On September 1, 2022, the Quebec Court of Appeal issued an important decision. Caisse populaire Desjardins de Saint-Raymond-Sainte-Catherine c. Girard.1 In a unanimous decision, the court held that regardless of whether the employer paid all or part of the cost of the premium, disability benefits received by the employee and paid by the insurance company could not be deducted from the salary in lieu of notice. I ruled that I couldn’t.
The employee started working as manager at Caisse populaire de Saint-Raymond-Sainte-Catherine (“Caisse”) in April 2013. She was immediately sent home to consider the proposed terms of her departure. She then fell into a severe depression and from 22 April 2014 until 22 August 2016 she received disability benefits under her group insurance plan. Meanwhile, on February 16, 2015, she was notified that her Caisse was terminating her employment. At the time, she had over 30 years of working experience at the Desjardins Group, including her 20 years as manager.
At first instance, the judge partially accepted the employee’s argument. He ordered his Caisse to provide 24 months’ salary in lieu of notice, but this payment would cover the employer’s portion of any disability benefits received by the employee during the notice period. determined that it should be subtracted from Relying on the judgment of the Supreme Court of Canada,2 He concluded that if an employer contributes to a group insurance plan, the benefits received by the employee should be deducted from retirement benefits in proportion to the employer’s contributions.
Of particular importance in this case is the question of whether the disability benefits received by the employee should have been deducted from the salary instead of the notice. It is worth noting that most of the grounds for appeal by both parties were dismissed.
On the issue of deductions for disability benefits, the Court of Appeal first noted that the discussion was about the application of CCQ § 1608.[t]The debtor’s obligation to pay damages to the creditor is neither mitigated nor altered by the fact that the creditor received benefits from third parties as a result of the damages suffered. Rights of Creditors. “
The court held that Section 1608 CCQ must apply “whenever an employee receives disability benefits from an insurance company, regardless of whether the employer pays all or part of the cost of the premium.” concluded.3 A finding to the contrary would have the effect of turning disability insurance for employees into a type of insurance that “protects the employer from the financial consequences of the obligation to give reasonable dismissal notice.”Four The court stated that the legislator’s intention was not to exempt employers from the obligation to compensate for damages suffered by employees if the termination was unreasonable and the notice period was inadequate.
Further, the court held that CCQ §1608 does not apply simply because the cause of the injury suffered by the employee (in this case, insufficient notice of termination) was different from the cause for which he received disability benefits (in this case). I said no. ,hindrance). In fact, the legislator intended CCQ section 1608 to apply even if the benefits received by the employee serve a purpose other than compensating for the damages suffered. As a result, the court partially overturned the trial court’s ruling and held that there was no basis for deducting disability benefits paid to employees by insurers.
It is important to note that the court recognized that the situation would be quite different if, instead of paying insurance premiums, the employer paid the employee a salary or a portion of the salary in the event of a disability. In such cases, the employee does not receive any benefit from the third party. Therefore, Section 1608 CCQ does not apply.
This Court of Appeal decision marks a major legal turning point in Quebec labor law. Employers who pay for all or part of the cost of a disability insurance plan on behalf of an employee should note that benefits received by the employee under that plan are not deducted from salary in lieu of notice if employment is terminated. need to do it. it may be indebted. In some cases, the amounts involved can be significant.
However, the scope of this decision should be carefully considered. I wonder if the same reason applies in the case of administrative sanctions for excessive absenteeism that occur after a long period of disability. It seems to me that in such circumstances an argument can be made to distinguish this situation from the one presented to the Court of Appeal.