The Toronto Transit Commission condoned the benefits fraud involving millions of dollars for orthopedic claims, the union representing workers is arguing in a number of grievances challenging their terminations.

In an interim arbitration award earlier this month, arbitrator Lorne Slotnick outlined how the TTC is facing 103 grievances over the firings of workers connected to the benefits fraud matter. The Amalgamated Transit Union Local 113 doesn’t deny the fraudulent scheme, Slotnick noted, but it’s challenging the firings on the basis that the TTC either condoned what happened or failed to act when warned about what was going on.

The case before Slotnick dealt with Kahmall Smith, a bus operator for 14 years who lost his job in April 2016. According to Slotnick’s arbitration award, he made two claims in 2015 through Healthy Fit Inc., the Mississauga, Ont., company at the heart of the case surrounding $5.6 million in claims by about 672 TTC employees between January 2012 and July 2015. One claim was for four compression arm sleeves totalling $1,980 and the other was for orthopedic shoes and orthotics for $750.

According to the arbitration award, Smith borrowed money to pay the amounts from one of the loan companies associated with Healthy Fit owner Adam Smith. In the case of the first claim, he repaid about 40 per cent of the loan after the insurance company reimbursed him, meaning he got to keep about 60 per cent of the money, Slotnick noted. The Healthy Fit arrangement generally involved kickbacks of about 60 per cent to the employees, according to Slotnick.

Read: Toronto benefits fraud probe takes a turn as new charges laid over city claims

While Slotnick noted the union doesn’t deny the fraudulent scheme, it’s challenging the firings on the basis of the context. It’s arguing the TTC was aware for years people like Adam Smith, who received a two-year jail sentence after pleading guilty to defrauding the TTC and the City of Toronto in September, had been preying on employees but did nothing to stop it. With supervisors also involved in the benefits transactions and the claims activity having been widespread for years, the union is arguing the TTC has engaged in discriminatory or delayed discipline.

In making its argument, the union referred to concerns it raised as long ago as 2007 about the number of employees making claims for orthopedic products. It says it also raised concerns about service providers advertising in the workplace and that the TTC did little to discipline employees in a previous case involving a chiropractor who faced criminal charges. In addition, it says the TTC rejected its suggestion of a list of preferred providers and failed to act on warnings by its insurers about rebates, discounts and other practices associated with fraud.

In the case of Kahmall Smith, Slotnick has yet to rule on his grievance. The interim award this month involved a decision on the union’s bid to force the TTC to address the condonation issue at the outset of the case. On that issue, Slotnick rejected the union’s motion.

For its part, the TTC is rejecting the union’s allegation that it condoned fraud. “That is simply not the case,” says TTC spokesperson Brad Ross.

Read: A free purse with a benefits claim? How incentives can land providers, employees in trouble

“Any time an employee is alleged to have defrauded our benefits system has been dealt with appropriately,” he adds, suggesting that “even if any employer condoned this, it doesn’t give you a defence to committing fraud.” 

As of its last update, the TTC said the benefits fraud investigation had resulted in the dismissal, resignation or retirement of 170 TTC employees. In addition, 10 former employees are facing criminal charges in the case.

Copyright © 2018 Transcontinental Media G.P. Originally published on benefitscanada.com

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