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How your job is terminated affects your severance

Fired from work.

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The question

A few years ago I was "temporarily" laid off. Technically, I understand that I was still an employee and able to receive employee benefits.

Unfortunately, shortly afterward, I had to go on employee permanent disability as I can no longer work.

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Am I legally entitled to severance?

The answer

Assuming that you would have been recalled back to work, you are not entitled to anything right now because you are still technically employed but on an inactive basis. Your employer will eventually get around to dealing with your long-term absence, and when they do, your entitlement to severance will be assessed based on whether there is a reasonable prospect of your return to the job in the future. This is due to the legal doctrine of "frustration of contract," which means what you bargained for no longer exists. In the workplace, this is a doctrine applied by employers to argue that, due to your permanent illness, the relationship they had with you has been concluded. If so, you have not actually been terminated, and whether you will receive severance is a function of the province in which you live and the length of your tenure. However, you will definitely not be paid the more generous common law severance payments that you would receive if you were terminated in any other circumstances.

Frustration of contract is a very difficult argument for an employer to establish. Courts often reject these claims, showing quite a bit of sympathy to employees when they do. As an example, in an recent case, a court concluded that an employer was unable to demonstrate frustration where an employee was absent from work for five years due to an illness, because the medical evidence did not dispositively show that he would never return.

Daniel A. Lublin is a workplace law expert and a partner at Whitten & Lublin. He writes on legal issues for Globe Careers.

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