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Generally, an employer who dismisses an employee without cause will give them pay in lieu of notice of termination. However, some employers may choose to provide what is called “working notice”, which means that the employee will continue to work until their date of termination.

However, a recent Ontario appeal decision demonstrates that the working notice option is not available to employers in all circumstances. It confirmed a lower court’s determination that working notice does not apply to an employee who is on leave for medical reasons.

The Facts

The employee worked as a driver/mover for the employer for approximately 17 years. The employee suffered a non-work related injury in a motor vehicle accident in September 2015. As a result of his injuries, he went on an unpaid leave of absence. He provided the employer with a medical certificate to this effect.

On January 31, 2016, the employer provided six months’ notice to all of its employees that it would be ceasing operations on July 31, 2016. The employer stated in its letter to the employee on medical leave that it considered the six month period to be “working notice”, despite the employee not being able to work. After receiving the notice, the employee continued to be on unpaid medical leave, but was able to return to work for a few hours at the end of July, 2016, just before the employer ceased operations.

The employee started an action for wrongful dismissal. The motion judge found that the employee was entitled to 12 months’ pay in lieu of reasonable notice of termination. He awarded nine months’ salary and benefits, subject to deduction for amounts already paid, as the employee had commenced work with another employer on October 31, 2016.

The employer appealed to the Divisional Court.

The Issues

The employer argued that the motion judge erred in two ways:

1) First, he erred in failing to draw an adverse inference from the employee’s failure to provide adequate medical evidence to establish that the employee could not reasonably mitigate his damages due to his medical condition.

2) Second, the motion judge erred by applying an incorrect legal standard on the employer with respect to establishing that the employee failed to take reasonable steps to mitigate.

The Decision

The appeal was rejected on both grounds.

First, the court found that the motion judge had made no error when he found that the employee’s medical condition was such that he could not be expected to undertake a serious job search until he was able to return to work on July 27, 2016. There was considerable medical evidence to support this finding and evidence setting out the nature of the employee’s medical condition and the further treatment needed. The medical documents specifically stated that he was unable to work until he received more treatment.

Further, the court agreed with the motion judge’s finding that the employee was on an agreed medical leave of absence and his finding that:

“When asked for more medical information, [the employee] provided it. The information must have satisfied [the employer] each time it was provided because [the employer] chose not to terminate [the employee] for cause.”

The court also rejected the second ground of appeal, finding that the motion judge made no error in finding that the employee had met his duty to mitigate based on the evidence.

Further Implications

By rejecting the appeal, the court is confirming the motion judge’s determination that a “working notice” does not apply to an employee who is unable to work while on medical leave or disability. The purpose of notice is to provide employees time to find new employment while receiving a salary or pay in lieu of notice. Therefore, this case demonstrates that a court will not consider that the period during which an employee is unable to work for medical reasons counts towards “working notice”; if an employee is unable to work, they are also unable to look for other employment.

Get Advice

If you have questions about unfair practices in the workplace, wrongful dismissal, or any other employment matter, contact the Mississauga employment lawyers at Campbell Bader LLP. We regularly advise both employers and employees on a wide range of issues that arise at work. Contact us online or by phone at 905 828 2247 to schedule a consultation.