In the recent decision Betts v. IBM Canada Ltd., 2015 ONSC, an Ontario court determined that a 15-year employee, who had previously successfully applied for short-term disability benefits due to a depressive episode, had abandoned his job with his employer. The employee argued that he had a legitimate reason for his absence, while the employer argued that he had effectively resigned from his post by not returning to work after his STD benefits application had been declined numerous times. This decision assists employers in understanding what actions constitute an employee’s abandonment of employment.

Mr. Betts was a 15-year employee with IBM.  He worked the majority of the time in New Brunswick as a Learning Specialist, and then as a System Service Representative, and travelled to Ontario for work on occasion. In 2008, Mr. Betts suffered a depressive episode due to his depression and anxiety disorders. He applied for STD benefits through IBM’s plan administered by Manulife (the “Plan”).  He received the benefits by complying with the Plan’s requirements, which required him to fill out certain forms and to visit a physician registered with the Canadian Medical Association (“CMA”).

In 2013, Mr. Betts suffered another depressive episode, stopped reporting to work, and applied to receive STD benefits. Despite letters from Manulife and IBM instructing him on the Plan’s process, which was identical to the process in 2008, Mr. Betts consistently missed deadlines to submit sufficient medical documentation prepared by a physician certified by the CMA. His application and appeal were denied.  Mr. Betts also directly contravened the Plan by moving to Ontario, without informing IBM, to live with his fiancée.

Over 7 months, IBM sent 5 letters to Mr. Betts outlining his options since he was not complying with the requirements of the Plan, including appealing the denial of benefits, submitting the necessary medical documentation, or returning to work. These letters clearly explained that if he did not follow an option, IBM would deem him to have voluntarily resigned.  In response to  his opportunity for a second and final appeal, Mr. Betts said that he would not return to work because his doctor’s note from his psychotherapist, who was not certified by the CMA, was still valid. IBM determined that Mr. Betts had resigned effective June 30th, 2014.

In his decision, Justice Diamond outlined the test for abandonment: “do the statements or actions of the employee, viewed objectively by a reasonable person, clearly and unequivocally indicate an intention to no longer be bound by the employment contract”.

Following this test, Justice Diamond determined that Mr. Betts had abandoned his employment. Mr. Betts had not reported to work for over 8 months, did not follow the policies outlined by Manulife despite IBM’s letters and his familiarity with the policies through his successful application in 2008, and relocated to Ontario while selling all his property in New Brunswick with no intention of returning to work for IBM in New Brunswick.

Typically, it is difficult for employers to demonstrate that an employee has abandoned their employment. IBM displayed extreme patience, of which the Court took note: “It is difficult to imagine what more the defendant could have done during the plaintiff’s 8 month absence from his job in New Brunswick”.

This case sets out a very good example for employers to follow when dealing with an employee who does not follow the existing process for STD benefits, and demonstrates that an employeesuffering from medical issues is not immune to being found to have abandoned his or her employment.

We understand that Mr. Betts intends to appeal Justice Diamond’s decision.

What does this mean for employers?

Be clear and proactive when managing a prolonged leave of absence. Send correspondence to the employee advising of his or her obligations under any applicable insurance plan, and the consequences of failing to follow an available option.

Provide ample opportunity to comply with requirements. Where an employee misses a deadline, consider the reasons for missing the deadline in light of the impact on the organization and the relevant circumstances.  While multiple warnings and opportunities can result in providing extensions and having to tolerate extended periods of absence, they can be key to a finding of abandonment.

When responding to medical leave requests, avoid relying solely on the insurance company’s/administrator’s findings on benefits eligibility. While the Court found that IBM did not have an independent duty to accommodate the employee over and above the terms of the insurance policy, this finding is specific to the facts and the issue of abandonment (Mr. Betts withdrew his claim for damages for discrimination under the Ontario Human Rights Code).  Mr. Betts did not demonstrate that his medical condition prevented him from complying with the insurance policy’s requirements. Employers who offer disability benefits through a third party benefits provider still have a duty to accommodate employees to the point of undue hardship