A recent decision by the Ontario Court of Appeal raised eyebrows in stating a former employee was allowed to receive long-term disability (LTD) benefits for an injury he sustained through work three years before he left the company.
Lenard MacIvor worked for Pitney Bowes from 1996 to 2005, ultimately becoming a division sales vice-president. In 2005, he suffered a severe back injury and traumatic brain injury during a company-sponsored event in Costa Rica and was off work for four months.
But his work performance deteriorated after that, so his responsibilities were reduced and — in frustration — MacIvor quit his job in 2008.
Within days, he found a job at Samsung, but the same performance difficulties continued and he was fired a year later.
When MacIvor asked Samsung about making a long-term disability claim, he was told to apply under his policy at Pitney Bowes since the injury occurred while employed there.
But MacIvor’s 2010 claim was denied, so he went to the Ontario Superior Court of Justice seeking benefits in the amount of $5,834 per month, less 85 per cent of the amounts he received for workers’ compensation and Canada Pension Plan benefits.
In 2017, that court denied his claim, saying the Manulife policy clearly stated there was no coverage for people who were not employed by Pitney Bowes. But the Ontario Court of Appeal disagreed.
The policy stated coverage would end on the day a person ceased to be “actively employed,” but citing the 2016 Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co. decision and the need for insurance policy language to be clear — “reading the contract as a whole” — the court said the policy meant coverage would not continue “when an employee begins working for another employer or after the employee has retired.”
In addition, the “termination of coverage” language relates to future claims, not claims that may have arisen during the course of the employee’s employment.
“In other words, if an employee’s claim arises as the result of an occurrence that takes place during their employment, the policy provides coverage,” said Justice Jean McFarland in her April 19 decision.
“The Manulife policy does not contain the type of exclusionary language that terminates coverage for undiscovered disability claims the employee had and that originated during their employment, when their employment ceases. To so conclude would leave former employees, like (MacIvor), in the untenable position of having no disability coverage from either their former employer or any new employer. Such a result would be contrary to the very purpose of disability insurance and the plain meaning of the coverage provision.”
Article written by: Sarah Dobson
Article published on: April 7, 2018 on Employment Law Today
Article Spotted by: Louise Burden
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