The Letter Nobody Expects: But Too Many People Receive

You went off work because your health left you no choice. You filed your long-term disability claim, you're following your doctor's treatment plan, and you're doing everything right. Then an envelope arrives, or an email, and your employer is telling you your position has been eliminated, your contract has ended, or your employment is being terminated effective immediately.

If this has happened to you somewhere in Toronto, the GTA, or anywhere across Ontario, the first thing to understand is this: your employer almost certainly did not have the legal right to do what they just did. Ontario law provides significant and enforceable protections for employees who are terminated while on long-term disability leave. The second thing to understand is that those protections have time limits, and the clock is already running.

This article explains exactly what your rights are, what legal violations may have occurred, and how Randy Ai Law Office fights to hold Ontario employers accountable.

The Hard Reality: Terminations During LTD Are Common — And Often Illegal

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Why Employers Do It Anyway

Terminating a disabled employee is, in many cases, unlawful under Ontario law. Yet it happens constantly across Toronto and the GTA, in small businesses, mid-sized corporations, and large enterprises alike. Employers terminate disabled employees for several reasons, most of which reflect either legal ignorance or deliberate calculation that the employee won't fight back.

Common justifications employers use,  none of which are automatically valid, include:

• "Your position has been eliminated" due to restructuring or downsizing
• "Your contract has been frustrated" because your absence has become indefinite
• "We cannot hold your position open indefinitely" without accommodation
• "Your probationary period has expired" during your disability leave
• "We have replaced you" with a permanent hire

Each of these justifications triggers a distinct area of Ontario employment and human rights law. Whether the termination is lawful depends entirely on the specific facts, the duration of the absence, what accommodation was offered, and whether the employer met its legal obligations before pulling the trigger.

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The Legal Framework: Your Rights Under Ontario Law

This is an employment law matter, which means the legal analysis is different from a standard LTD claim against an insurer. There are three overlapping bodies of law that protect disabled employees in Ontario from termination.

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1. The Ontario Human Rights Code:  Duty to Accommodate

The Ontario Human Rights Code prohibits discrimination on the basis of disability in employment. An employer cannot terminate an employee simply because they are disabled, on medical leave, or unable to perform their regular duties due to a health condition. This protection applies to virtually every employee in Ontario, full-time, part-time, contract, and probationary.

Before an employer can lawfully terminate a disabled employee, they are legally required to fulfill a duty to accommodate that employee's disability to the point of undue hardship. This is not a vague obligation,  it requires concrete, documented, good-faith efforts, including:

• Exploring modified duties, reduced hours, or a gradual return-to-work plan
• Considering a transfer to a different role within the organization
• Requesting updated functional abilities information from the employee's physician
• Engaging in a genuine, ongoing dialogue with the employee about accommodation options
• Documenting every step of that process

An employer who terminates a disabled employee without first demonstrating that they have genuinely exhausted accommodation options to the point of undue hardship has almost certainly violated the Human Rights Code. This is not a technicality, it is one of the most powerful legal protections available to disabled workers in Ontario.

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2. Frustration of Contract — A Misused Legal Doctrine

Frustration of contract is a common law doctrine that allows an employer to end an employment relationship without notice or severance when an unforeseen event makes it impossible to fulfill the contract, permanently and through no fault of either party. Some employers attempt to invoke this doctrine to terminate disabled employees by arguing that a prolonged or indefinite medical absence has made the employment contract impossible to perform.

However, the frustration of contract doctrine is frequently misapplied in Ontario, and courts have made that very clear. For frustration to be a valid defence, the employer must demonstrate several things:

• The employee's incapacity is permanent or so indefinitely prolonged that no reasonable employer could be expected to wait for a return
• The employer had no prior warning or knowledge that this type of absence was a possibility
• The employer genuinely had no ability to accommodate the employee in any capacity

The reality is that most long-term disability absences, even prolonged ones- do not meet this standard. A claimant who is on LTD, receiving benefits, undergoing treatment, and whose prognosis includes any realistic possibility of improvement is a very difficult case for the frustration of contract. Employers routinely invoke this doctrine prematurely and improperly, hoping the terminated employee won't challenge it.

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3. Wrongful Dismissal and the Employment Standards Act

Even where an employer's termination may ultimately be found to be lawful, an employee on LTD is still entitled to reasonable notice of termination or pay in lieu of notice under both the Employment Standards Act, 2000 (Ontario) and common law. The common law notice period, which significantly exceeds the ESA minimums, is determined by factors including the employee's age, length of service, the character of their position, and the availability of comparable employment.

A disabled employee who has been terminated without adequate notice, or who has been pressured to sign a severance agreement without independent legal advice, has likely accepted far less than they are legally entitled to. Severance packages offered to disabled employees at termination are routinely undervalued, sometimes by tens of thousands of dollars.

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What Evidence Matters in a Wrongful Dismissal / Human Rights Case

If a disabled employee believes their termination was unlawful, the evidentiary record required to support that claim draws from both the employment file and the medical record.

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Employment Documentation

• The termination letter itself, including every reason the employer provides, every date referenced, and any language about "frustration," "restructuring," or "position elimination"
• All accommodation correspondence — emails, letters, or meeting notes in which the employer discussed, or failed to discuss,  accommodation options
• The employment contract and any policies referenced within it regarding disability leave, job protection, or return-to-work procedures
• Performance records showing the employee was in good standing prior to the disability leave, undermining any suggestion that performance was the real reason for termination
• Communications between HR and management regarding the decision to terminate, particularly any emails that reveal the disability was a motivating factor

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Medical Documentation

• Physician reports and treatment records demonstrating the ongoing nature of the disability and any realistic prognosis for recovery or partial return to work
• Functional abilities assessments confirming what the employee could and could not do at the time of termination, directly relevant to what accommodation the employer should have offered
• LTD approval letters from the insurer confirming the claimant was recognized as disabled under their policy,  a powerful piece of evidence in a human rights claim

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How Randy Ai Law Office Handles Termination During LTD

Randy Ai Law Office takes a dual-track approach to cases involving termination during long-term disability, because most of these situations involve both an employment law violation and a parallel LTD insurance claim that must be protected simultaneously.

1. Immediate Legal Assessment. Upon receiving a termination letter, the full employment file is reviewed, including the contract, termination letter, accommodation history, and ESA entitlements, to identify every legal claim available, including wrongful dismissal, Human Rights Code violations, and bad faith conduct.

2. Protecting the LTD Claim. Termination by an employer does not automatically end LTD benefits; the LTD claim exists independently under the insurance policy. However, some insurers use employment termination as a pretext to revisit the claim. Any attempt by the insurer to use the termination against the claimant is identified and challenged immediately.

3. Human Rights Application or Civil Litigation. Depending on the specific facts, a claim may be pursued through the Human Rights Tribunal of Ontario, the Ontario Superior Court of Justice, or both. Human rights remedies include reinstatement, compensation for lost income, and damages for injury to dignity. Civil wrongful dismissal claims pursue the full common law notice period and any applicable bad faith damages.

4. Severance Package Review and Negotiation. Where a client has already received a severance offer, that offer is reviewed against the full scope of legal entitlements. In most cases involving disabled employees, the initial offer is significantly below what Ontario law actually requires,  and negotiation or litigation recovers the difference.

5. Coordinated Strategy. Because these cases involve employment law, human rights law, and disability insurance law simultaneously, a coordinated legal strategy is essential. Randy Ai Law Office ensures that steps taken in one proceeding do not inadvertently compromise the other.

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Frequently Asked Questions

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Can my employer legally fire me while I'm on long-term disability in Ontario?

In most circumstances, no, not without serious legal consequences. The Ontario Human Rights Code requires employers to accommodate disabled employees to the point of undue hardship before any termination can be considered lawful. Simply being on LTD, having an indefinite leave, or being absent for an extended period is almost never sufficient on its own to justify termination. An employer who terminates without fulfilling the duty to accommodate has likely violated the Human Rights Code, which gives rise to claims for lost income, general damages, and injury to dignity.

Does being fired affect my LTD benefits?

Not automatically, and this is a critical point. Long-term disability benefits flow from the insurance policy, not the employment relationship. In most cases, termination of employment does not terminate LTD benefits if the claimant continues to meet the policy's definition of total disability. However, some group LTD policies contain provisions that tie benefit continuation to active employment status, and some insurers attempt to use termination as grounds to revisit the claim. Anyone who is terminated while receiving LTD benefits should consult a Toronto disability lawyer immediately to understand how their specific policy responds to the employment change.

My employer says my contract is "frustrated" because I've been off too long. Is that valid?

Possibly,  but the bar is much higher than most employers suggest, and the doctrine is routinely misapplied in Ontario. For a frustration of contract to be legally valid, the employer must demonstrate that the incapacity is permanent or indefinitely prolonged with no realistic prospect of recovery, that there was no warning that this type of absence was possible, and that no accommodation was feasible. Most LTD claimants who are undergoing treatment and receiving benefits do not meet this threshold. If an employer has invoked frustration of contract to terminate employment, that position should be challenged with legal advice before any severance agreement is signed.

My employer offered me a severance package. Should I sign it?

Not without independent legal advice first. Severance packages offered to disabled employees at termination are routinely undervalued, often dramatically. The employer's offer typically reflects the minimum ESA entitlements, while common law notice entitlements, which are far more generous,  go unmentioned. In cases involving Human Rights Code violations, additional compensation for lost income and damages for injury to dignity may also be available and are almost never included in an initial offer. Signing a severance agreement usually involves waiving all further legal claims, which makes independent legal review before signing absolutely essential.

How long do I have to make a claim after being fired while on LTD?

The limitation periods depend on the type of claim. A wrongful dismissal action in the Superior Court of Justice must generally be commenced within two years of the date of termination under Ontario's Limitations Act, 2002. A complaint to the Human Rights Tribunal of Ontario must be filed within one year of the last discriminatory act. Because the human rights deadline is shorter, and because evidence and witnesses become harder to access over time, it is strongly advisable to consult a Toronto disability lawyer as soon as possible after receiving a termination letter.

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Your Job. Your Benefits. Your Rights. Don't Let Them Take All Three.

Being terminated while you are already living with a disability is not just financially devastating; it is a compounding injustice that Ontario law was specifically designed to prevent. The Human Rights Code exists precisely because disabled people are vulnerable to exactly this kind of treatment, and the courts take these violations seriously.

Randy Ai Law Office has helped employees across Toronto, the GTA, and Ontario who have been wrongfully dismissed during disability leave, pressured into signing inadequate severance agreements, and denied the accommodation that the law required their employer to provide. The legal protections available in these situations are real, substantial, and worth fighting for.

Consultations are completely free. No upfront fees. 

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