WORKER FIRED ON TRUMPED UP GROUNDS REINSTATED WITH DAMAGES FOR INTENTIONAL INFLICTION OF MENTAL DISTRESS

A British Columbia arbitrator has ordered the Village of Harrison Hotsprings to reinstate a worker who was fired based on trumped up grounds, and to pay him four weeks' salary in damages for intentional infliction of mental distress. In the arbitrator's view, the Village's ham-handed attempt to "get rid of" the grievor amounted to intentional infliction of mental distress: it was "flagrant and extreme," it was "reasonably foreseeable that the conduct would cause distress or suffering," and it caused the grievor "actual harm." Details below.

FAILURE TO TAKE THE STAND RUINS DISMISSED EMPLOYEE'S CHANCES OF REINSTATEMENT

An Ontario arbitrator has upheld the dismissal of a manufacturing plant employee who was fired after video surveillance evidence showed him fixing up his house while he was off work on sick leave. In the absence of any objection by the union to the admissibility of the video surveillance evidence, the arbitrator ruled, the employer had established a prima facie case for termination. The grievor's failure to testify constituted further evidence of his guilt, the arbitrator held, because "the conclusion can only be that the grievor's testimony would have been unfavourable both to him and the union's position in this case." Furthermore, he declared, "the grievor's failure to testify truncates any detailed consideration of mitigating factors." Details below.

The Facts:

Mere weeks after he was reinstated at arbitration, a municipal works employee, who was also the local union bargaining unit chair was fired again for allegedly threatening his supervisor.

The grievor had been discharged on February 14, 2006 for insubordination with respect to his conduct during a meeting with the Village of Harrison Hot Springs' Chief Administrative Officer (CAO). After being presented with a letter outlining a number of concerns about his performance including "poor attitude" and "a lack of respect for authority that borders on the [in]subordinate," the grievor was suspended, then dismissed, for repeatedly interrupting the CAO as he attempted to explain the letter, in spite of being warned to wait until the end of the meeting.

In an April 21, 2006 award, Arbitrator Ronald Keras ruled that the discharge was void ab initio. Because the grievor was "acting well within the scope of a union representative," Keras ruled, the employer was not entitled to discipline him for insubordination with respect to his conduct during the February 14 meeting. However, Keras rejected the grievor's demand for damages for intentional infliction of emotional distress, as he was "unable to conclude that the employer intended or caused 'actual harm.'" Thus, Keras held, the grievor was unable to establish the elements of the tort, i.e., civil wrong, of intentional infliction of mental distress as set out in I.W.A. – Canada, Local 1-7 v. CVC Services (1998), 65 L.A.C. (4th) 54 (Lanyon). For details of Keras' decision, see Lancaster's Municipal Employment Law News, May/June 2006.

Two days after his return to work, the grievor received a letter, dated April 27, 2006, detailing certain "performance issues," including failing to check in while working alone and taking too long to perform certain duties. In response, the grievor filed a grievance accusing the Village of "verbal/written abuse" and harassment. At a May 15, 2006 grievance meeting, the CAO took the position that the best solution to the grievor's "persistent dissatisfaction with his supervisor" would be for him "to seek employment elsewhere," and he offered the grievor six weeks' wages to go away.

The next day, on May 16, the grievor allegedly refused to comply with a request to meet with the CAO. That afternoon, the CAO claimed, another worker told him that the grievor said he would shoot the CAO if he had a gun. The CAO told the grievor to leave the premises as he was no longer an employee. When the grievor got home, an RCMP officer was waiting for him. Ultimately, no criminal charges were filed.

The union filed a further grievance challenging the termination of the grievor's employment, and demanding damages for intentional infliction of emotional distress.
   
The Arguments:

The Village maintained that the "firearms threat" gave it just cause to terminate the grievor's employment, and that the grievor was not entitled to damages for intentional infliction of mental suffering according to the three-part test set out in Rahemtulla v. Vanfed Credit Union, [1984] B.C.J. No. 2790 (B.C.S.C.) (QL), adopted in Communications, Energy & Paperworkers Union, Local 115-M v. Pacific Press (1998), 73 L.A.C. (4th) 35 (C. Bruce), which requires proof that: (1) the employer's conduct was "flagrant and extreme," (2) it was reasonably foreseeable that the conduct would cause mental distress on the employee's part, and (3) the employee suffered a "visible and provable illness" as a result. 

The union maintained that the employer had no cause to discipline the grievor at all, since the only evidence of the alleged threat was pure hearsay. By falsely asserting that it had cause to terminate the grievor's employment, the union submitted, the employer had intentionally inflicted mental distress. 

The Decision:

Arbitrator Ronald Keras upheld the grievance. He reinstated the grievor and ordered the Village to pay him four weeks' wages in damages for intentional infliction of mental distress based on its allegation of just cause to terminate where there was none.

Keras found that the employer did not have just cause to discipline the grievor. Since the grievor's alleged performance issues "did not warrant a letter on file," Keras ruled, "leaving the letter on the grievor's personnel file would treat him differently than other employees whose conduct ... was similar or the same." Accordingly, Keras ordered the employer to remove the April 27, 2006 letter from the grievor's personnel file. Furthermore, Keras found that the real reason the Village terminated the grievor's employment was because he grieved the April 27 letter: "Essentially the grievor was fired for filing a grievance."

Finally, Keras ruled that the employer failed to establish just cause to discipline the grievor on the basis of the alleged "firearms threat." Emphasizing that allegations of criminal misconduct must be proven by "clear and cogent" or "convincing" evidence, Keras adopted Arbitrator Don Munroe's statement, from United Transportation Union, Locals 1778 and 1923 v. B.C. Rail Ltd. (1984), 17 L.A.C. (3d) 402 (Munroe), that it would be inappropriate to "rely exclusively on hearsay evidence for the ascertainment of an essential and disputed fact ... in favour of the party on whom the burden of proof lies ... especially where, as here, the consequences on the other party would be so onerous — loss of employment." In the absence of corroborating evidence such as testimony from the employee who allegedly heard the threat, Keras concluded, "[t]he hearsay evidence alone cannot be relied upon to uphold dismissal." Since the employer could not prove that it had grounds to discipline the grievor at all, Keras concluded, "he is to be reinstated as soon as reasonably possible, made whole and this incident is to be expunged from all employment files."

Finally, Keras ruled that the Village's ham-handed attempt to "get rid of the grievor" amounted to intentional infliction of mental distress. In light of the fact that the employer "was aware of the arbitral standard with respect to cause and with respect to the jurisprudence concerning the intentional infliction of emotional harm," Keras ruled, its conduct in disciplining the grievor in a discriminatory manner, then dismissing him without just cause, was "flagrant and extreme," especially since everyone in the small community knew about the grievor's firing and the fact that the police were involved. Although he was "unable to conclude that the employer acted in a manner that was 'calculated to cause the grievor mental suffering'" within the meaning of Pacific Press, Keras found that the grievor's mental distress was a reasonably foreseeable consequence of the Village's "reckless" actions, and that its "cumulative conduct" amounted to "the tort of intentional infliction of emotional harm." In the result, Keras ordered the Village to pay the grievor damages equivalent to four weeks' salary.

Comment:

In ruling that the tort of intentional infliction of mental distress may be based on conduct that was merely "reckless," rather than "calculated to cause ... mental suffering," Keras relied on the British Columbia Supreme Court's often-cited decision in Rahemtulla v. Vanfed Credit Union, supra, which awarded a bank teller $5,000 in damages for intentional infliction of mental distress after she was dismissed based on a false allegation of theft. Rejecting the employer's argument that it never intended to cause the employee mental distress in that case, British Columbia Supreme Court Judge Beverley McLachlin (as she then was) wrote: "Accepting that [the employer's agent's] motive may not have been to inflict shock upon [the plaintiff], but rather to extort a confession and solve the mystery of the missing funds, the fact remains that at [the] very least he acted with a reckless disregard as to whether or not shock would ensue from his accusation.... It was clearly foreseeable that the accusations of theft which the defendant made against the plaintiff would cause her profound distress." Accordingly, she concluded, the plaintiff was entitled to damages for "mental distress in tort" (in contrast to damages for mental distress flowing from a contract breach: see Fidler v. Sun Life Assurance Co. of Canada, [2006] S.C.J. No. 30 (QL), reviewed in Lancaster's Pension & Benefit E-bulletin, Issue No. 44).
 
For further discussion of damages for intentional infliction of mental distress, see section 7.4.2 in Mitchnick & Etherington, Leading Cases on Labour Arbitration (Lancaster House, online edition).

Case Name: Canadian Union of Public Employees, Local 458 v. Village of Harrison Hot Springs
Jurisdiction: British Columbia
Proceeding: Grievance Arbitration
Arbitrator: Ronald Keras
Citation: [2006] B.C.C.A.A.A. No. 158 (QL)
Date: September 1, 2006
Full Text: http://www.lancasterhouse.com/decisions/2006/sep/Keras-HarrisonHotSprings.pdf

The Facts:

A press operator with ten years' service at a Brantford, Ontario manufacturing plant was fired in January 2005, after he was captured on videotape fixing up his house while he was off work on sick leave. 

Having missed some 135 weeks of work since 1999 with chronic back pain flowing from a non-work-related accident, the grievor returned to work following surgery in June 2004. However, on October 14, 2004, the grievor went back on sick leave when his pain flared up. In early December 2004, a supervisor at the plant informed management that the grievor was building an addition to his garage. The plant superintendent confirmed this from a view of the grievor's house, prompting the company to place the grievor under surveillance. Between December 16, 2004 and January 11, 2005, the grievor was caught on tape doing yard work, working on his car, shoveling dirt and snow, loading gravel and boxes, carrying lumber, and using a wheelbarrow and an axe – with no signs of weakness or pain. In contrast, at the company's December 18 Christmas party, the grievor hobbled around with a cane.

After viewing the video surveillance evidence, the company's doctor concluded that the grievor was more than capable of performing modified duties. In a January 17, 2005 interview to discuss a potential return to work, however, the grievor claimed that his condition had worsened and that he was depressed to the point of suicide. When the company informed the grievor that it intended to escalate the meeting to a disciplinary interview, he became irate and left the premises before his union representative arrived. The company terminated his employment that day for fraudulently claiming sick leave.

The United Steelworkers of America, Local 202G launched a grievance challenging the dismissal.
 
The Arguments:

The company maintained that it had ample cause to terminate the grievor's employment for sick leave fraud. Emphasizing that the union never objected to the admissibility of the video surveillance evidence, the employer argued that, in any event, it had reasonable grounds for initiating surveillance and the surveillance was conducted in a reasonable manner. Urging the arbitrator to draw an adverse inference from the grievor's failure to testify, the employer submitted that the grievor had clearly misrepresented the extent of his condition in order to get paid time off work. Finally, the employer contended that discharge was not an inordinately harsh response in light of the seriousness of the grievor's misconduct. 
 
Although the union did not object to the admissibility of the video surveillance evidence, it argued that the arbitrator ought to accord it no weight because the company's decision to place the grievor under surveillance in the first place was not based on reasonable grounds. Furthermore, the union contended, the tapes were edited to show a selection of events that favoured the company's position, and did not tell the whole story. Relying on the grievor's doctor's testimony, the union maintained that the grievor was capable of performing physical labour for short periods of time only, and had not misrepresented his disability. Accordingly, the union submitted, the company failed to establish on the basis of "clear and cogent" evidence that the grievor had fraudulently claimed sick leave benefits.

The Decision:

Arbitrator Victor Solomatenko denied the grievance, ruling that the employer had just cause to terminate the grievor's employment, and that the grievor's failure to testify foreclosed any consideration of mitigating factors that might justify the substitution of a lesser penalty.

Disposing of the union's attack on the video surveillance evidence, Solomatenko ruled that, "[s]ince the union did not challenge the admissibility of the company's videotape evidence from the outset, it has been admitted on the same footing as all the other evidence." Accordingly, "the weight to be granted to the videotape evidence, its relevance, its fullness and credibility will be determined in the same manner as any other evidence that is properly admitted." In short, Solomatenko declared: "Ultimately, videotape evidence arising out of surveillance is simply evidence, no more and no less." In any event, Solomatenko dismissed the union's argument that the surveillance failed the "reasonableness test," ruling that the company had good reasons to commission the surveillance, and that there was "no substance" to the union's allegation that the tapes were doctored.

On the merits, Solomatenko found "sufficient evidence to indicate that the grievor has deliberately sought to mislead or conceal the true state of his physical capabilities." The videotape "clearly identifies the grievor actively taking part in a number of activities," Solomatenko found, and further, "the nature of the various activities of shovelling, bending, twisting and pushing a wheelbarrow and the degree of effort exhibited by the grievor in each of those activities exceeds the requirements of his modified job." The medical evidence "does not assist the grievor," Solomatenko further ruled, because there was nothing to explain "why [the grievor] was unable to return to work at a time that he was able to carry on with the activities as observed by the investigator and as demonstrated in the videotape." In that regard, Solomatenko found that the grievor's failure to answer this "simple and basic question" was telling: "Ultimately, the grievor is the only one who could provide evidence in that regard and he did not testify." Solomatenko concluded that the employer had established just cause to discipline the grievor for fraudulently claiming benefits, stating: "There is no reasonable conclusion on the evidence other than that the grievor was misleading the company and claiming benefits at a time [when] he displayed full capability to perform the required duties of his modified job."

Solomatenko also found that the grievor's failure to testify constituted further evidence of his guilt. In this regard, he adopted Arbitrator Gorsky's statement, from United Automobile Workers, Local 1967 v. Douglas Aircraft Co. Ltd. (1976), 13 L.A.C. (2d) 410, that "where a party or a witness fails to give evidence, which could have been given by the party or witness and which might have elucidated the facts, then the tribunal is justified in drawing the inference that the evidence of the party or witness would have been unfavourable to the party in default." Applying this test, Solomatenko ruled that "the totality of the evidence adduced by the company in the instant case has established more than a prima facie [case] in its favour, as well as a secondary burden on the grievor to testify or call a witness in reply to that case." In light of the "strong prima facie case that the company had established against him," Solomatenko held, "the conclusion can only be that the grievor's testimony would have been unfavourable both to him and the union's position in this case." In the circumstances, he declared, "the only reasonable and logical conclusion that I must draw is to uphold the company's allegation that the grievor was fraudulently claiming benefits when he could have been at work."

Finally, Solomatenko ruled that discharge was an appropriate disciplinary response in light of the "arbitral jurisprudence upholding the principle that benefit fraud is a serious offence in the workplace," and that there were no mitigating circumstances that would justify the substitution of a lesser penalty. "To begin with," he mused, "the grievor's failure to testify truncates any detailed consideration of mitigating factors." Noting the 24-month "sunset" clause in the collective agreement, Solomatenko wrote: " On this issue, it can only be said that he has had no discipline in the past 24 months." Solomatenko concluded that "[t]he only factor before me in the grievor's favour is his length of service, which was subject to extended periods of absence during the past few years." Dismissing the grievance, Solomatenko wrote: "Given the seriousness of benefit fraud, the obvious discrepancy between the level of activity displayed by the grievor and his assertions to the contrary, and the refusal to provide any explanation for this conduct when he is the only one who can do so effectively, I can find no basis upon which to interfere with the company's assessment of penalty."

Comment:
 
This case demonstrates that an employee's failure to testify on his own behalf in a discharge case may buttress the employer's evidence establishing just cause for discharge, and undermine the union's case for the substitution of a lesser penalty based on mitigating circumstances. As the British Columbia Labour Relations Board held in United Food and Commercial Workers International Union, Local 1518 v. Tober Enterprises Ltd., [1991] 7 C.L.R.B.R. (2d) 148, an employee's silence at arbitration "may allow an arbitrator to draw an adverse inference from the failure to testify about matters within the grievor's knowledge," and to "legitimately regard the grievor's decision not to explain his behaviour as indicative of a lack of remorse, or a refusal to admit responsibility." In that case, the Board held, the arbitrator was entitled to treat the grievor's "lack of explanation" as a "determinative" consideration in assessing the appropriate penalty: "[T]he arbitrator held that, in accord with other authorities, the grievor was responsible for the decision to remain silent ... Neither the employer nor the arbitrator were provided with an explanation for the grievor's behaviour that could be taken into account as a mitigating factor": see Canadian Union of Public Employees, Local 2950 v. University of British Columbia, [2005] B.C.L.R.B.D. No. 288 (QL), Lancaster's College and University Employment Law News, March/April, 2006 (BCLRB).

For further discussion of the adverse inference to be called from a key witness's failure to testify, see section 5.16 in Mitchnick & Etherington, Leading Cases on Labour Arbitration (Lancaster House, online edition).

Case Name: United Steelworkers of America, Local 202G v. Saint-Gobain Advanced Ceramics
Jurisdiction: Ontario
Proceeding: Grievance Arbitration
Arbitrator: Victor Solomatenko
Citation: [2006] O.L.A.A. No. 454 (QL)
Date: July 19, 2006
Full Text: http://www.lancasterhouse.com/decisions/2006/july/Solomatenko-SaintGobain.pdf

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