When an employee takes a few days’ leave for a common cold or a medical checkup, it usually does not disrupt the business’s operation. However, when an employee takes extended medical leave due to a serious illness or injury, employers must consider several important factors.

If the situation is not properly handled, employers may face significant legal risks that could result in shocking financial liability and operational disruption. In one example, discussed later in this article, the employer was ordered to pay an employee almost $420,000 for lost income, and they were also required to reinstate the employee. To avoid such disruptions and financial loss, employers need to be aware of two key factors:

1. Legal obligations towards the employee: These include the duty to return the employee to the same or a comparable position and the obligation to accommodate any disabilities up to the point of undue hardship.
2. Set a clear return to work process: A clear return to work process ensures a smooth transition to enable the employee to return to work effectively.

We’ll outline both factors below in more detail.

LEGAL OBLIGATIONS

Legal Obligation to Reinstate Employees

Under employment standards legislation, employers are required to reinstate employees to their most recently held position. If that position no longer exists, the employer must offer a comparable position.

As such, employers should begin preparing for an employee’s eventual return as soon as the medical leave begins.

To meet these obligations, employers should manage the employee’s absence in a way that preserves the right to return. For example, if an employer permanently replaces the employee during their leave, it may be impossible to reinstate them to the same position. Courts have generally ruled that this constitutes a breach of the employer’s legal duty.

The proper approach is to hire a temporary replacement or redistribute the employee’s duties among existing staff until their return.

Defining “Most Recently Held Position”

Determining what constitutes the “most recently held position” can sometimes be contentious. In Elementary Teachers’ Federation of Ontario v. Toronto District School Board, 2005 CanLII 36712, an elementary school teacher taught French before taking pregnancy leave. Upon her return, the school board asked her to teach science. She refused and asked to teach French again, insisting that it was her most recent job. However, the court sided with the employer, finding that the collective agreement defined her position as “teacher,” not by subject taught. As such, the teacher’s grievance was dismissed. This highlights the importance of clear job descriptions and employment contracts. An employee is entitled to the same position, but not the same task/assignment. A well-defined job description and an employment contract help to define what a position is.

Defining “Comparable Position”

Courts assess comparability based on factors such as job location, hours of work, quality of the working environment, degree of responsibility, job security, possibility of advancement, and prestige and prerequisites of the position.

In Sheriff v. Bad Boy Furniture Warehouse Limited, 2011 CanLII 7234, the employer distributed the employee’s necessary job duties among other employees during the parental leave, and offered a different position with the same compensation. The Labour Board found 85% of the employee’s duties had not been distributed, so the previous position still existed. They also found that although the compensation for the new position was the same, the position was not comparable. As such, the Labour Board ordered the employee to be reinstated, and the parties should deal with back wages for the period September 2010 to the date of the hearing, January 11, 2011.

Possibility of No Reinstatement

Although medical leaves are generally job-protected, this does not mean an employer can never terminate an employee during or after such leave. Termination is permissible only if the reason is entirely unrelated to the medical leave, for instance, due to legitimate restructuring.

The burden of proof lies with the employer demonstrating that the termination was unrelated to the leave.

Some seemingly neutral reasons may, in fact, be connected to the employee’s absence. For instance, if an employer realizes during the leave that operations are more efficient without the employee and therefore eliminates the position, the court may find that the termination is related to the leave. Similarly, if a temporary replacement performs better and the employer refuses to reinstate the original employee, this may also constitute a violation.

Additionally, if the dismissed employee can demonstrate that their health condition was a contributing factor in the employer’s termination decision, this may lead to significant legal consequences for the employer, as mentioned in the opening of this article. In Fair v. Hamilton-Wentworth District School Board, 2013 HRTO 440, the school board failed to reinstate a teacher after his return from medical leave.The Human Rights Tribunal found the school board violated the teacher’s human rights, reinstated him, and ordered the school board to pay loss of wages from the termination date to the reinstatement date, which was a period of eight and half years, in an amount of $419,283.89, among other remedies. The Divisional Court and then the Court of Appeal upheld the Tribunal’s decision (see Hamilton-Wentworth District School Board v. Fair, 2016 ONCA 42).

As such, employers should therefore exercise extreme caution when considering termination during or after medical leave. Improper handling may expose them to liability under employment standards and human rights legislation. Any such decision should be carefully documented in writing and legally defensible.

“Sham Reinstatement”

If an employer terminates an employee shortly after reinstating them, the court may view the reinstatement as a sham. Courts are generally skeptical of immediate post-return terminations. However, facts and evidence can overcome this. As an example, a charity may return a person to work, only to learn the next day that the funding supporting their position has been unexpectedly cut, leaving the charity with no means to pay them and having to terminate their employment once the residual funding runs out. In such a case, the court will probably understand.

Legal Obligation to Accommodate

For employees who can return to work after taking medical leave, it doesn’t necessarily mean that they are fully recovered from their medical condition. As such, they may still need some accommodation to perform. Employers are required to provide reasonable accommodation up to the point of undue hardship.

What is Undue Hardship

Undue hardship is a high bar, but not an impossible one. The employer doesn’t have to do everything in their power just to keep the employee employed. As explained by the Supreme Court in Hydro-Québec v. Syndicat des employé-e-s de techniques professionnelles et de bureau d’Hydro-Québec, section locale 2000 (SCFP-FTQ), 2008 SCC 43 (CanLII), [2008] 2 SCR 561.

The test [for undue hardship] is not whether it was impossible for the employer to accommodate the employee’s characteristics.  Although the employer does not have a duty to change working conditions in a fundamental way, it does have a duty, if it can do so without undue hardship, to arrange the employee’s workplace or duties to enable the employee to do his or her work.  The test for undue hardship is not total unfitness for work in the foreseeable future.  If the characteristics of an illness are such that the proper operation of the business is hampered excessively or if an employee with such an illness remains unable to work for the reasonably foreseeable future even though the employer has tried to accommodate him or her, the employer will have satisfied the test.  The employer’s duty to accommodate ends where the employee is no longer able to fulfill the basic obligations associated with the employment relationship for the foreseeable future.

Undue hardship includes excessive cost, significant health and safety risks, serious disruption to business operations, and bona fide job requirements.

What is a Bona Fide Job Requirement

To establish a bona fide job requirement, the employer must:

• Demonstrate that it adopted the standard for a purpose that is rationally connected to the performance of the job.
• Establish that it adopted the standard in an honest and good-faith belief that it was necessary to fulfill that legitimate work-related purpose.
• Establish that the standard is reasonably necessary to accomplish its work-related purpose and that it is impossible to accommodate the employee without undue hardship.

However, whether the employer has discharged their duty is always a tricky question. Employers should proceed cautiously before assuming they have satisfied their obligation.

Procedural and Substantive Obligations

It is also worth noting that there are two aspects of the duty to accommodate: the procedural aspect and the substantive aspect. The procedural part of the duty requires the employer to engage with the employee in exploring reasonable accommodation. As such, failing to initiate such dialogue may constitute a breach.

Employers should proactively ask returning employees whether they require any accommodation or have any work restrictions. However, they should not demand medical documentation proving full recovery (as it may incur costs to employees) unless justified and supported by good reasons and evidence, such as health and safety concerns for the workplace.

RETURN TO WORK PROCESS

Once an employee indicates they are returning to work from a health-related leave, it is time to find out:

• Is the employee returning without any need for accommodation?
• Is a medical clearance for return to work necessary?
• Do you have a plan to re-integrate the employee into the workplace?
• Is a return to work plan necessary?
• Does return to work include a request for accommodation, or an apparent need for accommodation, that needs to be discussed?

Return to work plan

If accommodation is still needed when an employee returns to the workplace. You may need a return to work plan. This helps the employer meet their duty to mitigate, both procedurally and substantially. Its goals include:

• Return the employee to their previously held or comparable position.
• Identify potential barriers and solutions to the ability to perform core and essential duties of the position.
• Appropriate and reasonable accommodation.
• Clearly define timelines if accommodation is gradual or temporary.

The return to work plan should be written and updated as necessary.

Re-integration Plan

A reintegration plan differs from a return to work plan. After a lengthy absence, the workplace may have changed, introducing new staff, procedures, or tools. Re-integration focuses on helping the employee adapt to these changes and restore their full performance capacity.

Such a plan may include:

• Additional training or an adjustment period to accommodate any workplace changes, such as new processes, tools, and staff; and
• Allow time for re-integration to full performance expectations, to reduce potential trauma.

Employers should consider providing a supportive re-integration plan, especially after a lengthy medical leave.

Final Thoughts on Preparing for an Employee’s Return to Work After Medical Leave

Handling an employee’s return from medical leave requires careful balancing of legal obligations, operational needs, and compassionate management. Employers must ensure compliance with employment standards and human rights laws by reinstating employees appropriately, providing necessary accommodations, and avoiding decisions that could appear retaliatory.

Returning an employee from medical leave can be a path filled with landmines. However, by planning early, maintaining transparent communication, and implementing structured return to work and re-integration plans, employers can foster a supportive environment that upholds both legal compliance and employee well-being. Ultimately, a thoughtful and lawful approach not only mitigates risk but also fosters a stronger workplace trust and morale.