Denial of disability insurance doesn’t mean employee is not sick

Employers should never interpret denial of disability coverage to an absent employee by an insurer as evidence of malingering.

Just because the insurance company said “no” does not mean the absence is not justified due to illness. It may only mean that insurance companies save more money saying “no,” than they do saying “yes.”

Bill had worked for a funeral home for 17 years when he went off due to illness, having handed in a doctor’s note putting him off work for several months.

Two months after Bill went off, the employer found out that the disability insurer and Worker’s Compensation had denied his claim for benefits. The boss learned Bill had indicated to Worker’s Compensation that he was off partly due to stress because of the abusive behaviour of the boss.

The boss got mad. Eventually, Bill tried to put through a prescription claim on his benefits and learned they had been cut off. When he contacted the employer, he was told the relationship had been terminated because he had “abandoned his job.”

Little did the employer know that Bill was actually appealing the refusal of coverage by the disability insurer. The employer did not ask him for an updated medical note, which it could have. It did not ask him to be assessed by its own doctor. The employer did not call Bill to ask why he was not returning to work given the disability refusals. It just cut off his benefits and let him find out in a fairly nasty way after 17 years of service.

Bill alleged the employer had breached its obligation to him to deal with him in good faith and that its conduct was highhanded and reprehensible and caused him mental distress.

At the trial, the employer alleged it had contacted Bill to get him to return to work, but he refused. That never happened.

It argued he was working somewhere else. That was also untrue. It cast doubt on whether or not he was really ill even though it had not one scintilla of contradictory medical information.

Bill said that after he learned of the termination, by accident, his depression became worse and he eventually became suicidal.

He was awarded $25,000 in aggravated damages. Bill also claimed punitive damages and received an award of $110,000 for that.

The judge found that the boss was simply maliciously looking for a reason to get rid of Bill once he learned that his behaviour was alleged to have caused some of Bill’s health problems.

Punitive damages are exactly what they are called ... “punitive.” They are meant to teach a lesson to the employer.

While Bill’s employer made things worse for itself by making up evidence and lying to the judge and carrying out the termination in such an offhand manner, its problems started with that letter from the disability insurer.

The employer took it as evidence that Bill should be at work and not at home. Big mistake.