Length of Long-Term Disability Benefits Can Frustrate Employment Contract

The Ontario Superior Court of Justice recently held that the continued receipt of long-term disability benefits can legally frustrate an employment contract. The facts A worker commenced his employment with the predecessor company of the employer in September 16, 2002. About ten years later, on September 28, 2012, the worker started a short-term disability (STD) leave of absence for a medical condition, which eventually turned into a long-term disability (LTD) leave as a result of the employee’s disability and inability to work. In this case, the STD and LTD benefits were provided to the employee, subject to the terms of the employment benefit plan through a third-party insurer. According to the evidence submitted at trial, the third party insurer administers claims on behalf of the employer and makes all decisions and payments with respect to employee claims. The employer has no involvement in the third party insurer decision process and cannot legally challenge its…

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