Judge doubles a worker's notice, then sends the disability benefits fight to trial
A longtime worker who lost his job lost his wrongful dismissal case, too, after a lower court ruled his disability benefits erased any loss. Alberta's Court of King's Bench just said not so fast.
In a September 3, 2026, decision, Justice D. Jugnauth of the Court of King's Bench of Alberta partially overturned a summary dismissal against Thuro Inc., a sewer and water maintenance company, ruling that a longtime vacuum truck operator was owed 20 months of reasonable notice rather than the roughly 13 months he received. The lower court had thrown out his claim entirely, but Jugnauth sent the case back for trial to decide whether the worker's disability benefits should reduce the damages he is owed.
A disability diagnosis complicates a standard dismissal
The worker joined Thuro Inc. in January 1998 and spent decades in physically demanding field roles tied to the company's sewer and water maintenance operations. By late 2020, the company had grown concerned about how his rheumatoid arthritis affected his ability to keep doing that work, and it considered whether his contract had been frustrated by his condition before deciding against that approach.
Instead, in a letter dated November 20, 2020, the company told the worker his job would end effective December 15, 2021, giving him roughly 13 months of working notice, along with an offer of an additional $10,000 for a signed release, which he declined. He kept working after receiving the letter, and the company considered shifting him into a less demanding training role, though the transition was never completed.
The worker's health caught up with the timeline before his notice did. He went on medical leave in June 2021, drew short-term disability benefits through October, then moved onto long-term disability benefits, which he still receives. His employment ended as scheduled on December 15, 2021, and he sued, saying the notice fell short of what the law required.
A lower court ruling leaned on a disputed earlier case
At the application stage, the worker and Thuro each sought summary judgment. The company argued that even if the notice was too short, the worker suffered no financial loss because he would have been collecting disability payments rather than a paycheque during any extended notice period anyway. The application judge agreed, relying on an earlier Alberta ruling on similar facts, and dismissed the claim outright.
Justice Jugnauth disagreed on appeal, finding the earlier ruling failed to account for Supreme Court of Canada guidance on when benefits like disability payments should be subtracted from wrongful dismissal damages, treating their receipt as erasing the claim rather than weighing it as a separate question. Citing Supreme Court authority, Jugnauth wrote that whether an employee could have worked during the notice period is “irrelevant to the legal entitlement to damages.”
Weighing the worker's age, tenure and the pandemic-era job market he would have faced at 63 after 24 years in a specialized trade, Jugnauth concluded that “the Appellant was entitled to 20 months of reasonable notice,” well beyond the roughly 13 months Thuro had actually provided.
The benefits deduction question heads to trial
Jugnauth rejected Thuro's argument that the worker's contract had been frustrated by his disability, noting the company had considered and abandoned that theory before choosing working notice, reflecting its own assumption at the time that he remained capable of continuing to work.
On whether the disability benefits should reduce his damages, Jugnauth declined to rule either way. The actual policy was never placed into evidence, leaving only a general benefits handbook and a letter referencing possible deductions for other income without spelling out full terms, making it impossible to determine whether the benefits were meant to replace lost wages or whether repayment provisions might apply.
The appeal was allowed only in part. The dismissal order was set aside, the 20-month notice period was confirmed, and the deductibility question was sent back for trial.
