disability insurance paperwork

Yes, your employer can fire you while you’re receiving long-term disability (LTD) benefits. 

If you are sick or disabled, you likely wondering, “can I be fired on long-term disability?” and have legitimate concerns about what’s going to happen to your position. If there’s a possibility of returning to work, you don’t want to lose the position you’ve strived to achieve. Even when you are well enough to return to work, if you’ve lost your most recent job, it may be more challenging to find a comparable position because the effects of your injury or illness may still carry forward, even if they don’t render you ‘totally disabled’.

Firing an employee on LTD benefits is a sensitive matter with many stipulations that make it a complicated and delicate situation for both the employee and the employer. Our empathic human nature means your employer likely doesn’t necessarily want to fire you, given your situation, but employer insurance premiums can easily amount to hundreds, if not thousands, of dollars per month. “For cause” termination is not possible if an employee is receiving LTD benefits, except on very rare occasions. However, an employee can be terminated while on disability when the employment contract has been ‘frustrated’.

What Happens to My Work Benefits?

As defined by the majority of group disability insurance policies, the date of termination of an employee also marks the end of that employee’s eligibility for coverage under their LTD insurance provider. If an employee makes a claim with a date of disability after their date of termination, their claim will almost certainly be denied. 

If I’m Fired from My Job, Can I Still File for LTD Benefits?

If you’re fired from your job before applying for LTD benefits, you’ll need to be able to prove your date of disability is before your date of termination. If you cannot prove your disability did not occur before the date you were fired, there is almost zero chance you will be eligible for LTD benefits through your past employer’s group disability policy.

Is There a Time Limit After Which an Employee on LTD Can Be Fired?

A common misconception that exists between employees and employers is that after an employee has received LTD benefits for two years, the employer can automatically fire the employee. However, this is not necessarily true in all cases.

What does happen after two years of receiving LTD benefits is most insurance policies change to a different type of contract with different clauses and provisions. In this case, the insurance policy follows an any-occupation contract, when it was initially an own-occupation contract. This means that an employee must be found unable to work in any related positions based on their experience, education, and training levels at the time of the disability. Under the any-occupation contract, almost every policy requires the policyholder to also apply for CPP-D.

When the policy changes to any-occupation, the disabled person is still considered an employee of the company. It is always a decision of the employer whether or not the employment contract is considered ‘frustrated’, and if they have justification for firing a person with a disability.

Frustration of Contract

If the employment contract can be considered ‘frustrated’, then the employer has the legal justification of firing the employee on LTD. On the most basic level, an employment contract can be considered frustrated if it is more unfair for the employer to retain your employment than it is unfair for you to be terminated while on disability.

When an employee is absent due to their disability for an extended time, accommodating their absence can be difficult for the employer. If the absence is because of a disability, the question an employer will ask themself is, can they legally terminate the employee because of their absence caused by their disability without violating any human rights legislation or without providing reasonable notice for termination or pay in lieu thereof.

When an employee is unable to fulfill the duties of their position as a result of their disability, a frustration of contract might exist. Any employment contract would require an employee to fulfill the duties of their job adequately. Frustration arises when one of the parties (either the employee or employer, but in this case, the employee) can’t fulfill the terms of their contract. However, at what point frustration occurs is difficult to determine and can be argued based on your situation’s specifics.

To justify firing a person with a disability due to frustration of contract, an employer will consider the nature and expected length of a disability, the likelihood of recovery, and how soon recovery could happen. Employers usually also consider, to a lesser extent, how long the disabled employee has been employed.

Duty to Accommodate

Before an employment contract can be considered frustrated, an employer must uphold their legal duty to accommodate an employee to the point of undue hardship. To fulfill their duty to accommodate, an employer must make accommodations for an employee, taking into account the specifics of their job, work environment, and disability.

Ways an employer might accommodate an employee include:

  • Providing additional assistive devices, infrastructure, training, or assistance
  • Exploring and implementing alternatives to work standards (revising policies, shifts, duties)
  • Exploring whether business goals can still be met after exempting an employee from standards

Undue Hardship

How far an employer or service provider must go to accommodate an employee’s disability is an important factor that affects the extent of an employer’s duty to accommodate. When an accommodation is not possible because it would cost too much or create health or safety risks, it is defined as an undue hardship. Even if it has a negative effect on you, an employer can claim undue hardship as the reason why certain policies, practices, and work standards need to remain in place. Evidence and proof of the undue hardship will be required to be provided by your employer.

Undue hardship is most commonly proven in the form of an unreasonable cost to the business, whether financial, administrative, or employee morale. Undue hardship is more difficult to prove when employees are interchangeable and low-skilled, or the workforce is flexible.

Some conditions that would support the finding of undue hardship include:

  • Health or safety risks would be created by implementing the accommodations for the disabled employee
  • Business goals are unable to be met, and the core functions of the company are not being performed because specialized employees need to be replaced quickly to allow the organization to operate successfully
  • The purchase of equipment, infrastructure, or modifications required to accommodate an employee’s disability is unreasonable compared to the size of the business and their financial position

How can an employer terminate an employee on long-term disability?

It is very much the employer’s responsibility to prove they have exhausted every option to accommodate the disabled employee before going past the point of undue hardship. Our long-term disability lawyers commonly see employers required to prove:

  • The position has been kept vacant to allow the employee to return
  • The employee’s duties have been modified to enable them to return to work, including allowing a gradual return to work
  • The employer has shown efforts to alter the workplace to make accommodations for the employee’s disability
  • After two years, the employee must be shown they are incapable of engaging in ‘any’ work they are reasonably suited for with the employer

How Our Halifax Long-Term Disability Lawyers Can Help

The legality of firing an employee on LTD is a complicated and sensitive subject with many external factors at play. Every situation is unique to each individual suffering a long-term disability and the position they are or were employed for. 

If you think you were wrongfully fired for having a disability, accommodations were not adequately made to support you, and that you have faced even more hardship beyond your disability unnecessarily, the experienced long-term disability lawyers at Valent Legal can help. Our qualified team has the skills required to get you the benefits you’re entitled to, and you can start by contacting us for a free consultation.

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