Suspicions of malingering, no matter how deep-seated, are no substitute for hard evidence.
For 17 years, Don Bailey worked as a sales representative for Vancouver-based Forest Lawn and Ocean View Cemeteries and Funeral Homes. Asserting that he was suffering from health problems, Bailey went on sick leave. His doctor gave him a note supporting his claim that he was unable to work.
Without any salary during his leave, Bailey applied for short-term disability benefits with Manulife, the employer’s group insurer. Because his condition appeared to arise from his employment, the insurer declined his application and referred him to the Workers’ Compensation Board of British Columbia, known as Worksafe BC. Bailey filed a claim with Worksafe BC, explicitly attributing his medical issues to years of working in a stressful environment and being picked on and abused by a management team, including his boss, Brian Boyle.
When Boyle learned of the allegations against him, he was livid. Discounting Bailey’s medical condition, Boyle believed that the truth was that Bailey was readying himself for another career as a real estate agent. Equating Manulife’s denial of his claim as equivalent to a determination that he should not have been on leave in the first place, Boyle fired Bailey, retroactive to the first day of his medical leave.
Boyle did not inform Bailey of the dismissal and cut him off the employer’s group benefit coverage.
Not knowing of his termination, Bailey blithely proceeded with his appeal of Manulife’s denial of his application. It was only by accident that he caught wind of his firing, when his wife was blocked from utilizing the employer’s group benefit coverage.
Bailey sued Forest Lawn for wrongful dismissal. Fighting back, Forest Lawn maintained in its defence that it had just cause to warrant his dismissal. The company claimed that Bailey was not really sick, that his application for short-term disability benefits was declined owing to the absence of any medical proof of illness, that he was working as a real estate agent, that they had repeatedly attempted to call him to return to work and that he had abandoned his employment.
Rejecting the employer’s defence, Madam Justice Susan Wilson of the B.C. Supreme Court was outraged at its behaviour. There was no evidence that Bailey was not sick or that his benefits claims were denied because of a lack of evidence of disability. While he had made it known that he was interested in selling real estate, he never indicated it was to be a full-time endeavour or that he was leaving his job.
The court was particularly indignant at Forest Lawn’s defence that Bailey had not returned to work after being contacted. This proved to be false. Under cross-examination, Boyle admitted that he had not contacted Bailey and had never asked him to return.
Bailey’s employment agreement limited his recovery to eight weeks of notice. That did not prevent the court from awarding him $25,000 in aggravated damages for, among other things, terminating him while on medical leave and falsely alleging just cause. The court did not stop there. Finding that aggravated damages were insufficient as a deterrent to malicious and callous treatment of its employees, it imposed an additional $100,000 in punitive damages on Forest Lawn in favour of Bailey.
The stigma of a public decision alleging integrity issues against a well-known company should give Canadian businesses pause in assessing their termination protocols.
Don’t play doctor. If an employee has submitted medical evidence of disability, ensure that it is reviewed by third-party medical experts.
Understand limits of coverage. Just because an employee is declined for benefits does not mean that she is not sick. The insurance policy may have limitations on its scope of coverage that disqualifies their particular condition. That was the error Boyle made.
Have an impartial decision-maker. The court noted the historic tension between Boyle and Bailey. Have someone removed from the situation assess the evidence before making a determination to terminate.
Be upfront with the employee. Terminating an employee while on sick leave is challenging enough. Not letting them know of the decision during a period when they are vulnerable, depend on benefits and have no income simply compounds the unfairness and the exposure to punitive damages.
Avoid retroactivity. The rationale for the tendency of some employers to attempt to make terminations effective on a retroactive basis is not apparent. The termination takes place when the employer ends the relationship and not on some earlier date of its choosing.
Communicate in writing. This diminishes misunderstandings. If Forest Lawn had sent letters to Bailey and he hadn’t answered, there would have been a decision based upon documented job abandonment. Not only did they not do that, they never advised Bailey that his employment was over. In many jurisdictions, the termination would not be be effective unless communicated in writing.
Assert only what can be proven. The old defence strategy of throwing the kitchen sink at a plaintiff is downright dangerous. Levelling unprovable allegations of cause will outrage a court and attract an award of punitive damages.
• Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers. He practises employment law in eight provinces.
The most recent of his six books is War Stories from the Workplace: Columns by Howard Levitt.