In City of Toronto v CUPE Local 79 (2019 ONSC 4045) Justice Swinton judicially reviewed an arbitrator’s award which held that it is a breach of the Ontario Human Rights Code for the City to only provide part time benefits ( as opposed to better full time benefits ) to an employee who was being accommodated with part time work because he could no longer work time due to his disability .
In finding that the arbitrator’s decision was not reasonable, she said the following:
The arbitrator correctly stated that she was bound by the Court of Appeal’s decision in Ontario Nurses’ Association v. Orillia Soldiers Memorial Hospital (1999), 1999 CanLII 3687 (ON CA), 42 O.R. (3d) 692 (“Orillia Hospital”). However, she candidly expressed her preference for a different approach that had developed in the arbitral jurisprudence, but was rejected by the Court of Appeal in Orillia Hospital.
 In that case, the Court of Appeal held that the Code does not require an employer to make contributions to benefit programs for a disabled employee who is off work, since contributions to benefit programs are a form of compensation. At para. 27, the Court stated,
Disabled nurses do not receive this compensation because they are not providing services to their employer. It is not prohibited discrimination to distinguish for purposes of compensation between employees who are providing services to the employer and those who are not.
 The Court also held that even if a disabled employee is the subject of constructive discrimination within s. 11 of the Code because he or she does not receive employer contributions to benefits, “[r]equiring work in exchange for compensation is a reasonable and bona fide requirement” (at para. 58). The Court explained that accommodation refers to workplace adjustments to allow the employee to work (at para. 55):
The duty is on the employer to take all steps short of undue hardship to accommodate the needs of the person discriminated against so that they can compete equally with the other employees.
At this point of her reasons, one would have thought that the logical conclusion would be that the grievance must fail. Employees in the full-time unit receive greater benefits than those working part-time hours. For example, the City pays 100% of the cost of benefits for full-time employees in the full-time unit, while the City pays a pro-rated percentage for those in the part-time unit. As well, some of the benefits are different in terms of payment for shifts missed because of sickness and injury. In accordance with Orillia Hospital, the employer does not discriminate by failing to provide the added benefits to which a full-time employee is entitled to a person working part-time hours, even if the person is working part-time because of disability. The difference in treatment with respect to compensation and benefits is because of the number of hours worked, not because of disability, and the employer is not required to compensate the disabled employee for time not worked.
This case would apply equally to a non-union environment.
Of course an employer may, as part of its STD and/or LTD policy, agree to provide benefit coverage to those employees not able to work because of their disability, but the OHRC does not require them to do so .
Similarly it would seem that there would be nothing to prevent an employer from agreeing to provide benefit coverage for a limited period of time. For example the Employer may agree to provide benefits during the STD period but not the LTD period.
This raises an interesting issue that I often see in my mediation and arbitration practice, that is whether to terminate an employee who is on LTD for a lengthy period and claim that the contract is frustrated. Of course under the Ontario Employment Standards Act this triggers an obligation to pay both termination pay and severance pay, but not common law notice.
I have often wondered why employers feel the need to terminate employees in these situations when it often generates a severance obligation that could have been avoided if no termination took place.
When I have asked this question I am often told that one the reasons for doing this is to end the costs of providing benefits to disabled employees
Well it now seems that there is nothing in law that would prevent an employer from including a provision in their STD or LTD plans which imposes a time limit on how long the benefits will continue.
Therefore there would be no financial cost in simply continuing the status of the disabled employee as an employee of the Company.
Of course, under the ESA, either party can claim that a contract is frustrated, thereby triggering the obligation to pay termination pay and severance pay. Therefore the disabled employee could trigger their own termination even if the employer did not wish to terminate the employment relationship .