HOW TO EFFECTIVELY CHALLENGE A SUSPECTED FRAUDULENT DISABLITY CLAIM. Ryan Conlin and Allison Taylor Stringer LLP Management Lawyers

Transcription

1 HOW TO EFFECTIVELY CHALLENGE A SUSPECTED FRAUDULENT DISABLITY CLAIM Ryan Conlin and Allison Taylor Stringer LLP Management Lawyers

2 The Meaning of Fraud Deceitful conduct designed to induce another to give something of value by: 1) lying; 2) making a statement that ought to have been known to be false; 3) concealing a fact which may have affected other party s decision. 2

3 Murrell v. Simon Fraser University (1996) In deciding whether or the context justifies dismissal, there are two principles to be discussed. First, the cases make a distinction between an error in judgment and deliberate attempt to deceive. A single dishonest act which is merely an error in judgment and not made with an intention to deceive is not grounds for dismissal. Second, the consequences of the dishonest act must be such that it destroys the employer s confidence in the employee because of the character flaw such conduct reveals, hence, before a dishonest act justifies dismissal,.the employer must subjectively have believed that the employee had disabling character flaws and further that a reasonable, informed person would also have concluded that the employee had flaws that permitted dismissal without cause 3

4 Unsuccessful Fraud Defences Surveillance showing employee lifting a case of beer on one occasion will not be sufficient Not similar to repeatedly lifting heavy objects in workplace all day long Other evidence will be needed to suggest that necessary intent to deceive present 4

5 In Re Metropolitan General Hospital and CUPE Local 1124 (1990), registered nursing assistant terminated for claiming sick leave benefits on days when in fact working at a nursing home Employee mistakenly believed that sick leave was earned benefit that she could claim whether or not she was sick 5

6 Immediate admission when confronted a key factor Voluntary disclosure about claiming sick benefits on other days also in her favour Reinstated 6

7 Similarly, in Re Bell Canada and CEP (1996), employee went off work due to stress of sudden illness of both parents On certain days, claimed sick benefits from Bell while performing a job for Canada Post As a letter carrier, required to walk route and deliver mail and not to interact with public, unlike Bell job Despite denial, no intent to defraud employer so reinstatement, but without back pay 7

8 In Re Perley and Rideau Veterans' Health Centre and CUPE Local 870 (grievance of Antoinette Onwuachi), employee alleged to have exaggerated symptoms to physician and management Employee at school while off work Evidence suggested that fluctuation in pain and mood was real Medical evidence supported that she was managing to go to school with difficulty, but could not work 8

9 In Re Perley and Rideau Veterans' Health Centre and CUPE Local 870 (grievance of Antoinette Onwuachi), employee alleged to have exaggerated symptoms to physician and management Employee at school while off work Evidence suggested that fluctuation in pain and mood was real Medical evidence supported that she was managing to go to school with difficulty, but could not work 9

10 Initiatives to contact employer while on sick leave inconsistent with intent to defraud Number of documented regular visits to doctor with adjustments to medication mitigated against manipulating doctor Arbitrator felt it unlikely that she would have looked for student placement at Health Centre had she been seeking to defraud it 10

11 Arbitrator accepted that grievor should have told doctor about school activities Lack of transparency warranted discipline Employee was reinstated but received unpaid one month suspension 11

12 These cases demonstrate type of evidence which will preclude finding of fraud Employee must be caught contradicting position employee is taking with respect to inability to work or perform modified work - shows intent 12

13 Examples of Successful Fraud Defences Re Ontario Public Service Employees Unions and Toronto Community Housing Corp. (2012) Employee had hurt left hip at work climbing stairs Employee offered administrative work previously performed while recovering from knee surgery Employee refused to return to work because of difficulty walking between parking lot and office, pain and drowsiness from medication 13

14 Tip led to video surveillance of employee playing golf Once employer had surveillance video, despite understanding that hip surgery had been suggested, employee was terminated 14

15 Arbitrator held no evidence that employee had made any effort to resolve pain, medication issues Employee walked considerable distance while golfing, contradicting claim could not walk from parking lot to office Employee did not provide offer of modified work to doctors Never raised complaints regarding pain and drowsiness from medication with doctors 15

16 Employee claimed doctor agreed to change medication and prepare new FAF Doctor denied this At the time modified work was offered, employee could have performed it based on doctor s evidence Content to be off work while decided whether or not to have hip surgery 16

17 Arbitrator found employee not entitled to receive sick pay due to failure to cooperate, deliberately misleading doctor by failing to provide with offer of modified duties Grievance dismissed - termination for just cause 17

18 Re Ineos Nova Ltd. and CEP (2010) Grievor left a message : I think I ve come down with (pause), I am really sick right now so I won t be in today. Ok. I ll see you tomorrow. Bye. Unfortunately for grievor, phone line did not disconnect Message machine recorded conversation with his neighbour in which he indicated he would put up drywall in her house on sick days 18

19 When returned to work, met to discuss absence Voic not disclosed, but employee was asked whether he had been sick he said yes Employee suspended and given a further opportunity to explain his absence Within a few days no further information from union or employee so terminated for cause 19

20 Employee obtained a medical note confirming major depressive episode as of a few days after termination Arbitrator held that voic admissible and incriminating Undisputed that grievor suffered from depression which affected him episodically, but no evidence to support claim that he had experienced depressive episode on the dates in question 20

21 Doctor admitted that she could not offer retroactive diagnosis Arbitrator adopted comment of Arbitrator Swan in Canada Post Corp. v. W (1986) The grievor has engaged in a flagrant attempt to mislead the employer for personal gain and simply has not demonstrated that circumstances existed to mitigate the penalty 21

22 Arbitrator accepted test regarding penalty from Canadian Broadcasting Corp. v. CUPE (1979): 1) bona fide confusion or mistake by grievor as to whether entitled to do what he or she did; 2) grievor s inability to appreciate wrongfulness of act; 3) impulsive or premeditated nature of act; 4) trivial nature of harm done; 22

23 5) acknowledgment of misconduct by grievor; 6) sympathetic personal motive for dishonesty such as family need rather than hardened criminality ; 7) past record of grievor; 8) grievor s future prospects for good behaviour; 9) impact of discharge in view of age, personal circumstances etc. Grievance dismissed, terminated for just cause 23

24 Re Cuddy Food Products v. UFCW (2002) Employee reported sharp pain in lower thoracic/upper lumbar back Initial diagnosis of lumbar strain, return to full duties in 2 to 4 weeks Alleged pain increasing over time Suspicions led to video surveillance, including of employee wearing overalls and work gloves cleaning garage, lifting kitchen table 24

25 Employee said decision to clean garage an impulse while going for walk Contradicted by the fact that he was wearing overalls and gloves, which he kept in the garage as well as statements to company that he could not walk without cane 25

26 Contradictory evidence about medication either making him lightheaded and dizzy or brand new lacked credibility Arbitrator held that employer had met evidentiary burden to establish fraud Up to employee to explain how he had very good day on date in question whereby he did not need cane to walk and could spend day cleaning garage Grievance dismissed 26

27 Simoes v. Metaldyne Machining and Assembly Manufacturing Co. (Ontario Court of Justice), 2006 Employee off work due to viral labyrinthitis affecting balance Medical report from insurer stated employee to be seen weekly Doctor projected RTW to be three months 27

28 Employee s father became ill and employee then left for Portugal where father lived Father died shortly thereafter Defendant obtained employee s telephone number in Portugal and called him Stated he would obtain further medical documentation in Portugal and asked for leave of absence 28

29 Employee indicated that he intended to remain in Portugal to settle father s estate Leave of absence denied Employee told to return to Canada immediately to resume treatment in Canada Employee terminated when did not return 29

30 Employee alleged off work with depression, but never mentioned at the time Medical report could not be interpreted as justifying employee doing what he wanted for three months Court pointed out that employee was not ordered to return to work, but to return to Canada to continue to see his own doctor, and not terminated until had been given 12 days in which to return ie. after emergency leave days related to his father s illness and death had expired Wrongful dismissal action dismissed 30

31 Lawrence v. Honda (1998) Employee had medical note excusing him from work for three weeks chronic fatigue Brother picked up STD form and revealed that Lawrence away hunting Employee told if caught hunting on short-term disability would be terminated Initial short-term claim denied 31

32 Submitted a further short-term claim with further medical evidence Did not disclose to doctor that he had been hunting medical said zero energy level Placed under surveillance which demonstrated was again hunting Terminated for cause First disability claim might have been an error in judgment according to Court Second period of hunting was clearly fraudulent 32

33 Surveillance Two opposing strands of arbitral decisions 1) Employee privacy rights should be balanced against employer s right to investigate ( reasonableness ) 2) If relevant, must be admitted into evidence, otherwise a violation of natural justice ( relevance ) 33

34 First strand of cases requires the following: 1) Was it reasonable in all of the circumstances to request surveillance? 2) Was surveillance conducted in reasonable manner? 3) Other alternatives open to the company to obtain the evidence sought? 34

35 Other strand of cases relies upon concept of natural justice Excluding any relevant evidence violates principles of natural justice Not superceded by need for harmonious labour relations No general right to privacy that would preclude observing a person s presence or activities in public or any expectation of privacy in public places 35

36 Pontillo v. Zinger et al. Plaintiff sued corporate defendants for investigating plaintiff after car accident Court confirmed that insurance companies in such cases are entitled to conduct surveillance of plaintiffs within confines of law Cannot trespass on private property or intercept communications electronically 36

37 Photographing plaintiff in places open to public view is acceptable Identifying selves to neighbours and asking for information also acceptable Cannot threaten witnesses or litigants or defame plaintiff Do not need grounds to believe that claim is fraudulent before conducting an investigation Conducting an investigation is not defamatory 37

38 In Smith et al. v. Morelly (2011), affidavit of documents served by defendant did not mention surveillance and defendant had confirmed no intent to rely on surveillance at trial 5 days before trial plaintiff s counsel received surveillance video Court held surveillance not admissible at trial (ambush) 38

39 Risks of Unsubstantiated Claim of Fraud Where insufficient evidence, terminating for just cause can result in award of aggravated damages for hurt feelings as well as notice However, employer can be wrong about existence of just cause if acting in good faith If employer is reckless in alleging just cause, good faith not present 39

40 Without fraud, termination of disabled employee can lead to Human Rights claim May be difficult to demonstrate that good faith reason for termination exists Option: suggest termination with a package as a resolution, rather than terminating unilaterally 40

41 Steps to Take in Respect of Potential Fraudulent Claim 1) Ensure that all communications are in writing and that all steps required to be taken with respect to submission of disability claim and medical evidence are clear 2) Ensure that all employees understand that medical leave is not unconditional (requires workplace policies, training from the outset and consistent treatment) 41

42 3) Where fraud suspected, try to paint employee into a corner ie. compel employee to make blatantly false statement to explain conduct 4) Ensure that surveillance addresses specific statements made by employee eg. about ability to walk without a cane, bend and twist, lift, attend work at certain hours etc. 42

43 5) Ensure that employee is given sufficient opportunity to obtain requested medical and other documents and to attend at meetings or try modified work 6) Where modified work is provided, ensure sufficient supervision so that evidence of specific abilities is available from supervisor 7) Ensure that there are multiple witnesses to events on employer s side 43

44 8) Consider use of independent medical examination, multiple letters to doctor to clarify restrictions and limitations 9) Rely on surveillance only when specifically relevant to alleged restrictions and limitations eg. do not rely on beer case evidence alone 10)Where a possible explanation may exist, ensure that it is explored and employee s position is on the record before proceeding 44

45 8) Consider use of independent medical examination, multiple letters to doctor to clarify restrictions and limitations 9) Rely on surveillance only when specifically relevant to alleged restrictions and limitations eg. do not rely on beer case evidence alone 10)Where a possible explanation may exist, ensure that it is explored and employee s position is on the record before proceeding 45

46 The WSIB accepts audio/visual recordings as evidence, if they: provide new or more complete information than is already in the claim file, are relevant and pertain to the WSIB's duty to hear, examine, and decide issues under the Workplace Safety and Insurance Act, and are authenticated. 46

47 Persons convicted of illegally obtaining WSIB benefits can be subject to a fine of up to $25,000 and/or six months in jail for each offence. Corporations convicted under the Act can be fined up to $100,000 for each offence. WSIB will routinely prosecute workers for fraud in serious cases There is a hotline to report fraud to WSIB 47

48 WSIB v. Koomson (2011, Ontario Court of Justice) Defendant received funding from WSIB for a personal care attendant 16 hours per day due to diminished cognitive abilities. WSIB surveillance showed the worker driving, shopping and purchasing a television. Defendant convicted of failing to inform WSIB of a change in his condition. He was fined $20,000 and placed on probation 48