Many people who take long-term disability (LTD) leave also run into employment problems. Others face workplace issues first, and only later discover their LTD insurer is making things harder. These areas of law overlap more than most people realize — and having a lawyer who understands both is critical.
Below are clear answers to the most common questions Canadians ask about LTD benefits, terminations, toxic workplaces, and severance.
1. Does a Toxic Workplace Qualify You for Long-Term Disability?
It depends on the medical condition.
A toxic workplace by itself is not enough for LTD. Insurers often argue that your inability to work is “situational”—meaning tied only to that specific workplace. LTD policies don’t cover “bad boss” or “bad workplace” problems.
However, you can qualify for LTD if the toxic environment causes a disabling mental health condition that affects your ability to work anywhere, such as:
- Severe anxiety
- Major depression
- PTSD
- Panic disorder
If your symptoms have become generalized (not limited to the original workplace), the insurer must assess your claim as a medical disability — not a workplace conflict.
If your condition only prevents you from returning to that employer, you may have a strong constructive dismissal claim instead. The employment lawyers at Samfiru Tumarkin LLP handle these cases regularly.
2. Can Your Employer Fire You While You’re on LTD?
Yes — but it’s usually illegal.
If you’re fired while on disability or while applying for disability benefits, your employer is likely violating human rights legislation.
You may be entitled to:
- Full severance pay in Canada (up to 24 months)
- Human rights damages
- Additional compensation for lost income
This is a situation where employment law and LTD law connect. The settlement needs to be structured carefully so it doesn’t harm your LTD benefits. Our lawyers routinely resolve these cases in a way that maximizes both severance and LTD recovery.
3. Will a Termination Affect Your Long-Term Disability Benefits?
It can.
Many LTD policies allow insurers to deduct or “offset” income you receive from your employer, including:
- Severance pay
- Salary continuation
- Certain other forms of compensation
In some cases, insurers try to take 100% of your severance.
4. If Your LTD Claim is Denied, Can Your Job Be Affected?
Your employer shouldn’t penalize you.
A denied LTD claim is a dispute between you and the insurer, not you and your employer. You still have the right to accommodation based on your doctor’s medical restrictions.
If your employer:
- Pressures you to return before you are medically ready
- Refuses to accommodate restrictions
- Disciplines you because of the LTD denial
- Claims your absence is “unjustified”
…contact Samfiru Tumarkin LLP immediately. LTD denials are often reversed, and workplace consequences can be legally challenged.
5. What If You Became Disabled Before Your Job Ended?
If the disability arose while you still had active LTD coverage, you should qualify for benefits — even if you apply after your employment ends.
This often happens when:
- Symptoms become disabling shortly before termination
- The insurer claims you applied “too late”
- You weren’t able to file the application during the notice period
The key question is when the disability actually began, not when the LTD forms were submitted.
6. What If You Became Disabled After Your Job Ended?
Eligibility depends on two factors:
- Did your employer continue your LTD coverage during the statutory or reasonable notice period?
- Does your specific policy require you to be actively working at the time the disability begins?
Many policies do. If you weren’t actively working when symptoms started, the insurer may deny the claim. However, this is very fact-specific — and in some cases, employers fail to extend coverage when they were legally required to do so.
We can review the policy and determine whether coverage should still apply.
7. What If Your Employer (Not the Insurer) Is Responsible For Paying LTD?
Some large employers — particularly banks and major corporations — self-fund their LTD benefits. They hire an external company to manage the claims, but the employer is ultimately the one paying you.
When your employer is both:
- the payor of benefits, and
- your workplace authority
…your disability claim becomes an employment law issue as well. Actions like denials, delays, or refusal to accommodate may create additional legal claims.
These cases must be handled carefully, and our team resolves them frequently.
8. How Can a Disability and Employment Lawyer Help?
Because LTD and employment rights often overlap, a single misstep can impact both your benefits and your severance.
We help by:
- Reviewing your LTD denial and appealing or challenging the decision
- Protecting your job and enforcing your right to accommodation
- Structuring severance to avoid LTD offsets
- Handling human rights and wrongful dismissal claims
- Ensuring your employer and insurer both follow the law
You should never sign a severance package, return-to-work plan, or accommodation agreement without understanding how it affects your LTD case.
Want Advice About Your LTD or Employment Situation?
If you’re dealing with:
- an LTD denial
- pressure to return to work
- a toxic workplace
- termination while on disability
- severance and LTD offsets
- or an employer who refuses to accommodate
The lawyers at Samfiru Tumarkin LLP can help you understand your legal options and protect both your income and your health.
Samfiru Tumarkin LLP has helped over 50,000 Canadians secure the compensation they’re owed, and has earned more than 3,000 five-star reviews across the country.
Helping Disability Claimants Across Canada
If you live in Canada (outside of Quebec) and you’re encountering issues with your LTD and Employment matter, we can help. Our experienced legal team has successfully represented individuals in every province, from initial denials to final settlements.
We regularly take on major insurance companies — including Manulife, Sun Life, Canada Life, Desjardins and others — and know how to secure the compensation you are legally entitled to. Learn more in our guide to long-term disability insurance companies in Canada.