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GSB#0657/94, 0810/94
OLB#121, 144
IN THE MATTER OF AN ARBITRATION
Under
THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT
Before
THE GRIEVANCE SETTLEMENT BOARD
BETWEEN
OLBEU (Garth)
- and -
The Crown in Right of Ontario
(Liquor Control Board of Ontario)
BEFORE E.E. Marszewski Vice-Chair
FOR THE
UNION
J. Noble
Legal Counsel
Ontario Liquor Board Employees Union
FOR THE
EMPLOYER
J. Baker
Counsel
Hicks Morley Hamilton Stewart Storie
Barristers & Solicitors
HEARING August 21, 1996
January 30, February 25, April 15, 16, 1997
July 24, 28, 1997
Grievor
Employer
2
This matter involves two grievances of Grover Garth, an employee of the
Liquor Control Board of Ontario. The first grievance -involves a disciplinary letter dated
May 30, 1994 which suspended the grievor with pay. The second grievance involves the
dissmissal of the grievor for theft from Store 408 at Jane and Finch. The grievor had
been a full-time employee at that store about eight years. The dismissal was effective
June, 1994. The grievor seeks re-instatement and full compensation, as well as the
removal of any disciplinary notes and reports from his files.
The only disciplinary notation on the grievor’s record is one written
reprimand. The grievor was charged criminally with theft and convicted on September
16, 1996. The conviction was appealed and the appeal was to be heard in September,
1997.
A preliminary objection raised by Counsel for the Union with respect to the
Employer’s intention to introduce videotape evidence of the Grievor working as a cashier
at one of the LCBO stores was dealt with in a previous award of this Board. By award
dated May 7, 1996, I allowed the introduction of the videotaped evidence for the reasons
set out therein and subject to any final submissions by the parties with respect to any
Charter of Rights issues or questions related to relevance.
The pertinent facts of this case may be summarized as follows. Michael
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Palmieri, the Manager of the L.C.B.O. Store #408 located at Jane and Finch, had 11
employees, 10 of whom were bargaining unit members and one of the latter was the
grievor. Palmieri was the manager at this store from November 1993 to September 1994.
The following statement made by Palmieri in April, 1994, was filed in evidence and reads
as follows:
I am Manager of LCBO Store #408 located at 3865 Jane Street. I have
worked here since November 8, 1993. Mr. Garth was a part time and then
permanent full time employee for approximately 17 years in total. Prior to
March 29, 1994, I observed Mr. Garth with different customers under ringing
their purchases. Later, on another day he would receive money from them
for the shortage from their earlier transactions. Mr. Garth was cautioned
about this as these amounts were not reflected in his daily cashier
balancing report.
When I considered this along with the store shortages, I advised Dan Walsh
of this information on April 16, 1994. At this time a CCTV system was
being installed regarding improper cashiering procedures of another store
employee, Lloyd Brickley.
On April 23, 1994, I removed this first tape and installed a second tape
placing the date, time and my initials on a label on both tapes. I followed
this procedure again for 2 more tapes on April 28, 1994, May 4, 1994 and
on May 11, 1994 I removed this tape without replacing it with another one.
The first tape was turned over to Dan Walsh on April 26, 1994. The other
three tapes were turned over to Dave Hadlow on May 3, May 4 and May
15, 1994....
Palmieri testified that he was concerned with the store’s high losses, a
concern which was directly within the scope of his responsibilities as Manager. On April
16, 1994, Palmieri spoke to Walsh, the LCBO security investigator, and discussed both
the ‘underringing’ practise as well as the extremely high store shortages. Palmieri
testified that the store was overstocked with 50 ml. miniature bottles because the
4
cashiers were ringing in miniatures when in fact they were selling larger bottles.
Consequently, there was an excess supply of the small bottles and a shortage of the
large, 40 oz. bottles of liquor. He had originally suggested to his District Store Manager
that the surveillance cameras be installed to observe the cashiering procedures of another
employee who worked the same cash register as the grievor. One camera therefore
recorded each of the grievor and the other employee as they worked the same cash
register but on different shifts, The other employee mentioned in Palmieri’s statement
was subsequently terminated due to his improper handling of funds.
Yolanda Simone, the LCBO Acting Supervisor of Benefit Services since
September, 1995, had previously been the Human Resources advisor. In that capacity,
she had been involved in disciplinary issues at Steps 2 and 3 of Grievance proceedings.
She testified that the LCBO had been involved in videotaping employees in its various
stores since 1989-l 990. During her work for the Employer in the Human Resources
function, she testified that between three and five employees were discharged annually
as a result of videotaped evidence.
The grievor seemed to have a good relationship with the store’s customers
and was very friendly with them. Often, when customers came in asking for the grievor
and were told that he was away from the store, those customers then left without making
any purchases. As indicated in his statement, Palmieri testified that the grievor had
been seen to be ‘underringing’ customer purchases. The grievor had thus been
5
‘underringing’ customer purchases by allowing customers who were short of the
required cash for their purchases, to take those purchases out of the store while
promising to return later with the rest of the money owing. Palmieri had verbally
counselled the grievor to stop ‘underringing’ customer purchases. Palmieri thus testified
that the grievor ‘I... did not always take the full dollar amount for the purchases”, that he
“was observed receiving money from customers two and three days after the event and
putting his hands, presumably with money, in his pocket...“. The grievor denied
underringing but rather testified that his practise was to cover custormer’s cash shortages
with his own cash.
Palmieri also testified that the grievor’s ringing off procedues were
“irregular”. Palmieri recalled discussing these matters with the grievor although Palmieri
was not sure that he had spoken to the grievor about the fact that the latter had been
observed putting his hands in his pockets. Up until that point, the grievor had not been
disciplined for theft.
The Employer’s videotaped evidence, adduced subject to the usual
evidentiary requirements, recorded the grievor on shift at his cashiering station on each
of April 18, 19, May 2, 3 and 10, 1994. The camera was installed in the ceiling in such
a way that the picture encompassed the sales counter, the cash register, the immediate
area around it and the grievor. The V.C.R. was programmed with the current date, time
and the Grievor’s shifts. The surveillance cameras were installed to cover the cash area
6
of the store and were programmed to go on and off at certain times. The transactions
recorded by the videotapes were matched to the videotape counter numbers, the time
of day, the cash register tape transaction numbers, date and time and then to specific
sales amounts thus providing a direct link between the images on the videotape and the
specific sales transactions shown on the daily sales tapes. The bills tendered by the
customers were identified by their colour and by the position in the cash tray into which
they were placed.
The L.C.B.O. manual lists all the items sold at the L.C.B.0, identifying for
each item its CSPC number, the brand name, the contents in ml of the item and the
price. The manual shows that a 50 ml Vodka Smirnoff mini (CSPC No. 14466600) sells
for $2.00 whereas a 750 ml. of Smirnoff (CSPC No. 67) sells for $19.50. When ringing
in any item being sold, the cashiers must ring in the appropriate CSPC number for the
product being sold as well as the product price, the amount of money tendered by the
customer to the cashier and the amount of change given back by the cashier. The cash
register tapes thus showed the time and date of the transaction, the transaction number,
the CSPC number for the item being sold, the amount owing for each item sold, the total
purchase amount, the money tendered to the cashier and the change given back by the
cashier. In the instant case, along with the videotapes, the employer also submitted the
sales media, cash register tapes and balancing reports for each of the periods of time
covered by the tapes.
7
The Board investigation compared the sales media and the videotapes and
noted the discrepancies between the videotaped recordings on the one hand and the
sales media information (such as the cash register tapes, sign-off reports and cashier
over short reports) on the other. The videotape information and sales data for each of
the five days in question was summarized matching the transaction number, time of
transaction, videotape counter number and observable details.
The summary sheets identify the relevant details of each of the
transactions which was captured by the videotapes on each of the five days that the
videotape was positioned upon the grievor at cash. Each of eleven transactions in five
days was described by the investigagtive team as a “hit“. The following list sets out
these eleven transactions as detailed in the summary sheets.
TRANSACTION
April 18, 94
3347
TIME COUNTER DETAILS
18:38
3371 19:18
1431
1731
3414 20:26 2244
April 19, 1994
3700 18:24 10910
May 2,94
5703 16:23 11637
1 Mickey purchased, rung in as i mini,
$12 tendered ($8.00)
2 minis purchased, 1 mini ($2.00) rung
in, unknown coin tendered
1 - 750 ml bottle purchased, rung in as 1
mini, 2 unk. bills tendered
1 Itr. size bottle purchased, $20
tendered, rung in as mini ($13.00)
2 minis purchased. only 1 rung in. ($2.00
tendered) allowed to take both minis
8
May 3,94
5831
5855
5917
5918
16:49
17:33
18:44
18:45
May 10
7028 12:15 15314
7029 12:17 15325
21428
21749
22316
22317
3 minis purchased, only 1 rung in ($4.00)
1 mini-rung in. 1 btl. purchased ($17.00)
1 mini rung in, 1 btl purchased, receipt
thrown out coin given in change ($18.00)
selects $ from till puts in pants pocket.
3 hits for approx 39.00
mini rung in as bag ($1.00)
2 - 6pks paid for. Garth puts 2 minis in
bag and doesn’t charge for them ($5.10)
The numbers in brackets at the end of the comments column denote the
amount of money that the investigators alleged the grievor did not ring in for that
transaction. A summary of the incidents recorded on the summary sheets shows the
following:
1. A large bottle for a mini: Five occasions when a bottle ( a Mickey, a
750 ml. or 1 btl. ) was taken by the customer but only one mini was rung in. While it was
not possible to tell from the videotapes which type of liquor was contained in the larger
bottles, it was possible to distinguish on the videotapes the difference between the mini’s
and the larger bottles. The grievor had various explanations for the price entered for the
larger items. One explanation suggested that the larger bottles rung in were in fact
bottles which cost about or exactly $2.00. For example, a 500 ml bottle of Okocim beer
from Poland (CSPC No. 282368) was listed for sale at $2.00. However, when asked why
the corresponding CSPC numbers entered on the cash register tapes did not match the
9
cheap beers, the grievor answered that some of the beers in the fridge had scrunched
up labels and it was hard to read the CSPC numbers. Consequently, he rang up the
CSPC number for another $2.00 product. In the case of transaction Number 3347, the
video showed a bottle the size of a mickey but the grievor rang in the CSPC number for
a Smirnoff vodka mini which sold for $2.00. He maintained that he had sold a bottle of
Okocim beer for $2.00. However, it turns out that at the time of that transaction, a bottle
of Okocim beer actually sold $1.95. Therefore, he either surcharged the customer .5
cents or shorted cash by 5 cents. He also testified that Okocim beer was the only
product for which he rang in the wrong CSPC product number. The grievor also testified
to the fact that he had problems with his eyesight and needed but did not use bifocals.
With respect to transaction 3414, Mr. Hadlow, a witness for the Board and
the Board’s in-house investigator on this case, testified that the bottle shown on the video
in this instance was at least 750 ml. in size, whereas the bottle of Okocim beer, which
the grievor had suggested was what he had actually sold for $2.00 in that transaction,
was smaller than the bottle on the video as it was only 500 ml. in size. He was also
certain that it was definitely not a 50 ml. bottle.
Transactions 3700 on April 19th, 5855 and Transaction 5917 on May 3
each show a one litre bottle or a large bottle respectively. However, the cash register
tapes show a CSPC number 144600 for a Smirnoff mini at $2.00 each. The grievor
had no recollection of either transaction. With respect to transaction 3700, the
10
videotape showed a clearly visible large bottle which the investigator maintained was
about 1000 ml. The investigator also noted that a green twenty dollar bill was tendered
in payment and a blue five dollar bill was given to the customer by the grievor. With
respect to transaction 5855, the videotape showed a large bottle of about 750 ml. and the
investigator estimated that the Board’s loss on that transaction was approximately $17.00.
The videoptape also shows that Transaction 5917 involved a larger bottle on the
videotape for which the customer deposited cash and received change, the amount of
which was unclear.
2. One mini for more: There were three occasions when two or three minis
were taken by the customers but only one mini was rung in. The grievor did not have
an explanation for transaction 3371. He suggested that transaction 5703 could have
been an error on his part. Transaction 5831 was depicted fairly clearly on the videotape
which shows that the customer took three minis but the grievor only rung in $2.00 for one
of them. There was also no explanation for this discrepancy.
3. Cash from the till: In transaction 5918, the investigator observed that the
grievor took money for a mickey and pocketed it. The grievor testified that he thought
that in that incident he was actually taking money that belonged to him. A customer was
$4.00 short and the grievor testified that he took a $10.00 bill out of his pocket and put
it into the cash register, forgetting to take out the $6.00 of change. He testified that he
often covered for his regular customers, sometimes as frequently as twice weekly, and
11
for as little as $0.25 and as much as $20.00 monthly. He also suggested that this was
common practise at the store. The grievor named other co-workers and managers who
did this.
4. Minis for free: In transaction 7029, the grievor is seen to add two minis
to a customer’s purchase of two 6-packs without charging for the two minis. On that
occasion the grievor remembered that the customer had paid for two mini’s on a previous
trip into the store but had not received them. The grievor testified that he knew the
customer as he was a regular at the store and therefore he exercised his discretion and
gave the customer the benefit of the doubt.
5. A mini for $1.00: In transaction 7028, the grievor is seen to ring in a
mini as a $1 .OO bag. He had no explanation for this situation.
Counsel for the Board submitted that the grievor was discharged for theft,
as he deliberately rang in wrong product numbers for less money and either pocketed the
money or left the customer with the products unpaid. It was further submitted that it was
irrelevant whether the grievor or the customer was the beneficiary of his activities as one
way or another the grievor was betraying his employer‘s trust. It was submitted that the
grievor’s explanations for some of the transactions were clever but not to be believed and
that it was simply an attempt by the grievor to justify what was clearly improper.
Futhermore, it was the pattern of dishonesty, even if it were to be found that only some
12
if not all of the transactions involved dishonesty, that created the real problem and could
not be tolerated. Honesty and integrity issues go to the root of the employment
relationship and usually warrant a discharge. Finally,.it was submitted that in the instant
case there were no mitigating circumstances and that the grievor continued in his
dishonesty throughout the entire hearing.
Counsel for the Union took the position that the employer had not adduced
sufficient evidence to establish just cause for discharge. It was submitted that while
the evidence disclosed that the grievor made mistakes on cash and showed a disregard
for LCBO policies, it did not establish that the grievor intentionally took money or engaged
in deliberate, dishonest conduct to provide the grievor or others with a benefit. It was
submitted that the standard of proof in theft cases required clear, strong, cogent,
convincing evidence beyond mere suspicion or speculation. Counsel referred to the case
of Re Andres Wines (B.C.) Ltd. and Brewery, winery & Distillery workers, Local 300
(1996) 53 L.A.C. (4th) 247 in support of its position. In that case, it was determined that
an explanation that might reasonably be true on the proven facts, whether or not the truth
of the explanation has been established, is sufficient to shift the onus upon the employer
to disprove the truth of the explanation. In the alternative, it was submitted that due to
the grievor’s age, 14 year service for the Board, eight of which was full time and relatively
good disciplinary record, the penalty of discharge ought to be mitigated and a lesser
penalty ought to be imposed.
13
I have carefully reviewed and considered in detail all of the evidence
adduced in this hearing as well as the thorough submissions by counsel on behalf of
each of the parties and on that basis, I find that I cannot, for the most part, accept the
grievor’s evidence and explanations.
On the one hand, It is conceivable that the grievor’s explanation for
transaction 5918 is true in that he did in fact put $10.00 of his own money, on behalf of
a customer, into the ‘til and forgot to take out the $6.00 owed to him. It is also
conceivable that in transaction 7029, the customer was getting the two minis which he
had paid for but not taken on a previous trip to the store. While in the context of the
evidence as a whole I have trouble believing these explanations, I am prepared to give
the grievor the benefit of the doubt with respect to them.
On the other hand, I do not, believe the grievor’s explanations with respect
to the five occasions when he rang in the CSPC numbers for minis but could be seen
selling large bottles. The variety of explanations given do not mesh with the evidence
as adduced before me and raise more questions than answers. For example,.
- The large bottles were not all of a uniform size and therefore would not have all
been Okocim beer.
- If the grievor’s explanation was true that the Okocim labels were wet, scrunched
and therefore illegible, he could have easily checked the CSPC listings to get the
right number.
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- At the time that the grievor allegedly rang in Okocim beer at $2.00, it was
actually selling for $1.95.
- Since he alleged that the only product for which he substituted a CSPC number
was Okocim beer, why did he continue to substitute the Okocim CSPC number
with that of a mini. After the first or second such situation, even if one were to
believe that his explanations about the label and price were true in the first
instance, he could have easily looked up the correct number rather than continuing
to cause havoc in the stockroom with a wrong CSPC number.
- The grievor also blamed problems with his eyesight and glasses for the wrong
CSPC numbers. This explanation might have been believable, especially for one
or two transactions. However, after a couple of such situations, the grievor would
have found out the right number. Why did the grievor not have an eyesight
problem with any of the other products at the LCBO?
- In transaction 3414, the investigator identified the bottle on the video as at
least 250 ml larger than Okocim beer.
- In transaction 3700, if the grievor was selling a $2.00 mini or bottle of Okocim
beer, the change for a $20.00 should have been $18.00 and not $5.00.
Taken individually, perhaps some of the above explanations might be
believable. However, taken together, they stretch credulity beyond the limit.
There are also problems with the remaining four transactions. In three of
15
them, the grievor only rang in and was paid for one mini but gave away two or three
minis, in the fourth transaction, he rung in a mini as a $1.00 bag. The grievor had no
explanation for any of these other than that the suggestion that there might have been
an error and it is possible, according to the investigator, that one of those might have
been a case of shoplifting by the customer.
However, transaction number 7028 on May 10 is particularly difficult to
understand. The cash register tape for transaction number 7028 shows the CSPC code
for a $1.00 bag and the total sale is $1.00. However, by May 10, (the last of the days
that the grievor was under observation), had the grievor consistently rung in the CSPC
code for a mini because he couldn’t read the code for Okocim beer, he would have
memorized the Smirnoff mini CSPC code. Therefore, on May lOth, if the customer was
actually purchasing a $2.00 (approximately) mini, why did the grievor ring in the CSPC
code for a $1.00 bag? The mini on the video could not be confused with a bag. This
last transaction, number 7028, is the least significant in terms of dollar value. However,
it underscores the grievor’s unwillingness to be forthright and honest with his testimony
at this hearing.
In the particular and unfortunate circumstances of this case, I am left with
the inescapable conclusion that the grievor was engaged in an ongoing pattern of
deception of and disloyalty towards his employer. I find that he was engaged in a
consistent, deliberate and premeditated pattern of theft. It also does not matter that the
16
beneficiary of the theft might have been someone other than the grievor. The loss was
consistently borne by the employer.
The consensus of arbitral opinion is clear and is well expressed in the oft
cited passage from Phillips Cables Ltd. (1974), 6 L.A.C. (sd) 35 (Adams) at pp. 37-8 as
follows:
. ..in a very general sense, honesty is a touchstone to viable employer-employee
relationships. If employees must be constantly watched to insure that they
honestly report their coming and goings, or to insure that valuable tools, material
and equipment are not stolen, the industrial enterprise will soon be operated on
the model of a penal institution. In other words, employee good faith and honesty
is one important ingredient to both industrial democracy and the fostering of a
more co-operative labour relations climate.
If theft is considered to be among the gravest of the misconduct charges in an
employment relationship, theft of an employer’s property in particular was and usually still
is generally regarded as justifying the discharge of an employee. Accordingly, I find that
the employer has discharged its onus of establishing misconduct of sufficient gravity to
justify discharge.
The only remaining question is whether there is any justification for reducing
the penalty. The grievor’s seniority is relatively lengthy and his record is essentially
clean. One might consider substituting a lesser penalty due to his age and given his
record. It may also be argued that the value of the items identified in this hearing as
having been stolen is minimal. However, given the pattern of dishonesty demonstrated
by the evidence, I cannot believe that the pattern of dishonesty, in the context of the
17
grievor’s unwillingness to ‘come clean’ at this hearing, was or would be solely restricted
to the days when he was videotaped on cash. Given the grievor’s failure to come to
terms with any of the evidence of theft adduced at this hearing, rehabilitation is not even
an issue. Honesty is the cornerstone of any employer employee relationship and
particularly where the employee is working at a cash register and in a significant position
of trust vis a vis his employer. It also cannot be said that the grievor’s actions were
irrational, undertaken on the spur of the moment, or that the grievor has shown remorse.
I cannot find any mitigating factors to reduce the penalty of discharge.
Dated at Toronto this IS” day of April, 1998.
*.’ 7 c
/ cd i-1 L, 7 -F&*3 ‘7 y-LL7 (9 ’ ,
Eva E. Marszewski - Vice Chair