Long Term Disability (LTD) is intended to provide income replacement coverage if you are unable to work due to injury or illness. Long term disability benefits will normally commence once your short term disability benefits, if you have this coverage, have been exhausted. Most Long Term Disability policies contains a waiting period or elimination period, before you can start receiving payments. Once the elimination period passes, the insurance company has to determine whether you are “totally disabled”, i.e. unable to do your job, or in some cases any job, due to an injury or illness. If you meet this definition, which can vary from policy to policy, then your Long Term Disability coverage can begin. The following are some important points you should be aware of when applying for Long Term Disability benefits.

How long is my Elimination Period?

Your insurance policy will provide a specific elimination period, as these vary between insurance companies. In many cases the elimination period is set to correspond with short term benefits. For example, many plans that include short term disability coverage are designed so that your elimination period ends when the short term benefits run out, which means your benefits become payable without a gap in coverage.

How long is the elimination period? Will you be able to access short-term benefits in the meantime? Does your policy say that you have to apply for Employment Insurance benefits? How is your elimination period calculated? These questions would be answered in your policy. Taking the time to read your policy can prevent costly mistakes and loss of time  in the application process.

What is the impact of returning to work on my Elimination Period?

It is very important to understand how your elimination period is calculated. Depending on the method of calculation, you may restart the elimination period if you return to work. This would delay the payment of Long Term Disability benefits. For example, suppose that your policy prescribes a 90 day elimination period. If your policy calculates the period in terms of “consecutive days”, returning to work for just one day during that period  may restart the 90 day waiting period. On the other hand, if your elimination period allows for “interrupted periods”, the you can go to work on certain days without restarting the 90 day process.

If You Have a Recurrent Disability, You May Get to Skip the Elimination Period

If you received Long Term Disability in the past for the same illness or disability, then most Long Term Disability policies contain a clause allowing you to skip the elimination period.  This is usually found in the policy under the heading of “recurrent disability”. The policy will typically treat this later period of disability as a continuation of the earlier period, provided it is within the time limit stated in the policy. For example, suppose you previously went on Long Term Disability with a back injury, and eventually returned to work. If you become disabled later on due to back pain from the same injury, your benefits can be reinstated immediately, without the need to wait for the elimination period to end.

On the one hand, these clauses are useful because they allow you to avoid waiting through another elimination period for the same disability. On the other hand, any time limit for payment of benefits runs from the start of the first period of disability. This means that if your policy pays benefits for two years per claim, the two-year period would not restart the second time you go on Long Term Disability for the same disability. For more information, see our article on Successive Periods of Total Disability.

My Elimination Period is Over and I’m Still Disabled – Do I have to Apply for Long Term Disability?

Receiving short term benefits, if you have this type of coverage, does not automatically entitle you to Long Term Disability coverage even if your disability has not changed. You should start your Long Term Disability application as soon as you know that you are unable to return to work before of illness or injury. At this point, your insurance company will want proof that you are “totally disabled” under the terms of the policy before they approve your claim. The application process can be long and difficult, and it often requires lots of medical evidence. For more information on how to navigate through the Long Term Disability application process, please see our article.

Getting Approved for Long Term Disability – Do I Meet the Definition for “Total Disability”?

Once you have applied for Long Term Disability and your elimination period has passed, the benefits become “payable”, but before you actually get “paid”, the insurance company has to determine that you remain unable to do your occupation. To make this decision, the insurance company looks at the medical documentation and compares it to the definition of “total disability” in your policy. If you meet the definition your Long Term Disability claim will be approved and your benefits will begin.

If there is excessive delay in providing your long term disability benefits, you may have a claim for aggravated (bad faith) and punitive damages against the insurance company. Please see our article “Mental Distress and Punitive Damages in a Long Term Disability Claim”.

Once your benefits begin, they usually continue for 24 months. This 24 month period is called “own occupation” coverage because the insurance company defines total disability as being unable to do the essential duties of your own occupation, whether in your current work place or not.

After 24 months however, the definition of total disability usually changes. If you want to continue receiving benefits you need proof that your disability leaves you unable to perform the duties of any occupation for which you are reasonably qualified. This rule applies even if you are still unable to return to work at your original job. In practice this means that you may lose your benefits even if your medical situation remains unchanged.

Take away

The Long Term Disability application process can be long, complicated and stressful. A Long Term Disability applicant faces a number of legal and administrative hurdles at a time of great vulnerability. It is easy to make mistakes that cause costly delays. An experienced disability lawyer can help you understand the terms of your policy and how to make your way through the application process.

We are here to help navigate the Long Term disability claim process. Consult one of our experienced Disability lawyers at Raven, Cameron, Ballantyne and Yazbeck LLP if you are considering making a claim for disability benefits or if your disability claim for benefits has been denied. 

[This article is for informational purposes only and does not constitute legal advice, which cannot be given without consideration of your individual circumstances.]

By: Raphaelle Laframboise-Carignan, Anna Lichty and Geoff Dunlop (articling student)

Earlier this year, the Ontario Divisional Court issued a decision in Western Life Assurance Company v. Penttila, 2019 ONSC 14 (CanLII) addressing when the time limit for filing a claim, known as the limitation period, begins to run for individuals who were denied long-term disability (LTD) benefits. The Court determined that the limitation period starts once the individual receives a final decision from the insurance company. This is after all appeals are finished.

Background

Ms. Pentilla was receiving Long Term Disability benefits from Western Life Assurance Company. In February 2013, Western Life advised her that, effective March 2013, she would no longer meet the definition to qualify for benefits. In their letter, Western Life informed her while she could appeal the decision, they were not waiving their right to rely on any statutory time limit. Ms. Pentilla appealed the decision and provided additional medical information. In November 2013, Western life asked for more medical information, and wrote to Ms. Pentilla that they would complete the review of her appeal once they received the information. Their letter did not include any statement about relying on statutory time limits. In October 2014, Western Life wrote to Ms. Pentilla that they had reviewed the new medical information, but their position remained unchanged. Several months later, Ms. Pentilla told Western Life she had not received a decision letter, and so, in June 2015, Western Life wrote to Ms. Pentilla that she did not meet the definition for Long Term Disability benefits and therefore any further benefits remained denied. Approximately one year later, in June 2016, Ms. Pentilla issued her statement of claim.

The Motion Judge’s Decision

Western Life brought a motion for summary judgment that Ms. Pentilla’s claim should be statute barred because she had not brought her claim within two years of it being discovered. In Ontario, the Limitations Act, 2000 provides a two-year limitation period for most claims, meaning that an individual must start legal proceedings within two years of their claim being discovered. The motion judge dismissed Western Life’s motion for summary judgment, finding that Ms. Pentilla’s claim was discovered in October 2014 or June 2015 because before those dates, a reasonable person would not have understood that a proceeding was an appropriate remedy. Western Life appealed that decision to the Divisional Court.

The Divisional Court’s Decision

On appeal, Western Life argued that Ms. Pentilla should have known that a legal proceeding would be an appropriate means to seek a remedy by March 2013, when she no longer qualified for benefits. Ms. Pentilla argued that, by March 2013, Western Life had not finally determined her appeal, so a legal proceeding would not have been appropriate.

The Divisional Court upheld the motion judge’s decision. The court found that the two-year limitation period started on the date it would be appropriate to begin legal proceedings for payment of Long Term Disability benefits that the insurer refused to pay. A reasonable person in Ms. Pentilla’s situation would have made an internal appeal to Western Life before starting legal proceedings. At all times between receiving her initial denial in February 2013 and receiving her final appeal decision in June 2015, Ms. Pentilla believed that Western Life was considering her appeal. In this case, Western Life’s statement that it was not waiving its right to rely on statutory time limits was not sufficiently clear to show Ms. Pentilla that the limitation period was running before her appeal had been decided.

Discussion

The Divisional Court’s decision is a positive step for individuals who have been denied Long Term Disability benefits. It reinforces that the statutory time limit for starting a legal proceeding may not begin to run until the insurance company has issued a final decision. The Court also reinforced that it is reasonable for an individual to go through the insurance company’s internal appeal process before starting litigation.

This decision follows the Ontario Court of Appeal’s decision in Kassburg v. Sun Life Assurance Company of Canada, which found that the court must consider when the claim was clearly and unequivocally denied. In Kassburg, the Court also upheld a motion judge’s conclusion that the insured discovered her claim on the date of the letter in which the insurer told her that her final appeal was denied.

These cases suggest that legal proceedings may be premature until the insurance company’s internal appeal process has run its course. This determination, however, will depend on many factors, including the clarity of the language that the insurance company uses to show that the statutory limitation period runs during the time the internal appeal is being considered. See our article, Limitation Periods for Long-Term Disability Claims. If your insurance company has denied you Long Term Disability benefits, contact a lawyer to discuss your legal rights and how limitation periods may apply in your situation.

[This article is for informational purposes only and does not constitute legal advice, which cannot be given without consideration of your individual circumstances.]

RavenLaw was proud to again support the Annual Women’s Legal Education and Action Fund (LEAF) Ottawa Persons Day Breakfast, held on October 25, 2019. This year’s breakfast focused on women’s rights and climate change, and how to consider the impact of climate change on gender equality when finding ways to create a more sustainable future for all people.

LEAF is a charitable non-profit organization that works to advance the equality rights of women and girls in Canada. The annual fundraising breakfast commemorates the Persons Case – the October 18, 1929 decision of the Judicial Committee of the Privy Council that ruled that women were to be considered persons under the law and should be eligible to sit in the Canadian Senate. Proceeds from the Persons Day breakfast contribute to LEAF’s litigation efforts and help to sustain equality education programs such as LEAF at Work, the Only Yes Means Yes Campaign, and the Reproductive Justice Campaign.

How is the employment start date affected when an employee resigns, but then continues working under a new employment agreement for the same employer? The Ontario Court of Appeal has recently released two decisions that discuss how an employee resigning and then continuing to work affects the start date of their employment. The decisions show that the specific facts of the resignation and re-hire will determine whether an individual will be limited by the terms and conditions of their new employment agreement.

In Ariss v. NORR Limited Architects & Engineers, 2019 ONCA 449, the employee had agreed to waive his previous years of service to make the change from full-time to part-time hours. The Court determined that the employee was not bound by the new employment agreement because he had not intended to resign. By contrast, in Theberge-Lindsay v. 3395022 Canada Inc. (Kutcher Dentistry Professional Corporation), 2019 ONCA 469, the Court determined that an employee who resigned and then withdrew her resignation before her last day of work was bound by her new employment agreement.

Ariss v. NORR Limited Architects & Engineers, 2019 ONCA 449

In 1986, the employee started full-time employment as an architect. When the business was sold, the employee was notified that his employment would be terminated because of the sale. He signed a new offer of employment, which did not contain any termination provisions. In 2013, the employee wanted to reduce to part-time hours. The employer agreed, but only if the employee resigned and entered into a new employment agreement, where the employee specifically agreed to waive his previous years of service. The employer told him that these terms were non-negotiable. The employee agreed to these terms and changed to part-time employment.

Three years later, in 2016, the employee was dismissed without cause from his employment. The employer relied on the 2013 employment agreement and limited the employee to his minimum statutory entitlements, as though the employee had started his employment in 2013.

The motion judge determined that the employee had not waived his years of service. On appeal, the Ontario Court of Appeal found that the 2013 agreement to waive the employee’s previous service was in violation of the Employment Standards Act, because neither the employer or employee actually intended the employee to resign at the time. The Court found the agreement was constructed to circumvent statutory notice and severance based on the employee’s actual years of service.

Theberge-Lindsay v. 3395022 Canada Inc. (Kutcher Dentistry Professional Corporation), 2019 ONCA 469

In 1993, the employee started her employment as a dental hygienist. Over the course of her employment, she was required to sign a series of employment agreements. In 2005, the employee gave her notice of resignation, but then she changed her mind before her last day of work. Her employer agreed to let the employee stay but required her to sign a new contract. When the employee was terminated without cause in December 2012, the employer relied on the newest employment agreement to limit her statutory entitlement to one year of service.

The trial judge found that the employee’s employment had continued uninterrupted since 1993, and she was not limited to one year of service. The trial judge found that none of the three employment contracts signed by the employee during her employment were enforceable because they lacked consideration. Therefore, the trial judge determined that the employee was wrongfully dismissed and assessed her damages at 15 months’ notice.

On appeal, the employer argued that the trial judge erred in failing to take account of the employee’s 2005 resignation. The Court of Appeal held that the employee’s resignation, even though it was rescinded, opened the door to the employer instituting a new contract. Even though the employee never stopped working, there was effectively a resignation and a re-hiring, which broke the employee’s length of service. The Court determined a valid contract had been formed after the employee’s resignation because the employee offered to be employed again and the employer accepted her offer. The employee was therefore limited to the minimum statutory entitlements under the Employment Standards Act as though she had started her service after her resignation.

Commentary

These two decisions from the Ontario Court of Appeal, highlight that the circumstances of the resignation and the subsequent re-hire will be crucial to determining an employee’s start date. If neither the employee nor the employer intends for the employee to resign, and the new employment agreement is just a legal fiction, then the courts will likely find that employee’s previous years of service count when determining their reasonable notice entitlements. However, if the employee did intend to resign, but changes their mind, then the employer may be entitled to ask the employee to sign a new employment agreement, waiving the employee’s previous years of service.

[This article is for informational purposes only and does not constitute legal advice, which cannot be given without consideration of your individual circumstances.]

On September 17, 2019, Raphaëlle Laframboise-Carignan gave a presentation to the members of the Mood Disorders Ottawa (MDO) support group, a peer-run organization aimed at enhancing the lives of people with mood disorders. She presented on the topics of Short-Term Disability, Long-Term Disability, Canada Pension Plan Disability benefits, and accommodation in the workplace. Raphaëlle would like to thank the MDO group for inviting her to participate in their session.

In a recent victory for CUPE Local 109, Jessica Greenwood provided representation to an employee whose rights under the collective agreement and the Human Rights Code were violated due to an unfair termination of her employment.

In the July 29, 2019 decision, Arbitrator Eli A. Gedalof affirmed that an employer cannot rely on a pattern of innocent absenteeism to establish frustration of contract when the absences are due to exceptional events, the employee has demonstrated a substantial improvement in attendance, and there is objective evidence that the employee will be successful in maintaining regular attendance moving forward. The decision also affirms the employer’s obligation under the Human Rights Code to accommodate an employee’s disability to the degree of undue hardship.

The Union successfully argued that the City relied on an improper and discriminatory application of their Attendance Management Program (AMP) to the Grievor’s case.  This application of the AMP program served to hide the fact that the Grievor’s attendance had improved dramatically and was continuing to improve.

Arbitrator Gedalof ruled that the City had not met its burden under the first part of the test, by failing to establish repetitive and consistent absenteeism triggering the decision to terminate. Arbitrator Gedalof noted “far from demonstrating an escalating pattern of absence in 2018 leading up to her termination, the grievor demonstrated the opposite…. what precipitated the grievor’s termination was a single day of absence following an extended period of acceptable attendance. The grievor’s attendance in 2018 reflected a substantial improvement over an extended period of time, and effectively disrupted the pattern of absences in 2017”.

Even if the employer had met the first part of the test, the Arbitrator concluded that frustration of the employment contract would still not be established on the facts. The Union had satisfied the second part of the test, which places a burden on the grievor to present objective evidence demonstrating good reason to believe that any issues that contributed to the excessive absences have been addressed and the grievor will be able to provide regular and consistent attendance in the immediate and foreseeable future. Arbitrator Gedalof noted, “The most straightforward objective evidence of the grievor’s ability to attend work is that at the time of her termination, she had in fact been attending work regularly for an extended period of time.”

As a result, despite finding that the City had applied the AMP program absent bad faith, the City’s “decision to terminate the grievor without just cause, in the absence of frustration and due to attendance issues related to their medical condition, nonetheless violated the Collective Agreement and (s.5 of) the Human Rights Code”.

The Grievor was awarded re-instatement, with no loss of service or seniority, compensation for lost wages and benefits since the termination, and damages for the breach of the Code.

RavenLaw congratulates the Grievor and CUPE Local 109 for another successful defence of employee rights!

In a recent decision, a labour arbitrator found that an employer had failed to exhaust the search for accommodation options for an employee with a permanent disability before attempting to terminate her employment. 

In Sodexo Canada Ltd v Canadian Union of Public Employees, Local 145, Arbitrator Randi Abramsky recognized that the search for accommodation for the grievor’s disability had been a long and difficult one. Nonetheless, she determined that the employer had not yet met the point of undue hardship in accommodating the grievor when it attempted to end her employment in mid-2018.

The Arbitrator found that the employer had not addressed two considerations which were fundamental to its duty to accommodate. First, the employer could not establish that the grievor was unable to perform a modified version of her former position using assistive equipment. Second, even if the grievor could not perform her own position, the Arbitrator found that the employer had not looked beyond the grievor’s original work location to attempt to find position she could perform at other worksites.

As a result, the Arbitrator concluded that the employer had breached its procedural duty to accommodate the grievor, contrary to the Human Rights Code. She therefore directed the employer to work with the grievor and the Union to explore these accommodation options, with the issue of damages and compensation for the breach to be determined once the accommodation process concluded.

The Union was represented in this case by Morgan Rowe of RavenLaw.

RavenLaw is pleased to announce that Anna Lichty has been appointed to the Board of Directors of the Kiwanis Club of Ottawa.

The Kiwanis Club of Ottawa is a not-for-profit organization and registered charity with members who effect positive change within the Ottawa community by volunteering their time and raising funds for programs that promote youth literacy and leadership, help individuals with special needs and assist those struggling in the community.

Anna is thrilled to be joining the Board of Directors. Anna is an active member of the Kiwanis Club of Ottawa and previously a member of the youth group Circle K of the University of Ottawa. She looks forward to continuing to assist the Kiwanis Club of Ottawa with their initiatives.

RavenLaw is proud to sponsor the 20th Annual County of Carleton Law Association/Great Canadian Theatre Company Lawyer Play. The annual fundraiser supports the operations of Great Canadian Theatre Company (GCTC) and benefits a charity partner, which this year was St. Mary’s Home, an Ottawa-based social service agency that provides a full range of programs and services for young pregnant women, young moms and dads, and their infants and young children.

Over the last 20 years, the Lawyer Play fundraiser has raised well over $1 million dollars for GCTC and designated charity partners. Each year, the play’s cast is composed entirely of members of Ottawa’s legal community. This year’s play, War of Two Worlds, runs from June 6-8, 2019 and features RavenLaw lawyer Amanda Montague-Reinholdt as Flo.

On September 29, 2018, Julia Williams was a panelist at the Ontario Region – Canadian Association of Labour Lawyers’ second annual conference (OnCALL2) in Kingston, Ontario. Julia participated in the “Ten Minute Labour Lawyer” panel, presenting on the recent arbitral decision in City of Kingston v CUPE 109. Julia would like to thank the organizers of OnCALL2 for inviting her to participate in this event.