The referenced recent Ontario case from the attached article is a helpful reminder to employers of some key concepts that are clear at law, but are often complicated and confusing in practice for both employers and their employees.
First, the human rights legislation prevents an employer from terminating an employee because of illness or disability (absent accommodation to undue hardship). However nothing prevents an employer from terminating an employee while they are absent or being accommodated for illness or disability, so long as the reason for termination has nothing to do with the illness or disability (like the business closure in this case).
Second, while for good practical reasons most employers choose to pay severance; working notice is equally effective at reducing or eliminating the employer's liability for dismissal and can completely avoid any severance payment if it is consistent with the employees entitlement to notice and is given in a clear an unequivocal manner. In circumstances of a poor fit or poor performance, working notice is typically not practical or advisable given the potential damage to your workplace during the notice period; however, in situations of business closure or down sizing it can be very effective and cost saving for an employer.
Finally, understand that working notice only counts if it is given during a period of time where an employee is capable of working and looking for alternate work. In the referenced Ontario case the working notice given by the employer did not count against the severance liability as the employee was away ill an unable to work or seek alternate work.
Working notice no good when employee can’t work