HomeMy WebLinkAbout1984-0044.Gingell.84-07-27: ONTARIO cl?am EwLcmES
GRIEVANCE
SETTLEMENT
BOARD .‘~’ ‘.
44/04
172184
IN THE MATTER OF AN ARBITRATION
Under
THE CROWN EMPLOY~EES COLLECTIVE BARGAINING ACT
Before
THE GRIEVANCE SETTLEMENT BOARD
OLBEU (William B. Gingell)
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The Crown in Right of Onta
(The Liquor Control Board of On
rio
tario) Employer
Before: E. B. JollifTe, Q.C.~ Vice Chairman
B. Switzman .-.~ _ Member
A. G. Stapleton Member
For the Grievor: A. M. Heisey
Counsel
Blake, Cassels & Graydon
Barristers & Solicitors
For the Employer: J. Baker
Counsel
Hicks Morley Hamilton Stewart Storie
Barristers & Solicitors
Hearing: April 9. 1984
(Arguments in writing at
later dates)
'DECISION
As counsel have pointed out, the grievances of Mr.
W.B. Gingel are Unusual.
They follow his suspension and
discharge by th,e Liquor Control Board from his position as
manager of a store at Whitby, and it is agreed that the action
taken by the employer was based entirely on circumstantial
evidence.
When the matter-came on for hearing in April, four
witnesses were called for the employer, three of whom had taken
part in auditLng the Whitby store accounts. For the griever,
testimony was heard from two store managers, a retired manager
and a book-keeper as well as Mr. Gingell.
On completion of the evidence late on April 9, it was
agreed that Ms. Baker and ~Mr. Heisey would submit written
arguments. This seemed particularly appropriate in a case where
the evidence is complex and extremely technical. Subsequently
the arguments filed have been received and considered. Counsel
carefully set out theirrespective positions in such painstaking
detail that it would be unfair to paraphrase or abbreviate them.
They will therefore be quoted in full.
ARGUMENT FOR THE EMPLOYER
1. As we noted in our opening remarks, the case before
this board is somewhat unusual. In essence;the griever was
discharged for failure "to deposit funds tendered for 'the sale.of
alcoholic, beverage in the store under his charge to the credit
of the Liquor Control Board." Exhibit 4, Tabs 7 and~9.
2. It is conceded that the evidence implicating the
griever is circumstantial; however, the employer contends that
the evidence is clear and unequivocal that improper behaviour
occurred at the store (#587, Whitby) of which the grievor was
the manager, and that he was the person responsible for that
conduct.
3. We submit that~ betweenMarch 19, 1981 and December 10,
1983, 62 discrepancies occurred in the store, which can be demon-
strated by close ex.amination of the cash register tapes, and
which amount to a dollar value of $18.633.39. Exhibit 6, p.2.
3. Mr. Gelding, a Store Auditor, outlined the nature of
the discrepancies at issue here. When the type of cash register
used at Store 587 is cleared, a clearing number or "Z" number is
registered on the cash register tape. These "Z" numbers run con-
secutively from one clearing to the next: Therefore,'if a "Z"
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number is missing from a series of tapes, it means that a
portion of the tape has been removed or destroyed.
5. When the said machine is cleared, usually at the very
end of the business day or at the beginning of the next, it also
registers the total value of,cash transactions made since the C.
previous clearing. This will normally represent the value of
transactions for the business day, and is commonly 'referred to
as the daily total. At clearing, the machine also registers the
non-resettable grand total, which accumulates from clearing to
clearing. In the normal course of events, in any two%day period,
the difference between the grand totals for days 1 and 2 should
equal the daily total for day 2. Similarly, the "Z" number at
the end of day 2ishpuld follow consecutively on the "Z" number
for day 1.
6. In December, 1983, Mr. Neilson, an auditor, discovered
three instances at Store #587 where "Z" numbers did not follow
consecutively as they should-have,. and where the non-resettable
grand total computations did not yield the same figures as the
daily totals. Exhibit 11.
7. This led to an investigation by Mr. Booth, also an
auditor, who discovered similar discrepancies for the month of
November, 1983. Exhibit 12.
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8. Follo,wing on those events,
a thorough investigation
of all the register tapes from the store's opening in October,
1979, was done by Mr. Golding and an assistant. All the tapes
_ with similar discrepancies were re-examined personally by Mr.
Golding at some point. Mr. Golding prepared a sutimary of his
findings and a chart of all noted discrepancies. Exhibits 6
and 7.
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9. Various suggestions were ~made by both employer and union
witnesses as to how discrepancies of the type found can occur.
While the employer does not disagree with t.he possibility of "Z"
. numbers being eliminated for innocent reasons such as c~learing the
register'and destroying the "useless" tape after training sessions
or repair work, the employer does contend that the series of dis-
crepancies summarized by Mr. Golding can only be' explained by the
improper conduct of the grievor.
10. It is not part of the employer's case that the griever
was required to record the "Z" numbers or the non-resettable
grand tota1.s. We can even agree that he was ignorant of the
nature and function of those particular figures. It is .most
unlikely that someone aware of the nature and function of the
figures would have committed the conduct complained of here, 2s
he would have been all too aware that the discrepancies .could be
discovered.
11. When Neilson first discovered the December incidents,
he asked the griever f.or an explanation. None was forthcoming..
Neilson even suggested to the griever the possibil ity of the
register having been used~for training purposes or for a large
special order at the beginning of the business day, and then
having been cleared. The griever denied those possibilities at
the time and did not ever suggest in his testimony that such
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practices were followed at his store at all,, let alone on 62
occasions. Nor did any employee from Store #587 suggest that
such practices occurred.
12. Similarly, the griever offered no explanation for the
._ ~ .~ discrepancies to Mr. Booth, or in his subsequent correspondence
with the employer. It is true that Mr. Gingell may not have been
aware of the precise information about the discrepancies found in
Exhibit 7, but he was very much aware of the nature of the disr
crepancies from his work with Messrs. Booth and Neilson on the
incidents for November and December, 1983.
13. At no time did the griever suggest that the work of
the machine repairmen could have been responsible for the inci-
dents. Mr. Golding~ testified that his review of the service rec-
ords showed that the service visits did not occur at the same time
as zany of the alleged incidents. This testimony was not contra-
dicted by Mr. Gingell or by any employee of the store.
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14. It must be concluded that the only explanation for the
series of discrepancies outlined in -%xhibit 7 is the one proffered
by Mr. Golding: that someone, after the machine was cleared prop-
erly ; would ring up sales for a period of time, then clear the
machine, pocket the~m~oney, and destroy the tape for the trans-
actions between the two clearings. Sales made after the second
clearing would show up on cash register tapes retained by‘the
store, and would be totalled at the third clearing, but a close
examination of the tapes, as was done here, would show a missing
"Z" number and a difference between the daily totals and the non-
resettable grand total. The monies wrongly pocketed would not ‘
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show up in the Daily Sales,Reports, because they would not have
been retained on the daily tapes. However, they would be included
in any stock shortages reported by the store because stock had
been given to a customer in return for cash. The evidence is clear
&at the store had a record of high shortages but that the reported
shortages were larger than the discrepancies reported here. In
other words, the store was also losing stock through customer land/
or staff pilferage.
15. Why should Mr. Gingell be held responsible for these
particularrdiscrepancies? Much has been made of the fact that
nearly all the incidents occurred on a week-end, usually involving
a Friday, when it is alleged that an employee would have a greater
chance of being left alone in the store. We do not disagree with
the position that the opportunities for such conduct might in-
crease,on double-shift days. However, such opportunities would
be even more available to the manager. In addition .to the normal
opportunities during breaks, the manager has the ability to
"arrange:' opportunities by his directions and work assignments.
An employee can easily and genuinely be directed to some other
part of the store, including the basement,.to fetch stock, thus
leaving the manager alone for a few minutes.. Moreover, Mr. Golding
testified that the discrepancies occurred on the machine which was
stationed outside the manager's office. Finally, and most telling,
Mr. Gingell was the only employee who was. present for at least .) ^.
one day of each and every i.ncident. 'In other words, he is the only
person who could, according to the attendance records, have been
physically present to perpetrate the conduct complained of.
16. It is our submission that the standard of proof to be
met here is one of "reasonable,probability commensurate with the
gravity of the conduct alleged and the seriousness of the conse-
quences to follow if the allegations are proved." Indusmin Ltd.
(1978) 20 LAC (2d) 87 (Pichei‘l at p. 90, citing other cases.
17. We further submit that our evidence has sho& that dis-
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crepancies are indicated by the cash register tapes. The griever
does not appear to dispute the accuracy of that evidence. We also
submit that the discrepancies are not explicable by "innocent"
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the credit of the employer. A decision is enclosed (St. Joseph's
Hospital) which,while dealing with a very different fact situation,
is,illustrative of how conclusions based on circumstantial ,;
evidence can be reached.
19 . We.also ask that.the board uphold the penalty of dis-
charge. Although the griever is a fairlylongterm employee, with
a good employment record, the fact remains that he was in a
position of trust and responsibility. Any action undermining
that trust should be dealt with seriously, but in this case we
are notdealing with a spur-of-the-moment incident or an isolated
event. We are looking at a. series of deliberate acts over a 2 3/4 :
year period. We ask, therefqre,that the Board uphol,d the discharge
and dismiss the grievance. ,.'
In the paragraphs above, numbered 1 to 19, Ms. Janice
Baker, counsel for the, Liquor Control Board, has ably set out the
evidence on which she relies and which must I-orhainly be given
very serious consideration. In the paragrap:hs which follow
hereafter, numbered 1 to 56, Mr. A.M. Heisey: the griever's
counsel, has recapitulated, with equal precision and lucidity,
the evidence in support of Mr. Gingell's grievances.
conduct. Although the possibility of innocent means exists, we
have shown that it could not explain the series of incidents
outlined in chart 7. Aside from the implausibility of such a
long seri.es of incidents being explained by the various means
proffered, there is also no evidence to suggest thattthe "inno-
cent" explanationswere at work here. The prievor never agreed
with those explanations at the ~time the errors were first dis-
covered, he has never indicated that the practices suggested were
at work in his store, and neither has any other employee of that
store. One possible explanation was discounted by Mr. Gelding's
investigation and that evidence was not contradicted. It is our
position, therefore, that we have shown with clear evidence that
offensive conduct took place. The griever had the opportunity to -...
do the acts complained of. More importantly, he was the ONLY per-
son who had the opportunity to commit all the incidents which are
the subject of this grievance. We ask that the board find that
the griever committed the offence for which he was terminated., .~.
18 . As we indicated earlier, it is admitted that the evi-
dence is largely cir.cumstantial. However, given that we have
showrl that the only explanation for theseries of discrepancies
is inappropriate conduct and the only person who could have com-
mitted all the incidents is the griever, we submit that the con-
clusion must be made that the griever did indeed, neglect to de-
posit monies tendered for the~~sale of the~employer's property to
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ARGUMENT FOR THE GRIEVOR
I. THE GRIEVANCES
1. There are two grievances before the Board In this
matter. The first, Grievance Settlement Board File No. 44184,
was brought by W.B. Gingell on December 23, 1983 from the
decision of his employer the L.C.B.O. to suspend him without
pay effective December 22, 1983. The grievance requests the
following relief: '
"all monies lost due to Board's actions and
to be made whole in all respects'.".
(i)' Exhibit 4(4), Grievance dated '_
December 23, 1983
2. The second grievance, Grievance Settlement Board
File No. 172/84 i.s dated February 14 .( 1984 and is a grievance
from the dismissal of Mr. Gingell from his position as Manager
of Liquor Control Board of Ontario Store NO. 587 located in
Whitby, Ontario which termination was effective February.6, 1984.
The relief requested with respect to this grievance is as
follows:
"to be made whole in all respects".
(i) Exhibit 3, Grievance dated
February 14, 1984.
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II. 'THE BOARD'S JURISDICTION
3. The jurisdiction of the Board is derived from
Articles 3.2(c), 21 and 22 of the Collective.Agreement In force
between the parties and Section 18 of the Crown Employees .I
Collective Bargainins Acf, R.S.O. 1980, c.108 as amended.. The
test to be applied,by;the Board in determining the grievances
is whether the grievoriwas in the first instance suspended,
I and in the second instance dismissed from his employment, without
just cause. j.
(i) Bxhibi; 1, the Collective Agreement
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II,I.;, THE .GRIEVOR'S EMPLOYMENT
RECORD
4. Mr. Gingelljcommenced' employment with the L.C.B.O..
on January 2, 1971. His staff rating reports (exhibits 4(13)-
. . 4(26)) indicate that he was an exemplary employee during his
13 year career with the Board with no disciplinary record.
5. The follow$rg are excerpts from various of these
reports: I
la) "Mr. Gingell is a very trustworthy
man with a very good attendance
reco!d".
(i) Bxhibit 4(15), Memorandum from
T. Matthews to W;D. McLeod,
dated November 12, 1973
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"we feel that this employee is well
above average...".
(ii) Exhibit 4(16), Ann,ual staff rating
report, 1973
"Mr. Gingell has been left in charge
of a shift with our complete confidence".
(iii) Exhibit 4(17), Annual staff rating
report, 1974 ~,
"very capable employee, has the potential
for all phases of store operation....
Requires no supervision...".
(iv) Exhibit ~4 (18), Annual staff rating
report, 19,74
"Mr. Gingell is an outstanding employee
who is very efficient in all phases of
store operation". .~.
(v) Exhibit 4(20), Annual staff rating
report, 1976
"I feel.quite secure in knowing that in
my absence the store is managed the way
it should".
(vi) Exhibits 4(21), Annual staff rating
report, 1977
"I am quite confident in his ability.to
run the store in my absence as he is
very well versed in store procedures".
(vii) Exhibit 4(22), Annual staff rating
report, 1978
"Mr. W.B. Gingell continues to do a
terrific job in this store".
(viii) Exhibit 4(23), Annual staff rating
report, 1980.
6. The grievor was promoted from the,position of Clerk IV
to that of 'C' Store Manager inJune of 1980. He was assigned
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to store no. 587 in Whitby, Ontario that same month. Store 587
has four permanent employees, the manager, an assistant manager,
and,two.liquor store clerks.
(i) Oral testimony, W.B. Gingell
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: IV. THE SHORTAGES AT STORE NO.' 587
7. .Store no. 587 in Whitby, Ontario opened in October
of 1979. During its first three months of operation it had
substantial and unacceptable reported inventory shortages of
,. $1,031.25. These reported inventory shortages continued and
grew through 1980 until the date of Mr. Gingell's arrival in .
June. (It is possible that the inventory shortages were
substantially higher than ~reported as the audit disclosed an
inventory shortage for the period October 1979 to January 23,
1984 of $35,066.90 rather than the reported shortage of $32,135.55).
(i) Exhibit 9 Schedule of Inventory
Shortages for the period October
1979 - January 23, 1984
(ii) Oral testimony of W.B. Gingell.
8. After Mr. Gingell's arrival in June of 1980 at
store no. 587 the inventory shortages continued and increased.
Mr. Ging~ell was very concerned about the level of the inventory /
shortages and spoke to his supervisor and area manager on every
occasion when they attended at the store as to how to bring
the shortages under control. Mr. Gingell rotated staff,
performed cashier duties himself and did everything he knew of
to try and curb shortages.
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9. -’ By memo dated June 10, 1981 Mr. Gingell wrote to
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his district supervisor, Mr. A. Cheslo and stated the following:
"As you can see by the enclosed form, the
shortages in'this store continue to rise.
After having checked out all possible areas
in trying to find the shortages, I can only
conclude that the shortages are the result
of ~theft in the store. I would at this time
request the auditiors beg sent to verify the
shortage. I would also request the transfer
of Mr. ir. Preston and Mr. W. Michell be given
consideration at this time as a means of
stopping the shortage".
i;. ,..-. Mr. Gingell sent-a copy of this memorandum to his area manager,
Mr. A. Brady. Mr. Gingell received no response to this memo.
The auditors were not sent in to his store to verify the level
of the shortages and Messrs Preston and.Michell were not
transferred. Mr. Preston was eventually transferred out of
store 587 effective April 30, 1983 as a result of a personal
request by Preston. The transfer did not relate to Mr. Gingell's
request and was approximately 2 years after the qrievor's
request.
(i) Exhibit 4(l), Memorandum from
B. Gingell to-A. Cheslo, dated
June 16, 1981.
(ii ) Oral testimony W.B. Gingell
10. On or about September 9, 1982, Mr. Ginqell observed
one of his employees clerk W. Michell engage, while on duty,
in dishonest conduct. He observed Mr. Michell pour the contents
of broken bottles of liquor, that were the property~.of the
L.C.B.O., into containers. It was Mr. Gingell's belief that
Mr. Michell intended to take these containers of liquor home
with him. He notified the director of store operations for
,the L.C.B;O., his area manager and his district supervisor of
,what he observed by copy of a memo dated September 9, 1983 to
Mr. Michell from Mr. Ginqell. Mr. Niche11 admitted in writing
that he had committed the act complained of. No',discipline was
imposed by the employer upon Mr. Michell as a result of this
incident.
(i .) Exhibit 15, Memorandum of
September 9, 1982 from B.
Gingell to W. Michell
(ii .) Exhibitl6, Undated memorandum
from W. Michell addressed to
'Dear Sir'.
(iii) Oral testimony of W.B. Gingell.
1’1 . Throughout 1982 and 1983 the inventory shortages .
at store no. 587 continued and grew. Mr. Ginqell continued
.to speak to his area manaqer and district supervisor on a
frequent basis to ask for assistance and express his concern
regarding the store's shortages.
12. In response to a request from the assistant general
manager of the L.C.B.O., .Mr. Ginqell by memorandum dated
Auqust 10, 1983 explained the measures he had taken and was
requesting in order to assist him to control the shortages.
"In response to your request for an
explanation, I believe that I have
tried every possible solution that
I could think of to curb the shortages.
~. The staff has been rotated SO that
they do'not work together for long
periods of time. I have tried keeping
certain individuals off the register as
much as possible while using other members
of the staff. I have also gone on cash
myself as much as possible to try-to put
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, a stop to the rising shortage. :I have
spoken to Mr. Cheslo and Mr. Scowcroft
on this matter a number of times and
requested that the L.C.B.0 shoppers come
through the store. I would also like to
have noted that on June 10, 1981 that I
sent a letter to Mr. Cheslo and Mr. Brady
and that on that occasion requested that
not only the shoppers be sent in here but
also that the two clerks in the store be
transferred out. I do believe that the
shortages are cause by the staff and not
by the public!'.
(i) Exhibit 13, Memorandum from B. Gingell
to F.M. Burtt, Assistant General Manager,
dated August 10, 1983.
13 Pursuant to Mr. Gingell's request, shoppers were
sentthrough store no. 587 on or about June 16, 1983,.over . :- two years after Mr. Gingell's initial request for assistance.
14. During a five week pe~riod commencing in Narch of
1983 and ending on April 25, 1983 Mr. Ginqell was absent from
work due to illness. He attended at store 587 on only one
occasion during this five week period to pick up his pay cheque.
During the period that he was absent, inventory shortages were
reported of $700.00.
(i) Oral testimony of W. Ginqell
(ii 1 Exhibit 4(26) 1983 Annual staff rating report, dated May, 1983
indicating 20j sick days for the review period in question.
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V. THE AUDITS OF STORE 58-l
15. During the period June 1980 - November 1983
Mr. Gingell estimated that his store would have had 20
store audits, including 10 in 1983 alone. He was not
advised of any. irregularities by any of.the auditors who
attended at his store during this period and no evidence
was led by the employer to indicate that any irregularities
were uncovered by L.C.B.O. store auditors during this period;
In a letter written by'Mr. Gingell to Mf. Rankin;dated
January 16, 1984:
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. . . I can only state that during the two-
year period during which these discrepancies
<<Tare alleged to have occurred the auditors
attended at my,store in excess of 9 or 10
times. No bnementioned anything about
~'2' readings to me during this time or keeping
track of the non-resettable grand totals on the machines. I assume that as the auditors
~did not uncove,r any irregularities during this
period, the discrepancies were not obvious to
them either".
(-i.) Exhibit 4(8) page 2 of letter dated
January 16, 1984 from W.B. Gingell
to F.B. Rankin.
16. Kenneth Neilson an L.C.B.O. store auditor, from
the Peterborough region, attended .at the Whitby store on
December 12, 1983. In the Peterborough region store auditors,
when auditing a store, review the consecutive clearing numbers
or '2' key clearing numbers on the cash register machines to
see that all tapes created as a result of the clearing of a
cash register have beenretained by that store and that there
are deposits and/or explanations corresponding .to those tapes
and entries. Auditors .from the Toronto region did not check
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consecutive clearing numbers: As a result of Mr. Neilson's
audit, he determined that there were some tapes missing for
which there were consecutive clearing numbers.
17. On Wednesday, December 14, 1983 Mr. Neilson confronted
Mr. Ginqell with,the fact that some tapes were missing.Mr.
Ginqell seemed "surprised, not aware of it".
(i) Oral testimony of Kenneth Neilson.
18. ~~ Mr. Neilson advised Mr. Ginpell that there was a .,~
consecutive number printed on the tape called a 'z' reading or
a clearing number. He also told Mr. Ginqell that the,non-resettable
grand total could be used to determine whather there were entries
into a cash register for which there were no tapes. The auditor .
also advised Mr. Ginqe~ll that in some stores in the L.C.B.O.
system there is a practice of taking a '2' readinq from each
tape and placing it on to each daily sales report. ..
(i) Oral testimony of W.B. Gingell
(ii) Exhibit 4(8), Letter from W.B.
Ginqell to F.B. Rankin, dated
January 16, 1984.
19. Mr. Ginqell advised Mr. Neilson that he had never
heard of a 'z' reading or consecutive clearing number feature
on the cash registers in store 587 nor en any other machine.
He had noticed a number, which he learned from Mr. Neilson
was the ‘2’ clearing number, on tapes before but had not
understood that the number'had any function. Mr. Ginqell
was not aware that the non-resettable grand total on cash
register machines had any use to which it could be put and
he was not aware of any practice in the L.C.B.O. of taking
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a. I z I reading from each tape and placing~.hit on to each daily
sales report. Mr. Ginyell worked under five managers duririy
I his 13 year career with the Board and as many'as e-area
supervisors and at no time during that period were any of
the above-noted facts concerning cash registers brought to
his attention.
(i) Exhibit 4(8), Letter from W.B.
Gingell to F.B. Rankin, dated
January 16, 1984.
from the Peterborough area, ,Russel Booth attended at store
587 and uncovered three additional,irregularities where clearing
.: numbers and corresponding tapes appear to be missing. .~
(i) Exhibit .12,' Memorandum of December 16,
1983 from R.C# Booth to A.I. Hughes. "
21. By memorandum dated December 17, 1983, Mr. Gingell
wrote to Mr. .F;B. Rankin in connection with with Neilson's
findings. He stated inter alia:
"I do not know how these tapes have disappeared.
The money for each day has balanced-out and
there is nb trace on the tapes we have that the,
machine was cleared accidentally. The clearing
keys for these machines were kept in a draw in
the office, not at the cash registers. These
keys however, were accessible for any member
of the staff. I do not understand how a machine
could be cleared by anyone on a Friday or a
Saturday without someone else noticing.
While checking the cash tapes in the.mornings,
I tried to make sure that each taped was signed and that there was a proper clearing shown. I
I did not however check the clear numbers of the
tape. The tapes were checked periodically to
see if there were any unusual ringups but nothing
showed up. If the reason for the high shortages
in this store is because the machine is being
cleared and the money taken out, I can't see why this was not picked up on a previous audit".
(i) Exhibit 4(2), Memorandum dated
December 17, 1983 from B. Gingell
20. On December 15, 1983 another store auditor, again
to F.B. Rankin.
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VI. THE DECISION.OF. THE EMPLOYER :
22. By memo dated December 21, 1983 from F.B. Rankin
to the yrihvor, the grievor was advised that he was suspended
without pay indefinitely pending investigation of the "cash
register irregularities at the store under your charge...",;'
The grievor was advised that, "the Board's finding fin this
matter will be made known..."-to him in due course.
23. Mr. Ginge~ll's grievance from his suspension without
pay was launched the next day and alleged that Article,3.2(c)
of the Collective~Agreement had been violated. Article 3.2(c)
provides that an employee may grieve where an employee claims
that he has "been disciplined or dismissed or suspended from
his employment without just cause".
(i) Exhibit 4(3), Memo dated December 21,
1983 from F.B. Rankinto W.B.,Gingell.
(ii) Exhibit~4 (41, Grievance dated
December 23, 1963.
(iii! Exhibit 1, the~collective Agreement.
24. By letter dated January 12, 1984 Mr. Gingell was
advised of the results of the Board's findings and instructed
to respond within three calander days to write to the Board
to explain "the matter mentioned above which has prompted
this letter".
(i) Exhibit 4(7), Letter dated
January 12, 1984 from F.B. Rankin to W.B. Ginyell
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25. The letter from the employer of January 12, 1984
was inaccurate in several respects:
(a) The letter states that there were
"money discrepancies" in store 587.
Mr. Goldinq testified that there were
entries made into a cash register in
store 587 for which there are tapes
missing;~ Mr. Gold&g agreed that. there
is no proof of any monies missing.
(See paragraph 32).
. (b) The letter statesthere were 60 occasions,
where clearing totals in the tape were
missing~, in fact it was the evidence of
Mr. Golding that there were 62 such occasions.
(c) The letter states that there were
"discrepancies" amounting to $15,710.15
for the period of time in question. Mr.
Goldinq testified that the differences
in the entries to the cash register machines,
for which there were no tapes, totalled
$18,633.39..
(i ) Exhibit 4(7), Letter dated January 12,
1984 from F.B. Rankin to W.B. Gingell
(ii) Exhibit 6, Report of D.J. Goldinq dated
January 23, 1984.
- 23,-
26'. ~'~ By letter dated January 16, 1984 Mr. Gingell ~__ i_.
responded as instructed and confirmed the fact of his
conversation with auditor Neilson outlined in paragraphs 18
and 19 above. In that letter the qrievor made four requests
for information:
(a) Particulars of the dates on which
it was alleged there was a clearing
total and a tape missing.
(b) Access to store attendance records
for the.entire-period in question so *.+
that he could review them.
(c) Full details as. to how the alleged
money discrepancies were calculated.
(d) Information as to how the Board came
to the conclusion expressed in Mr. Rankin's
letter of January 12, 1984 that Mr. Gingell
had,. ~'failed to deposit founds tendered for
the sale of alcoholic beverage in the store
under your charge to the credit of the.Board".
2-i. No response to these requests was ever received
by the qrievor.
20. 7 The grievor offered'to make available to the L.C.B.O.
his personal financial records in order for them to review them.
No response was received to this offer.
.
ZY..~ 'I
- 24 -
As to an explanation, the grievor stated:
"1 can offer no explanation for the apparent
discrepancies uncovered by the auditors.
I canonly state,that during the two-year
period during which these discrepancies are
alleged to have occurred the auditors attended.
at my store in excess of nine or ten times.
No one mentioned anything about '2' readings
to mew during this time or keeping track~of
the non-resettable grand totals on the machines.
I assume that as the auditors did not uncover
any irregularities during this period, the discrepancies were not obvious to them either.
I assure you that npon return to my position
I will in future obtain a record of 'z' readings,
and non-resettable grand totals for each and
every cash register and monitor both of these
figure's very carefully. Apparently if I had
done so this problem would never have arisen. As I was not aware of either the importance
of these readings and in the case of the 'z'
reading of its existence, it does not seem fair
to penalize me”.
(i) Exhibit 4(8j, Letter dated January 16, 1984 from W.B. Gingell to F.B. Rankin.
30. By letter dated February 6, 1984 Mr. Ginqell was
advised that he-was terminated effective February 6, 1984.
The letter states:
"After full consideration of the information
available~to us, it has been decided that
your services are terminated...".
(i) Exhibit 2, Letter of dismissal
dated February 6, 1984.
31. The information available to the L.C.B.O. in making
its decision to terminate the qrievor was, never made available
to the qrievor in order that he might respond. Exhibits 6,7,8
and 9 constituting the auditor's report and various schedules
- 25 -
were never shown to Mr. Gingell. The auditor's report exhibit
6 and the attachments to it, exhibits 7,8, and 9 were all
prepared a,fter the date.that Mr. Gingell was advised incorrectly
(see paragraph 25) as to what the employer's findings were.
The report was dated January 23, 1984 some two weeks after
Mr. Gingell was requested to give an explanation.
32. ~Most importantly the report of--the store auditor,
Exhibit 6, stated that the store auditor's examination reveals,
It
. ..that there are 62 instances ;of...these cash registers being
used for what could have been customer transactions". (my under-
lining) In other words, the Board's own witnesses and reports
state that-there is no proof of any monies'm&sing at all.
(i) Exhibit 6, Report of, Douglas
James Golding, dated January,,2~3, 1984
(ii) Exhibit 7, Charts
(iii) Exhibit 8, Attendance chart outlining
absences of staff on occurence dates
(iv) Exhibit 9, Reported and true inventory
shortages for the period December 1979
~to January 23, 1984.
~33. Aside from what was present before the employer
on the date that it made its decision.to.dismiss the griever,
the following was not before the employer:
(a) Mr. Gingell's memoranda of June 10
1981 and August 10, 1983 wherein he
requested the transfer of two employees
he suspected of theft and a.'store
audit, which requests remained unanswered.
The memos also outline the extensive
(ii
(iii
,I
.I
. (b)
i., ‘.
(i
(c)
- 26 -
measures Mr. Ginge 11 had undertaken to
attempt to control shortages in his store,
without success, ,and record the fact that
.he had spoken to his district supervisor
I
and area manager on.many occasions.
Oral testimony of R.M. MacDouga
Staff Relations Officer for the
L.C.B.O.
11,
.Yi.
Exhibit 4 (11, Memorandum dated
June 10, 1981 from W.B. Gingell
to A. Cheslo.
Exhibit 13, Memo dated August 10,
1983 from B. Gingell to P.M. Burtt.
It was also apparent that although Mr.
Ginqell's .personnel file was physically
present before the personnel committee of
the L.C.B.O. when the decision was made to
fire Mr. Gingell, attention was not drawn
to the outstanding work history and
Mr. Ginqell had received during his
tenure with the L.C.B.O.
Oral testimony of R.M. MacDougall.
-appraisals
13 year
The reported inventory shortages experienced
by the store when Mr. Gingell was not employed'
there, for the period.October 1979 to May .i
~1980 and the $700 inventory shortage experienced
in April 1983 when Mr. Gingell was absent due
to illness.
. .
.i . I. - 27 - ',
34. Access to Liquor Control Board of Ontario store
no. 587 in Whitby, Ontario is achieved by possession of a store
key. Mr. Gingell, the manager, his assistants manager and the
senior clerk who throughout the period of Mr. Ginqell's tenure
as manager was Mr. W. Michell all had store keys in their-'
possession; Mr. Gingell distributed the number of keys that
he did on the advice ,of the Durham Regional Police.
(i) Oral te,stimony of W.B. Ginqell
35. 'Access to any of the cash registers could be
obtained through the use of the 'X' and .AZ' .keys. The
'z' key is the key that would permit one to c1ear.a machine
and take a reading. All of:the cash register keys in store
;.587'were kept in an unlocked drawer in a desk in the store
office which was open to all. Any employee at store 587
could, therefore, have rung entries into the machine, taken
a reading and destroyed the resultant tape if-alone on the
store floor at a cash, register.
36. Store no. 587 is op'en Monday, Wednesday, Thursday,
Friday .:lnd Saturday of every week. On Friday it is a two-shift
store. During the time that the store operates two shifts,
two employees work from 9 a.m. to 6 p.m. and two employees
work from.2 p.m. to 9 p-m. During the morning 9 a.m. to 2 p.m.
and evening 6 p.m. to 9 p.m. there would be many occasions
where an employee would be left alone on the floor.
/: (. ? - 28 -
37. Of the 62 pairs of<dates for which there are entries
on to a cash register machine and unaccounted for tapes, only
7 of the pairs of dates do'not involve a~friday. Friday would
be the day most likely for a cashier to be left alone on the
floor of the store.unsupervised by any other employee.
(i) Exhibit 7, Chart
(ii) Exhibit 10, 1981, 1982 and
1983 calenders.
38. Cashiers are left alone on the floor area when
lunch or washroom breaks are taken by fellow employees, when
shipments come in., approximately every week, when employees
.
are doing bookkeeping etc. 'As much of 50% of a manager's time
would be spent away.-from the cash registers and out of sight
of the acting cashier(s).
.
39. Although the auditors could determine a two day
period during which entries were made into a cash register
for which tapes and clearance numbers are missing, they could
not determine at what time the entries were made. They could ~.
not say.therefore whether an employee tias or was not present
at the time when the entries were made on to the cash register.
(i) Oral testimony D.J. Gelding,
store auditor.
40. Entries for which there would be no corresponding
customer cash transaction on a cash register, could include
the following:
.> ‘a~ ,,‘. * - 29 -
(a) the servicing of a machine by a
repairman
(b) the training of 'new staff
(c) the training of staff who are.not
familiar with the particular cash /
register in question as the L.C.B.O.
has over ,5 or 6 different casii register
models
(d) experimentation by staff on a cash _~
register to determine how the cash
register operates.
VII.. L,.C~.B.O. STORE PRACTISES.
AND PROCEDURES
'41. There is no written or oral L.C.B.O. procedure
regarding .the safekeeping of the '2' key to store'cash registers.
In fact the only witnesses called who presently work on a day
to day basis in the L.C.B~.O. store system testified that until
very recently in all the'stores they had worked. in, including
all of the stores in which Mr. Gingell was trained, cash register
keys were uniformly kept in an unlocked area to which all
employees had access i.e., in the cash register drawer itself,
a drawer in the manager'~s desk; a hook on the door to the store
office.
(i)~ Oral testimony of Michael Sullivan
(ii). Oral testimony of Tim Kikot
(iii) Oral testimony of George O'Connor
(iv) Oral testimony of W.B. Gingell
-
: ‘.
.
(iii) Oral testimony of George O'Connor .
(iv-) Oral testimony of W.B. Gingel .
4.5. Two weeks after Mr. Gingell was terminated by the
L.C.B.O., a circular, number SO-2240 was sent to all L.C.B.O.
store managers. This circular was initiated as a result of
the findings of the .uditors at Mr. Gingell's store. This
circular reported the fact,
"that on occasion not all detailed tapes
can be accounted for. ~This could be ., ;:ii
because you have.been training a new
employee and the use of your cash register,
or a service person has been in, or for
other reasons".
;~ The Board requested that should this occur,
"the cash register detailed tape is to be
kept and~a notation is to be made as to
the occurrence".
46.. The memorandum further advised that managers with
cash registers which have. consecutive clearing numbers or
consecutive transaction numbers are to ensure the tapes from
one business day to the next are in numerical suquence and
that those numbers are to be recorded on the back of the daily
sales report for verification. Circular SC-2240 that post-
dates Mr. Gingell's dismissal was the first written policy,
procedure or guideline of any description issued by' the L.C.B.O.
to its store managers outlining.any such requirements.
(i) Exhibit 4(11)., Circular NO. SO-2240
dated February 20, 1984.
(ii) Oral testimony of George O'Connor
(iii) Oral testimony of Tim Kikot
(iv) Oral testimony of T F. MzltthewS
(v) Oral testimony of Michael Sullivan
. .
,,,* .‘. - 30 -
~.,: _, ,‘.,” - ~, ‘.\.
42. George O'Connor a non-bargaining unit L.C.B.O. store
manager who had~worked for 24 years with the L.C.B.O. in 15 :.-~ :
different stores stated that until very recently consecutive
clearing numbers of tapes and the non-resettable cumulative
grand total were completely ignored. In add.ition it was Mr. .
O'Connor's opinion that the non-resettable cumulative grand.
total was a very inaccurate measure of the actual cash trans-
actions that occur.on a particular cash register. Returns to
stock, voids and deliveries are all recorded as transactions
for which money is received when in f.act such'is not the
case.
(i) Oral testimony, George.O~'Connor
43. Tim Kikot a Clerk IV with the L.C.B.O:-and a former
associate of Mr. Golding in the L.C.B.O. audit department, gave
evidence as to the measures he would take and he had observed
had been taken, in a store where there were suspicions that
employees were stealing. The measures suggested were identical
to those requested by Mr. Gingell in June of 1981 i.e., transfer
of staff etch.
(i) Oral testimony of T. Kikot
44. All of the individuals who gave testimony at the
hearing who were currently employed in the L.C.B.O. store
system agreed that until recently (see paragraph.461 none
had tiorked in a store where all cash register tapes created
by a machine were retained.
(i) Oral testimony of Michael Sullivan
(ii) Oral testimony of Tim Kikot
(iii) Oral testimony of George O'Connor .
(iv) Oral testimony Off W.B. Gingell .'-
45. Two weeks after Mr. ,Gingell was terminated by the
L.C.B.O., a circular ,. number SO-2240 was sent to all L.C.B.G.
store managers. This circular was.initiated,as a result ,of
the findings of the auditors at Mr. Ginqell's store. This . . . .~
circulars reported the fact,
"that on occasion not all detailed tapes
.can be accounted for. This could be .I:- because ~you have.been training a new
employee and the use of your cash register,
or a service person has been in, 'or for
other reasons".
The Board requested that should this occur,
"the cash register detailed tape is to be
kept and a notation is to be made as to
the occurrence".
46.. The memorandum further advised that managers with
cash registers which have.consecutive clearing numbers or
consecutive transaction numbers are to ensure the tapes from
one business day to the next are in numerical suquence and
that those numbers are to be recorded on the back of the daily
sales report for verification. Circular SO-2240 that post-
dates Mr. Gingel,l's dismissal was the first written pOlicy/
procedure or guideline of any description issued by the L.C.B.O.
to its store managers outlining any such requirements.
(il Exhibit 4(11), Circular No. SO-2240
dated F'ebruary 20, 1984.
(ii) Oral testimony of George O'Connor
(iii) Oral testimony of Tim Kikot
(iv) Oral testimony of T F. Matthews
(VI Oral testimony of Michael Sullivan
-
I
‘. ,*
- 32 -
VIII. CONCLUSION
47. As stated in the Bmployer's argument and in Exhibit
4(7) it is alleged by the Employer that the grievor "failed to
deposit funds tendered for the sale of alcoholic beverage in
the store... “under his charge to the credit of the Board.
48. The allegation of the employer is a very grave and
serious one. The employer alleges that the grievor, a manager
in a position of trust misappropriated,monies that were the _..;.
property of his employer. It is submitted that although the
.standard of proof in both of these grievances is proof on a
. I balance of probabilities, the level of ~proof required mustbe
commensurate with the.qravity of the allegation. It is, submitted
that a very high standard of proof is required where there is
anallegation of conduct that is morally blameworthy or that
could have a'criminal or penal aspect:
(il Continental Insurance Company vs.
Dalton Cartage Compan Limited
(1983) 25 C.P.C. 72 6.C.C.)
49. It is submitted that the essence of discipline,~
and hence dismissal with just cause/is that it relates to
blameworthy conduct and to matters over which the person who
is disciplined or dismissed, has con,trol.
(i) Re General Motors of Canada Ltd.
and United Automobile Workers,
Local 119 1 L.A.C. (2dl 401
(ii) Re United Automobile Workers and Massey Furguson Ltd. (1969)
20 L.A.C. 370
*
,i . .
.’ . .
- 33 -
~I t
50. It is submitted that~ there is no evidence of-any
behaviour or action on the part of the grievor that would
justify any discipline whatsoever. The grievor was cognizant
of the shortages being experienced by his store, he reported
them, he took~ steps to bring them under control, all to non
,avail. On the basis-of the training that he had received,~and
the L.c.B.O. procedures,,in place prior to hi!s dismissal, he
could not have uncovered the fact of the missing tapes.
51. The only evidence of any real loss to the L.C.B.O.,
as opposed to entries on to a cash register machine, are the
shortages evidenced as inventory shortages. No analysis was
done by the L.C.B.O. of~these shortages. The L.C.R.O..did
not consider the substantial inventory shortages that occurred
for time periods when Mr. Gingell was not-even an employee
at store no. 587. The only employee at store 587 for the
~entire period of the inventory shortages was Mr. W. Michell,
not the grievor.
52. ">" The L.C.B.O. in its argument at paragraph 15
states that " . ..Mr. Gingell was the only employee who was
present for at least one day of each and every incident"~.
No one can p.lace the date on which each of the 62 incidents
occurred except to say they occurred on one of 62 pairs of
days. Mr. Gingell was absent for three days out of the 62
pairs of days involved. The L.C.B.O. gave no consideration
to the possibility of two employees stealing from store 587,
as was suggested by Mr. Gingell~in his memo of June 10, 1981
so that focusing on the attendance record of one employee is
a meaningless exercise.
:I. :: - 34 - '-.
53. Further, as three-out of four employees.at store 587.::
had 24 hour access to the cash register machines by use of
their store keys and once inside the Store access~ to the cash
register machines through the use of the 'z' key which was
kept in an unlocked drawer in the store office, it.is possible
that the entries to the machine, for which tapes are missing
were'made after hours by an employee who might have been absent
onone or both of the days on which t.he incidents are alleged to
have occurred.
. .
54.. The Board must ask itself how probable it is
that an employee would draw attention to shortages~that he _I
is creating and ask his employer for help to stop.those
shortages and determine their cause. It is submitted that
such a scenario is a highly~ improbable one but it is the
scenario that the employer would ask you to accept.
55. It is submitted that the employer has failed to
prove its case'.
56.
IX. RELIEF REQUESTED
The grievor requests the following relief:
(a) Reinstatement as manager of store no.
587 in Whitby, Ontario effective immediately
(b) All monies and benefits lost from
December 22, 1983 to the date of
reinstatement
- 35 -
(cl Interest on that amount
::- (d) Removal of the letter of suspension
dated December 21, 1983 and the letter
of dismissal dated February 6, 1984, to-
gether with all other references to the _*
suspension and dismissal from the griever's
personnel file and employment record.
The foregoing paragraphs, numbered 1 to 56, represent
--- as previously explained --- Mr. Heisey's argument in support
of the two grievances.~
Before stating this Board's conclusions, it is approp-
riate to make some comments on the evidence received and the
arguments which have been quoted.
COMM(ENTS
Our first comment must be that we think all the em-
ployer's witnesses ~pe,rformed their duties in good faith and
testified at the hearing with honesty and candour. The same
must be said of the other witnesses. The problemhere is not
one of credibility. The problem relates to the validity of an
analysis based almost entirely on the system of r?cord-keeping
and stdck-taking in effect at the Liquor Control Board's Whitby
store.
- 36 -
t relates to evidence that discrep- Our second commcn
ancies and shortages occur in other stores. This may be due
to theft or- pilferage by customers or by employees. Altern-
atively, discrepancies or apparent shortages may be due to
honest errors in record-keeping or stock-taking. When, how-
ever, it becomes obvious that shortages are excessively high
on Boeing compared with those in other stores, it is reasonable
to expect that management must make an effort to discover the
reason. There are a number of ways in which this can be
attempted: auditing tapes is only one of them and taking inve,nr
tory is another, but it is clear that neither will necessarily
yield conclusive explanations for apparent shortages.
Another comment is the following. The employer alleges
that,the griever was discharged for failure "to deposit funds
tendered for the sale of alcoholic beverages in the store under
his charge to the credit of the Liquor Control Board." It
seems to us that this is merely a euphemistic way of saying . . .
that over a prolonged period of time the grievor was a thief,
or at least a party to theft, a very serious charge calling
for strict proof. In a'case such as this the onus of proof is
on the employer. As is often-mentioned at arbitration, a civil
proceeding, the balance of probabilities and not proof beyond
a reasonable doubt is the appropriate standard. Nevertheless,
as pointed out by the Supreme Court of Canada. the burden of
- 37 -',
proof required should be "commensurate" with the gravity of the
allegation. Continental Insurance v. Dalton Cartage, supra.
Thus when it is alleged or implied even in a c.ivil
proceeding, that the other party has committed what'~a&unted to :.
a serious crime, the allegation or implication must be strictly
proved. Moreover, such allegati,ons cannot be disguised .by
euphemistic language.
,~.-_ -:
.It is not without significance that no criminal charges
against the grievor have been initiated. If there were any
substance in the allegations against him, that ought to have
been done. When a manager's whole career is at stake, an
accusation too flimsy to stand the test in a criminal court
should not be allowed to wreck--his life.
As though it were an al~ternative to the accusation of
theft, it has been suggested that the grievor, as manager, should
be held responsible for what occurred in a store under his charge
We do not think that suggestion is acceptable in the circum-
stances of this case. Perhaps it could be entertained if it
were shown that while being aware of shortages the grievor as
manager took no steps to solve the problem. The evidence is
clear, however, that:
’ *
I
.i,’
- 38 -
(a) the grievor knew about excessive shortages, occur-
ring before and,after he became the store's manager,
(b) he made his own investigation and reported on it,
Cc) in his memorandum to district supervisor Cheslo
oft June 10, 1981, he expressly requested an audit "to verify
the shortage" --- and rec.eived no reply,
(d) he reported his suspicions ,of an employee both
orally and in~writing~,
(e) he reported~further to the L.C.B.O. assistant
general managers on August 10, 1983, requesting the transfer
of two.clerks and asking-again for "shoppers" to visit the
store. It certainly cannot be said that he did nothing to solve
the problem.
A curious feature of the evidence is that 'the Whitby
store accounts were repeatedly audited between 1980 and Decem-
ber, 1983. NO reason for excessive shortages was uncovered in
those audits. It would seem illogical to charge the grievor
with responsibility for failing to solve the mystery when the
Board's own auditors had failed to do so.. Apparently they had
not resorted to the "2" numbers, as a different team of auditors .~. ..,
did in Decembe.r, 1983. If there were defects in accounting
procedures at Whitby, it would also appear that the procedures
followed by many of the Board's auditors had been far from
effective.
I
- 39 -
This raises an even more curious aspect of the case:
the status of !'Z" numbers. These were explained for the first
time to Mr. Gingell in December,-1983, by Mr. OK. Neilson, an
_.~
auditor who normally works in the Peterborough area. Use of the
"2" numbers was again explained at the arbitration hearing in
April. Although a "2" key was accessible to all employees at
Whitby;the griever, according to his uncontradicted evidence,
had never been instructed to use .~it. This 'ii'j entirely credible
because consistent evidence was g,iven by Mr. George O'Connor,
Manager of a large store in Toronto, who has .had 24 years of
experience with the L.C.B.O. in 15 different stores and had no
knowledge of any directive about~"Z" numbers in the Manual.
Except for recent month,s --- since the discharge of Mr. Gingell
--- no store, he said, kept track of "Z" numbers, adding that
auditors were interested only in the "X" numbers on the tapes.
As for the non-resettable grand total he said: "It should be
completely ignored. It never made any sense to us. It never
agreed with the ring-off total. If it did represent anything,
we never used it... We never discussed it with an auditor." He
pointed out that stores have four different kinds of-cash
registers.
Another manager of a large store in Toronto, Mr. T.
Kibot, testified he was told "the day after Gingell's suspen-
sion" to start tracking "Z" numbers. He~knew nothing of such
7
.,.
- ‘,
- 40 -
a requirement prior to 1984, although~.he had spent some time
working with Mr. Golding and others as an auditor. He and other
witnesses agreed that "2" keys were not always kept in a safe
or a locked drawer. Thus it would often be possible for any
.I employee to use one.
.~It was Mr. Douglas Golding, a store auditor for the
past three years, who did most of the work and prepared the
reports on which the cmployer.'s decisi.o&was based. He had
not even started his audit when the grievor was sus~pended on
.
December 22. His paper work (including.many of the.~exhibits'
later filed at arbitration) was done between January 5 and 25,
and then placed before a management meeting. Mr. 3.0. Mac-
Dougall was the only witness to testify about that meeting.
He had not been aware of Exhibit 4(l) --- the grievor's mem-
orandum to Mr. Cheslo of June 10, 1981 --- nor was it put be-
fores the meeting at which management decided on discharge.
However. Mr. MacDougall did inform the meeting that
Mr. Gingell had a good record.
It may be added that Mr. Gelding's testimony about
the griever's presence in the store at all material times is
not convincing. There are shifts on Fridays and Saturdays ---
-
‘., :.
: .~’
when the store is open from 9 a.m. to 9 p.m., -and it is obvious
.that the Manager would snot be present for 12 full hours on those
days; he had an assistant 'manager and two clerks. Moreover, an
inventory shortage of $700 was reported for the period~of~ZO%~.days
during whic~h the grievor was absent on sick leave. : :, ..'!<.,
Much of the case against.the grievor rests on the theory
that opportunity can be equated with guilt, a classic example of
fallacious reasoning. When it is proved that an accused person
^~~
had opportunities to commit an offence, what conclusion follows?
All that has been proved is that it is possible the accused is
guilty. A possibility is never a certainty. ~Much more is required
to establish guilt. The point becomes even more important when it
is known that other persons had more or less the same opportunities
as the accused.
A,further comment may be made on the somewhat confused
nature of the evidence relating to alleged losses by the L.C.LB.0.
The employer's letter to the grievor of January 12 said there were
"discrepancies" amounting to $15.710.15 for the period of time in
question. jn argument'however, Ms. Baker referred to Mr. Gelding's
calculation-tha,t "between March, 19&l and December 10, 1983, 62
discrep:ncies occurred in the store, which can be demonstrated by
close examination of the cash register tapes and which~amount to a
dollar value of $18;633.39."
Actually, 'Mr. Gelding studied tapes from the opening of
the store in 1979. He testified that most discrepancies occurred
on Fridays --- a two-shift day; He agreed that until January, 1984,
"~ auditors did not usually check "Z" numbers. He said the 1979 losses
at Whitby~had been "very high." (Mr. Gingell~ did not arrive as man-
ager until June, 1980). He further said auditors ought to have been
! ~.:- sent when the grievor requested it. After finding discrepancies
--- including the fact that some tapes were missing --- Mr. Golding
and a team of five other auditors conductedaphysical inventory of
all items on the shelves and in the basement. Compared with the
.: "perpetual inventory" recorded since the store openinq, it
appeared likely that losses had been much higher than suggested by
analysis of tapes --- perhaps considerably more than $30,000. hit
is apparent that the L.C.B.O. does not re.ally know what the true
figure was. Nor does the L.C.B.O. know who was responsible.
c
The employer concedes that the griever had a good record
during his 13 years of service. at seven different stores. The
details were recited in Mr. Heisey's argument. Consistent with that
record he repeatedly attempted to discover the cause of shortages
at the Whitby store. It is difficult to understand why his plea
‘: . . ! .
.
for help on June 10, 198 1
by management, and it is
- 43 -
, and his other requests were ignored
even more difficult to understand why
his memoranda were not brought to the attention of the committee
considering d$scharge.
Also consistent with a good record was the grievor's
conduct when a special audit finally (and very belatedly) began in
December, 1983, and "Z" numbers were checked for the first time. _.
Two~of the auditors who interviewed the grievor at that time were.
called as witnesses. Mr. K. Neilson said the grievor was "co-
operative throughout." Mr. Russell Booth said he wa.s "co-operative."
The former also said Mr. Gingell seemed "surprised" by their findings
which of course were based.-on "2" figures.
On January 16 the grievor made a number of reasonable
requests for,information,, to which management did not respond. He
further invited an investigation of his personal financial position,
but again there was no response. Instead, relying almost exclusiv-
ely on Mr..Golding's report and without knowledge of relevant facts,
management decided in February to dl.scharge Mr. Gingell.
CONCLUSIONS
On the merits of this case. the principal conclusion is
clear. Even on the balance of probabilities it has not been proved
,
. . - 44 -
~ ‘*
that the griever was responsible for excessive shortages at the
Whitby store. : A higher standard of'proof would be appropriate in
a case such as this and the evidence falls far short of reaching
that standard. _.~ ._
In respect of the suspension in December, management
did not have sufficient evidence at that time to justify a sus-
pension without pay. The.greivor had repeatedly reported excessive
shortages, asked for help and suggested changes in staffing.
Managements knew little more in December than what was known for
at least three previous years, and at this arbitration 'failed to
explain why no response had been given the griever over a long
period of time.
In respect of the discharge, our Fonclusion necessarily
is that it was without just cause and must be set aside. If there
were satisfactory evidence of deliberate and repeated theft, we
would not hesitate to uphold a termination of employment. There .:g
is no such evidence.
If there were evidence of such negligent supervision of
staff as to facilitate theft by others, there might well be
grounds.for severe disciplinary action. There is no such evidence:
the record is to the contrary.
i
The theory that a store manager can be held personally. ,..
responsible for all shortages, regardless of the re.ason, is not
acceptable. If that were the rule, many .and perhaps ~most store
mana,gers would be relieved of their duties after every audit.
It Mayo be noted (although it has no application to this
case) that Article XXV of the collective agreement between the
L.C.B.G. and the Liquor Boards Employees Union deals with "Stock
and Cash Shortages" as follows:
::
25.1 lhe Board agrees not to require reitisement for stock
shortages by the group of employees in the store involved
where the shortqes are deemed by the Board to be reason-
able except where the employee or employees involved are
identified or such shortage occurs as a result of group
action or a criminil act.
25.2 All daily cash shortages of two dollars ($2.00) or 1eSS
shall bs absorbed by the Board. All daily cash shortages
in excess of two dollars ($2.00) shall be the respnsi-
bility of the cashier and he/she shall reimburse the Board
for fifty percent (50%) of such cash shortages in excess of
two dollars ($2.00) but not including the twa dollars ($2.00).
All overages shall be retained by the Board.
There has been no suggestion that Mr. Gingell should reimburse
the employer for the los~ses at the Whitby store --- or any part
of those losses. The.reason obviously is that the person or
.persons responsible have not been "identified'! nor has any
"criminal'act" been proved. It is equally obvious that the
Whitby shortages were not deemed "reasonable," but no convincing
explanation has been given by any one.
r - 46 -
..~. All of Article XXI
lates to "Discharge Cases.”
is as follows:
I in the collective agreement re-
In som.ewhat unusual langauge, it
22.1
22.2
.
A claim by an employee tie has completed his/her probat-
ionary period that he/she has been unjustly discharged
shall be treated as a grievance if a written statement
of such grievance is filed by the employee commencing
at the second step of the Grievance Procedure (Article
21.5(a)) with the Chairman,of the L.C.B.O. or the Chair-
man of the L.L.B.O. within ten (10) days after the em-
ployee ceases to work.
Such special grievance may he settled under the Grievance
Procedure by:
(al confirming the Board's action in dismissing the
employee:.
(b) reinstating the employee with full compensation for
time lost; or
cc) by any other arrangement which may be deemed just in
the opinion of the conferring parties of the Crown
Employees Grievance Settlement Board. ,...~
As Mr. Heisey pointed out in his argument, this Board :.
is also .given jurisdiction by Sections lE(and 191 of thee Crown
Employees Collective Bargaining Act, which was recognized in
Article III.2 of the collective agreement and also by the foll-
owing paragraph cc.) in Article XXI.8 _
21.8(c) 'lhe determination of a grievance by the Crown Employees
Grievance Settlement Board pursuant to the terms of this
Agreement is final and binding upon ~the parties and em-
ployees covered by this iqreement.
. . - 47-
.,i..’ ‘,; rr
. ‘I
The decision of this Board is that William B. Gingell
shall be reinstated not later than August- 2.2, 1984,, as 'manager
of Store 587 at Whitby or as manager of any other Class C store
within 70kilometres of the Toronto City Hall, with full pay and
all the benefits he would'~have earned had he not been suspended
and discharged. In the event that the employer deems it neces-
sary or expedient ~to employ him at a store other than Store 587,
he must, receive the benefits or assistance provided by Article
XXVII of the collective agreement, titled "Expenses of Moving
and Transfer. ‘I
. The proper me.thod,of computing compensation has been
authoritatively discussed by the Ontario Labour Relations Board
in its Practice Note Number 13, dated September 8, 1980, and in
certain cases. In particular, the O.L.R.B. dealt with the matter
of interest, which has been, claimed by the grievor in this case
and referred to its decision in Hallowel House Limited (1980)
OLRB Rep. Jan 35, where the following example was used:
I
The Hoard determines that an employee has heen wrongfully
discharged. 'Ihe bard's award marks four months from the
time of discharge. Over that four-month perial the total
loss of wages, taking into account mitigation., is estab-
lished to he $3,000.00. ?he prime rate published in the
Bank of Canada Review during the month the complaint was
filed is 12 per cent. Tne interest would be calculated
by dividing $3,000.00 in half and~applying the 12 per cent
annual interest rate adjusted to a four-month pried, that
is, 1 per cent multiplied by 4/12ths. The resulting interest
then is $1,500.00 multiplied by 12 per cent multiplied by
4/12ths or $60.00.
1
.
I
. . -( c, ,\ ‘r - 48 -
The issue of.interest was also discussed by this Board
in Knudson 348/80,
the ~panel being chaired by Professor J.W.
Samuels.
After reference to several other cases, it was said
~.;~.
at pages 6 and 7:
I accept the formula suggested by Ms. Lennon for the calcu-
lation of interest owing on lost wages. It is a derivative of the
Hallowe House formula.
a. Take the total amount owing;
b. Divide it by 2, in order to reflect the fact that, at
the outset only one-wage payment was delinquent, and
so on to the date of reinstatement, when all the wage
payments were owing; ,,..
C. Apply the--appropriate annual interest rate pro-rated .I'
over the pericd over which .the monies were owing to
-the date of reinstatement;
d. Then, take the total amount owing at the time of re-
instatement, and apply the appropriate annual interest
rate pro-rated over the ~pericd from the date of rein-
statement to the date of payment. For this last cal-
culation,~do no.t divide by 2, because you are not
dealing with an 'increasing l,iability but a fixed one;
e. The appropriate annual interest rate is the prima
rate established by the Bank of Canada at the time the
grievance is filed. (8 might say that sOme modification
is needed here if the period of calculation is a long
one and the interest rates have fluctuated dramatically,
'~ ~~ :.% they have in recent times.)
To be precise, and so that ther~e need be no’ misunder-
standing about the implementation of this decision; it is our
conclusion that interest should be paid by the employer in
accordance with the formula set out below, which is considered
- 49 -
to be consistent with the principle of ,Hallowel and the approach '~
outl~ined in Knudson.
Let'the grievor"s annual salary be represented by the
letter S.
Let the annual value of monetary benefits under the
agreement be 8.
If the grievor is duly reinstated on August 22, eight
months after his suspension, then his entitlement to compensation
(C)-excluding interest will be: %&$' xE=C
If reinstated before August 22, the employer would be
entitled to credit in respect of the days between reinstate~ment
and.August 22. .,
The employer .will also be entitled to credit in respect
of earnings by the grievor, if any, between December 22, 1983,
and the date of his reinstatement. : i--
This Board is also of the opinion that to be placed in
the same position the griever would have been in had he not been
suspended and discharged, interest is payable as follows:
The total principal amount owing at August 22 is C. ~.,. ::
Interest thereon, calcul,ated at the prime rate of 11 per cent
(effective 'in December,,~'~1983, when the grievance was filed)
will be Y, -as follows:
Thus total compensation (T) due as of August 22, ..~~
will be:
C+Y=T.
There is a further formula to be stated. In the event
that, for any reason, th&grievor.is reinstated at some~date. later
than August 22, interest wi~ll accrue daily'on total compensation
CT) as and from that date. This figure can be computed as follows:
Where the-number of days of delay is D, and the prime
rate is 12.5 (in recognition of rising rates in recent months)
the additional interest would be:
TX 12.5
mx
.
The computation Of z of course will not be necessary
if the grievor is reinstated, as directed by-this Board, on or
before 'August'22, 1984.
Another remedy requested was..,
(d) removal of the letter of suspension
dated December 21, 1983 and the letter
of dismissal dated February 6, 1984,
together with all other references to
the suspension and dismissar from the
griever's personn~el file and employemnt
record.
In light of the result on the merits, the reque~st
must be granted and it is so ordered.
Dated at Rockwood, Ontario
this 27th' day of July, 1984
:~. / . .
EBJ:sol
‘.
E.B. /Jolliffe.Q.C..,vice Chairman
B:. Switman Member
A. 6. Stapleton Member ;
i
I