SHP 372











Laurent F. Caron, Labour relations officer

Scott A. MacDouaald, Manager Labour Relations


Mr. Frank Klamph, System General Chairman I.B.E.W.

S. Ekisian, General Chairman, No. 33.

A hearing in this matter was held in Montreal on November 30, 1992.

The grievance in this case which bears date February 25, 1992 is

directed against the discharge of the Grievor, Mr. Alain Maheu,

effective February 6, 1992. At the time, Mr. Maheu had been out of

service since August 10, 1990, due to occupational asthma, a medical

condition synonymous with permanent physical disability given that

the Company was not in a position to offer him a contaminant free

environment which his condition demanded. The discharge was the

Company's response when it learned that the Grievor had allegedly

received remuneration from employment which he failed to report to La

Commission de la Sante et Securite du Travail from whom he was

receiving Company sponsored benefits at the time.

The Joint Statement of Issue furnished by the parties on the

grievance is to the following effect:


in a dispute between





Appeal of discharge of Electrician Alain Maheu of AMF, effective

February 6, 1992.


On August 10, 1990, Mr. Maheu left his position. at AMF following

the development of a permanent physical disability.

On August 25, 1990, the employee began receiving benefits from

the Commission de la Sante et Securite au travail (CSST).

In December 1991, an investigation revealed that the employee was

receiving earnings from an outside company without declaring it to

the CSST.

In light of these facts, an investigation was held on January 23,

1992, after which Mr. |Maheu was discharged for:

'Pour avoir omis de rapporter ses gains d'un emploi a

l'exterieur du Canadien National et ce, en relation avec la

loi de la Commission de la Sante et Securite au travail.'

The Brotherhood contends that the employee was wrongfully discharged

and requests that he be reinstated with full compensation.

The Company denies the Brotherhood's contention and declines its



(s) S.A. MacDougall (s) Frank Klamph

For: Assistant Vice-President System General Chairman

Labour Relations International Brotherhood of

Electrical Workers"

The facts, as the Arbitrator has been able to determine them upon the

evidence, are as follows. The Grievor was first hired by the Company

on July 26, 1979. On August 10, 1990, as stated above, he was

obliged to withdraw his services due to a medical condition and has

remained out of service since that time. His medical condition

qualifies as a permanent physical disability since the Company was

not in a position to provide for him a contaminant free environment

compatible with his medical condition.

The Grievor was eligible for and did receive benefits from La

Commission de la Sante et Securite du Travail as and from August 25,

1990. As an employee labouring under an occupational incapacity

receiving such benefits, it would have been incumbent upon the

Grievor to report any remunerative employment which he might secure

while in a state of incapacity. Any such remuneration would then be

taken into account for purposes of determining the extent of his

entitlement, if any. It should be said that the Company, under its

arrangement with La Commission de la Sante et Securite du Travail

bears the full amount of employee benefits in addition to an 18.8%

administration charge.

In early September 1991, information came to the Company's attention

that the Grievor was working for remuneration for an outside

employer. It immediately initiated an investigation. The

investigation revealed that the Grievor had in fact been working for

a sub-contractor of Canada Post Corporation since the month of

February 1991 and had received approximately 3 700,00$ over the

period. The work consisted of the sorting and delivering of mail.

Neither the employment nor remuneration received was reported as

required under the applicable statute.

Following conclusion of the Company's investigation the Grievor was

convoked to a meeting in accordance with the Collective Agreement and

confronted with the allegations which the Company had investigated.

When the Company was not satisfied with the Grievor's explanations it

proceeded on February 6, 1992, to discharge him for "avoir omis de

rapporter ses gains d'un emploi a l'exterieur du Canadien National et

ce, en relation avec la Loi de la Commission de Sante et Securite au


Both during the course of the Company's inquiry and at the

arbitration hearing, the Grievor insisted that his activities over

the period February 1991 to September 1991 did not qualify as

remunerative employment and as such could be of no concern to the

Company. He stated that rather than remain idle he preferred to

offer his services to a friend for what was effectively no

remuneration. He conceded that he received 20,00$ per day from the

"friend" for gas and wear on the vehicle he was using. He describes

what he was doing as a "pastime' while awaiting his return to work

with the Company. He acknowledged that his activity involved driving

some 60 to 100 |kilometres per day, over a period of some 6 to 8

hours. He did not deny that over a period of some 5 five weeks,

during which he served as a replacement for his "friend', that he was

receiving 45,00$ per day.

In effect therefore, the Grievor is claiming that his activities

over the period February 1991 to September 1991, do not amount to

remunerative employment. All that he received was reimbursement for

expenses which he incurred occasioned by the use of the vehicle

employed while assisting a friend in order to keep busy.

The fact remains however that the Grievor was performing work six to

eight hours per day, Monday through Friday, over a prolonged period,

even to the point of serving as a replacement of a person gainfully

employed during the course of the latter's vacation. Throughout the

entire period he was receiving benefits from La Commission de la

Sante et Securite du Travail. Sums were paid him which were not

officially recorded and as such, not susceptible of control or

verification. In the final analysis the Arbitrator has before him

the portrait of an individual working virtually full- time without

any reliable basis for determining the remuneration being received

other than his own assertions and those of an employer who it would

seem, has chosen to maintain no official record of the employment or

the amount paid.

Where an individual performs work on a regular basis where that work

under normal circumstances, would qualify as remunerative employment,

the individual, where challenged, must bear the burden of

establishing that the work performed was gratuitous or charitable and

without remuneration. Otherwise, an individual receiving benefits

under circumstances such as the ones which present themselves in this

case, could assume unrecorded full-time employment with impunity by

claiming that no remuneration was received. In effect, regulatory

bodies such as La Commission de la Sante et de la Securite du Travail

would find themselves without means of enforcing laws and regulations

designed to ensure that benefits are paid only to those entitled to


In the present instance, the Grievor was working on a virtually

full-time basis for which he received moneys. In the aggregate, the

amounts received were not trivial. Under normal circumstances, what

the Grievor was doing would have qualified as remunerative employment

and on the evidence, the Arbitrator is not in a position to say that

it was not. On the whole, the finding of the Arbitrator must be that

the Grievor had accepted and assumed remunerative employment which he

was obliged to report but which he did not report to the regulatory

authority from whom he was receiving benefits which may well have

been affected by disclosures that the Grievor was obliged to make.

It is not disputed that the Company bears the full onus of all

benefits paid by La Commission de la Sante et Securite du Travail so

that the Grievor's actions would have impacted adversely upon the

Company's legitimate interests. In effect the Grievor, in failing to

report his employment and the income derived therefrom, caused the

Company to pay sums greater than what it otherwise would have been

obliged to pay.

The situation which presents itself to the Arbitrator is not without

precedent. In the case of Canadian Pacific Ltd., and Canadian

Division, Brotherhood Railway Carmen, decision of June 29, 1987,

Arbitrator Weatherhill maintained the discharge of an employee, who

failed to disclose outside earnings while receiving job security

benefits. In concluding as he did the Arbitrator states:

"Having regard to all of the evidence before me in this

matter, it is my conclusion that the grievor was familiar

with the Job security benefit plan, and that he understood

the import of the questions put to him in respect of outside

work. It was only when he knew that the company had found

out that he had indeed had outside work that he began to

suggest that he had not understood the questions relating

to it. What the grievor puts forward as his understanding of

the questions, however, is to naive (the grievor being

experienced with the plan), too contradictory and too self-

serving to be credible. At the investigation, the questions

were repeated and clarified, and I do not believe were

misunderstood by the grievor.

On the evidence, then, it is my conclusion that the grievor

did fraudulently obtain benefits to which he was not

entitled. While there has, it appears, been restitution,

that does not affect the offence itself. Discharge is, in

General, the penalty appropriate in such cases, and the

material in the instant case does not establish the sort of

circumstances which might justify some exception.

There was, I find, just cause for the discharge of the

grievor, and the grievance is accordingly dismissed."

In another decision of I. B. L. Industries Limited and the National

Union, United Automobile, Aerospace and Agricultural Implement

Workers of Canada, decision of February 23, 1989, E.E. Palmer, Q.C.,

Arbitrator, the Arbitrator maintained the discharge of an employee

receiving workmen's compensation benefits while working in his own

business and earning sizeable amounts of money in relation to his

work. Again the comments of the Arbitrator are instructive.

"On this latter point, the Union takes the view that the

evidence does not disclose any fraud against the Company.

With this I disagree. Clearly the evidence is that the

grievor did not disclose facts relevant to his monetary

claims against not only the Worker' Compensation Board, but

also the Company. Indeed, he went further and misled both as

to the true state of affairs. As a result of these

activities both were unable to determine the true nature of

the grievor's claim. This, in my opinion, is an extremely

serious offense. The administration of these systems of

providing assistance to injured employees is of great

importance to the Union and employees, as well as the

Company. Truthfulness on the part of applicants for these

claims is a central component in their efficacy. Mr.

Singh's activities strike directly at this point. Thus,

while I agree with the Union that the acts of the grievor may

not violate 8 directly clauses like Article 19.06, these

clauses implicitly show how this system works and, it must be

remembered, one of the rights of the Company established

under this collective agreement (see Article 7) is to be able

to discipline employees for just cause. In this case,

manifestly such cause exists."

The issue in this case is not whether the Grievor is prevented from

working for the Company by reason of a medical condition. It

concerns rather a matter of the Grievor's failure to report income

earned where he was obliged to do so and in the process securing for

himself benefits greater than those to which he would otherwise have

been entitled. The corollary of such failure is that the Company,

for its part, was obliged to pay a sum greater than the one which

would otherwise have been the case. Against such a background the

question which presents itself is whether the Company's response to

the Grievor's actions was appropriate.

Of primary concern in cases such as these is the integrity of a

system designed to help those in need. Inherent in such a system is

the possibility for abuse. Arbitrators who have been called upon to

address abuses have been inclined to respond most harshly. Such an

approach is quite understandable since the workings of the system

itself rely to a very considerable extent upon honesty and trust.

When weighed against the Grievor's entitlements as an employee unable

to work by reason of an occupational incapacity, remuneration which

the Grievor received over the period February to September 1991,

whatever that remuneration may have been would undoubtedly be

insignificant. But the Grievor's failure to report that income,

however insignificant by comparison, cannot be characterized as

insignificant at all because what he did strikes at the very heart of

the system from which he was benefiting. The system leaves no room

for abuse and that is why discharge has been considered by

arbitrators to be the appropriate response where abuse has been

found. There may, in any given case, to be sure, be present

mitigating circumstances that might militate against discharge but,

this notwithstanding, discharge will be the general rule.

For these reasons the Arbitrator cannot take issue with the Company's

desire to deliver the clear and unequivocal message which it did so

that there would exist no basis for intervention. The grievance is

accordingly dismissed.

Montreal, December 8, 1992