Claims for ‘Phantom Dependent’ Justifies Termination for Cause

False Claims Justifies Termination for Cause

Summary of Case

In Cavic v. Costco Wholesale Canada Ltd. the Employee, Ms. Mykki Cavic, who had worked for the Employer, Costco Wholesale Canada Ltd., for approximately 19 years, was terminated for cause after it came to the Employer’s attention that the Employee had falsified her health benefit claims and had failed to provide a truthful explanation regarding her conduct on three separate occasions.

Specifically, in or about 2004, the Employee, who was a Night Floor Merchandise Supervisor for the Employer, noticed a “phantom dependent” wrongfully listed on her benefits profile as her daughter. The Employee contacted the insurance provider on multiple occasions in an attempt to have the phantom dependent removed. Unfortunately, her efforts were unsuccessful. As a result, in 2010, the Employee attempted to obtain the insurance provider’s attention of the ongoing issue by falsifying documents and submitting false claims under the phantom dependent’s name, for which the Employee received reimbursements. However, following the submission of the falsified claims, when the insurance provider contacted the Employee and inquired if the phantom dependent was her daughter, the Employee confirmed that she was. Despite successfully obtaining the insurance provider’s attention as originally desired, the Employee failed to proceed with the removal of the name from her benefits profile.

When the Employee’s actions were discovered by the Employer, the Employer provided the Employee with two opportunities in addition to the opportunity provided by the insurance provider to provide a reasonable explanation for her actions. In the Employer’s opinion, the Employee’s explanation was not reasonable. The Employer considered the Employee’s conduct to be an attempt to gain a greater amount of reimbursement then what was permitted under the benefit policy. Additionally, the Employer found the Employee’s conduct to be a fundamental breach of trust given the Employee’s management position which entailed significant trust and reliance. As a result, the Employee was terminated for cause.

After hearing evidence from both parties, the Court determined that the Employee’s explanation for submitting the falsified claims was not credible and that her conduct constituted termination for cause, thereby dismissing the Employee’s claim against the Employer for wrongful dismissal.

Impact of Decision on Employees

Generally, terminations for cause can be difficult for employers to justify unless the employee’s conduct in the given situation has fundamentally breached the employment relationship beyond repair. As demonstrated above, one of the ways in which a fundamental breach will be found to have occurred is when the employee engages in conduct which breaches the trust or reliance that an employer has placed in them. Employees who have been terminated for cause should seek the assistance of an Employment Lawyer to determine whether the employer has likely met the required threshold to justify the termination.

Impact of Decision on Employers

Given the difficulty that is generally associated with justifying a termination for cause, employers should be aware of the decision referred to above, which demonstrates that an employee whose conduct fundamentally breaches the trust and or reliance placed in them by the employer will be justified in terminating the employee for cause. However, given that the Court will consider the specific context of each termination for cause to determine whether or not it is justified, employers should always consult with Employment Law lawyers prior to terminating an employee for cause.

Minken Employment Lawyers is your source for expert advice and advocacy on today’s employment law issues. Whether you are an employer or employee, we can help. Contact us to see how.

See also, “Claims for ‘phantom dependant’ justify termination” published in Canadian Employment Law Today, and “Claims For ‘Phantom Dependent’s Justifies Termination For Cause” published by CCCA/Mondaq.

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