Forced Sick Leave: Is it Constructive Dismissal?

Can an employer insist that an employee take sick leave?  Or is this a constructive dismissal?  A recent decision of the Manitoba Court of Appeal sided with the employee on this issue and awarded the plaintiff more than $340,000 as damages for constructive dismissal.

The case of  Irvine v. Gauthier (Jim) Chevrolet Oldsmobile Cadillac Ltd. (2013 MBCA 93) involved a senior long service employee who was fighting diabetes.  Kelly Irvine had worked for the defendant car dealership for 19 years, mostly as the general manager for new car sales and as a vice-president.  Mr. Irvine was diagnosed with diabetes and lost eyesight in one of his eyes.  He was called into a meeting with the dealership’s owner and told to take a sick leave of indefinite duration.  The dealership then circulated an announcement stating that Mr. Irvine was going on a leave of absence to address his health problems.  The dealership paid Mr. Irvine for two weeks, provided him with long term disability forms and then replaced Mr. Irvine with a new general manager within a month.

Mr. Irvine was not interested in pursuing disability benefits.  Instead, he looked for work.  Four months later, Mr. Irvine located alternate employment with a different company but that employment only lasted for 8 months.  Meanwhile, Mr. Irvine sued his former employer for wrongful dismissal.  The defendant car dealership took the position that Mr. Irvine had resigned.  At trial, the court accepted that the employer had told Mr. Irvine to take time off, apply for disability insurance and convalesce.  However, the judge concluded that based on all of the circumstances, including the fact that Mr. Irvine went and found alternate employment, he had resigned and had not been dismissed.

Mr. Irvine appealed the decision.  The Manitoba Court of Appeal assessed the main issue as being whether or not Mr. Irvine had been constructively dismissed.  After tracing the law of constructive dismissal, it adopted the proposition that forcing an employee to take a leave of absence without a sufficient basis for doing so may constitute a constructive dismissal.  The court noted that if the employer has sufficient medical information or a reasonable plan for reintegration, a forced leave of absence may be sustainable.  But the onus is on the employer to prove that the employee cannot perform the duties of the position.  Key factors include the anticipated duration of the employee’s illness, the nature of employment, the prognosis for recovery, the availability of sick leave and pay, the length of service and other related points.

In this case, the employer did not obtain any of this information.  It simply met with Mr. Irvine and told him that he was being placed on a sick leave.  It then filled his position permanently within a month.  This was a forced leave of absence which constituted a constructive dismissal.  The employer had not obtained any documentation about the plaintiff’s prognosis and had no meaningful discussion with the plaintiff about his ability to perform his duties.  The Court of Appeal reversed the trial decision and held that Mr. Levine had been constructively dismissed.  He was awarded more than $340,000 in damages.

This decision shows that it can be very tricky for both sides to deal with a disability situation.  Employees who are facing medical challenges or other challenges that may require accommodation should be prepared to provide their employers with information about any restrictions they may be facing or any required accommodation.  Employees have the right to refuse to take a leave of absence if they do not feel that it is medically warranted.

Employers have the right to request some information from employees about the need for accommodation if there is evidence that an employee is medically unable to perform the duties of the position.  However, employers may not simply tell the employee to take a leave of absence without having a provable basis for making that request.  If a leave of absence is required, employers should discuss some reasonable plan with the employee based on the employee’s prognosis for a return to work and should hold the position open.  Employers who fail to meet these requirements can be faced with significant damage awards as this case demonstrates.


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