David Harris - Canadian Employment Law

This may not be a well known legal maxim spoken in Latin, but the words "if it ain't broken, don't fix it", mean a lot to lawyers and clients. The Supreme Court forgot all about this concept in deciding this case, and, with all due respect, fell flat on its nose in the process. Before Sylvester, the Ontario Court of Appeal decision in , determined the law with respect to an employee who was fired and suffered a medical illness in the notice period. For example, if someone was to receive 12 months pay in lieu of notice and became ill for 3 months in that period, then there was determined to be an interruption of the notice period. Any disability insurance received in the 3 month period would have no impact on the severance claim. The severance claim would be "on hold" in the disability time period and would then start up again on its expiry. This theory was based on the idea that the 2 payments were distinct - the severance sum was to compensate for the time period of unemployment, while the disability income was designed to pay income while ill. All this made perfect sense and was the way the law was structured for roughly 15 years until the Supreme Court got its hands on the Sylvester case. Sylvester worked for the BC government and was fired. Just prior to his termination he became ill and was receiving disability income. He declined the offer of compensation and sued for more. He was successful - too successful - he recovered severance payments concurrently with the disability income at trial and at the BC Court of Appeal- the format and principles of the Ontario Court of Appeal decision had not been followed. The SCC overturned the trial and appellate decisions from BC. However instead of reverting the case back to the Ontario model, which wasn't close to being broken - it fixed or at least tried to fix it and failed dismally. The SCC determined that it was wrong to have severance and disability paid concurrently - in cases where the employer paid the disability insurance premiums. The court decided that where the employee paid the premiums the employee could get both - disability and severance - even where the employee was too sick to look for a new job ! However the court left open the possibility that there could be cases where the employee indirectly bargained for fringe benefits such as disability insurance as part of the wage package and hence really "paid" for the insurance premiums itself. This is what the trial judge did find in a later case, McNamara vs. ACIL. In such cases the employee would get both the insurance proceeds and the severance - even though he was ill all through the notice period. The Ontario Court of Appeal upheld the trial decision in McNamara. Quite frankly none of this makes any sense - but this is the law today.