There are many issues to be considered in making or assessing a settlement offer on termination. One such issue is the health of the person who has been fired.

Statutory Coverage

Ontario law requires every employer to continue health and insurance benefits for a minimum statutory time period following termination. The minimum period after three months is one week. This increases a week a year after 2 years of employment to a maximum of eight weeks.

This has important consequences for any person suffering from a medical disability at termination or within this statutory period. Should the employee prove he or she was disabled during this time period, he or she can recover full short and long term disability benefits for as long as he or she is medically qualified. It is vital to get medical evidence to prove the disability in this time period. This claim is brought against the employer usually for short term disability and the insurance company for long term disability, which usually starts after 6 months.

For this reason, it is often prudent to get a medical examination before signing a release which gives up such claims.

Common Law Period

Should the disability occur within the “common law” notice period yet after the statutory period, there can be a claim against the employer for the full extent of lost disability benefits. This presumes, of course, no release being signed.

Disability benefits are somewhat complicated as usually the test for recovery changes over time. Typically the insurance sum is due for 2 years when the employee cannot work for the specific job held on termination. After 2 years, the test usually is can the employee work in any job for which he or she is qualified by reason of education, skills and work experience.

When qualified, disability can last for up to age 65. Such a claim on these facts can be brought against the employer.

Human Rights

To make this issue even more complicated, when the termination decision was influenced by a medical disability, a human rights complaint may be brought. One case recently award reinstatement and 12 years back pay to a person who was adversely treated due to such a medical disability.[1] Human rights awards are complicated. Not every claim can be predicted to be of this magnitude.

Employers’ View

These issues make it very important for the employer to negotiate a full settlement and a general release. Often an unforeseen medical circumstance cannot be anticipated. The sole solace is a complete release.

Employees’ Take Away

Individuals would be prudent to obtain a complete medical and consult a qualified employment lawyer before signing off their right to sue. In addition, if there is any apparent medical problem, proper documentation should be made to show it occurred within the statutory period.

Take Advice Before You Act

Needless to say this question is unduly complicated. Situations of this nature mandate effective legal advice. Legal advice is critical to both sides of this dispute. For advice on this issue from either side, contact the offices of Toronto employment lawyers Grosman Gale Fletcher Hopkins. We regularly advise workplace parties on a wide range of legal workplace issues. Contact us online or by phone at 416 364 9599 to schedule a consultation.

[1] Fair v Hamilton-Wentworth, upheld by the Divisional Court, in turn, upheld by the Court of Appeal