First off, let me reiterate that this is not a sales pitch. It may sound like one. But, it’s not.
Every once in a while, there’s a court decision that changes the employee benefits industry. Yet, few people hear about them. This is one of those cases.
Canac Kitchens employed Luis Romero Olguin for 24 years, before he was terminated in a restructuring. He found work at Cartier Kitchens, at a lower salary, and worked there for 15 months before undergoing surgery for laryngeal cancer. In the five years since being hired by Cartier, Mr. Olguin underwent many additional surgeries, and more are scheduled.
Cartier Kitchens did not include Long Term Disability (LTD) coverage in it’s employee benefits plan.
Canac Kitchens did include LTD coverage, but when Mr. Olguin was terminated, he received a total of 8 weeks of disability coverage.
Mr. Olguin sued Canac Kitchens for wrongful dismissal, and won.
In deciding this case, Mr. Justice Echlin of the Ontario Superior Court of Justice noted “the existence of any real or imagined rule of thumb (of one month a year of service or any other amount) has been ruled out by the Court of Appeal for Ontario.” He awarded Olguin a period of notice of 22 months based on a salary of $71,000.
“Canac consciously chose not to make alternative arrangements to provide its loyal, long-service employee with replacement disability coverage. Rather, it chose to go the bare-minimum route. It provided only the statutory minimums in pay and benefits and then gambled that he would get another job and stay well. When it lost that gamble, it chose to litigate this matter for over five years. When confronted with its potential significant exposure, it raised the argument that Mr. Luis Romero Olguin failed to mitigate his potential damages by purchasing his own replacement disability policy. I reject that argument,” Justice Echlin said.
- Advise employees of replacement disability coverage. If Canac had done that, and it was at a reasonable cost, the court might have found that he failed to mitigate if he had not purchased it.
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