Conscionability of Release Not Appropriate for Resolution by Summary Judgment

Is the issue of the “conscionability” of a full and final release, signed as part of a severance negotiation and purporting to release claims to long-term disability benefits, the kind of issue appropriate for resolution by way of summary judgment?

Notwithstanding the agreement of the parties that it was, in Swampillai v. Royal & Sun Alliance Insurance Company of Canada, 2019 ONCA 201, the Court of Appeal for Ontario held that, in the circumstances of this case, the issue of whether the release was unconscionable and therefore unenforceable was a genuine issue requiring a trial.

Receipt of LTD Evidence of Frustration

Is the continued receipt of long-term disability (“LTD”) benefits evidence that one’s contract of employment has become legally “frustrated”? In the case of Roskaft v. RONA Inc., 2018 ONSC 2934 (CanLII) the Honourable Justice Andra Pollak said yes.

Termination of Employment Does Not Terminate Ability to Apply for LTD Benefits

Consider this scenario: An employee is covered for long-term disability (LTD) benefits under his employer’s group policy of insurance. He sustains a head injury, but does not immediately appreciate the seriousness of the same. Three years later he quits the job that provided LTD coverage. Two years after that, he makes application for LTD benefits under his former employer’s policy. Is he still covered?

If you said “of course not”, you would be wrong. In the case of MacIvor v. Pitney Bowes, 2018 ONCA 381, Ontario’s top court ruled that the employee was not only eligible to make application for such benefits, the insurance company was required to respond and pay.

Divisional Court Dismisses Appeal in Case Concerning Working Notice Being Inappropriate for Employees on Disability Leave

On November 24, 2017, in a post titled, Working Notice Inappropriate for Employees on Disability Leave, I blogged about the decision of the Ontario Superior Court of Justice (Hood, J.) in McLeod v. 1274458 Ontario Inc., 2017 ONSC 4073.

As the title of that post suggests, at that time, the Superior Court had found that a period of working notice did not ‘count’ with respect to an employee absent from employment on disability leave.

On March 19, 2018, a three-member bench of the Divisional Court (Swinton, Sachs and Corthorn JJ.) dismissed the employer’s appeal: McLeod v. 1274458 Ontario Inc. o/a Frontier Sales Limited, 2018 ONSC 1866 (CanLII).

Working Notice Inappropriate for Employees on Disability Leave

Few things in law are certain. Even fewer things in life are certain. In fact, it is said that only two things in life are certain: death and taxes. Allow me to submit that there is one more thing in life of which you can be certain: your mother is, was, and will be correct.

Among the myriad things about which your mother was correct is the fact that if you were too sick to go to school, then you were too sick to go out and play once your friends got home from school.

I raise this tautology, actually a repetition of an argument that I made in paper that I authored in 2010 titled Sick of Work? The Legal Minefield of Workplace Burnout, in respect of the case of McLeod v. 1274458 Ontario Inc., 2017 ONSC 4073, which held that working notice was inappropriate for an employee absent from work on medical leave.

Div Court Finds No Frustration of Contract after 29-Month Disability Leave; Upholds Awards of Human Rights Damages and “Punitive” Costs

(c) istock/Hailshadow

Some decisions are just textbooks on employment law. They are ‘must read’ decisions for anyone looking to practice in this area. Boucher v Black & McDonald Ltd., 2016 ONSC 7220 is a key example of how to approach the following subjects: long-term absence; frustration of contract; human rights damages; and off-set of benefits for the receipt of long-term disability benefits.

The facts of the case are easy to understand and the statement of law is first-principles stuff. For anyone wondering what to do with an employee who has been absent from employment for a considerable period of time, here is a lesson in what not to do.

Termination from Employment While on Disability Leave

There is never a good time to be fired from one’s job. However, some times are worse than others. A particularly bad time to be fired is while absent from work on disability leave.

While there are few definitive answers when it comes to the law, this post will take a look at some of the most common questions concerning termination from employment during disability leave.

Court of Appeal says Group LTD Policies are not "Business Agreements"

Is a group policy of insurance a “business agreement” for the purpose of ss. 22(5) and (6) of the Limitations Act, 2002? In a reversing an earlier decision of the Superior Court of Justice, Kassburg v. Sun Life Assurance Company of Canada, 2014 ONSC 1523, considered by this blog in the post Time Limit to Sue for LTD benefits, the Court of Appeal for Ontario in the case of Kassburg v. Sun Life Assurance Company of Canada, 2014 ONCA 922 has clearly said that such contracts are not.

Time Limit to Sue for LTD Benefits

How long do you have to sue an insurance company after they deny you long-term disability (“LTD”) benefits? According to a now-reversed decision from the Ontario Superior Court of Justice, if the benefits are provided as part of a group benefits plan, as most employee benefits are, it can be as little time as the insurance company says.

In a decision released in March of 2014, Kassburg v. Sun Life Assurance Company of Canada, 2014 ONSC 1523 (CanLII), the Honourable Justice M. Gregory Ellies of the Ontario Superior Court of Justice held that a group policy of insurance, issued by an insurance company to an employer, was a “business agreement” under the law and accordingly the usual limitation period governing such policies of insurance did might not apply.

However, on December 29, 2014, the Court of Appeal for Ontario reversed Justice Ellies' decision, finding that such policies of insurance are not "business agreements" and that the time limit applicable to such claims is two years from the date such claims are "discovered." For a summary of the Court of Appeal's decision see: Court of Appeal says Group LTD Policies not "Business Agreements".

$300,000 in Exceptional Damages Awarded for Denied LTD Benefits Claim

An Ontario judge has ordered an insurer to pay $100,000 in aggravated damages and $200,000 in punitive damages after finding that the insurer had wrongfully denied its insured long-term disability benefits.

In a decision released March 22, 2013, Fernandes v. Penncorp, 2013 ONSC 1637 (CanLII), the Honourable Justice Peter Hambly ordered Penncord Life Insurance Company to pay the damages to an injured employee.

The Requirement to Maintain Disability Benefits on Dismissal

As regular readers of this blog may know, I have a certain affinity for the decision of the late Justice Echlin in Brito v. Canac Kitchens, 2011 ONSC 1011 (CanLII), affirmed by the Court of Appeal for Ontario, 2012 ONCA 61.

The reason why the decision in Brito is so important is that Justice Echlin ordered an employer who had provided to its employees a group insurance plan to essentially stand in the disability insurer’s shoes when the employee was dismissed and the employer made no arrangements for the dismissed employee to maintain that insurance coverage beyond the statutory notice period; a decision that cost the employer nearly $200,000 in what was otherwise a modest wrongful dismissal case.

Release Reaches Farther than Expected

The phrase caveat signator means "beware what you are signing." It is an appropriate warning when signing a Full and Final Release of liability.

If an employee signs a full and final release of all liability at the request of and in favour of his or her employer, can that release be used to disentitle the employee to the receipt of third-party disability benefits?

In the case of Zelsman v. Meridian Credit Union Limited, 2012 ONCA 358, upholding the earlier decision of the Honourable Justice Kendra Coats, reported at 2011 ONSC 1680, the Court of Appeal for Ontario answered that question with a “yes.”