[1985] OLRB Rep. September 1398
0513-85-M Ontario Allied Construction Trades Council, Labourers International Union of North America, Local 607, Applicant, The Electrical Power Systems Construction Association and Ontario Hydro, Respondents
BEFORE: Robert D. Howe, Vice-Chairman, and Board Members A. Grant and W. F. Rutherford.
APPEARANCES: David Strang, Pat Little and Gerard O'Leary for the applicant; Barry Brown, Ivars Starasts and L. J. MacIsaac for the respondent.
DECISION OF THE BOARD; September 25, 1985
This is a referral of a grievance to the Board under section 124 of the Labour Relations Act. The Form 104 Referral which initiated these proceedings indicates that the grievance being referred to the Board for final and binding determination is a grievance dated November 21, 1984 in which Gerard O'Leary (the "grievor") alleges that the respondent Ontario Hydro ("Hydro") violated Article 19 of the applicable collective agreement by failing to pay room and board (also referred to in this decision as "subsistence allowance"). However, at the hearing of this matter on August 29, 1985, the parties advised the Board that during the grievance procedure, they had agreed to have the matter of the grievor's January 17, 1985 discharge arbitrated at the same time as the aforementioned grievance. Thus, it is common ground between the parties that the Board has jurisdiction in these proceedings not only to determine whether the grievor was entitled to receive subsistence allowance, but also to determine whether Hydro was justified in discharging him.
The grievor commenced employment with Hydro in April of 1983. On April 28, 1983, he applied for room and board allowance by submitting an application which contained the following information:
(see over)
personal
data
mr. mrs. miss ms.
surname (last name):
"O'Leary"
trade:
"labourer"
given name(s) in full:
"Gerard"
employer:
"Ontario Hydro"
Date of birth:
Social insurance no.
“702-144-395”
marital status:
"married"
year
“44”
month
“9”
day
“26”
definition of regular residence
An employee's regular residence is "the place where an employee maintains a self—contained domestic establishment (a dwelling house, apartment, or similar place of residence where a person generally sleeps and eats) in which he/she resides and for which he/she can show proof of financial commitment in accordance with this form.
address of regular residence
street & number, apt. no. , box no. , rural route no.
"311 Mack's Rd"
city or town:
"Reserve Mines"
Province:
"Cape Breton Nova Scotia"
Postal Code:
home telephone no.: "902—849—4083"
(n/a lines and stations)
if the above address is a box no. or rural route, please describe exact location:
claim either (a) or (b) below
(a) room and board allowance
I understand that in order to qualify for Room and Board Allowance I must maintain a regular residence. To verify my entitlement I will be required to provide formal documentation by supplying either a lease, letter of proof from landlord, rent receipt, tax notice, deed, mortgage or any other documentation acceptable to the approving authority.
(i) I commute daily from my regular residence. □ Yes
or "597—1559"
"Joseph O'Leary" "19 Viciene Av" "Ont"
I commute daily from…………………………………………………
street a no. town/city province
(ii) I am applying for Room and Board Allowance effective…………………. "28 Apr. 83"…………………………. date
(b)
daily travel
allowance
employee responsibility
I agree to notify my employer and the local EPSCA Office of any change of address within 5 working days of such change and to provide additional information relevant to any change of address.
declaration
I declare that I have read and understand this form and that all the foregoing information is true and complete. I understand that a false statement regarding my regular residence may be cause for disciplinary action up to and including termination. My signature acknowledges my receipt of a copy of this application.
“28 April 83” “Gerard Leary" _______________________
Date Signature of Signature of
applicant witness
office use
only
(The information written on that application by or at the request of the grievor has been placed in quotation marks to differentiate it from the printed portions of the form.)
The "formal documentation" that the grievor provided to Hydro in support of that application consisted of three handwritten receipts, dated February 1, March 1, and April 1, 1983, respectively. Each of those receipts purported to be signed by "Tom O'Leary" (the grievor's father) and purported to indicate that he had received from the grievor "two hundred & fifty dollars for rent of 311 Mack's Rd." in each of those three months.
On the basis of that application and those three receipts, Hydro paid the grievor subsistence allowance totalling $11,196 in the period from May of 1983 to September of 1984. At the time that application was submitted, it was Hydro's policy to accept such receipts at face value, without verifying their authenticity. However, the "tremendous cost" of subsistence allowance payments subsequently prompted Hydro to take various steps to investigate the validity of some of those payments. That investigation disclosed that both the grievor and his brother Joseph had specified "311 Mack's Rd., Reserve Mines, Cape Bretton, Nova Scotia" to be their "regular residence". It also revealed that while employed by a subcontractor at Hydro' s Atikokan G.S. site, the grievor had submitted in support of an (earlier) application for subsistence allowance two rent receipts (dated August 1, 1982 and September 1, 1982) which also purported to be signed by "Tom O'Leary". However, the "Tom O'Leary" signature on those two receipts was distinctly different from the "Tom O'Leary" signature on the three receipts submitted by the grievor to Hydro in April of 1983. When management confronted the grievor with the disparity between those signatures on August 28, 1984 at a meeting at which he had union representation, the grievor became very angry. After uttering some vulgarities which need not be repeated in this decision, the grievor pounded the table and vociferously asserted that he was "morally entitled" to receive subsistence allowance. The grievor did not provide management with any explanation for the disparity between the signatures during that meeting or at any other time prior to the hearing of this matter. However, he did undertake to provide Hydro with further documentation in support of his entitlement to subsistence allowance. Hydro requested that the documentation be provided in the form of a deed or affidavit. However, the grievor provided the following letter dated August 30, 1984, from his brother Ted:
To Whom It May Concern:
This is to confirm and hopefully clarify an apparent problem with regard to my brother Gerard's "living out allowance".
Up to about July, 1982, Gerard lived with us for approximately seven years. He paid "board" which varied depending on his ability to pay. In addition to "board", Gerard also shared the cost of not your every day maintenance and repair expenses, such as replacing a dryer motor, etc.
Our basement is completed for living. Gerard's room is in the basement and it is available to him at any and all times.
When Gerard decided to go to Ontario for work, he knew the loss of his contribution to the family income would place a strain on my Dad's personal budget. My father was on a pre-retirement pension due to illness at the time. Fearing the loss of his mom to a boarder or roomer and yet not knowing what his own financial position would be in Ontario, Gerard arranged with my father to hold his room with the understanding he would send what he could whenever he could, but definitely it would be something. A loose arrangement like this, within a large and close family such as ours, is not unusual.
I do not know how much Gerard sent to my father. However, since his death, June 20, 1983, Gerard has sent or given me personally $7155.78 most of which was used to maintain the house and our home. Keep in mind an even greater need exists now that we are without my father's income, as small as it was. In fact, some interim arrangements have been made with my brother Joe which will provide us with some additional financial help.
A few facts; my Dad died without a will; there are nine heirs; the estate is still opened and I am the administrator.
To finalize I wish to make three statements:
(1) There will always be a room for Gerard in this or any other house that I own or have control over; not only because he is my brother, but also because of the past and present financial assistance he has given and is giving to the maintain [sic] and upkeep of the house and family.
(2) I do not know what purely legal rights Gerard would have to a room in the house, because any situation can give rise for and to a question of litigation. However, from a moral viewpoint he has a total and complete right simply because he has paid for it and still is paying for it.
(3) I am willing to swear before a court of law as to the validity of the content of this letter. I am sure I can document my proof if required by a court. But, quite frankly, I am not going through the trouble, unless required to do so by a court of law.
Sincerely yours,
"Thomas Ted W. O'Leary"
- Since the contents of that letter did not convince Hydro of the grievor' s entitlement, payment of subsistence allowance to him ceased as of September 12, 1984. However, no disciplinary action was taken at that time because the grievor convincingly asserted that he could produce further documentation in support of his claim. That documentation took the form of a further letter from his brother, and a number of statements, invoices, and cancelled cheques in respect of payments made by Ted O'Leary. It also included bank "telephone transfer" slips which indicated that the grievor had transferred from his account in Atikokan, Ontario, to his brother's account in Sydney, Nova Scotia, $250 in May of 1983, $740 in June of 1983, $1,100 in October of 1983, $250 in March of 1984, and $250 in April of 1984. The letter, which was dated December 4, 1984, read:
To Whom It May Concern:
Enclosed are copies of statements, invoices and cancelled cheques for services, maintenance, repair and general up-keep of our home. Of course there were many other expenses, which were put on one of four charge cards. Only a court will force me to take the time to locate these costs.
The period covered is generally June/83 to present date.
Also attached are copies of the legal papers opening my Dad's estate and appointing myself as Administrator.
Some of these bills were paid totally from the money Gerard sent home, other [sic] were paid partly with his money, and still other [sic] none at all was used.
Gerard was sending home about $300.00 a month and quite frankly what I do with it is my business. However it is used to maintain the house. But since Ontario Hydra stopped paying him the "living out allowance", I have received nothing from him since Aug! 84 and therefore have been looking after his part of the above mentioned costs. I can not afford to continue this extra expense much longer. Therefore, if the matter is not finalized shortly, it is my intention to seek legal advice as to whether or not, I can bring an action against Ontario Hydra for the amount due me to date about $1,000.00. A word of caution, it would be wise for Ontario Hydra not to view this as an idle threat, but a promise from an irate Irishman with a temper to match. Besides, I may even include the 'Union" in the same action as their negligence, refusal to act and procrastination may have been the result of my financial loss.
Sincerely yours
"Ted O'Leary"
Administrator
- After considering that material and all of the circumstances, management concluded that the grievor was not entitled to subsistence allowance and that he should be discharged for obtaining subsistence allowance under false pretences. Accordingly, the grievor was given the following memo on January 17, 1985:
This is to advise you of your termination for cause effective this day, for reasons of fraudulent behaviour in obtaining money (Subsistence Allowance) under false pretenses.
Respectfully,
"D. B. Reid"
Assistant Divisional
Superintendent - Acting
It was the grievor's evidence that he had lived at 311 Mack's Rd. (also known as 311 Neville Street) from 1972 to the summer of 1982, with the exception of a period of approximately two years from 1975 to 1977 (when he was living with his wife in a nearby house prior to their separation). The other persons living in the house situated at 311 Mack's Rd. were the grievor's father, his brother Ted, his sister Linda, and his first cousin Patty Duke Bennett. In his testimony before the Board, the grievor confirmed the accuracy of the information contained in his brother Ted's letters of August 30 and December 4, 1984. He also testified that when he was living at 311 Mack's Rd., he paid $75 a week for his "grub". It was his evidence that prior to his father's death, he (the grievor) paid one-third of any bills that came in, such as the cost of repairing appliances. It was also his evidence that he purchased a stereo for the home and paid half of the cost of a pool table. He told the Board that his brother Ted had taken over the management of his finances under a power of attorney while he was hospitalized in Halifax in 1977 as a result of a life-threatening accident. After the grievor left the hospital, Ted continued to manage his finances because of his recurring problems with alcoholism. During the periods when he was not living at 311 Mack's Rd., he ceased to pay the aforementioned $75 a week, but sent money to Ted from time to time to be dispersed at Ted's discretion to meet various "costs of the family", such as tuition for Patty Duke Bennett, the grievor's child support payments, and expenses incurred in maintaining and repairing 311 Mack's Rd. The grievor also testified that there is a bedroom in the basement of the house at 311 Mack's Rd. that is "his room", and that he keeps a television, a VCR, and some clothes there. He conceded in cross-examination that until the time of his death on July 20, 1983, his father was the legal owner of 311 Mack's Rd., although he suggested that his father could not have remained the legal owner without financial assistance from himself and his brother Ted.
When a three or four month job with Nova Scotia Power ended in July of 1982, the grievor came to Ontario to visit his brother Joe, who was working for a subcontractor at Hydro '5 Atikokan G.S. site. During that visit, the grievor obtained through the union a six-week job at Atikokan with another Hydro subcontractor. After that job ended, the union referred the grievor to a job in Kenora, but he did not report for work because he was "on the bottle". He went to Regina near the end of September of 1982 and began to collect unemployment insurance. While the grievor was in Regina, his brother Ted sent him $1,000. During the last three months of 1982 the grievor also spent time in Prince Albert, Calgary, and Edmonton, before returning to 311 Mack's Rd. at Christmas time. He remained there until the end of February of 1983, when he returned to Thunder Bay. While he was in Thunder Bay, Ted sent him $350 to pay his way back to Nova Scotia. However, the grievor used that money to go on a drinking spree and "ended up in a detoxication centre". After spending five weeks in a hospital alcoholism programme, the grievor paid his union dues which had fallen into arrears, and was referred to Hydro's Atikokan G.S. site in April of 1983. After accepting that referral he submitted the aforementioned application for room and board allowance. He later submitted the aforementioned three receipts in support of that application.
After conferring prior to the commencement of the hearing of this referral, counsel advised the Board that it was an agreed fact between the parties that the three receipts which purported to be signed by Tom O'Leary were in actuality made out and signed by Joseph O'Leary, the grievor's brother. In his testimony before the Board, the grievor stated that he initially thought that he would be able to document his claim for subsistence allowance by relying on the two receipts that he had submitted to the Hydro subcontractor in support of his earlier application for subsistence allowance. However, just before the time that subsistence allowance cheques were due to be issued, he spoke with his union steward, who advised him that he would have to submit new receipts in support of his application. The grievor testified that he then approached his brother Joseph, who was also working at the Atikokan G.S. site, and asked him to telephone their father to request that he send a receipt. When the grievor went home after work, Joseph handed him the aforementioned three receipts. It was the grievor's evidence that Joseph told him "I called Dad and Dad told me to sign them for you." The grievor further testified that he telephoned his father that night to confirm that information before submitting the receipts to Hydro the following day. He also told the Board: "I didn't feel that the receipts meant anything and I don't think that [my father] thought they meant anything. I never got a receipt for the money I paid him. I never asked for one. It was a hell of a lot more than $250 a month."
The grievor conceded in cross-examination that at the time he submitted the three rent receipts to Hydro, he knew that he had not sent any money to his father or Ted in February or March of 1983, and in fact thought that he was "using their money ~ as they had been sending him funds to supplement his unemployment insurance payments. However, it was also his evidence that Ted later advised him that he (the grievor) did not owe Ted any money for that period as, unbeknownst to the grievor, Ted had received and cashed cheques payable to the grievor in respect of the aforementioned accident and the cost of certain related nursing care. However, he conceded that Ted did not give him that information until some time during the summer of 1983 and that at the time he submitted the receipts, he believed that he had not made any contribution to the 311 Mack's Rd. household for February or March of 1983, although he later attempted to backtrack from that concession by asserting that at the time he submitted those receipts, he thought that he owed his brother one half of the maintenance and repair costs for 311 Mack's Rd. during that period. The grievor conceded that the idea of the receipts was to make it appear as if he had a set of receipts from Tom O'Leary. He also admitted that he submitted them to Hydro in that form because he knew that that was what was needed in order to claim subsistence allowance.
Counsel for the employer submitted that the grievor's discharge was justified on the ground of fraud, in that he had submitted forged documents in support of his subsistence allowance claim with intent to deceive Hydro, and received subsistence allowance totalling $1 1,196 on the basis of those receipts. He urged the Board to reject the grievor's belated explanation of why his brother signed his father's name on the receipts, and noted that even if that explanation was accepted, the receipts would still be false in that the grievor did not in fact pay any rent in respect of 311 Mack's Rd. Counsel submitted that the grievor was not entitled to receive any subsistence allowance because he did not maintain a self-contained domestic establishment in which he resided and for which he could show proof of financial commitment in accordance with the "Application for Daily Travel/Room and Board Allowance". In addition to asking the Board to uphold the discharge of the grievor and dismiss his grievance, counsel requested that the Board order the grievor to make full restitution to Hydro for the subsistence allowance paid to him.
Counsel for the applicant submitted that the grievor had a "financial commitment" to the residence at 311 Mack's Rd. in that he periodically transferred substantial sums of money to his brother Ted to be used for purposes that included payment of a proportion of the costs incurred in respect of that residence. He further contended that the discharge of the grievor was unwarranted since the grievor was entitled to receipts which reflected his financial commitment. It was his submission that when Hydro confronted the grievor with this "alleged forgery", the grievor did not deny the facts. He also submitted that the fact that management did not discharge the grievor until approximately five months later indicated that management did not view those receipts as forgeries in the sense of a serious misdeed against Hydro. Accordingly, counsel asked the Board to reinstate the grievor with compensation for lost wages and benefits, including subsistence allowance. In response to Hydro's request that the Board order the grievor to make restitution in respect of the subsistence allowance received from Hydro, counsel for the applicant submitted that the Board was without jurisdiction to make such an order in these proceedings. In this regard, he noted that Hydro had not filed a grievance respecting restitution, and that any such grievance would now be untimely.
The collective agreement provision pertaining to subsistence allowance that was in force at the time of the grievor's application for same provided as follows:
Article 19
GENERATION PROJECTS DAILY TRAVEL
ALLOWANCE AND ROOM AND BOARD
ROOM AND BOARD
19.2 The following conditions will apply for employees whose regular residence* is more than
97 radius kilometers from the project:
(a) An Employer may supply either:
(i) free room and board in camp or a good standard of board and lodging within a reasonable distance of a project; or
(ii) a subsistence allowance.
(b) An employee may exercise his option not to stay in a camp or accept free room and board. An employee who exercises this option shall receive a subsistence allowance as follows, subject to 19.2 (c) below:
(ii) When an employee's regular residence is more than 161 radius kilometers from the project, he shall be paid a subsistence allowance of $28.00 per calendar day
subject to the following:
An employee will not be entitled to subsistence allowance for a Saturday, Sunday or Statutory Holiday if he is absent from work on the last scheduled working day preceding or the first scheduled working day following a Saturday, Sunday or Statutory Holiday unless, for a legitimate reason, he receives the approval of the project medical attendant or an authorized representative of his Employer. Such permission shall not be unreasonably denied.
(c) During an extended shutdown period, subsistence allowance will only be paid for days worked or reported for.
- An employee's "regular residence" is the place where he maintains a self-contained domestic establishment (a dwelling house, apartment or similar place of residence where a person generally sleeps and eats) in which he resides and for which he can show proof of financial commitment in accordance with the "Application for Daily Travel/Room and Board Allowance" as agreed to by the parties.
The applicable subsistence allowance provision in the current collective agreement differs from that provision in a number of respects, but those differences are immaterial to the disposition of the issues before us in these proceedings.
- Also pertinent to the instant proceedings is Article 29.7 (which is identical in both the collective agreement currently in force, and its predecessor):
GRIEVANCE PROCEDURE
29.7 Alleged unjustified termination, discharge, suspension or disciplinary action may be grieved beginning at First Step.
Having carefully considered the able submissions of counsel and the totality of the evidence adduced before us in these proceedings, we have concluded that the grievor was not entitled to receive subsistence allowance as he did not maintain "a self-contained domestic establishment.., for which he [could] show proof of financial commitment in accordance with the 'Application for Daily Travel/Room and Board Allowance' as agreed to by the parties" within the meaning of Article 19.2. That application, which is incorporated into Article 19.2 by reference, specifies that to verify entitlement to subsistence allowance, an employee is ''required to provide formal documentation by supplying either a lease, letter of proof from landlord, rent receipt, tax notice, deed, mortgage or any other documentation acceptable to the approving authority." The types of "formal documentation" listed in that sentence provide a clear indication that the parties intended subsistence allowance to be payable only when an employee could prove a financial commitment of the type that would arise when the employee rented a self-contained domestic establishment (and was thus in a position to provide the employer with a "lease", "letter of proof from landlord", or "rent receipt"), or was purchasing or had purchased a self-contained domestic establishment (and was thus in a position to provide the employer with a "tax notice", "deed", or "mortgage"). It is evident that the grievor was aware of the type of financial commitment that had to be proved and, accordingly, presented the aforementioned receipts, which purported to indicate that he had paid Tom O'Leary $250 a month in February, March, and April of 1983 for rent of 311 Mack's Rd. However, it is clear from the evidence that the grievor was not in fact renting a self-contained domestic establishment at 311 Mack's Rd., and had not in fact paid rent to Tom O'Leary or to anyone else during those months, or at any other material time.
The grievor's case derives no assistance from the inclusion of the phrase "any other documentation acceptable to the approving authority", as Hydro did not find the "documentation" submitted by the grievor to be acceptable, and their conclusion in that regard was not in our view unreasonable in that the letters, telephone transfers, and other documents submitted by the grievor after August of 1984 did not establish that the grievor had a "financial commitment" to 311 Mack's Rd. of the type contemplated by Article 19.2. While the grievor sent money to his brother Ted from time to time to be disbursed at Ted's discretion to meet various costs of the family, such as tuition for his first cousin, child support payments, and expenses incurred in maintaining his father's home at 311 Mack's Rd., those gratuitous payments do not in our view constitute a "financial commitment" of the type required to entitle an employee to subsistence allowance under Article 19.2.
We shall next consider the matter of the grievor's discharge. If the grievor had informed Hydro of the true facts concerning the financial arrangements with respect to the maintenance of 311 Mack's Rd. at the time he applied for subsistence allowance, no disciplinary action would have been justified. However, by submitting in support of his application receipts that he knew to be false in that "Tom O'Leary" had not in fact signed them, and also in that the grievor had not in fact paid any rent in respect of 311 Mack's Rd., the grievor engaged in serious employee misconduct. In this regard, it is noteworthy that the declaration which the grievor signed as part of his application for subsistence allowance emphasized the need for "true and complete" information, and stipulated that a false statement "may be cause for disciplinary action up to and including termination".
The importance of honesty in the context of employer-employee relationships has been recognized in the arbitral jurisprudence. For example, in Re Phillips Cables Ltd. and International Union of Electrical, Radio and Machine Workers, Local 510, (1974) 1973 CanLII 2161 (MB QB), 6 L.A.C. (2d) 35, at page 37 (Adams), it was the unanimous view of a board of arbitration that "honesty is a touchstone to viable employer-employee relationships". In that case, which involved falsification of production records, the board of arbitration also noted that "employee good faith and honesty is one important ingredient to both industrial democracy and the fostering of a more co-operative labour relations climate." See also in this regard the following cases to which we were referred by counsel for the employer: Re Forrester and Treasury Board (Post Office Department) (1981), 1981 CanLII 4466 (CA LA), 2 L.A.C. (3d) 182 (O'Shea); United Steelworkers of America, Local Union No. 6709 and The Cooper Tool Group Limited, an unreported award dated September 30, 1980 (O'Shea); and Re Treasury Board (Department of Supply and Services) and Deschenes and Pharand (1978), 1978 CanLII 3437 (CA LA), 20 L.A.C. (2d) 388. In the Cooper-Tool case, the arbitrator upheld the discharge of an employee (with six years' seniority) for forging his supervisor's signature on a special pass form authorizing the removal from the employer's premises of a plastic container that was of little, if any, value to the employer, even though the supervisor testified that if the employee had requested such a pass, he would have signed it. In the Forrester case, the P.S.S.R.B. Adjudicator upheld the discharge of an employee with five years' seniority for forging a physician's signature on three medical certificates. A discharge for falsification of medical certificates was also upheld by a P.S.S.R.B. Adjudicator in the Deschenes and Pharand case. (A second grievor was reinstated with a two week suspension in that case, in view of the presence of certain mitigating factors.)
In the present case, the grievor obtained subsistence allowance payments of over $11,000 on the basis of receipts which to his knowledge falsely indicated that they were signed by Tom O'Leary and that the grievor had paid $250 per month for rent of 311 Mack's Rd. in February, March, and April of 1983. As indicated above, that fraudulent action constituted serious employee misconduct. Such abuse of negotiated benefits is harmful not only to the employer, which has paid out a substantial sum that may be difficult, if not impossible, to recover, but also to the union and the other bargaining unit employees whom it represents, in that such abuse may (during the course of collective bargaining) form part of an employer's argument for reducing, eliminating, or not improving benefits of that type. The grievor had worked for Hydro for less than two years at the time of his discharge. Moreover, his fraudulent action occurred near the commencement of his employment with Hydro, and continued to provide him with substantial unwarranted benefits for a period in excess of sixteen months. Finally, we note that it was not until the hearing of this matter that the grievor provided any explanation concerning the forged signature on the receipts in question, and in providing that belated explanation, he expressed no remorse for having presented those false receipts to his employer.
Having regard to all of the circumstances, we are satisfied that the discharge of the grievor was justified and that this is not an appropriate case in which to exercise our discretion to substitute a lesser penalty. For the reasons set forth above, the grievance dated November 21, 1984 is hereby dismissed. However, no order of restitution will be made in respect of the $1 I ,196 paid to the grievor by Hydro as we agree with counsel for the applicant that we do not have jurisdiction in these proceedings to make such an order.