SHP – 413




(the "Employer")



(The "Union")




SOLE ARBITRATOR: Jack M. Chapman, Q.C.

There appeared on behalf of the Company:

J. J. Worrall

J. L. Andronikos

G. S. Sichello

W. S. Burns



And on behalf of the Union:

Brian McDonagh

Glen Michalchuk

Jake Taillefer

D. J. Martens




A hearing in this matter was held in Winnipeg, Manitoba on May 9, 1996.



The Arbitration hearing in this matter took place in Winnipeg, Manitoba on May 9, 1996. Jack M. Chapman, Q.C. had been appointed to act as sole Arbitrator. Mr. J.J. Worrall represented the Employer. Mr. Brian McDonagh represented the Union and the Grievor. In addition to Mr. Worrall, the following individuals attended at the Arbitration hearing on behalf of the Employer: Mr. J.L. Andronikos, Mr. G.S. Sichello and Mr. W.S. Burns. In addition to Mr. McDonagh the following individuals appeared on behalf of the Union: Glen Michalchuk and Jake Taillefer. The Grievor was present at the hearing.

[page 2]

At the commencement of the hearings the parties confirmed the jurisdiction of the Arbitrator to hear the matter. It was agreed that witnesses would not be excluded and that there was no other individual who required notice of the hearing. However, Mr. McDonagh, on behalf of the Union advised that he had a preliminary objection to the Employer introducing any videotape of the surveillance which it had conducted with respect to the Grievor. Both Mr. McDonagh and Mr. Worrall had prepared briefs with respect to the admissibility of such evidence and each presented their briefs. At the conclusion of these submissions the Arbitrator ruled that the evidence would be seen, subject to the objection of the Union and the Grievor to its introduction, and that the issue of its admissibility would be dealt with in this award.

The Employer had two videotapes and had made a copy of them on one videotape which it provided to the Union. There was some discussion as to whether the tape given to the Union contained the entire transcription of the surveillance evidence. Ultimately it was agreed that the video given to the Union would be the only one viewed.

The parties, over a period of time have evolved a procedure in arbitration cases whereby they strive to obtain agreed statements of the Facts and the Issue. In this case they were unable to do so. Accordingly each filed separate statements. Each Statement of Fact was identical and read that the Grievor was dismissed for:

"deliberately misrepresenting yourself to the Company as being physically incapacitated and unable to perform either your normal duties or modified duties due to a work-related elbow injury, despite evidence that you had full and unrestricted use of your right arm and elbow during the time frame in which you were receiving Workers’ Compensation benefits; a deliberate, calculated and wilful attempt to mislead and defraud the Company, at Winnipeg, Manitoba."

[page 3]

However, as mentioned, the Statement of Issue were different. The Employer’s statement reads as follows:


The Union seeks the grievor’s reinstatement into Company service "without loss of seniority, with full redress for all lost wages, benefits and losses incurred as a result of his dismissal including but not limited to, interest on any money owing".

The Company contends that the Union’s claim for "losses incurred" exceeds their claim during their progression of Mr. Martens’ grievance and that this expansion of the claim at this stage is inappropriate.

The [company] further contends that Mr. Martens was dismissed from Company service following a fair and impartial investigation from which it was irrefutably concluded that he had indeed misrepresented the nature and extent of his physical incapacity and that he had irreparably severed the bond of trust which must exist in the employee/employer relationship.

The Company has declined the Union’s request.

The Union’s Statement of Issue reads as follows:


It is the position of the Union that: the investigation did not establish any wrong doing on the part of D.J. Martins and specifically did not establish the reasons cited in the Company Form 104 as cause for dismissal.

Therefore, Carman D.J. Martins should be reinstated forthwith without loss of seniority, with full redress for all lost wages, benefits and losses incurred as a result of his dismissal including, but not limited to, interest on any moneys owing.

The Company denies the Union’s contentions and claim.

On September 15, 1995, the Grievor was dismissed from his employment. The notice of dismissal was on the Employer’s Form 104 and reads as follows:

[page 4]

September 15,1995 05

Date Number

D J Martens 510008


Carman Winnipeg/Weston Car Department

Title/Occupation: Location:

Dear Sir:

Please be informed that you are DISMISSED for deliberately misrepresenting yourself to the Company as being physically incapacitated and unable to perform either your normal duties or modified duties due to a work related elbow injury, despite evidence that you had full and unrestricted use of your right arm and elbow during a time frame in which you were receiving Workers’ Compensation Benefits a deliberate calculated and wilful attempt to mislead and defraud the Company, at Winnipeg Manitoba.

(signed) G S Sichello

Facility Manager Wpg/Weston Car

A grievance was filed on behalf of the Grievor on October 3, 1995. The grievance itself is quite lengthy and sets out much of the background of the matter. In essence, the Union requested that the Grievor "be returned to service and made whole in all respects," and that the discipline be voided.

On October 24, 1995, the Employer responded to the grievance and denied it. The matter, obviously, proceeded to Arbitration.

The Grievor had been employed, at the time of his dismissal, for approximately 17-1/2 years. As stated by the Employer, "his discipline record while not unblemished stands at 10 demerit marks." The Employer made reference to the number of accident reports filed by the Grievor during his years with the Employer and that the Grievor had been absent from work other times for personal reasons or sickness. Objection was taken to the introduction of that evidence and the Arbitrator ruled that it would considered only for the purpose of view of determining the question of whether the Employer had reasonable grounds to conduct the surveillance. The Union stressed that the grounds for dismissal were clearly stated in Form 104 and could not be enlarged or expanded upon at this time. The Arbitrator agreed with that submission.

[page 5]

The facts relating to the Grievor’s injury are not substantially in dispute and accordingly they will only be recited in brief form. On Sunday, July 15 while at work, the Grievor sustained an injury to his back and right arm. He filed an accident report on the proper company document and returned to work and completed his shift. On the following day, July 16th, the Grievor returned to work. As his back and elbow were still sore he stayed in the lunchroom where he applied ice packs to his elbow and completed his shift. The Grievor visited his family physician the next day and was advised that he could not perform modified or regular duties. Notwithstanding that advice, and because he had not specifically been told to be absent from work, he reported for work and presented the physician’s report to his supervisor. He was assigned modified duties and performed those for the next 3 days. i.e., until July 19. July 20 and 21 were days off. On July 21 the Grievor visited his physician and obtained another report which stated that he could not perform his regular duties but was able to perform modified duties. It should be noted that the Employer has a policy that offers injured workers modified lighter duties. On July 22 the Grievor again returned to work and was assigned to modified duties. On July 23, after reporting to work, he subsequently complained to his supervisor that his arm was extremely sore and requested that he be taken into the hospital. The attending physician at Seven Oaks Hospital concluded that the Grievor could not work for 1 week and that he perform modified duties the following week. The Grievor returned to the Employer’s premises, turned in the latest physician’s report and then went home. He applied for Workers Compensation Benefits.

The Grievor apparently did not want to lose any salary and requested that he be given modified work assignment. When he returned to work on or about July 24 he was told by his supervisor, Mr. McKelvey, that as he was already on Workers’ Compensation he should remain on it. This is confirmed by Paragraph 22 of the Employer’s brief which reads:

"It is undisputed that Mr. McKelvey did in fact instruct Mr. Martens on July 24th, to remain on compensation after having been sent home on July 23rd even though he had inquired about light duties. This was done based on the latest Physician’s Report dated July 23rd, 1995 from Doctor Shymchyk which was available to Mr. McKelvey and which showed a diagnosis of contusion/tendonitis of the right elbow and recommended rest for one week and then resumption of light duties for a further week. Obviously, Mr. McKelvey was of the belief at that time that Mr. Martens would resume light duties the following week as stated in the report, and this report from Dr. Shymchyk also indicated that he could perform neither light nor regular duties for a week following July 23rd."

[page 6]

There is some question as to whether or not the Grievor specifically notified his physicians as to the possibility of his obtaining modified work assignments and the nature of such assignment. On July 28 the Grievor, as mentioned had been advised by his family physician not to do any type of work for one week and then to commence light duties on August 25. The Grievor did return to work on August 5 and continued on with modified work assignments until his dismissal.

It is perhaps worthwhile to note that no challenge was taken by either party to the validity of the medical reports. On July 17 the Grievor’s physician noted that the diagnosis was "strain of the right elbow and lower back." That medical report said that the Grievor should not perform either regular duties or modified duties. On July 21 his physician said the diagnosis was continued as a strain to the right elbow and midback and the Grievor was not permitted to perform regular duties but was advised to perform modified duties. On the medical report of July 23 the diagnosis was contusion/tendonitis right elbow and the physician recommended rest for one week then resumption of light duties for a further week. It stated that the Grievor was not capable of either regular duties or modified duties as at the date of the report. On July 28 the diagnosis was "contusion and strain of the right elbow. He should not work completely for one week and then perhaps could try light duties on August 5." The report specifically stated that the Grievor could not perform either regular duties or modified duties for the first week.

It may suffice to say that the Employer, in view of the Grievor’s previous accident record and absenteeism record was "concerned" with the legitimacy of the seriousness of the Grievor’s injuries. It then decided to have the Grievor placed under surveillance and hired a private investigator for that purpose. The surveillance was done on or about July 26th and 27th.

The videotape was shown and it clearly discloses that the Grievor was able to carry on certain normal activities with his right arm and hand. A partial list of the items the videotape shows is that the Grievor was able to drive, was able to comb his hair, was able to place his right arm over the rear of the front automobile seat, could open the trunk, carry what appeared to be bags of groceries and, on one occasion, it shows him kneeling on the ground apparently supporting himself on his right hand.

The essence of the Employer’s case is set forth in four (4) allegations in its brief. These read as follows:

1. The videotape surveillance clearly and irrefutably disclosed that Mr. Martens had full and unrestricted use of his right arm during the period of surveillance.

2. The videotape evidence conflicts with statements made to the Claim Agent with respect as to the level of pain and discomfort Mr. Martens was actually suffering as well as the Mr. Martens’ demeanour on the date the statement was given namely August 4, 1995.

3. The Workers Compensation Board on viewing the surveillance tape came to the opinion that Mr. Martens demonstrated an ability to perform the modified duties that had been offered to him and immediately finalized his claim. An appeal of this decision has never been initiated by Mr. Martens.

4. The grievor was not candid with his personal physician with respect to what type of modified duties were available to him from the time of the initial injury examination up to the time of his return to duty on modified duties on August 5, 1995 by his own admission in response to Question Nos. 20, 29, 60 and 61.

[page 8]

The essence of the Union’s position is shown on Pages 10, 11 and 12 of its brief as follows:

41) If the Arbitrator decides to allow the video surveillance tape to be introduced as evidence in this matter, the Union reserves the right to point out a number of inconsistencies and flaws throughout the surveillance tape itself and the period of surveillance.

42) The Union points out that there is nothing on the surveillance tape which indicates whether Jim Martens arm was sore even though he can be seen performing simple tasks that are more second nature than anything else. Jim Martens is not seen performing any strenuous work what so ever.

43) In any event, the union takes the position that this case does not turn on what is or is not on the surveillance tape, or whether Jim martens had or didn’t have adequate use of his right arm to perform light duties. This case turns on the fact that the Company is responsible for Jim Martens claim for Compensation Benefits because of its refusal to allow him to work the light duties he when requested same.

44) The Company has claimed in its dismissal of Jim Martens that he "Deliberately" misrepresented himself to the Company. We find no evidence of this in any of the evidence produced by the Company in their investigation of this matter.

45) The Company further accuses Jim Martens of "a deliberate, calculated and wilful attempt to mislead and defraud the Company, …" There is no evidence of this in any of the evidence produced by the Company’s investigation that would suggest, in the slightest, that this was the intent of Jim Martens.

47) The Union submits that there is clear unrefuted evidence that Jim Martens suffered an accident on July 15, 1995 for which he filed a Company accident report (Form 1409).

[page 9]

48) The Union further submits that there is clear unrefuted evidence that between the two Doctors involved 5 separate reports were filed (Exhibits 6, 7, 8, 9 and 10) which substantiated Jim Martens injuries and made recommendations based on their professional opinions with respect to same.

The Employer referred to the following arbitral precedents:

1. Canadian Railway Office of Arbitration Case No. 2184, Canadian Pacific Limited v. United Transportation Union - (Grievance of R. Hargreaves)

2. Re Steels Industrial Products and Teamsters Union, Local 213 24 L.A.C. (4th) 259

3. Canadian Railway Office of Arbitration Case No. 2302, Canadian Pacific Express and Transport and Transportation Communication Union (Grievance of Victor Godler)

4. Canadian Railway Office of Arbitration Case No. 2707, Canadian Pacific Limited and Brotherhood of Maintenance Of Way Employees (Grievance of Chahal)

The Union referred to the following arbitral precedents:

1. Doman Forest Products Ltd., New Westminster Division and International Woodworkers, Local 1-357 13 L.A.C. (4th) 275

2. Independent Canadian Steelworkers Union and Atlas Specialty Steels - (Grievance of Stratako - unreported -1989)

3. E.B. Eddy Forest Products Ltd. v. Canadian Paperworkers Union, Local 74 (Grievance of P. Rodgers - unreported -1989)

4. Mill and Timber Products Ltd. and International Woodworkers of America, Local I-357 (Grievance of Dhesi - unreported -1990)

5. Canadian National Railway Company and Canadian Auto Workers Union, Local 100 (Grievance of Rowe - unreported -1992)

[page 10]

It must also be noted that the Employer, in accordance with its usual and proper procedures, carried out a very comprehensive investigation of this matter including an exhaustive review of the matter with the Grievor. I do not propose to recite all of that evidence as it is set out in the briefs of each of the parties. The only area of evidence which might be in dispute is whether the Grievor indicated to his various physicians whether or not modified work assignments were available to him and the nature of that modified work. However, I note that each of the doctors must have known about the availability of modified work as reference is made to that in the medical forms. However, it is true that they might not have known the nature of the work that constitutes modified duties.

I note comments of the Employer in Paragraph 23 of its brief that:

"Had he clarified with Dr. Shymchyk the types of modified duties available to him during his examination on July 23, 1995, the whole question of whether or not the doctor would have authorized light duties would have been properly dealt with in the physician’s report and not left up to either Mr. Martens or the Company to determine their applicability."

I will deal firstly with the admissibility of the surveillance evidence. I do not propose to write a treatise on that subject. There have been a number of decided cases and I have reviewed all of those cited by both Mr. Worrall and Mr. McDonagh. I note that in considering both the Doman Forest Products Ltd. and the Steels cases a number of Arbitrators in other jurisdictions have stated that those cases must be reviewed in light of the Privacy Act of British Columbia. I also note the comments of Arbitrator Vickers in the Doman Forest Products Ltd. case with respect to the Charter of Rights. I am a great respecter of the rights of privacy of an individual however the Employer has certain rights with respect to its employees. Whether or not the allegations of the Employer are proven in this case, they are serious as the Employer was of the view that the Grievor had "deliberately misrepresented the facts and participated in a deliberate, calculated and wilful attempt to mislead and defraud the company." These are serious allegations and must be proven.

[page 11]

An excellent summary of the jurisprudence is found in a decision of Arbitrator Picher in Canadian Railway Office of Arbitration Case No. 2707 involving the Canadian Pacific Limited and Brotherhood of Maintenance Subway Employees respecting the grievance of Mr. Chahal. I do not propose to quote from that decision at length but I refer the parties to the comments of the Arbitrator found at Pages 8 to 17 inclusive. I only propose to quote very briefly from Pages 16 and 17 with respect to the conclusions reached by that Arbitrator. I note the following:

The employment relationship is generally based on the payment of money by the employer to the employee for good consideration, subject to certain well-established conditions. Part of the bargain in many contemporary employment relationships involves the payment by the employer or its insurance carrier of sickness benefits or other forms of insurance or indemnities, short term or long term, when an employee is incapacitated by illness or injury. An employer obviously has a legitimate interest in preventing abuse of that system of employee protection by those who would advance fraudulent claims.

That interest must be fairly balanced with what is becoming recognized as the employee’s interest in a respect for his or her personal privacy. The employer’s interest does not extend to justifying speculative spying on an employee whom the employer has no reason to suspect will be dishonest. As a general rule, it does not justify resort to random videotape surveillance in the form of an electronic web, cast like a net, to see what it might catch. Surveillance is an extraordinary step which can only be resorted to where there is, beforehand, reasonable and probable cause to justify it. What constitutes such cause is a matter to be determined on the facts of each case. As well, the method and extent of such surveillance must be appropriate to the employer’s purpose, and not excessive or unduly intrusive. A legitimate interest in an employee’s physical condition might not, for example, justify the covert examination of is or her bank records or other personal information.

In my view, in a case such as this, in considering the admissibility of videotape evidence acquired in the course of surreptitious surveillance, the appropriate test involves a two-part analysis.

1. Was it reasonable, in all of the circumstances, to undertake surveillance of the employee’s off duty activity?

2. Was the surveillance conducted in a reasonable way, which is not unduly intrusive and which corresponds fairly with acquiring information pertinent to the employer’s legitimate interest?

This approach, diligently applied, should protect reasonably against the possible abuse of the right of an employer to resort to surveillance of its employees, in a manner consistent with the obligation which boards of arbitration have to safeguard the integrity of their own procedures, and the credibility of the arbitration process generally.

(Emphasis added)

[page 12]

Without in any way reviewing the specifics, it is clear that the Grievor had previously been absent from work on a number of occasions. It is also clear that the Employer has a direct financial interest in the decisions of the Workers Compensation Board. Accordingly I am applying the same test as Arbitrator Picher and am satisfied that each of questions 1 and 2 above should be answered in the affirmative.

Having concluded that the evidence was admissible, I must now consider what it revealed. In my view the tape does not disclose that the Grievor was in any way malingering or faking his injuries. The medical evidence is unchallenged. I parenthetically note that the Employer could have to sent the Grievor for an independent medical examination. It did not do so. As mentioned, the surveillance tape showed that the Grievor, on or about July 26 and 27 was engaged in normal activities that any one might do on a day off from work. None of those activities, in any way whatsoever, in my view establish that the Grievor was physically able to return to work. It must be remembered that the injury was sustained by him on July 15. The evidence is undisputed that for a number of days subsequent to the injury the Grievor did do modified duties. He was not completely disabled and did perform modified duties subsequent to the date of his injury.

On July 24, approximately nine (9) days after the injury he attempted to continue performing modified duties but a representative of the Employer, Mr. McKelvey, did in fact instruct Mr. Martens to remain on compensation.

I have reviewed all of the cases cited and a number of them relate to such activity as injured employees performing yard work, construction work, carrying large or heavy items, etc. Those are not representative of the activities of the Grievor. As stated by Arbitrator Picher in the Canadian National Railway Company and Canadian Auto Workers Union, Local 100 case relating to the grievance of Mr. Rowe "it is not unreasonable to expect that he might have been capable of some light degree of physical activity at the time he was observed."

[page 13]

Arbitrator Picher referred to the decision in Canadian Railway Office Arbitration Case No. 2414 wherein he quoted "the Arbitrator appreciates that there should be some latitude for a degree of light activity in the latter stages of convalescent from an injury."

I am satisfied that the activities carried on by the Grievor as shown in the surveillance tape fall within that classification of light activities. Arbitrator McKee in the Mill and Timber Products Limited case made reference to what he describes as a "recovery curve" . At Page 20 I note the following:

An employee who has suffered injuries such that he cannot perform work will , of course, be on a recovery curve; he will not just on the last day of his sick leave recover all his necessary capabilities and stamina. He may have regained his mobility and ability some time before his return to work but the doctor may have considered that, while recovered in respect of movement, he is not recovered in respect of stamina and cannot yet tolerate to work an eight-hour shift.

This is an area, in my view, that clearly requires a medical opinion. No evidence was led to show that the Company had received such an opinion before charging the Grievor with the abuse of sick leave in this incident.

It is undisputed that the onus is on the Employer to prove the allegations made in the letter of dismissal and the Employer cannot change the grounds. Admittedly, an Employer must only prove those allegations to a reasonable standard and not to the criminal degree of proof i.e. beyond a reasonable doubt. However, the allegations as stated in Form 104 are serious and, if established, would undermine completely the basic relationship of trust which is paramount to the Employer/Employee relationship.

I am not satisfied from the evidence that the Employer has established or shown any cogent proof of the allegations it has made and/or the reasons it chose for dismissing the Grievor. The primary evidence adduced by the Employer, i.e. the surveillance tape, shows that while the Grievor was absent from work he engaged in the normal activities previously mentioned, i.e., driving a car, combing his hair etc. I do not find that evidence, in the circumstances of this case, to be a significant factor in support of the actions of the Employer.

[page 14]

There is no evidence, in my opinion, which shows that the Grievor engaged in any activity which would support the Employer’s conclusion. The simple fact that he could carry on some simple non-working activities, does not, especially in view of the undisputed medical evidence, prove that he would be able to carry on even the modified duties of his position during his very brief absence from performing any work i.e. approximately one week.

I have also noted the comments of Arbitrator Picher in the Canadian Pacific Express and Transportation Communication Union involving the grievance of Victor Godler. In that case, he concluded that fraud had not been established, and the Grievor should be reinstated in his employment. However, as that Grievor had been less than candid with his Employer there should be no compensation. The evidence in that case indicated that the Grievor, during the earlier days of his leave of absence, was able to perform many kinds of substantial work and the Arbitrator concluded that the Grievor’s behaviour was a departure from the expected obligation of candour to his Employer. However that case is distinguishable from the instant case in that, as mentioned, the Grievor did seek to have modified work duties assigned and was refused.

Additionally, as stated, Mr. Martens, at the time of the surveillance was only carrying on normal activities. An examination of the transcript of his examination by the Employer shows that he was only using his hand. He had never claimed any injury to his hand and he was not using his arm or his elbow to any significant degree. It is, obviously, difficult to separate a hand from an arm or an elbow. However such activities as opening a door or a trunk hood with his hand, or driving an automobile, do not establish that his arm and elbow were not still sore. The videotape only shows him performing normal day-to-day activities and not any which, in any reasonable manner, could be construed as representative of the duties of the workplace.

[page 15]

I have also noted the comments the Grievor allegedly made to Mr. Andronikos at the time of his injury on August 4 to the effect that he "had to carry his arm across his belt to relieve the pressure." Whether or not that is correct, it is essential to note that on August 5 the Grievor did return to work on modified duties. In view of this I do not conclude a fraudulent intent on the part of the Grievor. His arm may have been sore and, possibly, there may have been some exaggeration. However the fact remains, as stated, that he did return to work on August 5, the following day.

After reviewing all of the evidence and the authorities cited I am satisfied that the Employer has failed to establish the reasons stated in the dismissal. Accordingly I direct that the Grievor be reinstated in his employment as and from the date of the termination. He shall not suffer any loss of seniority or other benefits under the Collective Agreement. The parties have agreed that the case would be "split" as to compensation and other similar matters. Accordingly, if the parties cannot agree upon the terms of the reinstatement or the compensation due the Grievor, then the matter is to be referred back to me for my decision. I retain jurisdiction for that purpose.

I wish to thank Mr. Worrall and Mr. McDonagh for their very complete and thorough presentation of the issues in this case.

In accordance with the terms of the Collective Agreement each party will be responsible for one-half (1/2) of my costs.

DATED at Winnipeg, Manitoba this 23rd day of May, 1996.

(signed) JACK M. CHAPMAN, Q.C.