Consider workplace decisions carefully in tough economic times

By Tony Poland, LegalMatters Staff • In trying economic times, people may be more inclined to ignore mental health issues and continue to work for fear of losing their jobs. However, that can be short-sighted and counterproductive, says Ontario disability insurance lawyer Courtney Mulqueen.

With stock markets tumbling amid a global trade war ignited by U.S. President Donald Trump’s tariff plan, studies indicate that many Canadians are concerned about a potential recession in the coming year.

Bank of Canada Governor Tiff Macklem said “the erratic, unpredictable course of U.S. trade policy” has “violently” damaged the economy, according to a Politco report.

Macklem noted that in a “long-lasting trade war, the economic consequences are severe … and the economy is in recession for a year.”

Economy lost 33,000 jobs in March

Meanwhile, Statistics Canada reported our economy lost 33,000 jobs in March, the biggest decrease since January 2022.

Mulqueen, principal lawyer of Mulqueen Disability Law Professional Corporation, says the economic uncertainty has added another level of stress to already challenging times.

“People are on edge and for good reason,” she tells LegalMattersCanada.ca. “The stress of not knowing what is going to happen next impacts people differently. For those anxious about losing their jobs, it can trigger a mental health disability.

“In the past few years, I have witnessed more people dealing with issues that are affecting their everyday lives. Some are super stressed and have difficulty with emotional regulation, depression or anxiety, and they are struggling to just hold it together.”

Mulqueen says some people suffering from mental health issues may be hesitant to seek help, worrying about how it will be perceived.

“There is that stigma,” she says. “Add in a precarious economic environment, and many people will keep pushing and pushing, going to work every day no matter how horrible they feel or how much worse their condition is getting.

Can interfere with work relationships

“It can get to the point where it is interfering with their relationship with their employer and their ability to do their job.”

The stress of dealing with a mental health problem can lead some to just give up.

“People may believe that quitting their jobs will take all the stress off their plate and they will feel better,” she says. “It will be one less thing to worry about. But the relief may only be temporary, and making such a rash decision could have consequences.

“Stress can get the best of people, and something can happen to trigger an outburst,” Mulqueen adds. “They may not even have the intent to quit, but there is some communication with their supervisor that is taken the wrong way, which can result in a termination. Then it can be difficult to undo the damage.”

She points to the King’s Bench for Saskatchewan decision in Denton v Parriwi Management Inc. that dealt with the wrongful dismissal of a man who argued that his employer incorrectly treated his statement during a heated exchange as a resignation.

Reacted to an intense argument

According to the judgment, the man reacted to an intense argument during a July 2020 meeting, saying he was “done” before walking out of the office. Court heard the man had suffered some emotional setbacks and was given time off to get better.

The man received a text from his employer following the incident telling him he was “welcome back anytime.” 

“Don’t be ashamed it’s not a big deal. Take a break and get better we want you to be happy and healthy not stressed. It’s not your fault it’s just the economy and a recession. Everything will get better so don’t worry. Catch up on your sleep, go fishing, relax, do things that make you happy. We can handle it until your better it’s all good!” the text read.

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The man received short-term disability (STD) for seven weeks. However, after later being turned down for long-term disability (LTD) benefits, he received a letter from his employer in November 2020 stating his resignation had been accepted.

“Fortunately, the court found the man hadn’t actually resigned and he was awarded almost $350,000 in lieu of notice,” says Mulqueen, who was not involved with the case but comments generally. “However, it shows how an impulsive statement made in a time of stress can have serious repercussions.”

Can impact disability benefit entitlements

Quitting your job can have an impact on your entitlement to disability benefits, which could limit your ability to get the help you need, she says. 

“If you quit and are no longer covered by your employee insurance plan, will you be able to afford treatment for a mental health issue?” How are you going to get better? Your condition is potentially going to become far worse,” Mulqueen explains. “It can be challenging to find affordable treatment.”

She says some people may be fearful of losing their job if their employer learns they have a mental health issue or if they take a medical leave, but workers are protected from discrimination under the Human Rights Code.

It is also important to note that if you become disabled while you were employed, even if your job was terminated, you may still be entitled to insurance benefits, Mulqueen says. 

It is not only employees who may not be clear on the rules. She says some employers don’t know that a terminated employee may still be eligible to claim STD or LTD, and if they don’t comply with a claim, they risk being sued for damages in lieu of benefits.

Advice for dealing with mental health issues

Mulqueen offers the following advice to clients who are dealing with mental health issues:

• If you are struggling at work, apply to go on leave. Do not resign; 
• Continuing to work while unwell risks damaging your workplace relationships and may result in termination of employment;
• If you are terminated but can prove that your disability arose while employed and were still covered under your group benefit plan (either prior to termination or during the statutory notice period following termination), then you are entitled to LTD coverage and possibly even STD coverage. 
• If you were fired but had been struggling to do your job due to disability, or the termination caused your condition to become worse, contact your employer immediately to apply for STD and LTD.
• If the employer refuses to provide disability forms, reach out directly to the insurance company or contact a disability insurance lawyer for help in obtaining and submitting the STD/LTD forms.
• If your LTD claim is denied on the basis that you were not covered under the employer’s plan, contact a disability lawyer to help you determine your eligibility and whether it will be necessary to sue both the insurance company and the employer for interfering in your insurance entitlements.

“When clients come to me for advice, I tell them they are doing themselves a disservice by being brave and riding out a mental health issue,” Mulqueen says. “Your health comes first because if you don’t have that, you don’t have much. Discuss your issues with their doctor and explore all your options, including applying for disability benefits. Seeking help is better for your health and your finances.”