What Is Long-Term Disability in Canada?

Long-term disability (LTD) is an insurance plan available to employees who become unable to do their jobs due to a medical condition, disability, or injury. The insurance pays about 60-75% of the salary earned prior to the employee becoming unable to work. If the condition resulting in LTD is permanent, the employee could receive benefits until age 65. If it’s not permanent, the LTD ends when the employee can return to their job.

Many employers have this insurance, and many pay for the policies. However, employers aren’t required to have the insurance, and some that do require the employee to pay part or all of the premiums. If you’re unsure what your status is, check with your employer. Self-employed people have the option of purchasing their own policy.

To receive LTD, the employee must have been covered in the employer’s policy, and the disability must match what’s defined as an LTD in the policy. Definitions vary across different insurance companies and policies, but it usually comes down to the employee’s inability to work due to the medical issue.

Am I Still Considered an Employee if I’m on Long-Term Disability?

Someone on LTD is still considered an employee unless they resign from their job, their contract ends and isn’t renewed, or they’re terminated by the employer. It’s important to understand that LTD is separate from employment–even if the employee is terminated, the LTD continues while the employee is still eligible, whether or not they’re still employed.

Sometimes, a situation occurs where the employee can’t work, but their LTD claim is denied. This shouldn’t affect the employee’s job status, but it might. Talk to a lawyer who specializes in LTD to determine what the next steps should be.

Can an Employer Fire an Employee Who’s on Long-Term Disability?

It is possible for an employer to fire an employee who’s on LTD. That said, they have to be extremely careful about how they do so. While the employee has partial income from the LTD policy, terminating their employment could cause them to lose additional benefits, such as retirement investments. However, an employer legally cannot fire an employee because of the disability itself; that violates anti-discriminatory laws.

In order for an employer to release an employee on LTD, several things must first happen.

  • The employer must try to provide accommodation for the employee to reasonably do their job. For that to happen, the employee needs to provide information about the disability and what accommodations need to be made.
  • Suppose the employer can’t provide the accommodation for various reasons, including cost, and the loss of the employee in their specific role causes a hardship to the company. In that case, the employer may be able to claim undue hardship as a reason for releasing the employee.
  • The employer must provide adequate notice. The amount of notice varies depending on several factors, including provincial law and how long the employee worked for the company. The only time exempted from adequate notice is if the employee is terminated for cause. That means the employee was found behaving in ways that negatively affect the company, such as stealing, harassing other employees, or insubordination to management.

Suppose your employer terminated your employment while you were on LTD, and you’re not sure they had the right to do so. In that case, it’s highly recommended that you contact an experienced long-term disability lawyer to see what your options are.

What Is Frustration of Contract?

A concept known as the doctrine of frustration often comes up with LTD cases. This states that the foundation of the relationship between an employer and employee is that the employee provides work that the employer needs, and the employer pays the employee for that work. If the employee becomes unable to do the job through no fault of their own or of the employer, the contract may be deemed frustrated. In other words, the job ends.

The employer doesn’t fire the employee, and the employee doesn’t resign.

These are complex cases because there are no specific situations or circumstances that define when a contract is frustrated. If an employee is told their job is over because of a frustration of contract, they should contact a lawyer to determine if this can legally hold.

What if the Employee Becomes Disabled After Being Removed from Their Job?

If an employee is terminated from their job and then becomes disabled, whether or not they’re eligible for LTD depends on whether the employer kept them covered under the policy. Many policies require the employee to be actively working at the time the disability occurs to be eligible for LTD, so even if the employer still had the employee on the policy, they still may not be eligible.

Some policies don’t make that distinction, so if the employer still had the employee on the policy, the employee may be eligible for LTD.

What Should I Do if I Need Help with Long-Term Disability?

Call NOVA Injury Law at 902-706-5205 to schedule a free case review. We know how crucial LTD can be when there have been catastrophic life changes. Our team of knowledgeable, experienced LTD lawyers can help guide you through the process of filing for LTD and assisting if there are difficulties along the way. We can also help determine whether an employee on LTD who was let go from their job was terminated legally and provide support for pursuing legal remedies if not.