If you’ve been on disability for some time, the likelihood of your return to work becomes an important issue. If it’s highly unlikely that you’ll be able to return to work within a reasonable period of time, your employer can legally terminate your position. This is called a “frustration” of your employment contract. It means that the contract ended because of uncontrollable or unforeseen circumstances.

The employment laws of Alberta and common law in Canada allows for individual assessment of each case of termination. There are many factors involved in determining whether or not a termination is a wrongful dismissal.

Regardless of whether or not your termination was a wrongful dismissal, you are entitled to the minimum amount of termination pay and severance. See What Am I Entitled to During the Termination Notice Period? for more details about calculating these amounts.

When disability is a part of the picture, disability benefits must be considered, too. It is not uncommon for employment contracts to include wording that cuts off disability benefits at the time of termination, so be sure you clearly understand the implications of your employment contract.

By law, unless stated otherwise in the employment contract, all forms of compensation – including disability benefits – are to continue through the duration of the termination notice period. In other words, you should receive the same benefits during the termination notice period that you would if you were still working.

This means that if you become disabled during the termination notice period, you should still qualify for disability benefits even if you’re not physically working during that time.

If your employment contract does indicate discontinuation of disability benefits at the time of termination, it may be possible to negotiate an agreement with the employer that ensures you receive alternate coverage to compensate for the loss of disability benefits. This is sometimes referred to as “transitional coverage”.

For employees, have your employment contract reviewed by an employment lawyer. Even if you’re not currently disabled, you need to be sure you’d be covered if you do require disability benefits in the future.

If you’ve already been terminated, be sure to consult an employment lawyer before signing your release. The lawyers at Osuji & Smith will advise you on the full amount of severance you are entitled to.

For employers, always consult an employment lawyer before terminating an employee on disability to protect yourself from any wrongful dismissal claim.