B E T W E E N :


(the "Company")

- a n d -


(the "Union")




ARBITRATOR : Michel G. Picher



THE COMPANY : Michael Restoule - Manager of Labour Relations

John J. Morrison - Superintendent of Car Maintenance

Tom Burton - Technical Superintendent

Eric Moody - Corporate Security Officer



THE UNION : Pierre Sadik - Counsel

Domenic Mancini - System President

Andy Mitchell - Local Officer

Gerry McCausland - Grievor




A hearing in this matter was held in Toronto on January 25, 1994.







This is the arbitration of a grievance against discharge. Mr. Gerald McCausland, who has been employed by the Company since February of 1980, was advised on May 31, 1993 that his employment with the Company was terminated effective April 18, 1993. The basis for the Companyís decision, and the position of the Union, are reflected in the dispute and joint statement of fact submitted by the parties at the hearing, which reads as follows :


The dismissal of Engine Attendant Mr. G. McCausland.

Joint Statement of Fact

The Company terminated Mr. McCausland for engaging in an occupation for wage or profit while in receipt of weekly indemnity and/or unemployment insurance sick benefits during the period from April 27, 1992, until February 7, 1993.

The Union contends that Mr. McCausland was not engaged in the day-to-day operations or the actual physical work of his company while collecting weekly indemnity benefits, therefore, the discharge is unjustified. The union requested that Mr. McCausland be reinstated with full seniority and compensated for all lost wages and benefits.

The Company refused the Unionís request.

The evidence discloses that on or about April 19, 1992 the grievor experienced a serious pain in his right hip. He was subsequently diagnosed as suffering from trochanteric bursitis, as well as a bone growth or osteophyte in the hip joint. As a result of his injury Mr. McCausland remained off work from approximately April 19, 1992 to the date of his termination.

The Company relates that in February of 1993 its director of human resources, Mr. J.D. Knox received a telephone call advising that the grievor was performing physical work for an insulation contracting business which he had operated for a number of years. It is common ground that prior to the grievorís injury he had an interest in an insulation contracting business in North Bay, and that subject to certain changes in partnership arrangements and business names,




his endeavours in that regard continue to the present. It does not appear disputed that Mr. McCauslandís involvement in the insulation business both prior to and during the time of his injury was known to the Company. Before the arbitrator the Company rested its decision to terminate Mr. McCausland on the basis that he had performed physical work in the furtherance of his insulation business which was comparable to work which he claimed he was incapable of performing for the Company, by reason of his physical disability. Specifically, no objection is taken to the fact that he may have had an administrative hand in the activities of his insulation business during the period of his disability ; the Company subjects that the alleged activity of the grievor in performing physical labour disclosed a violation of his obligation to the employer which justified the termination of his services.

At the arbitration hearing, the Company adduced no direct evidence of any physical activity having been performed by Mr. McCausland. It appears that the Companyís corporate security officer, Mr. E.V. Moody performed an investigation during the course of which he was told by two individuals, Mr. John Cyr, the grievorís former business partner and Mr. Kenney Soucie, a former employee of Mr. McCausland, that there were times that the grievor did perform some of the physical work on the job sites where his business was active. However, neither Mr. Soucie nor Mr. Cyr were called by the Company as witnesses. In the result, the entirety of the evidence upon which the Company relies before the arbitrator is hearsay in the form of two reporting letters of Mr. Moody, dated April 1 and May 25, 1993 respectively. Those letters relate the allegations of Mr. Cyr and Mr. Soucie, as reported to Mr. Moody, as well as the statement of Mr. Larry Erwin stating that the grievor did some work on Mr. Erwinís home in North Bay in April or May of 1992. However, as there is no precision with respect to the date of that work, it is not clear as to whether it might have been performed prior to the grievorís injury in April of 1992.

The Union called Mr. McCausland to give testimony with respect to his activities in the period in question. He relates that he did continue to remain active in the affairs of his insulation business during the time of his absence from work for disability. He states, however, that he did not involve himself in the physical labour of installing insulation, or of carrying heavy materials, tools or equipment. According to his testimony, which stands unrebutted by any other direct testimony at the hearing, his activities within the insulation business principally involved answering telephone calls, preparing appraisals and job bids and, on jobs which were ongoing, making periodic visits to job sites to oversee the work being performed. He states that on occasion he would use his car to transport small quantities of vapor barrier or insulation material, but that when




material of any weight was involved it was loaded into his vehicle by the supplier and unloaded at the job site by his own employees. According to his testimony part of his work on job sites involved instructing new employees in work methods, a process which might involve only minor physical activity.

In a case of discharge, as in any discipline case, the burden is upon the employer. It must establish, on the balance of probabilities, that the grievor did engage in physical activity inconsistent with the claim of disability for which he received weekly indemnity payments from the Company, as well as Unemployment Insurance Commission sickness benefits, between April 27, 1992 and February 7, 1993. As noted above, the Company adduced no evidence in the form of eyewitness testimony with respect to the grievor having performed any physical labour. While Mr. Moody was in attendance at the hearing, the information available to him, and reflected in his reporting letters filed in evidence, is hearsay evidence obtained from persons not present to be cross-examined. There is, moreover, reason for concern with respect to the weight to be given to the evidence drawn from Mr. Cyr and Mr. Soucie. According to the grievorís evidence he had a falling out with Mr. Cyr in August of 1992, which caused their relationship to end on a negative note. He also relates that Mr. Soucie now works for Mr. Cyr in a business which appears to be in competition with the grievorís.

Although there is a certain informality with respect to the presentation of evidence, and a degree of reliance upon documentary evidence, which is particular to the railway industry, it is well established that in matters of credibility, as a general rule, direct testimony under oath is to be given greater weight than hearsay evidence. The governing principles were touched upon in CROA 2185, which concerned the discharge of a trainman for allegedly having defrauded the Canadian Pacific Railway of weekly indemnity sickness benefits while operating a personal logging business. In that case the Company offered no direct evidence of the discharged employee having in fact performed any physical labour, although it was admitted that he had remained involved in the overseeing of his logging business, which involved the use of a hired man. In allowing the grievance, in an award dated September 13, 1991 the arbitrator commented, in part, as follows :

During the course of the investigation conducted by the Company Mr. Carter revealed that he is the sole proprietor of a logging operation under the name "C&S Logging". He explained to the Company that he himself did no physical work for his enterprise, which commenced logging in the summer




season of 1989, and that the felling, skidding and bucking of trees which was done in his woodlot, using his skidder, was accomplished entirely by use of a hired man. The Company did not inquire as to the identity of the hired person, nor seek to substantiate the grievorís explanation. Additionally, during the course of the investigation, Mr. Carter provided the Company with the name and location of his physiotherapist in Cranbrook. Again, it appears that the Company did not avail itself of that information to verify the truth of Mr. Carterís statement, nor seek any documentary support for it.

Nowhere in the material provided by the Company is there direct eye-witness evidence to establish that during the time that he was drawing indemnity sickness benefits, or indeed during any of the period examined, that he was performing work inconsistent with the medical condition for which he was on leave and under a doctorís care. Whether or not it can be said that the Company had reasonable grounds for concern about the grievorís action, its position, and its decision to terminate Mr. Carter are entirely based on pieces of indirect and circumstantial evidence. These include the records of his logging contracts with Crestbrook Forest Industries Ltd. of Cranbrook and the report of a private investigator who spoke with the grievor at his father-in-lawís farm on or about August 11, 1989.

In CROA 2185 the arbitrator carefully compared the indirect evidence relied upon by the Company with the direct testimony of the grievor supported, in part, by business records which he presented at the hearing. On the whole it was found that the direct evidence presented on behalf of the grievor was to be preferred to the hearsay and circumstantial evidence relied upon by the employer.

In the arbitratorís view the principles in CROA 2185 are appropriate to the case at hand. Little weight can be given to the allegation attributed to Mr. Erwin, as it would appear that he is unsure of the date upon which work was performed at his home by the grievor. It is fully possible that that work was performed prior to Mr. McCauslandís injury. Nor can the arbitrator place great weight upon the hearsay evidence brought forward from the alleged statements of Mr. Cyr and Mr. Soucie. Firstly, they are not available for cross-examination and it cannot, therefore, be determined precisely what degree of physical activity they attribute to Mr. McCausland. Secondly, and perhaps more substantially, the unchallenged




evidence of the grievor would suggest that both Mr. Cyr and Mr. Soucie are persons opposed in interest to himself, whose evidence might in any event be called into question by reason of the falling out of Mr. Cyr and Mr. McCausland, who are former business associates.

What weight can be given to Mr. McCauslandís testimony ? In the arbitratorís view Mr. McCausland sought to be open and candid in his testimony at the arbitration hearing. His statements tended to amplify, and not to contradict, the responses which he gave to the Company during the course of its disciplinary investigation held on April 19, 1993. On the whole the arbitrator judges Mr. McCausland to be a crediblr witness whose evidence can be relied upon. Further, I am satisfied that, on balance, whatever suspicions the employer may have, the arbitrator is compelled to give greater weight to the testimony of Mr. McCausland than to the hearsay statements relied upon by the Company. For these reasons the grievance must be allowed, at it relates to the merits of Mr. McCauslandís conduct.

I turn to consider the issue of remedy. During the course of his evidence, when questioned by the arbitrator, Mr. McCausland indicated that he feels that he is presently able to return to work. According to his account, his physical condition normalized itself in late December of 1993 or early January of 1994. It appears, however, that he does not have a firm grasp of his present medical condition, and whether he can expect further difficulties in the future. Although his entitlement to weekly indemnity benefits ceased in February of 1993, it is not clear whether he was medically fit to return to work, or to what degree, even to the present time. In this regard the grievor has offered no compelling medical evidence to support a claim for an order of compensation. In the result, the arbitrator is satisfied that this is not an appropriate for an order of compensation and that any order for the reinstatement of Mr. McCausland must be on terms which will protect the Companyís interests, having regard to his physical ability to safely perform the task of his position.

For the foregoing reasons the grievance is allowed in part. The arbitrator directs that the grievor be reinstated forthwith into his employment, without compensation and without loss of seniority. The grievorís reinstatement to employment shall be conditional upon producing satisfactory medical documentation to certify his fitness to return to work. While it is unnecessary for the arbitrator to make any further direction, and the parties may speak to the matter if need be, it would appear that medical certification by Dr. J.E. Holmes, the orthopaedic surgeon who previously examined the grievor, would be sufficient






to satisfy the condition described above. In any event I retain jurisdiction in the event of any dispute between the parties with respect to the interpretation or implementation of this award.

DATED at Toronto, this 31st day of January, 1994.







Michel G. Picher - Arbitrator