Group benefits are one of the most important aspects of your compensation as an employee. And those benefits may become even more important to you in the event that you need to take a disability leave from work. Usually, your employer will continue your much-needed coverage even while you are on a disability leave. But sometimes, with little or no warning, employers cut those benefits off. You may not find out until after the fact, when you try to submit a claim to your insurance.
This leads many employees to wonder whether this is even allowed in the first place. Can your employer legally cut off your benefits while you are on disability leave?
The short and cautious answer is usually probably not, but you should seek advice from an employment lawyer based on your specific situation. Here are the types of things we might consider:
Employment standards legislation requires benefits to be maintained for specified types of leave, for specified periods of time. The amount of benefit continuation guaranteed to you by employment standards legislation varies from province to province.
Every employee in Canada is covered by human rights legislation, which protects against (among other things) discrimination in employment on the basis of disability. Discontinuing benefits for employees on disability leave arguably amounts to prohibited discrimination on the basis of disability, but this question is not a well-developed area in human rights law.
Are you paying your premiums?
Many group benefit plans require the payment of employee premiums. When you’re actively working, those benefit premiums are deducted from your paycheque each pay cycle, and you may not even think about it. In contrast, when you are on disability leave, you have no paycheque from which those benefit premiums are deducted. While some employers will gratuitously cover the employee premium, others may discontinue the benefits altogether. If you want to ensure that your benefits continue during your disability leave, make sure you know who is responsible for paying premiums.
Perhaps the most important legal question is whether discontinuing the benefits of an employee on disability leave amounts to a termination of employment, known in these circumstances as a constructive dismissal. Unfortunately, the case law does not provide a straight answer. In one 2009 Ontario Superior Court case, Briggs v Treco, the discontinuation of benefits was held to amount to a constructive dismissal. In another case, Lemesani v Lowerys, the court reached the opposite conclusion. This issue still has yet to be conclusively answered by courts, and each case will likely come down to its own facts.
If it is a constructive dismissal, what are you entitled to?
If your employment was constructively dismissed by the abrupt cessation of your benefit coverage, you may quit and sue your employer for damages. The discontinuation of your benefits while on disability leave may also amount to a failure to accommodate your disability, which violates human rights legislation and could entitle you to additional damages. The value of your case, however, will depend on whether your medical condition has led to the frustration of your employment.
Frustration of employment
Your employer may terminate your employment and your benefit coverage if and when your employment has become frustrated by your disability. Frustration occurs where you have been disabled from working for a prolonged period (at least two years or so), and your medical condition is such that you are not likely to be able to return to work in the foreseeable future.
Depending on the location and industry of your work, you may be entitled to certain notice and/or severance payments upon the frustration of your employment.
If you have had your claim for long-term disability denied, contact the long term disability insurance lawyers at Share Lawyers. Our experienced team of long term disability (LTD) lawyers can help. We have recently settled cases against Canada Life, Desjardins, Manulife, RBC Insurance, Sun Life, and many more. We offer free consultations and there are no fees unless we win your case. Find out if you have a disability case.