Employment terminations can create significant liabilities to an employer. In some cases, these liabilities come as a complete surprise to the employer, because the employer failed to identify and assess the liabilities in advance. In some cases, employers mistakenly rely on provisions of an employment agreement to limit their liability, only to be told by a court or other decision-maker (after the termination) that the provisions are not enforceable. In other cases, employers fail to appreciate the statutory protections that are tied to an employee at the time of termination, and so violate statutory obligations mistakenly and unknowingly.

In the employment context, statutory liabilities (employment standards, human rights, workplace safety etc.) can be easily overlooked, but are often very significant. Breach of employment statutes will usually result in the employer being liable for "make whole" remedies – remedies intended to fully compensate an employee. In the context of a termination of employment, a make whole remedy could include reinstatement of employment with full back pay, and other remedies. The stakes are high and so employers should proactively consider the liabilities, mitigate the risks where possible and seek guidance from qualified human resource professionals and/or legal counsel before terminating employment.

Below is a case summary of an employee who claimed to have been terminated because they were allegedly on a statutory leave of absence. We acted as legal counsel for the employer. While the employer was successful in defending the complaint, this case is a reminder of the easily missed but significant liability that an employer may face when dismissing an employee.

To provide context, The Employment Standards Code (the "Code") in Manitoba entitles employees to a statutory leave of absence for long term illness or injury. In order to be eligible for the leave, a "physician must issue a certificate providing evidence reasonable in the circumstances that the employee is expected to be incapable of working for a period of at least two weeks because of a serious illness or injury." The issues at hearing were whether the employee was entitled to this statutory leave and, if so, whether the employer breached the Code by terminating the employee's employment because the employee had taken the statutory leave.

A.M. v 7044119 Manitoba Ltd., 2020 CanLii 43048 (MB LB)

An employee (AM) was issued a written warning following a respectful workplace incident. Following receipt of the warning, AM made requests of the employer to produce all interview notes relating to the investigation. The employer refused and the employee then provided the employer with a medical report which stated that AM was, for a period of one month, not fit to attend work for medical reasons. The medical report did not provide a prognosis or an expected return to work date.

The employer granted AM a leave of absence (permission to be away from work), largely because it believed that it had no other option. At the time of the request, AM did not make any specific reference to seeking a statutory leave of absence (for long term illness or injury, or otherwise), but the employer also did not ask whether the employee was seeking a leave of absence under the Code.

Prior to the end of the leave, the employer asked to meet with AM to discuss AM's intentions to return to work. The employer met with AM to discuss the issues but, by the date of the meeting, the medical report had expired (by a few days) and the employee had not yet provided an updated medical report. During the course of the meeting, AM couldn't confirm when a new medical report would be provided, but indicated an intention to seek a new medical report the following day. As a result of AM's conduct at the meeting (and prior conduct), the employer lost trust and terminated their employment. The next day, AM secured a new medical report and sent it to the employer, which confirmed that AM would be fit to return to work later that same week. The employer refused to reinstate employment and confirmed AM's termination.

AM filed a complaint with Employment Standards, alleging to have been terminated as a result of taking a statutory leave of absence. Employment Standards determined that AM was entitled to a leave of absence under the Code, based on the medical note provided. Employment Standards took the position that any report evidencing a medical need for a leave of absence of two weeks or more met the Code eligibility requirements for long-term leave for serious injury or illness. However, Employment Standards dismissed the complaint, finding that the termination was totally unrelated to the leave entitlement and so not in breach of legislation. AM appealed the decision to the Manitoba Labour Board, and the matter proceeded to hearing.

The law required AM to establish a prima facie case (proving AM was terminated while on a protected statutory leave), at which time the onus shifts to the employer to prove that the reasons for termination were totally unrelated to the leave entitlement. In this case, the employer was successful in its argument that AM had failed to establish a statutory right to the leave of absence in the first place, such that statutory protection did not apply (and the employer did not have to prove that its decision to terminate had nothing to do with the employee having taken a leave of absence under the Code). The Board noted that while the employer could have sought additional information on the nature of the leave request, there was no objective evidence to suggest that AM was seeking access to a statutory leave for long term illness or injury.

The Board stated:

  1. There may be instances where an employer may be held to the standard of clarifying the type of medical leave that an employee is seeking, and there may be instances where an employer's failure to inquire may result in a finding of a breach of Section 59.10 of the Code. That is not the case here.

Take Aways

Where appropriate, employers should seek clarification on whether an employee is seeking access to a statutory leave. Employers should also seek clarification on medical information that is vague, incomplete or inconsistent. More broadly, this case is a reminder of the "hidden risks" employers may face when they terminate an employee's employment at a time when the employee may have statutory protections. Statutory protections can come in the form of leave protections, prohibitions against reprisals and prohibitions against discrimination, among others. While AM didn't succeed on this point, it is generally straight forward for an employee to establish a prima facie case - usually establishing just that the employee exercised a statutory right and also experienced a negative employment outcome, like a dismissal. The burden then shifts to the employer to prove a negative - i.e. that the employee exercising a statutory right had nothing to do with the employer's decision to take action against the employee. This burden, and the associated liability for failing to meet it, should encourage employers to act carefully before taking action against an employee, to ensure they put themselves in the best position possible to discharge this burden of proof.

As stated, the potential liability is significant in these kinds of cases and so employers should take these issues seriously. Employers should proactively consider the liabilities, mitigate the risks where possible and seek guidance from qualified human resource professionals and/or legal counsel before terminating employment.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.