linked to his health status.

Federal court appeal
Tutty appealed to the Federal Court of Canada. In agreeing with the commission’s decision, the Federal Court said:

  • There was no question that MTS had accepted Tutty’s disability at face value, even though his ability to work overtime and travel was a live issue at the time of his termination; and
  • MTS met its duty to accommodate by implementing the gradual return-to-work plan and hiring the return-to-work coordinator.

What the decision means
This decision is an example of a successful accommodation effort. It provides further clarification to Canadian employers about their duties to employees with disabilities in a corporate restructuring. As the Federal Court said, “an employer’s duty to accommodate does not . . . require that it hold a legitimate corporate reorganization in abeyance pending the resolution of an affected employee’s disability.” Canadian employers are entitled to carry on with their strategic planning as long as they make reasonable efforts to accommodate employees with disabilities.

The Federal Court also reaffirmed the principle stated in Central Okanagan School District No. 23 v. Renaud that accommodation is a “two-way street.” Employees must be open to reasonable workplace adjustments, including accepting positions with different or reduced responsibility when necessary.

The dismissal of a disabled employee in Canada is fraught with risk. However, if that employee is properly accommodated during his or her employment and the termination isn’t based on a disability, the dismissal can be carried out. Beware though — if any part of the reason for the dismissal is based on the disability, the employee’s complaint may succeed.

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