One issue that arises occasionally when an employee is being accommodated is whether the employer can adjust their compensation to bring it in line with their new reduced hours and/or duties. For example, if an individual is moved into a lower level role to accommodate certain restrictions and limitations identified by their doctor, does the employer have to keep their salary and perquisites the same? This may surprise many readers, but the answer is no: all else being equal, it is not unlawful to reduce an employee’s compensation in order to align it with their new role.

This is because, as a recent decision of the Divisional Court confirmed, an employee is only entitled to be compensated for the work they are actually performing.

Background

In City of Toronto v Canadian Union of Public Employees, Local 79, the Divisional Court heard an appeal from an arbitration decision which allowed the grievance of an employee who claimed that the City had failed in its duty to accommodate him pursuant to the Ontario Human Rights Code (the “Code”).

The grievor was hired by the City in 1991 in a full time role. As a member of the full-time bargaining unit, he was entitled to a more robust benefits package than employees in the three part-time bargaining units. Unfortunately, in 1999, the grievor became disabled and was unable to continue working full-time. The City accommodated him by allowing him to work part-time four days a week but, interestingly, also allowed him to remain in the full-time bargaining unit where he continued to be entitled to participate in the more generous benefits package.

Over ten years later, in 2010, the grievor required additional accommodation and his working hours were further reduced to three days a week. Still, the grievor remained in the full-time bargaining unit. In 2013, the City requested medical documentation from the grievor which confirmed that his three day a week schedule would need to be permanent.

Finally, in January 2016, the City put the Union on notice that as of September, it would be changing its past practice of allowing part-time employment within the full-time bargaining unit. Under the new scheme, the City would provide employees with “a two-year transitional period during which an employee could work part-time while remaining in the full-time unit.” If, at the end of this period, the employee was still not able to return to full-time hours, they would be transferred to the part-time bargaining unit. As a result of this change in practice, the grievor was transferred to the part-time unit, which had a significant impact on his benefits and pension.

The arbitrator’s decision

The Union brought a grievance, alleging discrimination pursuant to the Code. The arbitrator agreed with the Union, finding that:

an employer is required to maintain…accommodation for so long as the circumstances remain unchanged, and the accommodation remains reasonable. The unilateral withdrawal of that accommodation, in my view, absent justification or claim of undue hardship, is a violation of section 17 of the Ontario Human Rights Code.

Essentially, the arbitrator found that absent a change in circumstances which would result in undue hardship for the employer, it was not open to the employer to make changes to the accommodation it had been providing to the grievor for several years. The arbitrator ordered the City to return the grievor to the full-time bargaining unit and restore all benefits.

The decision of the Divisional Court

The City successfully appealed the decision of the arbitrator. The Court confirmed that the City did not discriminate against the grievor by failing to provide him with full-time benefits, because the difference in compensation was not as a result of the employee’s disability. Rather, the difference was based entirely on the number of hours worked by the employee.

The Court noted that employers are not required to compensate employees for work that they are not actually performing. In this case, in order to be eligible for the full-time benefits plan, the grievor had to demonstrate a “reasonable expectation that he would be able to work full-time”, which he was unable to do.

Key takeaways

This case confirms that accommodating an employee does not mean completely rewriting the terms of the employment relationship or creating an entirely new role. In that regard, where an employee is not able to perform their core duties or must work reduced hours, it may be permissible for an employer to adjust their compensation package to reflect the change in the services being provided.

However, employers should carefully consider whether it is possible to accommodate an employee in their existing role before alternative positions, and compensation structures, are explored. Otherwise, their efforts will likely fall short of the duty to accommodate imposed pursuant to the Code.

While employees should keep in mind that the Code does not require that they be kept “whole” in terms of compensation and benefits during the accommodation process, any reduction in compensation or diminution of responsibilities should be based on the restrictions and limitations actually identified by the employee’s treating physician. Employers should not be selecting accommodation options based on the potential cost savings, but on the actual needs of the employee in conjunction with the potential hardship caused to the employer. That said, an employee is not necessarily entitled to their preferred form of accommodation.

By Brittany A. Taylor and Stuart Rudner