When an employee is fired from their job while they are sick on sick leave it can trigger a lot of important employment law issues in Ontario. This blog looks into the issue of being fired while on sick leave or while being sick. First, we review what sick leave is in Ontario, why employers cannot terminate or penalize an employee for taking sick leave, how termination may still be possible even though an employee is on sick leave and how an employment contract or employment agreement may be “frustrated” in certain circumstances related to sick leave or being sick.

What is sick leave in Ontario?

In Ontario, there is legislation called the Employment Standards Act, 2000, S.O. 2000, c. 41 (“ESA”) which sets out that provincially regulated employees are allowed certain sick day entitlements. For federal employees, sick leave is set out in the Canada Labour Code R.S.C., 1985, c. L-2. However, in this blog, we will focus on provincially regulated employees in Ontario.

To remind our readers, sick leave is a statutorily protected entitlement that employees have under the ESA. Sick leave is not discretionary on the part of the employer, and an employee does not have to ask permission to take statutorily protected leaves like sick leave. The ESA further sets out that employees are entitled to three (3) unpaid sick days per calendar year and to qualify for those sick days the employee needs to be employed for at least two (2) consecutive weeks. Employees who are federally regulated, such as those employees who work in banking or in the telecommunication industry, are entitled to ten (10) paid sick days as set out in the Canada Labour Code R.S.C., 1985, c. L-2.

Employers Cannot Terminate or Penalize an Employee for Taking Sick Leave

An employer should not terminate or penalize an employee because they took a leave of absence protected by the ESA such as sick leave. If the employer decides to fire someone for taking sick leave, then the employer can expect that this course of action on their part may result in some serious consequences for the employer. For instance, the employer may be liable for termination and severance pay, an order of reinstatement, damages under the Human Rights Code, R.S.O. 1990, c. H.19 (“Code”) if the ESA protected sick leave also constitutes a protected ground under the Code (which it will in most situations involving sick leave), as well as moral and punitive damages.

Further, while it is possible that an employer terminates an employee for taking more than three (3) unpaid sick days as set out in the ESA, it is extremely unlikely as firing an employee for simply taking sick leave greater than three (3) days would almost certainly violate the Code or other related leave provisions under the ESA. Further, under the Code, employers are mandated to accommodate their employees if they take sick leave up to the point of “undue hardship.” This means that an employee may be theoretically allowed to be on “sick leave” for months or, possibly, even years. However, employers may terminate or dismiss an employee for taking sick leave if the sick leave majorly disrupts the employer’s business and any accommodations cannot alleviate the situation without extreme difficulty having regard to the employer’s costs, outside sources of funding and / or health and safety requirements, as this would possibly constitute undue hardship.

The bottom line is that an employee has the right to take a leave of absence protected by the ESA (such as sick leave) in Ontario and should be able to return to work at the same job they had before they went on leave. This means that the employee should come back to the same job with the same title, work hours, workplace location, benefits, responsibilities and pay. If the employee’s role no longer exists, then the employer must reinstate the employee to a comparable position if one is available.

Termination Still Possible While an Employee is on Sick Leave

Generally, an employer can fire or terminate an employee while that employee is on sick leave as long the leave was not a factor in the decision to terminate the employee. However, even if the reason for the dismissal is not due to sick leave, the employer still owes the dismissed employee notice of termination or pay in lieu of that notice. If the employer fails to do so, the employee may have a claim for wrongful dismissal. See above for more information.

Frustration of Contract

In employment law, an employment contract or employment agreement can be “frustrated” when there is no reasonable likelihood that an employee can return to work and that this set of circumstances is not the fault of either the employee or the employer. As such, the employment contract cannot be fulfilled and will be seen to be “frustrated” meaning that the employment relationship is no longer possible and the employee is not owed notice of termination or pay in lieu of notice of termination under the common law. However, in Ontario the ESA specifically carves an exception for individuals who experience permanent job loss as a result of a disability. In such a case, the employer still must pay to the employee or provide to the employee the minimum entitlements to notice as set out statutorily under the ESA.

In the context of sick leave, this means that an employment contract will be frustrated when an employee is not able to return to work because they are too sick or too ill for such an extended period that renders the employment contract frustrated. For example, the employee may have experienced an ongoing and prolonged illness where the illness is simply too debilitating to allow them to return to work and complete the responsibilities related to their employment with the employer. In such cases, the employment relationship would be over, and the employment contract would be frustrated.

As such, it often happens that an employer will claim the employment contract has been frustrated if an employee has been on sick leave for an extended period. However, this does not mean that the employment contract is frustrated as the assessment of whether an employment contract is frustrated is heavily fact dependent or fact driven. The best course of action in cases where there is a possibility that an employment agreement is frustrated would be for the employee to approach an employment lawyer. This is especially the case if their employer has set out that the employment contract has been frustrated due to the employee’s illness. An employment lawyer can review the facts of the matter at hand and determine if the employment contract was indeed frustrated or if there still remains a reasonable likelihood that the employment contract remains and whether or not the employer has failed in their duty to accommodate the employee under the Code.

How Zeilikman Law can Help

Zeilikman Law helps both employers and employees deal with employment law issues around job-protected statutory leaves of absence,  including sick leave, by providing legal advice, preparing various policies, correspondence or other documentation, helping to negotiate a resolution to these issues, litigation management, etc.

We have a lot of blogs about the topic of sick leave and other related employment law issues like wrongful dismissal. For example:

• Need to Take a Leave From Work? Know Your Ontario Rights
• What Are Sick Days?
• Can an employer terminate my employment while on disability or sick leave?

Contact Zeilikman Law today at (905) 417-2227 or online here to get your questions answered about this topic and other employment law issues.