Managing situations where employees who are away from work on long-term absences can be challenging for employers. Difficulties can arise in a number of areas - maintaining contact with the employee, attaining updated medical information, and ensuring the employee continues to make his premium contributions for benefits. At the same time, uncertainty of if and when an employee might return to work can create operational challenges. Employers face the balance of trying to find a temporary replacement for the employee while maintaining the employee's position available for the employee if and when the employee returns to work. Traditionally, where an employee's absenteeism was excessive and there was no reasonable prospect of the employee returning to work in the foreseeable future, as long as there was no contractual term providing otherwise, the employer was entitled to discharge the employee for non-culpable absenteeism or to treat the employment contract as having been frustrated, bringing the employee's employment to an end.
With the proviso that as long as there is no available reasonable accommodation without undue hardship that could result in the employee returning to work in the foreseeable future, this test has generally been recognized as being consistent with human rights obligations of employers and applied by human rights adjudicators across the country.
However, a recent B.C. arbitration decision suggests that when considering discharging employees for non-culpable absenteeism, employers may need to consider more than just the traditional test.
The Facts
In Langley Township v. Canadian Union of Public Employees Local 403 (PDF), the employer considered the employment of three employees, each of whom were on long term disability ("LTD") and "totally disabled from any occupation". Two of the employees had been on LTD for 6 years. The other employee had been on LTD for 10 years. The level of absenteeism of all three was excessive. And there was no reasonable prospect of any of them returning to work in the foreseeable future.
The employer reviewed the cost to the employer of continuing the benefits of the three employees if they remained employed. It realized that if all three were discharged, it would result in a cumulative cost savings of approximately $10,000. The employer's overall budget was $178 Million.
The employer discharge all three employees. While the discharge had no impact on the employees' entitlement to LTD benefits, it adversely impacted each of them as it resulted in the termination of their benefits coverage. Each of them also claimed that it created stress and financial hardship.
The Traditional Test
The traditional test for non-culpable discharge for innocent absenteeism was satisfied for all three employees: they had all been absent from work for an excessive period and there was no reasonable prospect of any of them returning to work in the foreseeable future.
But…
However, the arbitrator's assessment did not stop there. Instead, the arbitrator went on to consider whether the discharge of the employees was contrary to the employer's human rights obligations.
The employer conceded that there was prima facie discrimination - that the employees had been discharged because of their disabilities. But the employer claimed that the discharges were justified as a bona fide occupational requirement ("BFOR").
The arbitrator rejected the employer's argument:
- the employer had no policy on how long it would wait while an employee was off work until it would discharge; and
- the employer's decision to discharge the employees was to save money on benefit premiums.
While the desire to save money was not in itself an indication of bad faith or malice, it was also not automatically a BFOR. As there were no frustrating events – nothing happened that altered the situation that had existed for each of the three employees for years – the arbitrator concluded that the employer's decision to discharge the employees was and at a random point in time. As such, the employer's decision to discharge the employees was discriminatory.
What Does this Mean?
Employers were always well-advised to be cautious in discharging employees for non-culpable absenteeism. In light of this decision, employers must be doubly so. They must consider not only the employee's length of absence and whether there is a reasonable prospect of him or her returning to work (whether in a regular or accommodated position) in the foreseeable future, but also what has triggered the decision to discharge. Only by considering this trigger can an employer ensure that its decision is not arbitrary or otherwise discriminatory.
To that end, we suggest that employers in every province implement a policy outlining how they will approach innocent absenteeism.
