In our August 2024 newsletter, Erin Kuzz discussed the importance of actively managing an employee on a medical leave of absence, including the type of information an employer can request during the medical management process.
In a decision released earlier this summer, the Ontario Superior Court of Justice addressed a similar issue – whether an employer can require a former employee to undergo an independent medical examination (“IME”) to verify the employee’s claim they cannot find a new job because of a medical condition. The court answered this question, yes.1
What happened?
Lyndon Marshall was dismissed, without cause, after 25 years of service as a courier with Mercantile Exchange Corporation (“Mercantile”). Marshall rejected Mercantile’s severance package and started a wrongful dismissal action claiming 26 months’reasonable notice of termination.
In the nine months following his dismissal, not only did Marshall take no steps to find new employment, he claimed he would be unable to find any employment for the entirety of the 26 month notice period as his “mental condition” would “prevent him from mitigating his damages until he [was] cured.”2
Mercantile argued that if Marshall was going to claim his medical condition prevented him from finding a new job, he should be required to submit to an IME to prove his medical condition. Marshall refused, which landed the two parties before a judge where Marshall argued that:
- Personal injury decisions were not applicable to this case
- There was an insufficient relationship between his medical condition and his wrongful dismissal claim, as his “mental health [was] not the basis for the damages” and was “ancillary”3
- Courts have accepted mental health issues, post-dismissal, as a “valid reason” for failure to mitigate
- The court should not allow Mercantile to use an IME as “a weapon for employers.”
The court rejected all of Marshall’s arguments.
The legal basis to ask for an IME
Under section 105(2) of the Courts of Justice Act, a court may order a party to submit to a physical or mental examination if a physical or mental condition is relevant to matters at issue.4 Historically, the court used this power in personal injury litigation.
Courts have also generally accepted that stress from termination may hinder an individual’s mitigation efforts for some period of time. However, the longest period accepted was 12 months – not the 26 months claimed by Marshall.
In an effort to strike the right balance between Marshall and Mercantile, the court decided “it would be unfair to allow [Marshall] to make [his] assertion without having it tested.”5 This was especially so because Marshall had put his mental condition into question during the proceedings:6
[15] It strikes me that in the circumstances of this case, if the plaintiff takes the position that he is unable to mitigate after 12 months have passed, he should be required to submit to an independent medical examination. That strikes me as a fair balance between giving an employer the right to test allegations of inability to mitigate without allowing employers to abuse independent medical examinations as a tactic to dissuade plaintiffs from legitimately relying on medical issues that prevent them from mitigating damages.
[16] None of that is to say that the plaintiff is not suffering from a condition that prevents him from mitigating. It is merely to say that if someone takes a position as unusual as the plaintiff is taking, they should be prepared to subject themselves to an independent medical examination in order to test the assertions they are making.
[emphasis added]
Takeaway for employers
The duty to mitigate is a critical component of any wrongful dismissal case. A dismissed employee must make reasonable attempts to secure alternative employment to reduce their loss. If an employee secures alternative employment during the reasonable notice period, the employer is entitled to credit those earnings against the employee’s claim. If the employee fails to make reasonable attempts, their claim may be reduced by a court. If an employee alleges they cannot mitigate due to a medical condition, an employer should be prepared to use all the tools at its disposal to challenge this assertion, where appropriate. An IME can be an important tool in this tool-box.
To learn more and for assistance, contact your Sherrard Kuzz LLP lawyer or our firm at info@sherrardkuzz.com.
1 Marshall v Mercantile Exchange Corporation [Mercantile].
2 Ibid at para 4
3 Mercantile, supra note 1 at para 6.
4 Courts of Justice Act, s 105(2).
5 Mercantile, supra note 1 at para 9.
6 Mercantile, supra note 1 at para 11.
