Disabled employee fired for lying

Surveillance by insurance provider showed employee was more active than he stated on functionality questionnaire

Injured employee playing possum?

When an employer fires an employee for cause, the onus is always on the employer to prove just cause. This can get especially difficult when a disability is involved. However, dishonesty is usually near the top of the list of reasons for dismissal that will hold up in court or arbitration.

Honesty carries a lot of weight with courts and arbitrators and is generally considered a fundamental part of the employment relationship. If an employee is fired because of dishonesty and the employer can provide sufficient evidence of it, it is usually safe to assume some sort of discipline, if not dismissal, will hold up in court.

When a Manitoba employer discovered an employee who was off work with back problems and receiving long-term disability benefits wasn’t entirely truthful about the status of his condition, it immediately fired him. The employee contested the termination, but the employer went into the case feeling confident about its position.

A Manitoba employer had just cause to fire an employee receiving long-term disability (LTD) benefits after surveillance showed the employee living beyond his claimed medical restrictions, an arbitrator has ruled.

Sean Cook was an employee of Winpak, a Winnipeg-based company that manufactures and distributes packaging materials and machines for perishables. The collective agreement stipulated Winpak was responsible for paying all of the premiums for the employee welfare plans, including the weekly indemnity and LTD plans. Hired in 1991, Cook worked steadily for 17 years until he injured his back in June 2008.

Back pain caused long-term absence from work

After he was injured, Cook initially went off work under a weekly indemnity plan. By December 2008, he was still unable to work due to a herniated disk in his back and filed a disability claim for LTD benefits.

In August 2009, with Cook still off work and receiving LTD benefits, Winpak’s insurance provider asked him to fill out an “Activities of Daily Living Questionnaire” which required him to specify his medical status and confirm his inability to work. The questions referred to his functional abilities, limitations, activities, medical condition and capacity to return to work.

Cook filled out the questionnaire, indicating he had trouble sleeping and got exhausted quickly because of the pain in his back. He said he didn’t need special assistance for personal needs and grooming, but it took longer than usual. He also said he relied on his fiancée to prepare his meals, do his housework and go shopping for him, since he was unable to do these things.

Cook also claimed he couldn’t “do all the things I love to do,” which included physical activities such as riding his mountain bike, weightlifting and other sports, to the point where he couldn’t even take a long walk or visit friends and relatives. He wrote on his questionnaire that he didn’t do any activities anymore and spent most of his time on the couch watching television and movies. He also said he was able to drive a car but it was difficult for him and he tried to avoid it.

Acknowledging that he hadn’t worked for a year, Cook said he didn’t feel he was capable of working any job for which he would be qualified due to the pain. He saw his doctor on Aug. 2, 2009, and said he was “not progressing very well” and his doctor didn’t advise when he would be able to work. Cook submitted the completed questionnaire on Sept. 24, 2009.

Surveillance showed inconsistencies with employee’s stated limitations

Shortly after Cook submitted the questionnaire, the insurance provider hired investigators to conduct surveillance on Cook. Over two days on Sept. 28 and 29, 2009, the investigators observed and filmed Cook carrying bags to his vehicle and driving it away. Upon following him, they saw him visit a gas station, bank, various stores, a dental clinic, two restaurants and a fitness centre. He spent more than four hours at the fitness centre and was seen carrying a gym bag. He also went to a school each day and picked his wife.

The investigators filed a report that concluded “Mr. Cook is active.” The insurance provider compared the observations with Cook’s stated limitation and determined there were inconsistencies with his activity and what he had said he was capable of.

The insurance provider sent a letter to Cook on Nov. 6, 2009, stating its surveillance revealed he was “capable of activities without symptoms of a severe nature which would prevent you from performing the essential duties of your own occupation.” It said he was not experiencing significant limitations on his functions and it was terminating his LTD benefits. It also sent a copy of the letter to Winpak.

One week after the insurance provider sent the letter, Winpak terminated Cook’s employment for what it called “fraudulent behaviour.” Cook, through the union, filed a grievance, claiming his conduct did not constitute fraud and Winpak did not have just cause to fire him, as required by the collective agreement and his physiotherapist had recommended he get what exercise he could, including swimming at the fitness centre. The union argued Winpak had rushed to judgment without giving Cook a chance to explain his situation and pointed out the company didn’t even view the video from the surveillance, only going on the insurance provider’s decision to discontinue LTD benefits.

However, Winpak maintained Cook had completed his activities questionnaire untruthfully. The activities he was observed doing were inconsistent with how he represented his disability and his dishonesty was just cause for dismissal, it said.

An arbitrator from the Manitoba Arbitration Board found Winpak’s reference to “fraudulent behaviour” was a description of his dishonesty and misrepresentation and there didn’t necessarily have to be a legal act of fraud to warrant discipline. The arbitrator also found there was nothing in the collective agreement that required Winpak to interview employees or conduct a wider investigation before imposing discipline.

“While employers are answerable for shortcomings in their investigations, the fact that a cursory investigation has occurred does not necessarily void any discipline imposed,” said the arbitrator.

However, the arbitrator noted that since the discipline was dismissal, the onus was on Winpak to prove there was just cause.

Clear evidence of dishonesty

The arbitrator found the evidence was clear that Cook had filled out the questionnaire by indicating he was mostly confined to his house and could do very little in terms of activities. Cook also said he had to depend on his fiancée to run errands for him and his condition was not progressing very well. However, the surveillance report from the insurance provider clearly showed “a far different reality,” said the arbitrator. Even though Winpak didn’t view the video, it had the report upon which it was based and the video existed as evidence. Upon viewing the video, the arbitrator agreed Cook didn’t show any restricted movement or other sign of disability.

Cook also admitted he was swimming at the fitness facility on the recommendation of his physiotherapist, which he neglected to mention on the questionnaire.

“Comparing the questionnaire completed by (Cook) on Sept. 24, 2009, with the surveillance of Sept. 28 and 29, 2009, the inescapable conclusion is that (Cook) made numerous false and misleading statements in the questionnaire. The observed behaviour is fundamentally at odds with (Cook’s) report of his symptoms and level of activity. The proximity between the surveillance activity and the date on which (Cook) completed the questionnaire is also significant in my view,” said the arbitrator.

The arbitrator found Winpak established that Cook provided false and misleading information in his LTD claim and it was within reason for Winpak to characterize this behaviour as fraudulent. It also found there was no reasonable explanation for Cook’s answers on the questionnaire to be inconsistent with his observed activities.

The arbitrator found it wasn’t necessary to determine the extent of Cook’s disability, if he still had one, as he was disciplined for dishonesty on his LTD claim. Since Winpak established he was dishonest and provided false information, there was grounds for discipline.

Trust fundamental to employment relationship

The arbitrator also found dismissal was appropriate discipline in this case, as trust was a fundamental part of the employment relationship. Cook’s grievance was dismissed.

“Employees are obligated to be honest and forthright in dealing with their employer and its insurer with respect to disability claims,” said the arbitrator. “Dishonest or misleading statements by employees in dealing with their disability claims strike at the heart of the employment relationship that is necessarily founded on trust and integrity.”

For more information see:

Winpak Ltd. v. C.E.P., Local 830, 2010 CarswellMan 591 (Man. Arb. Bd.).

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