Osgoode Labour & Employment Law Society

Hydro‑Québec v. Syndicat des employé‑e‑s de techniques professionnelles et de bureau d’Hydro‑Québec, section locale 2000

Introduction to the Duty to Accommodate

Duty to Do the Impossible?  Duty to Create a Job?  ”Accommodation” to the point of excess malingering? (air-quotes included)

These cynical, yet all too common takes on the duty to accommodate demonstrate the frustration employers go through in trying to meet their legal obligations with respect to disabled employees.

But it’s a big problem – did you know that 54.8% of all human rights claims filed last year in Ontario cited “disability” as the cause for complaint? 

An employer’s duty to accommodate comes from a number of places, including case law (see Meiorin) and legislation (see Ontario’s Human Rights Code and Workplace Safety and Insurance Act).  The gist of the duty calls for employers to consider employees in light of their true abilities, which means making every reasonable effort to individually accommodate their needs, short of undue hardship.

As one can imagine, the standard is woefully ambiguous and causes employers no end of frustration.  Defining “reasonable accommodation” and “undue hardship” could be a mini-series of posts all in itself.  Complicating this is the fact that the original Meiorin decision describes an employer’s burden as having to “demonstrate that it is impossible to accommodate individual employees … characteristics.”

Fortunately, on July 17, 2008, the Supreme Court provided much needed guidance on an employer’s duty to accommodate when it overturned the Quebec Court of Appeal’s decision in Hydro‑Québec v. Syndicat des employé‑e‑s de techniques professionnelles et de bureau d’Hydro‑Québec, section locale 2000 (SCFP-FTQ).  It ruled accommodation for chronic absenteeism must be assessed globally, and not just at the time of termination.  Further, the Court ruled there is no burden on employers to do the “impossible”.

Quebec Court of Appeal Asks for the “Impossible”

Employers had cause for concern in 2006 when the Quebec Court of Appeal ruled that Hydro Québec was liable for not proving it was “impossible” to accommodate a mentally ill employee.

The employee in question had 24 years of service, but had missed 960 days of work between January 3, 1994 and July 19, 2001 – over two and a half years in a seven year period.  She suffered from various physical and mental illnesses, including tendinitis, hypothyroidism, and mixed personality disorder.  Both the employee and employer’s doctors did not give a positive prognosis for recovery, and recommended she stop working for an indefinite period of time.

Hydro Québec terminated her shortly thereafter, citing chronic absenteeism and future incapacity to perform.

The Quebec Court of Appeal overturned the arbitrator’s decision to uphold the termination on two grounds:

1. Hydro Québec failed to demonstrate it was “impossible” to accommodate the employee’s disabilities (note the troublesome language from Meiorin), as the evidence did not suggest she was completely unable to work; and
2. Hydro Québec only learned of the mixed personality diagnosis a few months before termination, so none of the employee’s previous absences, nor the employer’s previous accommodation efforts, could be taken into account.

Although Quebec’s civil law system meant the decision did not have a direct impact on other provinces, the fact an appellate court had interpreted the (otherwise uniform) duty to accommodate this way was certainly troubling.

The Supreme Court Sets the Record Straight

With respect to the alleged burden of an employer having to show that it be “impossible” to accommodate a particular employee, the Supreme Court rejected this notion.  It held the disputed language from Meiorin meant nothing more than to enunciate the test we’ve known all along:  that the duty requires it to be impossible for the employer to accommodate without undue hardship.

In this regard, the Quebec Court of Appeal erred in creating a freestanding requirement of “impossibility” for employers to meet.

Further, with respect to the accommodation analysis’ proper time frame for non-culpable absenteeism, the Supreme Court held it must be a global analysis.  This meant it was irrelevant that Hydro Québec only became aware of the precise nature of the employee’s disabilities so late in the employment relationship.

In other words, it was not correct for the Quebec Court of Appeal to say the accommodation clock ought to have been “reset” once a diagnosis was made.  All the employee’s absences were relevant to the accommodation analysis (and thus termination decision), even if the employer did not know why.  Similarly, Hydro Québec’s previous accommodation efforts were valid evidence of its attempt to discharge its duty.

In this regard, the Quebec Court of Appeal erred in fixing the reference period at the time the diagnoses was disclosed to assess whether the duty to accommodate had been met.

What Does Hydro Québec  Mean Going Forward?

There’s noting particularly new or different in the law after Hydro Québec, but the clarification the Court offered on what’s expected of employers who must discharge their duty to accommodate is most certainly valuable in and of itself.  As mentioned, the statistics from the Human Rights Commission show most employers get it wrong.

In this regard, the Court reemphasized that accommodation is an individualized and multi-party process, and that rules must be flexible and inclusive, not rigid and exclusive.  Further, there is no “duty to create a job” for a disabled employee, nor is there a duty for an employer to change the working conditions in a fundamental way.  

However if it can do so without undue hardship, the Court held an employer must “re-bundle” an employee’s duties, or offer the employee a flexible work schedule (the latter is especially relevant in matters involving seasonal accommodation – click here for more).

Finally, the clarification on the proper timing of the accommodation assessment will be particularly helpful to all parties going forward in matters of non-culpable absenteeism.  In this regard, all absences and all accommodation efforts will be relevant to the analysis, even if the employer was unaware the employee was suffering from an undiagnosed disability at the time.

Some may question whether this is in fact, a “good thing”, since it seems inherently unjust to be held accountable for the absences caused by one’s undiagnosed illness.  However I don’t think that’s the Court’s intention here.  Rather, it seems the Court is simply trying to encourage all parties to initiate the accommodation process as soon as a problem arises.  If one party, such as the employee, does not cooperate, then they’d simply be responsible for that.

Honda v. Keays

Background

The second case in last year’s epic employment law quadrilogy came on June 27, with the Supreme Court’s long awaited decision in the Honda v. Keays (or Keays v. Honda, as it started out as) saga.  I’ve previously written a couple of posts (here and here) about the fallout from Keays, so this is more of an overview of the drama surrounding the decision.

Keays had all the melodrama a human resources or employment law nerd could ask for:  a long service employee with an “invisible” disability, a showdown between an insensitive employer and a feisty human rights lawyer, the looming specter of indeterminate liability for an unprovable illness, and the possibility the Supreme Court could (finally) give guidance on how businesses and practitioners alike should be dealing with these impossible situations.

Of course, the Supreme Court did no such thing.  However, like any good trilogy, the conclusion was shocking, and left those who followed it with many unanswered questions.

The Keays Trilogy

The Phantom Menace or A New Hope?

It started in 2005 when McIsaac J. shocked the world by making the largest punitive damages award in employment law history – $500,000 against Honda Canada for its wrongful dismissal of Kevin Keays.  This award was intended to denounce Honda’s “protracted, deliberate, and outrageous corporate conspiracy” it plotted against a “dedicated, conscientious” but disabled employee of 14 years, Kevin Keays.  Keays suffered from chronic fatigue syndrome and was terminated for just cause after refusing to see the company doctor, who (incidentally?) denied the veracity of his condition.

McIsaac J.’s characterization of Honda’s conduct struck fear into many employers who felt their hands were tied when it came to “invisible” illnesses.  In contrast, disability rights groups across Canada, frustrated with the skepticism CFS and fibromyalgia sufferers faced, applauded the decision.

The Empire Strikes Back

The sequel to Keays came in the fall of 2006 when the Ontario Court of Appeal released its decision on Honda’s appeal.  Writing for the majority, Rosenberg J.A. found the trial judge had erred in awarding punitive damages on the same scale as the comparator case, Whiten v. Pilot Insurance.  In doing so, the majority cast doubt on a number of the trial judge’s findings of fact, including the allegation of a “corporate conspiracy” and claim that Honda had “waged war” against Keays for 5 years.  Consequently, the punitive damages award was reduced to $100,000, but all other aspects of the trial decision, including Keay’s length of reasonable notice and the 9 month “Wallace” extension, remained unchanged.

In a dissenting opinion, Goudge J.A concurred with the trial judge’s fact findings, noting they were egregious enough to justify leaving the punitive damages award intact.

Revenge of the Sith or Return of the Jedi?

On June 27, 2008, the Supreme Court rendered its decision in the final installment of the Keays trilogy.  Observers everywhere waited with baited breath, figuring this would be the most significant case since Wallace v. United Grain Growers in 1997.  What would happen to the punitive damages award?  Would Keays usher in a new era of reasonable accommodation?  How much more sympathetic could an already employee-sympathetic court get?

The Supreme Court’s decision was shocking, but not for the reasons you might think.  The decision was shockingly conservative.  Not only did the court wipe out the largest punitive damages award in employment law history, they also obliterated the entire concept of Wallace damages while they were at it (click here for more on this).

In essence, the Supreme Court reinterpreted the trial record to find that Honda had not acted maliciously in its confrontations with, and subsequent dismissal of, Keays.  Significant deference is usually given to trial judges’ findings, so to say it was unexpected that the Court would essentially re-characterize the entire case would be a huge understatement.  

The crux of this decision appears to have been Keays’ medical notes.  While at first legitimate and descriptive, over time they became vague and self-reporting, e.g. “Mr. Keays feels he cannot come to work today”.  Because of this, the Court found Honda had a right to be skeptical, and insisting Keays visit their doctor was not outside the realm of reason.  In other words, the Court recognized that self-reporting illnesses were ripe for abuse and basically said “no”.

For employers, the Supreme Court’s decision in Keays was a huge relief.  Not only did the Court suggest that they could be a little more bullish in challenging suspected malingerers, but the ominous threat of Wallace damages (should they get it “wrong”) was also eliminated.  But what about disability rights groups?  What had started with MacIssac J. championing the veracity of CFS and fibromyalgia ended with the the Supreme Court giving employers the tools to combat manage it.

Conclusion

At the end of the day, Keays went from an award of 14 months notice, 9 months Wallace extension, and $500,000 in punitive damages with a premium on his costs, to being left with nothing but 14 months notice and the burden of having to pay Honda’s undoubtedly huge legal fees.  He also went down in history for bringing about one of the most closely watched employment law trilogies in recent memory, but somehow I doubt that is much consolation.

Evans v. Teamsters Local Union No. 31

Introduction

2008 was certainly a busy year for employment law.  There were no less than four major cases heard by the Supreme Court, providing clarification, and in some cases re-writing, the law on employees’ good faith obligations (RBC Dominion Securities) and duty to mitigate (Evans v. Teamsters), and employers’ duty to accommodate (Hydro Quebec) and sanctions for bad faith conduct (Honda v. Keays).

The “Employment Law Quadrilogy 2008″ roundup will discuss the implications, if any, of these four cases going forward.  I say “if any”, because on one hand unusual facts increase the likelihood of a case being heard by the Supreme Court, but on the other hand, unusual cases can also mean a narrower application.  As they say, “extreme facts lead to extreme law”.

 Does the Duty to Mitigate Require an Employee to Return to the Terminating Employer?

It’s a central tenet of contract law that the innocent party has a duty to mitigate its damages once a contract has been breached.  In the context of employment, this means an employee has a duty to find comparable employment elsewhere upon notice of termination.  The corollary to this is that pay-in-lieu of notice is then subject to earnings from alternative, comparable employment, if any is secured.  But what happens if the only comparable employment available is with the former employer itself?  Does the duty to mitigate require the terminated employee to return to his or her former employer to work out the remainder of the notice period (and thus receive no severance package)?  This contentious question was the subject of Evans v. Teamsters Local Union No. 31.

Evans was decided on May 31st of this year, upon appeal from the Yukon Court of Appeal.  The case concerned a business agent in Whitehorse, Evans, who had 23 years service with Teamsters.  When the union hired a new executive, who Evans had a contentious relationship with, Evans was provided with  notice of his dismissal.  Evans suggested 24 months notice, comprised of 12 months of continued employment and 12 months of pay-in-lieu of notice.  Teamsters rejected the offer and requested that Evans return to work the balance of his 24 month notice period.  When Evans refused, he was immediately terminated and given nothing.  The question for the court was whether Evans had acted reasonably in refusing Teamsters offer of temporary employment, and in doing so had Evans breached his duty to mitigate.

What Would the Reasonable Person Do?

The Court found that Evans had failed to act reasonably in refusing Teamsters offer, and thus was in breach of his duty to mitigate.  The Court held that a reasonable person would be expected to accept such an offer, where the salary offered was the same, the working conditions were not substantially different or demeaning, and where the working relationships were not acrimonious.  In this case, Evans himself had requested 12 months of working notice through the performance of his old job, and admitted at trial that there would be no humiliation in returning to work.  Because of this, the Court did not hesitate to find that Evans acted unreasonably in refusing Teamsters’ offer, and held that in breaching his duty to mitigate, he was entitled to nothing.

What are the Implications of Evans?

On one hand, some may think Evans means an employer can call a terminated employee back to work whenever severance package negotiations aren’t going the way the employer wants them to.  After all, per the Court’s holding, if the salary and position are substantially the same and there hasn’t been any acrimony involved in the decision to terminate, wouldn’t it then be unreasonable for the employee to refuse such an offer? 

Perhaps, but note how fact specific Evans is:  he admitted, both through his request for working notice and through his admission at trial, that there would be no humiliation or acrimony involved in returning to work.  Furthermore, in assessing the reasonableness of Teamster’s offer, one must consider the limited availability of comparable employment for a union business agent in Whitehorse, Yukon.  These factors constitute a “perfect storm” for a Court to say a terminated employee must return to his or her former employer, lest they get nothing, and would likely be difficult to replicate.

There are also practical concerns in threatening to recall a terminated employee if they didn’t accept an employer’s severance package offer.  Would an employer really want to put a terminated employee in the care of its business operations?  Because of such judgment about the viability of such an arrangement, it wouldn’t be hard for the employee’s counsel to argue that returning to work would be demeaning, humiliating, and embarrassing.  

While Evans is the first case to stand for the proposition that it may be unreasonable for a terminated employee to refuse an offer to return to his or her former employer, the facts and practical considerations dramatically narrow its potential application.  However, as we will see over the remaining three parts of the Employment Law Quadrilogy 2008, Evans is nonetheless another judicial tool the Supreme Court has granted employers to better manage their operations.