An Ontario employer has lost its bid to alter the grounds for firing a unionized worker after it said new evidence came to light during the arbitration hearing.
King Nursing Homes fired the worker, who had been with the private long-term care home for more than 15 years, for cause. The justification?
It claimed she stole towels and personal protective equipment (PPE), shipped them to the Philippines and sold them for a profit.
Another employee alerted the company to the theft and, following a third-party investigation, she was fired. There were also criminal charges laid, but the arbitrator believed those had been stayed.
Trading prescription drugs for hygiene products
Her union, CLAC Local 304, grieved the termination but didn’t seek reinstatement as a remedy.
During the hearing, the worker who blew the whistle on the theft dropped another bombshell — he said he saw her trade prescription drugs for shampoo, body wash and other personal hygiene products.
He testified that she obtained the prescription drugs through fraudulent claims made to the employer-provided health and benefit plan.
The worker said he thought he told the employer about the insurance fraud, but wasn’t sure. During cross examination, he said he was certain he told the employer she was stealing drugs.
“I try to be as open as much as I can,” he said.
Employers can’t usually alter grounds for discipline
King Nursing Homes acknowledged that the general rule is employers can’t alter the grounds for justifying discipline.
“However, the Employer argues that arbitrators have found exceptions to this rule when, for example, the new or additional grounds were unknown and not easily discoverable at the time of discipline,” the arbitrator said. “The Employer argues that that they were not previously aware of the allegations concerning insurance fraud.”
It also argued that insurance fraud and theft are closely related because they show a pattern of dishonesty and illegal conduct.
The union countered that the employer was “reasonably aware” of the allegations with respect to insurance fraud prior to its decision to fire her.
The arbitrator’s ruling
The arbitrator dismissed the employer’s bid to add insurance fraud as an additional ground for discharge. Furthermore, it declined the employer’s request for the union and/or grievor to produce “all the relevant information including the Grievor’s prescription records from 2015 to 2020” relating to the allegation of insurance fraud.”
It disagreed that the PPE theft and insurance fraud were closely related.
“Both acts are indisputably dishonest, are a breach of trust, and would result in serious and significant discipline, and very likely discharge,” it said.
“However, theft of towels and PPE and insurance fraud do not arise out of the same or similar facts, nor do they flow from the same evidence. Insurance fraud would likely require an analysis or review of (the worker’s) medical history, her claims made under the benefit plan, and the pharmaceutical records.”
The testimony of the whistleblower also weighed heavily against the employer. The arbitrator was satisfied the company was sufficiently aware of the allegations before she was terminated.
Reinstatement request might have altered ruling: Arbitrator
However, in another twist, the arbitrator noted the ruling might have been different if the union was seeking reinstatement — it was not seeking that remedy in this case.
“Insurance fraud is a serious allegation which goes to the core of an employment relationship and would be considered a breach of trust. In a discharge case, where reinstatement is sought, such allegations, even if raised in the manner that they have been in this matter, may be relevant to the remedy of reinstatement,” the arbitrator said.
For more information, see King Nursing Home Ltd. v. CLAC, Local 304, 2023 CanLII 1131 (ON LA).
