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Not Discriminatory to Distinguish Between Active and Non-Active Employees for Severance Pay
July 14, 2008

The British Columbia Court of Appeal recently ruled that an employer-union agreement which denied severance pay to “non-active” employees was not discriminatory under the Human Rights Code.

When the employer decided to partially close down a lumber plant, it entered into an agreement with the union which provided for severance pay for “active” employees but not for “non-active” employees. Some employees were classified “non-active” because they were off work and receiving workers’ compensation or long-term disability benefits. Those employees filed a human rights complaint against the employer alleging that they were “non-active” because of a disability and that the difference in their treatment under the agreement was therefore discriminatory.

The Human Rights Tribunal agreed and upheld the complaint, and the employer’s application for judicial review of the Tribunal’s decision was dismissed by the B.C. Supreme Court. On appeal, however, the B.C. Court of Appeal quashed the Tribunal’s decision, finding that the complainants were not denied severance pay under the new agreement because they were disabled, but because they were not affected by the closure. The agreement granted severance pay only to those employees who would lose their jobs because of the closure. The complainants did not lose their jobs, the Court said, because they remained on leave. As a result, they suffered no disadvantage under the agreement and no discrimination in breach of the Code.

International Forest Products Ltd. v. Sandhu, 2008 BCCA 204