(the “Company”)






(the “Union”)







ARBITRATOR:                                     MICHEL G. PICHER



Denis Laurendeau                 - Manager, Labour Relations, Montreal

Sylvie Grou                                 - Senior Manager,

  Labour Relations, Montreal

Yves Langis                               - Manager, S&C, Montreal

John Greene                             - Witness



Sylvain Beauchamp             - Attorney

Luc Couture                              - International Union representative

Martin Dagneault                    - Grievor

Luc Pépin                                               - Witness

Steven Hethrington               - Witness

Daniel Marquis                         - Witness

Siléonce Sime                          - Witness

François Poirier                      - Witness


Heard in Montreal, Quebec, on September 8, 2014.




The grievance is in relation to a dismissal.  The Company is claiming that the Grievor, Martin Dagneault, knowingly defrauded the Company by claiming, over a two-year period from January 25, 2010, to January 18, 2012, mileage expenses and all inclusive allowances to which he was not entitled, in an amount exceeding $34,000.


            The relevant facts of the grievance are, for the most part, not under dispute.  Mr. Dagneault was hired on May 13, 1985, and had 28 years and 7 months of service at the time of his dismissal. At the time, he held the position of S&C Lead Hand Mechanic on the construction teams for the Signals and Communications (S&C) department.  He had not been subject to any disciplinary action during his career, prior to the events in question.


            During the two-year period under investigation, the Grievor lived in St-Colomban, Quebec, in the St-Jérôme area.  In January 2010, he received a permanent position as S&C Mechanic with no headquarters.  As of January 25, 2010, he was assigned to the team of Luc Pépin, S&C Coordinator, and was to report to work at the Rivière-des-Prairies Yard at 11455 26th Avenue, Montreal.  From that point on, he began claiming expenses for weekend travel as well as the all inclusive allowances stipulated in Appendix T of the collective agreement. In principle, these expenses are payable to an employee who must travel over 64 kilometres (40 miles) in one direction between his place of residence and his work location. 


            It seems that in October 2013, the CN Police received an anonymous tip accusing the Grievor of having wrongfully claimed travel expenses given the actual distance between his residence and his work location.  After investigating, the Company concluded that the distance between the Grievor’s residence and his work location was only 36 miles, and that he was therefore not entitled to the travel expenses he had been claiming and receiving for two years.  Following the disciplinary investigation, the Company dismissed Mr. Dagneault for what it qualifies as: “Having fraudulently claimed and accepted payments for mileage and all inclusive allowances to which you were not entitled, for the period of January 25, 2010, to January 18, 2012.”


            This grievance arises from the application of the provisions of Appendix T of the collective agreement, which stipulates the following regarding the payment of the all inclusive allowance:


“It is understood that the assistance provided for under this Memorandum of Agreement is limited to those employees required to be absent from their headquarters or boarding cars; or for employees without a headquarters, from their place of residence, to work at a location which is more than 40 highway miles in one direction (more than 80 miles return) from their headquarters or boarding cars; or for employees without a headquarters, from their place of residence, by the most direct route.” 



            Based on several points, the Union claims that there was no need whatsoever to discipline Mr. Dagneault.  The Union’s statement on the events, submitted to the Arbitrator, outlines its objections, as follows:


Union’s statement on the events


The Brotherhood considers Mr. Dagneault’s dismissal to be illegal for numerous reasons.


First, the facts show that Mr. Dagneault acted transparently, did nothing wrong, and did not deserve discipline.  Second, the evidence shows absolutely no intention by Mr. Dagneault to commit fraud.  Third, the Brotherhood considers the discipline to be void ab initio given the overall situation, including the fact that forty-seven (47) months elapsed between the first claim and the investigation’s notice to appear.  Fourth, the Brotherhood considers the discipline to be discriminatory and unfair, and that it should be cancelled for this reason alone.


Additionally, the Brotherhood considers immediate dismissal, in any event, to be clearly excessive given the circumstances.


The Brotherhood is demanding that Mr. Dagneault be reinstated to his duties and reimbursed for any loss of salary, advantages and benefits, including pension, without loss of seniority or other advantages.


The Company disagrees with the Brotherhood’s position and declines the grievance.




            First, the Union counsel claims that the actual distance of the direct route between the Grievor’s residence and work location complies with the regulation. According to him, this route is 69 km, which is more than 40 miles (62.4 km). This route follows major highways, including Autoroute 15 South from St-Colomban, and Autoroute 40 East, once on the Island of Montreal, to the Rivière-des-Prairies Yard.


            Moreover, counsel draws the Arbitrator’s attention to the longstanding nature of this practice.  He notes that since 1992, original date of Appendix T to the collective agreement, the Company has not required an employee to spend the night away from his place of residence in order to qualify for the all inclusive allowance.  He points out that according to common practice in Quebec, the all inclusive allowance for Item C was always paid provided the employee had to travel 40 miles or more along the most direct route between his home and his work location.


            Counsel also cites the employer’s unsuccessful attempt to introduce a change in practice. It appears that in 2008, Regional Manager Terry O’Shell issued a notice regarding the application of Appendix T, which stated that the practice of paying the all inclusive allowance for travel between home and work location would end on March 7, 2008. Following strong objections by the Union, this planned action by the Company appears to have been abandoned, and the practice at the core of this grievance continued until January 2012. At that point, supervisor John Greene announced the termination of the practice at a safety meeting. There appears to be no argument against the fact that, from that point on, Mr. Dagneault, like other employees, ceased to claim the allowance for travel between his residence and his work location.


                        The Grievor’s evidence raises certain questions about the employer’s perspective on these events. According to the Grievor’s statement, it was Mr. Greene who encouraged him to apply for the position in Rivière-des-Prairies. He reports that the supervisor told him: “By applying for that position, I would be stationed at Rivière-des-Prairies and therefore eligible for the all inclusive allowance.” This version of the facts, which I accept as the truth, is confirmed by the statement by S&C Coordinator Luc Pépin, who says he was present when Mr. Greene suggested that Mr. Dagneault apply for the position in Rivière-des-Prairies (which he obtained), “...telling him that he would be able to claim full expenses.” Subsequently, the Grievor submitted claims openly and consistently up until January 2012. When asked, during the investigation, why he stopped making these claims, he answered: “Because John Greene...strongly recommended that we stop submitting all inclusive claims for employees who do not sleep at the hotel (who return home) as this would no longer be tolerated.” 


            The employer’s representative points out management’s efforts to inform employees that they were not entitled to claim expenses for travel of less than 40 miles between their residence and work location.  Among others, he cites a 2008 memo from Regional Manager Terry O’Shell that states:


Effective March 7, 2008, all employees returning to their headquarters or place of residence at the end of the work day are not entitled to and MUST NOT claim Appendix T Item C (All Inclusive Payments).”



            Regarding the distance between the Grievor’s residence in St-Colomban and his work location in Rivière-des-Prairies, the employer cites a Google Maps route of 58.9 km or 36 miles.  The parties appear to agree that a portion of this route includes Henri-Bourassa Boulevard, which features a number of intersections with traffic lights. For its part, the Union claims that the most direct route, also obtained from Google Maps, is instead Autoroute 40, which would mostly avoid the red lights. The route proposed by the Union is 42 miles. According to Google Maps, the route proposed by the employer would take 51 minutes, whereas that proposed by the Union would take 57 minutes.


            In light of these facts, it must be concluded that the route proposed by the employer, which is less than 40 miles, would be the most direct route according to the terms of Appendix T of the collective agreement. But, are we to conclude that the Grievor knowingly defrauded his employer? I do not believe so.  First, there never appears to have been any discussion between the Grievor and the Company regarding the most direct route between his residence and Rivière-des-Prairies.  Second, I find it difficult to conclude that the Grievor’s preference for taking Autoroute 40 in order to avoid the red lights on Henri-Bourassa Boulevard constitutes a conspiracy to knowingly defraud his employer.


In my opinion, the evidence shows an error in judgement by both the Grievor and the Company.  There is no contesting that Mr. Dagneault was under an obligation to take the most direct route, which he did not do. However, it was not unreasonable for him to take Autoroute 40 to avoid the red lights on Henri-Bourassa Boulevard. In addition, the evidence demonstrates a certain flexibility on management’s part with respect to travel expense claims.  Mr. Greene, whom I believe acted in good faith, indeed told the Grievor that he could claim his travel expenses when he started working at Rivière-des-Prairies. Moreover, when Mr. Greene announced in January 2012 that the practice of claiming travel expenses between place of residence and work location would no longer be tolerated, he indirectly admitted that he had allowed the practice to continue by the Grievor, as well as by other employees.  I accept the Union’s position, supported by several employees present at the arbitration hearing, that the practice of claiming travel expenses between home and work location had been permitted for the previous 20 years, at least up until Mr. Greene’s statement to the contrary in January 2012.


I am not convinced of the Union’s position regarding the supposed delay by the employer.  In my opinion, prior to receiving the anonymous tip about the Grievor’s actions, the Company had no reason to believe that there was anything unusual about Mr. Dagneault’s claims.  It was only upon receiving the tip that the employer had reason to more closely examine the claims, which are largely based on an honour system with employees.  Nor do I perceive any discrimination against the Grievor based on the actions of Luc Pépin, the employee responsible for submitting Mr. Dagneault’s claims to the employer, as the Union claims.  It is agreed that Mr. Pépin was not subject to any disciplinary measure.  However, there is nothing in the evidence that would appear to require Mr. Pépin to verify or investigate the legitimacy of claims submitted by employees.  Moreover, there is no evidence that he had any reason to suspect the legitimacy of the Grievor’s claims.  The fact that he was not disciplined is quite reasonable and cannot serve as the basis for an allegation of discrimination against the Grievor.


In my view, this is a case of shared fault, in which Mr. Dagneault and his supervisor, Mr. Greene, were equally responsible.  Under the circumstances, I cannot allow the employer’s argument that the Grievor acted fraudulently or in bad faith.  In my opinion, the evidence shows negligence or an error in judgement by Mr. Dagneault, attributable partially to Mr. Greene’s actions, and to the previous claims practice that he appears to have tolerated up until January 2012.


For these reasons, the grievance is upheld, in part. The Arbitrator orders that the Grievor be reinstated to his duties, with half compensation for loss of salary and benefits.  I will keep abreast of this file to resolve any possible conflicts concerning the execution of this ruling.


Signed in Ottawa, on September 15, 2014.


Michel G. Picher