October 24, 2024 from HRD Canada
Some employers may assume that when an employee is on long-term medical leave, their employment status automatically ends. However, this belief can be not only incorrect but also financially burdensome. “An employer ignoring an absent employee does so at its peril and, ultimately, its cost,” explains employment lawyer Erin Kuzz.
Understanding Long-Term Disability and Employment Status
Employees on long-term disability often have to meet specific requirements outlined in their insurance policies. For the first period of coverage, typically two years, they must prove they cannot perform their own job duties, also known as “Own Occ” coverage. After this period, the coverage shifts to “Any Occ,” requiring employees to demonstrate they cannot perform any job duties. However, even if an employee meets these conditions, they remain employed unless the employer formally ends the employment relationship.
A significant oversight occurs when employers assume that meeting “Any Occ” coverage means the employee no longer accrues service. In reality, employees continue to accrue service time and, depending on their province, may be entitled to notice, severance, or both when their employment ends. Under the Ontario Employment Standards Act (ESA), for example, even employees who cannot perform any job still require notice or pay in lieu of notice upon termination due to illness or injury, with the maximum combined payment reaching up to 34 weeks.
Managing Long-Term Absences to Avoid Liability
To avoid accumulating financial liabilities, proactive management of long-term absences is essential. This includes requesting regular updates on the employee’s medical status, ensuring that the information is sufficient to understand the employee’s prognosis, expected duration of absence, and any potential restrictions.
It’s also important not to rely solely on disability insurers for medical information. Adjudicators expect employers to gather details directly from the employee’s physician rather than only using information from the insurance provider. This approach ensures the employer has a comprehensive understanding of the employee’s condition and potential return.
Taking Steps to Protect Your Business
- Request regular updates: Depending on the expected length of absence, these could range from monthly to quarterly updates.
- Seek detailed, relevant information: Employers are entitled to receive enough detail to understand the general nature of the employee’s condition and any limitations, without requiring a diagnosis.
- Monitor for employment frustration: If it appears unlikely that the employee will return, consult with legal counsel to determine if the employment relationship can be considered “frustrated” and if it’s time to formally end the relationship.
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