What are Ontario employees entitled to when permanently disabled from work?

If you are off work due to a disability, the law affords you job protection, up to a point. However, that job protection is typically not permanent. After two or more years on disability leave, if no recovery or return to work is in sight, your Ontario employer may be able to formally dismiss you for a kind of no-fault reason known as “frustration of employment”.

Frustration of Employment – What is it?

Employment relationships become “frustrated” at law when they become impossible to perform. Frustration is a no-fault termination of employment; it means your employer can end your employment without providing you with common law severance (i.e., damages for wrongful dismissal).

“Your employment might become frustrated if you have been disabled from work for a lengthy period with no reasonably foreseeable return to work,” explains Nick Goldhawk, Toronto employment lawyer at Share Lawyers.” In the disability context, frustration of employment typically starts becoming a possibility after about two years of absence due to disability, with no foreseeable return. That said, if your doctor believes that a return is possible, your employment may survive for much longer – in some cases, for as long as a five-year absence.”

You are entitled to payment upon frustration of your employment due to disability

While you are not entitled to any common law severance in this circumstance, you are still entitled to notice and severance pay under the Employment Standards Act (ESA”), under Ontario law. Those ESA payments are calculated based only on your years of service (including periods of time on disability leave) and can top out at 34 weeks (around 8 months’ pay). This puts Ontario employees at a relative advantage compared to some other provinces, where frustration of employment is grounds for termination without payment of any kind.

You can claim termination pay/severance -- even if you have not been terminated

Because of these entitlements, your employer may drag its feet on terminating your employment for frustration – even if you are clearly permanently disabled. Why pay you notice and severance when they can simply leave you hanging for free?

This is a very common employer strategy. Some employers may go as far as to encourage you to resign to collect your pension or retiree benefits, and to do away with the annoyance of providing regular medical updates

However, you have another option in this situation – to claim that your own employment has been frustrated, giving rise to your notice and severance entitlements under the ESA. Ontario Courts have held that frustration occurs as a matter of law, and that it is not necessary for your employer to terminate you for the appropriate termination entitlements to become payable in this circumstance.

Be aware of offset issues

Employees should be mindful of how termination/severance payments might interact with ongoing long term disability payments. Specifically, many long term disability policies contain terms which say that your monthly LTD payments may be temporarily reduced or eliminated if you receive some other form of income replacement, including termination or severance pay. Therefore, before claiming termination pay/severance due to frustration, consider whether doing so will benefit you overall – or whether you’re simply doing your LTD insurer a favour.

This last point is one of the reasons that Share Lawyers, a Toronto disability law firm, has employment lawyers to assist our clients with their denied claims. Disability law and employment law intersect in ways that are not well understood by those who need legal protection the most.

If you have been dismissed due to frustration of employment, or your termination or severance payment may cause offset issues with your LTD payments, contact Share Lawyers. We have 35 years of experience specializing in disability law and employment law, and we can help. Share is There.

If you have been terminated, laid-off, or severed from your employment contact in Canada, our experienced team of employment law lawyers in Toronto can help. We offer free consultations and there are no fees unless we win your case. Find out if you have an Employment Case.

Denied your long term disability claim?

Contact Share Lawyers today and put our experience to work for you. Our 35+ years of experience can help you win your case against Canada Life, Desjardins, Manulife, RBC Insurance, Sun Life, and other insurance companies. We offer free consultations and there are no fees unless you win your case. Join us on Facebook and become a Top Fan for a chance to win each month.


A note from our long term disability lawyers

Taking a medical leave from work is not an easy decision to make. Concerns about providing for yourself and your family and keeping your job may cause you to want to push through your pain, but this won’t make your problems go away. Stopping work is often the smartest decision for your long term health and well-being, and your disability benefits are there to provide you with financial support until you can return to work.

If you have made the tough decision to stop working and apply for your short term disability or long term disability benefits, you may feel overwhelmed by the process and have questions that your employer and your insurance company are not able or willing to answer. Share is There to see you through and answer your questions.

Our Disability law firm knows what you have been going through

We understand that things have not been easy for you over the last little while. Your health has been suffering, you are unable to work, and now your insurance company, who was supposed to be there in your time of need, has decided they will not pay your disability benefits or respect your disability claim. These benefits exist to provide you with the financial support you need so that you can focus on your health and rebuilding your life. It is unfortunate that your insurance company has not lived up to its promise. If your disability claim has been denied, we will fight to get you the benefits you are entitled to. Our disability lawyers have helped thousands of Canadians get their long term disability benefits over the past 35 years, and we can help you too.

Our experienced disability lawyers can fight back on your behalf

Share Lawyers believes that every client who is dealing with a disability claim deserves superior personal service. To achieve that goal, we have developed our team of experienced, compassionate, and caring long term disability lawyers, law clerks, and administrative staff to meet all of your needs. Our team of experienced long term disability, life insurance, employment, and critical illness insurance lawyers have made successful claims against many insurance companies, third-party administrators and employers.

If you are unable to work, your disability benefits should be there to provide you with the financial support you need. While your insurance company may be focused on finding ways to avoid paying your claim, our focus is on what is in your best interest. When Share Lawyers gets involved, you have an entire team of lawyers that are there to support you and to fight for what is yours.

Our disability claim lawyers fight for your disability insurance claim by relying on our many years of experience to apply the best strategic planning and approach in each case, using the latest technology available. Experience matters, and with Share Lawyers, you are in the best hands with 35 years of success on your side.

In this video, we explain the role of a long term disability lawyer and how we can support you when you have been denied your long term disability benefits.

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