When taking a sick leave to apply for disability benefits, it is important to understand your employment rights and obligations. You have a relationship with your employer that is separate from the disability insurance company. You and your employer have rights and obligations that operate apart from your disability claim. Your employment rights come from the common law, employment standards laws, and human rights laws.

The employment relationship

The relationship between employer and employee is a special relationship that is governed by several laws, including the Common Law, Employment Standards Acts, Occupational Health & Safety Acts, Labour Relations Acts, Workers' Compensation Acts, and Human Rights Acts. These laws have both provincial and federal versions.

The laws that apply to you will depend on how your employer is regulated. If your employer is regulated by provincial laws, then the employment laws of your province will apply to your situation. If your employer is regulated by federal laws, then federal employment laws will apply to you.

All employment situations include both express and implied obligations. Express obligations are those that are written in your employment contract. Implied obligations are unwritten rules that are deemed to apply in all situations, even if they are not written into the employment contract. 


The employer's duties and obligations also come from the common law and statutes. Your employer's obligations from common law include the duty to pay you for work done, the duty to provide work, a duty to provide a safe work environment, a duty to treat you fairly, and a duty to give you reasonable notice of termination.

Your employer's statutory duties arise from Employment Standards Legislation, Occupational Health and Safety Legislation, and Human Rights Legislation. From the perspective of someone on disability leave, your employer's important statutory duties include a duty to provide termination pay (with exceptions and limits), a duty to provide a workplace free of discrimination or harassment, a duty to allow you to take a sick leave, and a duty to accommodate your disability in the workplace. 


As an employee you also owe duties to your employer. These duties include:

  • attending work on time;
  • not engaging in improper conduct or behaviour (harassing other employees, drugs in workplace, criminal acts); 
  • performing work competently;
  • maintaining good faith and loyalty to the employer; and
  • to give reasonable notice of resignation.

As a person with a disability, or as someone who needs a sick leave, you will be in a situation where you will not be able to attend work on time or perform your work competently. Violation of these duties would normally be cause for the employer to terminate your employment; however, there are special protections for people suffering illness or disability. These protections arise form your employer's duties to allow you to take a sick leave and to accommodate your disability.

Termination of Employment for Employee on Disability Leave

With some limited exceptions, employers and employees have the right to terminate an employment contract at any time. Your employer can dismiss you from employment for almost any reason. You have the right to resign from your employment at any time and for any reason. Your rights as the employee being fired are different depending on the situation. There are three types of employment dismissal scenarios:

  • Dismissal without cause
  • Dismissal for cause
  • Dismissal for frustration of contract
  • Constructive dismissal


You have no inherent right to keep your job; no one does. Your employer can dismiss you from employment even if you have done nothing wrong and are a stellar employee. This is called dismissal without cause. As long as your dismissal is not based on discrimination, your employer can dismiss you for any reason, or none at all. Human rights laws prevent employers form dismissing employees based on protected grounds of discrimination, which include disability. Therefore, in the short-term, your employer cannot dismiss you because of your sickness or disability. You can be dismissed for other valid reasons, just not because of your disability.

If your employer dismisses you without cause, it must give you a reasonable notice of termination. Reasonable notice refers to the number of days or months in advance you must be given before your job ends. The length of the reasonable notice period is determined by applying several factors, including age, length of employment, and the prospects of finding another job.   

Once the reasonable period is determined, your employer has the option to give it as a working notice, or it can end your employment immediately and pay severance equal to the pay you would have received over notice period. This is also called pay in lieu of notice or severance pay. 


You do not always have the right to receive working notice or severance pay. If you engaged in certain types of misconduct, your employment can be terminated immediately for cause, and you would have no right to working notice or severance pay. Your misconduct must be serious and can include things like chronic absenteeism, incompetence, insubordination, sexual or other harassment of co-workers, misrepresentation at hiring, negligence in performing your work, and off-duty conduct.  

If you are suffering sickness or disability, then you are likely going to experience chronic absenteeism and inability to perform some or all of your work duties. While these issues would normally give your employer cause to terminate your employment, it cannot legally do so if sickness or disability are the reasons for your poor work performance. An employee who becomes sick or disabled is protected from summary dismissal under provincial and federal human rights laws. Under human rights laws, your employer has a duty to accommodate your disability to the point of it causing undue hardship on the employer. Common accommodation is allowing the employee to take an extended sick leave without fear of losing his or her job. 


While human rights laws protect your employment in the short term, you employer does not have to employ you indefinitely if you have been off work for a long time and here is no plan for return to your job in the immediate future. When determining if employment has been frustrated, courts have drawn a line between temporary illness and permanent disability. Courts consider several factors, including terms of the employment contract, how long employment would have lasted even if you weren't sick, nature of the employment, period of employment, and how long your disability is expected to last. Courts will consider all these factors to determine when and if an employment contract has become frustrated. People often cite two to four years as the period when employment becomes frustrated, but courts have rejected any arbitrary times like this. The period could be shorter or longer depending on the specific circumstances. 

Some judges have ruled that frustration of contract can't happen in situations when a person is on an approved long-term disability claim. The thinking goes that if the employment contract contemplated long-term disability, then it can't be frustrated by the person receiving long-term disability benefits. This principle is an evolving area of the law and may not apply to you, even if you are on an approved disability claim. You would need to seek legal advice on whether frustration of contract would apply to you.

If your employment contract has become frustrated, then your employment is deemed to end immediately and you have no right to working notice or severance pay in place of working notice. However, there are some exceptions under provincial and federal employment standards legislation. You may still be entitled to limited severance pay through provincial and federal legislation, even if your employment has become frustrated. 

Finally, if your employment has not been frustrated, then you have a right to the same reasonable notice as any other employee, even though you are on sick leave. This means your employer must give you working notice or pay severance in place of working notice. Your employer has a duty to prove that your employment has become frustrated. This is often no easy task, so many employers will opt to pay severance as a way to end the employment.


Constructive dismissal happens when you technically remain employed, but the employer has changed your employment in such a fundamental way it amounts to a dismissal. In these situations, an employee can treat the employment as having ended and will be owed reasonable notice of termination, either as working notice or pay in place of working notice. 

Enforcing your rights as an employee on sick leave

If your employer has not met its obligations, there are several ways for you to enforce your rights. These include employment standards boards, human rights commissions, arbitration, and courts. 


If your employer has violated its obligations under provincial or federal employment standards legislation, you have the right to file a complaint with the provincial or federal employment standards board. Your claim will be assigned to a officer who will review your complaint and attempt to negotiate a settlement between you and your employer. The process before employment standards boards can include mediations and eventually a hearing before the board. If you can't reach agreement with your employer, the board will issue a ruling on your situation that applies to both you and your employer.


If you believe your employer discriminated again you based on your disability, then you can file a complaint with the applicable human rights commission. This will either be the human rights commission in your province (if your employer is provincially regulated) or the Canadian Human Rights Commission (if your employer is federally regulated). The commission will assign an officer to review your complaint. The officer may arrange a mediation between you and your employer. If the mediation fails, then your case will go to the human rights tribunal. This is essentially a specialized court that hears human rights cases and issues decisions that are binding on employees and employers. 


If you have been wrongfully dismissed form your employment without reasonable notice of termination, you can sue your employer for severance pay and other damages. You would do this by filing a lawsuit with the courts in your province. You would then negotiate with your employer during the court process and possibly reach an out of court settlement. If there is no settlement, then your case would go before a judge who would make a decision on whether you are owed payment from the employer, and if so, how much. You may not have the right to sue your employer if your employment is governed by a collective agreement or arbitration requirement. 


Some employment contracts include arbitration clauses that require any disputes between the employer and the employee to be settled by arbitration, rather than the courts. If your employment contract includes an arbitration clause, then you would make your claims for wrongful dismissal through and arbitration process. The arbitrator is usually an independent lawyer who does not represent either side. He or she would try to facilitate a settlement and eventually act as a judge and make a final decision that is binding on both you and your employer. 


If your employment is governed by a collective agreement, then you likely do not have right to file a lawsuit against your employer. If you feel you were improperly dismissed from employment, you would have to follow the grievance process set out on your collective agreement. You should speak with your union for advice on how to start the grievance process.  


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