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Employers Liable for LTD over Full Common Law Notice Period
JUDGE SHOOTS DOWN EMPLOYER

Q: What happens if a former employer becomes “totally disabled” over the common law notice period? Can the company be liable to pay LTD benefits to the employee?

Your organization, like many others, may provide employees with some form of long term disability (LTD) benefits coverage typically through a policy with a third party insurance company. When an employee is dismissed without working notice, like many employers you probably end LTD coverage on the last day of work or the end of the statutory notice period.

Malcolm MacKillop
LL.B,
Senior Partner,
Shields O’Donnell
MacKillop LLP
What happens if a former employer becomes “totally disabled” over the common law notice period? Can the company be liable to pay LTD benefits to the employee? According to a recent decision in Ontario in Brito v. Canac Kitchens, 2011 ONSC 1011, released on February 18, 2011, the answer is a resounding “Yes”.

In that case, Canac Kitchens (“Canac”) terminated a 55 year old employee with 24 years service without cause and without working notice. He was paid only his minimum statutory notice and severance payments. His LTD coverage was terminated at the end of the eight (8) week statutory notice period. The trial judge found that the employee was entitled to common law reasonable notice of 22 months.

Nearly 16 months into the common law notice period, the employee was diagnosed with laryngeal cancer, received surgery and chemotherapy treatment, and thereafter was unable to engage in any work. The issue before the court was whether Canac was liable to pay LTD benefits that the employee would have received under the LTD policy had his coverage continued over the common law notice period.

Justice Echlin concluded that Canac was liable to pay the LTD benefits the employee would have received under the policy until age 65 valued at nearly $200,000. Justice Echlin rejected Canac’s argument that the employee had failed to mitigate by not purchasing replacement LTD coverage on the basis that Canac had not provided evidence that comparable LTD coverage was available.

The judge also held that the LTD policy language that limited coverage to those employees “actively at work” did not disentitle the plaintiff to LTD benefits. This was because the law deemed the plaintiff to be a “notional employee” of Canac over the reasonable notice period. He also ordered Canac to pay $15,000 in punitive damages for its “hardball approach”, noting that Canac had a track record of paying dismissed employees only their minimum statutory entitlements and aggressively litigating the resulting wrongful dismissal cases in the courts.

Brito is an important decision that can have serious implications for employers, especially those with an aging workforce. Here are some practical tips to keep in mind:

Always speak with your LTD insurer before terminating an employee. Not all insurance companies will continue LTD coverage for employees over the statutory and common law notice period. Some will end coverage on the last day of work or the last day of the statutory notice period.

Be prepared to pay more to get a release. If your insurer will not extend LTD coverage over the notice period, it becomes very important to obtain a release from the departing employee. In most cases, an employee will not give their employer a release in exchange for their minimum statutory entitlements.

Provide reasonable notice. If the departing employee does not have a termination clause that limits his or her entitlements on dismissal, you should offer common law reasonable notice. You should also consider providing compensation in lieu of benefits coverage. Not only will this make it easier for you to obtain a release, it will help you avoid the “hardball tactics” label if you are forced to litigate.

Tighten up the employment contract language. As demonstrated in the Brito case, having policy language that requires an employee to be “actively at work” to qualify for benefits coverage may not be enough to limit your liability. Speak with your employment lawyer about revising the language in your employment contracts to clearly limit post-dismissal entitlement to LTD benefits coverage.

Have a back-up plan. In cases where the parties are unable to reach a settlement, you as the employer may want to arrange for alternative disability coverage with another insurer or provide compensation that would allow the employee to obtain alternative disability coverage.

Malcolm MacKillop, LL. B. is Senior Partner, Shields O'Donnell MacKillop LLP in Toronto and can be reached at (416) 304-6417 or via email at mmackillop@djmlaw.ca.


NOTE:Malcolm MacKillop presents on "Generational Diversity: Legal Aspects in the Changing Face of the Workplace" at IPM Toronto May 9 Conference. Click here for more details

Conduct Performance Reviews without Fear
GET YOUR MESSAGE ACROSS

Q: I've noticed a lot of our managers are having problems getting messages across during performance evaluations. Can you give us a few hints on how to improve the communication process?

Communication in the workplace is critical when creating an environment that is indicative of growth. Performance reviews create a lot of energy on their own. At times they become a battle of opinions. Too many times performance reviews are looked upon as judgments. It is very important to consider what message you are attempting to deliver and to handle only the current issues at hand. Never draw in past challenges to build a case or use second hand information to make a point.

“Communication is not what you say- it’s how you say it.”

Wendy Godmere,
Communications
Specialist
Performance reviews begin long before the actual meeting. This is an area where managers have the opportunity to uplift and encourage employees to want to give their best. When you compliment someone for their efforts on a regular basis, they will be motivated to apply more of themselves and strive to be a greater part of the team. If an employee has to wait until a yearly review to receive their recognition for a job well done and also receive feedback on areas of improvement all in the same 30-minute meeting, they will mostly likely remember the negative as it causes a stronger emotion. In a management position, you set the tone of the organization. You get to choose what you sow into your team. If you are continuously looking for what an employee is doing right on a daily basis, this leaves a greater opening for growth when an area of concern arises and needs to be addressed. I ask managers to picture their teams with a plaque on their forehead that reads “Make me feel important”. It is human nature to seek that desire. Understanding the Law of Sowing and Reaping can impact your ability to manage. What you sow, you will reap. If you sow encouragement and confidence, you will reap encouragement and confidence. If you sow judgment and disappointment, people will only live up to what you expect of them.

Performance reviews do not have to begin and end in a 30-minute meeting. Allowing issues to build or holding onto areas of concern until their performance review could mean disaster. This is one of the greatest misunderstandings in leadership. Recognition on a regular basis lays a strong foundation in a relationship that allows for areas of concern to be addressed with an open mind when an employee feels validated for their contribution. Performance reviews are merely the opportunity to address the outcomes of situations. For example, if an employee is constantly late for work every day and the issue is addressed promptly, their performance review would be a time to revisit the issue by making a statement such as,” I realize we had to deal with the issue of arriving on time to work each day and I wanted to take this opportunity to thank you for making a greater effort to be on time.” If the challenge still exists, comments along the lines of “I would like to revisit our previous conversation about arriving late- is there something I am not aware of that is causing this challenge?” This allows for a greater opening for growth and lends support without accusation to the employee.

One concept I would encourage managers to consider when setting a performance review meeting is the thought process of Intent vs. Impact. We must pay attention to what the real intention is and then notice the impact of our words and actions on others. It is important to praise or uplift another person for what they have contributed and to recognize the value that they have brought to the organization.

During a performance review, people are seeking recognition for a job well done. If that is not the case and an issue needs to be addressed, clarify the intention first and then deal with the impact it is causing. At the end of the day, it is the impact of words and actions that people have to live with. In the long run, this is what you will have to live with on a daily basis as that attitude follows them to the office every day and has a ripple effect on the entire team. Always remember as the manager, you can make the difference one conversation at a time.

“Communication is not so much what you say- it is what the other person hears”

Wendy Godmere is a Certified Communications Specialist and can be reached at 1-866-534-6094 or via email at wendy.godmere@sympatico.ca.



NOTE: Wendy Godmere presents on "Communication: Bridging the Diversity Gap" at IPM Ottawa April 12 Conference. Click here for more details

The Secret to Powerful Presentations
DISCOVER THE KEYS TO SUCCESS

Q:We want to improve the presentations in our organization. What we can do right now to succeed?

Do you realize that over 1 million presentations are delivered in North America every day? By the time you finish reading this article, over 100 thousand presentations will have been delivered. Regrettably, the vast majority of them will be poor. They will fail to inspire or even engage their audience and therefore, will not achieve their objective. This has a cost.

Wayne Rawcliffe
President of Senga
Consulting Inc.
As an example, let’s say that five corporate executives with salaries of $100K/year are in three meetings a day with two presentations delivered in each meeting, causing them to sit through six presentations a day. It is not a stretch to calculate they will sit through 200 presentations a year. If at least 50% of these presentations are not effective, cause confusion, do not achieve their objective and require re-work or additional information to clarify the message, then we can calculate the direct loss to the organization of executive time that could have been spent on more productive activities as over $250,000.00. That’s very costly!

The three most common complaints about presentations are: the presentation is boring, the speaker is not prepared and the slides are used as the presenter’s speaking notes.

While most of us will never deliver an “I had a dream…” speech, we will all likely have occasion to deliver a presentation in our careers. Most of the time within the workplace and in our personal lives, we want to persuade our audience to support a recommendation or plan of action. We must deliver the right message effectively.

Here are six things that you can do to make your presentations more engaging, relevant and achieve your objectives.

Know your objective. First, write down the objective of your presentation as an outcome. Do you want the audience to make a decision, support a particular cause or take a specific action? If you do not know what you want from the audience at the end of your presentation, you cannot expect your audience to know how to react.

Understand the needs of your audience. Be sure to understand your audience’s needs, especially their challenges. If you can identify their needs and demonstrate how well you understand them, you’ll have your audience nodding in agreement with you. Speak to and answer those needs in your presentation and it becomes an easier path to move to recommendations and solutions.

Tell a story. We are all story tellers. We communicate through stories. Stories are how we grab the audience’s hearts. Human beings do NOT make decisions with their intellect. We make decisions with our heart and then rationalize them. If you connect with their heart through storytelling and provide data for the brain to rationalize, this combination will be sure to get their hands in action.

Don’t read from your slides. The most fatal mistake you can make is reading from your slides and even worse, looking more at the screen instead of looking directly at your audience. It sends immediate signals that you are not prepared and have no other supplemental information to provide. Turning your back to the audience even for a few seconds will result in losing their attention immediately, not to mention losing their potential buy-in. It is also perceived to be rude behaviour. If you were holding a one-on-one conversation with another person, would you want them to turn their back to you? Why would this be any different in a group presentation setting?

Don’t make them think. Make it as easy as possible to understand your message. One method is to ensure your message has a logical flow. This could be done with a chronological outline or a “problem and solution” flow where you divide the solution into logical steps. This will guide the audience to where you want them to go, often with little resistance. You can definitely challenge their ideals, conventions and assumptions with your content. However, if you create a clear “flow" much like a well-designed road map, the audience will follow where you want them to go usually with minimal resistance.

Connect with your audience. Most important of all, take time to connect with and move your audience. Make eye contact with each person during your presentation. Draw them into your presentation and stimulate them with your ideas. People support people, not just recommendations. If your recommendation is worth considering, be sure to help your audience hear it. Engage your audience and build their confidence in you as a person. Implement these six simple steps and you will improve your presentations immediately.

Wayne Rawcliffe is President of Senga Consulting Inc. and can be reached at 604.909.3840 or via email at wayne@senga.ca.

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