Terminated While on Medical Leave in Ontario? Your Rights on STD, LTD, or After Returning to Work

Since founding Kompa Law in 2021, one of my most common interactions is with employees that are terminated while on medical leave, or shortly after returning. It's happened enough times that I wanted to share some general guidance on what to do if you find yourself in this unfortunate situation.

As an employment lawyer, the timing raises serious legal concerns. In my experience, it's rarely a coincidence, even when your employer says otherwise.

In this post, I'll discuss your rights and some general guidance on what to do if you find yourself in this situation.

Key takeaways

• Disability is a protected ground in Ontario. Your employer can't terminate you because of a disability or medical condition. If your health played any role in their decision, it may be discrimination under the Ontario Human Rights Code.
• Being on medical leave doesn't reduce your entitlements. You're still owed proper notice or severance based on your full tenure, not just the time you were actively working.
• The timing matters. Courts are skeptical when employers terminate someone during or immediately after medical leave, even when the employer claims the decision was unrelated to the leave.
• Your benefits may be at risk. Termination can disrupt your STD or LTD benefits, especially if they're tied to your employer's group insurance plan. This needs to be addressed immediately.
• Don't sign anything before speaking with a lawyer. Termination packages in these situations often undervalue your claims, particularly when human rights violations and bad faith are in play.

Your rights when terminated during or after medical leave in Ontario

Disability, whether physical or mental, is a protected ground under the Ontario Human Rights Code, even if it's short term. This means your employer has a legal obligation not to discriminate against you because of your condition, and to accommodate your needs up to the point of undue hardship.

When an employer terminates someone who's on medical leave or has recently returned, it raises an immediate question: "was the disability a factor in this decision?"

Your employer doesn't have to say "we're firing you because of your medical condition" for it to be discrimination. If the timing, circumstances, or pattern suggest that your health was part of the reason, even a small part, you may have a human rights claim on top of your wrongful termination claim.

If you've been terminated while on short-term disability (STD)

If you're currently on STD and receive a termination notice, your employer is going to tell you one of two things: either that your position has been eliminated as part of a restructuring, or that the decision is unrelated to your medical leave.

Maybe that's true. But in many of the cases I've seen, the "restructuring" conveniently targets the person who's been absent on medical leave. Courts recognize this pattern, and they scrutinize it.

Your employer can't terminate you because you're on STD. If the termination is motivated, even in part, by your disability or absence, it's discriminatory. Your entitlements are based on your years of service, age, position, and other factors, and they aren't reduced because you happened to be on leave at the time.

And it's worth remembering that the duty to accommodate didn't end just because your employer decided to let you go. Before terminating you, they were required to explore every reasonable accommodation option, up to the point of undue hardship. If they skipped that step, it strengthens your case.

If you've been terminated while on long-term disability (LTD)

This one is close to my heart because the people I represent in this situation are often the most vulnerable. You've been off work for months, sometimes longer. You're dealing with a serious or chronic condition. You may already feel like your employer has forgotten about you. And now you've been told your employment is over.

I want you to know something important... being on long-term disability doesn't mean you have fewer rights. Your years of service don't disappear because you've been on leave. Your protections under the Human Rights Code aren't diminished.

A few things that are specific to LTD terminations.

Some employers argue that a long medical absence means the employment relationship has been "frustrated," essentially that it no longer exists. Ontario courts set a very high bar for this defence, and it fails more often than it succeeds. If your employer is relying on this argument, don't take it at face value.

There's also a dynamic that doesn't get talked about enough, which is that sometimes the LTD insurer cuts off benefits first, and then the employer uses that as a pretext to terminate. Other times it's the reverse. Either way, you end up squeezed from both sides. A lawyer can help you understand both relationships and protect your interests with each.

Between wrongful termination damages, human rights compensation, bad faith damages, and the value of continued benefits, LTD termination claims are often worth significantly more than what shows up in the termination package.

If you've been terminated shortly after returning from medical leave

You did everything right. You took the time you needed, you recovered, you came back to work. And then, weeks later, you were let go.

Employers sometimes believe that waiting until someone returns from leave gives them cover. It doesn't, not if the medical leave was a factor in the decision.

A few things to watch for include if you had positive reviews before your leave and suddenly face performance concerns upon your return, that's suspicious. If you came back to a different position, reduced responsibilities, or a modified role you didn't agree to, that may itself be constructive dismissal. And being let go within weeks or a few months of returning raises the same timing questions as a termination during leave.

What you should do right now

If you've been terminated while on medical leave or shortly after returning, here's what I'd tell you:

1. Don't sign your termination package. Your employer may give you a deadline. You can ask for an extension, and in most cases they'll grant one. The package they're offering likely doesn't account for potential human rights damages, bad faith, or the full value of your common law entitlements. Read more about why you shouldn't sign before speaking with a lawyer.

2. Document the timeline. Write down the key dates: when you went on leave, any communication with your employer during your leave, when you were terminated, and what reason (if any) they gave.

3. Figure out what's happening with your benefits. If your STD or LTD benefits are at risk because of the termination, this needs to be addressed immediately. A lawyer can help you understand your options for maintaining coverage.

Frequently asked questions when terminated while on medical leave

"Can my employer fire me while I'm on medical leave?"

Technically, yes, if the decision is genuinely unrelated to your disability. But the timing creates a strong inference that the disability was a factor, and your employer bears the burden of proving otherwise. In practice, that's a difficult position for employers to defend.

"Will I lose my STD or LTD benefits if I'm terminated?"

It depends on how your benefits are structured. If they're tied to your employer's group plan, termination can put them at risk. This is why getting legal advice quickly matters so much in these cases. Protecting your benefits often needs to be part of any settlement negotiation, and the window to address it can be short.

"I've been on LTD for over a year. Do I still have rights as an employee?"

Yes. Your years of service don't evaporate because you've been on leave. You're still owed proper notice or severance based on your full tenure, and you're still protected under the Human Rights Code.

"My employer says my termination is due to restructuring. Is that legal?"

It can be. But when the person being "restructured" happens to be the one on medical leave, courts look closely at whether the disability was actually a factor. If it was, the restructuring explanation won't protect your employer.

"I was terminated shortly after returning from medical leave. Is that discrimination?"

It may be. If your employer developed concerns about your performance or fit only after your medical leave, or if the termination happened within a short window of your return, the timing strongly suggests your leave was a factor. Every situation is different though, and an employment lawyer can assess the specific facts of yours.

The bottom line, if you've been terminated while on STD, LTD, or shortly after returning to work

Your situation likely involves more than a standard termination pay calculation. Human rights protections, the duty to accommodate, benefit continuation, and potential bad faith all factor in, and they often mean your claim is worth significantly more than what's in the termination package.

Kompa Law is a boutique employment law firm serving communities in Belleville, Kingston, Cornwall, and across Eastern Ontario. If you've been terminated during or after medical leave, request a callback to discuss your situation.