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Ontario Court Reverses $249K Judgment Denying Worker’s LTD Benefits

May 25, 2023 from Benefits Canada


A $248,931 judgement against an employer who refused to pay long-term disability payments to a worker was overturned by the Ontario Court of Appeal due to the trial judge’s incorrect interpretation of the eligibility criteria.


The employer, Stahle Construction Inc., was represented by Justin Heimpel, a partner at Sorbara Schumacher McCann LLP. “The employee’s position was that he was on temporary medical leave, but he had been working until the day he left and the medical evidence clearly indicated that nothing prevented him from working before that,” Heimpel says.


Construction site manager Roberto Soave took a temporary leave of absence in January 2014, claiming that he needed surgery to treat a hernia. Prior to the hernia surgery’s scheduled date, some six weeks later, Soave was seriously hurt in a car accident.


Soave sought LTD benefits by applying through his group benefits provider, Mercon Benefit Services, and Great-West Life Assurance Co. (now Canada Life Assurance Co.), the insurer. However, his claim was denied due to the requirement of being actively employed at the time of the accident.


Stahle Construction Inc. decided to appeal the judgment. The Ontario Court of Appeal determined that the trial judge had misinterpreted the eligibility criteria outlined in Mercon’s booklet. It was crucial to consider whether Soave’s work interruption resulted from a leave of absence or a disability and whether he met the requirements for LTD coverage.


The court clarified that the booklet specified that individuals on a leave of absence during which they become totally disabled would be ineligible for LTD benefits. To be eligible, Soave needed to meet the disability criteria either when he stopped working or during his leave of absence, with his employer legally obligated to provide benefits.


The court concluded that the booklet did not cover disabilities that emerged after an employee had stopped working but focused on disabilities causing the initial work interruption. The trial judge’s interpretation was deemed incorrect.



The court allowed the appeal, overturning the initial judgment against the company. However, it remitted the case back to the trial judge to assess whether Soave was genuinely disabled when he stopped working.



According to Natalie MacDonald, an employment lawyer at MacDonald & Associates LLP, the decision by the appeal court reflects a strict interpretation of the contractual terms outlined in Mercon’s booklet.


MacDonald explains that the booklet explicitly excluded long-term disability (LTD) benefits from those benefits that would continue to be covered during temporary employment interruptions. However, if Mr. Soave’s hernia condition had rendered him disabled at the time of the accident, there could have been a possibility of qualifying for LTD benefits.


Nevertheless, making such a determination required additional evidence regarding Mr. Soave’s health status during his leave of absence. While the court allowed the appeal and overturned the initial judgment against the company, it referred the case back to the trial judge to ascertain whether Mr. Soave was genuinely disabled at the time he ceased working.




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