The Supreme Court of Canada has held that a deemed termination clause in a collective agreement which provides for automatic termination after three years’ absence due to disability did not breach the employer’s duty to accommodate an employee’s disability. 2 The Supreme Court concluded that the terms of a collective agreement should be taken into consideration when assessing an employer’s duty to accommodate. At the same time, the court made it clear that an employer must take into account a disabled employee’s individual circumstances when applying a deemed termination clause.


In 2000, the grievor, an employee of the McGill University Health Centre, was off work for three months after suffering a nervous breakdown. For the next two years, the grievor tried unsuccessfully to return to work and the employer provided her with periods of rehabilitation leave. In 2002, she was injured in a car accident and became totally disabled. In 2003, the employer advised the grievor that her employment would be terminated under the deemed termination clause in the collective agreement. That clause stated that after 36 months of absence “an employee shall lose his or her seniority rights and his or her employment” in the event of “absence by reason of illness or of an accident other than an industrial accident … after the thirty-sixth (36th) month of absence.” The union filed a grievance contesting the employer’s decision to terminate the grievor’s employment, and it asked the employer to negotiate a reasonable accommodation with the grievor.

Arbitrator’s Decision

The arbitrator dismissed the grievance, concluding that the employer had treated the employee in a just and non-discriminatory fashion. The arbitrator pointed out that the employer had already accommodated the grievor by granting her rehabilitation periods that were more generous than those provided for in the collective agreement. In the arbitrator’s view, “it is difficult to imagine an … additional duty to accommodate an employee whose attending physician considers her to be totally disabled.” Québec Superior Court and Québec Court of Appeal

The Québec Superior Court dismissed the union’s application for judicial review. However, the Québec Court of Appeal reversed that decision, finding that the arbitrator had not assessed the reasonable accommodation issue on an individualized basis. The Court of Appeal held that the arbitrator had mechanically applied the deemed termination clause in the collective agreement.

Supreme Court of Canada

Canada’s highest court concluded that the parties to a collective agreement are entitled to negotiate clauses concerning attendance of employees at work. The majority of the court stated that the period of time negotiated by the employer and the union when crafting a deemed termination clause is a factor to consider when determining if an employer has met its duty to accommodate. However, the majority also held that such deemed termination clauses are not in themselves determinative and cannot be applied automatically.

The court found that the arbitrator had not applied the deemed termination clause mechanically, but had in fact taken into account:

1. all of the events leading up to the termination;

2. the steps the employer had taken to accommodate the employee’s absence from work;

3. the grievor’s current state of health; and

4. the lack of evidence that the grievor would be able to return to work in the foreseeable future.

Most importantly, the court held that if the grievor felt that the accommodation provided in the collective agreement was not sufficient and that she would be able to return to work within a reasonable time, she was required to provide evidence of this.

Interestingly, the minority judgment of the court expressed the view that the grievor had failed to prove prima facie discrimination, and therefore the issue of the employer’s duty to accommodate did not arise. The minority judgment did not accept the view that ‘automatic’ termination clauses inevitably discriminated against employees on the basis of stereotypical or arbitrary assumptions about persons with disabilities.

Lessons for Employers

This case indicates that an employer and a union can bargain deemed termination clauses in collective agreements. Such clauses can be relied on, in part, to terminate an employee who has been absent from work for a considerable period of time due to disability. However, the court has also made it clear that such deemed termination clauses must provide for a reasonable period of absence from work, and cannot be applied mechanically. The employer’s duty to accommodate must be assessed in terms of each employee’s individual circumstances. Finally, this case also indicates that the employee must prove that he or she is entitled to continued accommodation. The employee must provide evidence that there is a reasonable prospect that he or she will be able to return to work in the foreseeable future.