In the matter of an appeal under Part III of the Canada labour Code BETWEEN: MALASPINA COACH LINES LTD., Appellant AND: CHRISTINA S.J. HAIGH, Respondent
Malaspina Coach Lines Ltd. and Haigh (Re)
Judgment: January 10, 2006
Docket: 2204
Counsel: Mr. Michael Blaxland for Malaspina Coach Lines Ltd. (”Malaspina,” the “Employer” or the “Company”)
Ms. Christina S.J. Haigh for herself
Ib Skov Petersen, Referee
DECISION
1 Malaspina appeals a Payment Order, dated April 22, 2005, issued by an inspector under Part III of the Canada Labour Code. The Payment Order for wages in lieu of notice of termination (s. 230) and severance pay (s. 235) owing to Ms. Haigh, in the amount of $3,046.14, was issued against Malaspina (the “Payment Order”.
2 By agreement of the parties, I convened a hearing in Vancouver, British Columbia on November 7, 2005.
3 I apologize to the parties for the time it has taken to get this decision to them. Their patience is much appreciated.
FACTS AND BACKGROUND
4 Malaspina operates a daily scheduled bus service between the Sunshine Coast and Vancouver, British Columbia, and, as well, a charter service in and out of the province.
5 Ms. Haigh was an employee of Malaspina between July 21, 1997 and June 22, 2004, employed as an office manager. After her termination, she filed a complaint against her employer for severance and termination pay under the Code.
6 In June 2004, Malaspina employed six drivers and six office staff, including Ms. Haigh. It also utilized some non-employee agents. As president, Mr. Ismail controlled the day-to-day operation of the operations of the Employer. A part-time controller oversaw the financial and regulatory affairs — the “outer picture” in Mr. Ismail’s words. Ms. Haigh, a salaried office manager, and Mr. Ismail were in charge of the “inner picture.” Ms. Haigh’s duties included payroll, accounts receivable, payables and supervision of office staff in Sechelt and Powell River. Mr. Ismail testified that she had “control’ of payroll and other functions. However, from the job description, entered into evidence by the Employer, her position seem more clerical in nature. In fact, virtually nothing in the job description suggests a management position. She had signing authority for Malaspina. Mr. Ismail testified that Ms. Haigh occupied a position of trust.
7 Mr. Ismail’s testimony was that Ms. Haigh was the “gate-keeper,” ensuring, among others, office staff and drivers follow company policy and procedure. In his view, 90% of the issues with drivers would have come to the attention of Ms. Haigh and she would deal with the issues or bring them to his attention. For example, if drivers did not hand in their time cards properly, she would deal directly with the drivers. As well, if drivers were late with cash, she could give written warnings. On all of the evidence, Mr. Ismail was the person primarily responsible for the drivers, including such matters as scheduling, discipline, pay and raises.
8 A large proportion of the Employers revenue is cash, some 30 percent, and, on Mr. Ismail’s evidence, handling of cash came up within the company frequently, in meetings with Ms. Haigh and others, and in various Company memoranda. One memorandum from May 2000 suggested a “zero tolerance” with respect to cash-handling. According to the policy, on Mr. Ismail’s evidence, drivers were required to hand in cash receipts to the Sechelt office and “not to sit on cash for more than a day or two.” Another memorandum, addressed to Ms. Haigh, in May 2004, set out in considerable detail the requirements, and Mr. Ismail’s very detailed expectations, with respect to her duties as they related to the time cards. All the same, while there were written policies, as often is the case, the reality of the work place here was probably more relaxed.
9 As much as Mr. Ismail sought to maximize the managerial nature of Ms. Haigh’s duties and responsibilities in the organization, Ms. Haigh, conversely, sought to minimize them. Overall, I am not persuaded, that her position was as “managerial” as he claimed. While it had some supervisory responsibilities, there was little doubt that there was only one “boss” at Malaspina, a small business, Mr. Ismail, and that his style of management could very much be characterized as “micro-managing,” as evidence by some of the memoranda in evidence. I am also not convinced that Ms. Haigh’s duties and responsibilities were as clearly defined as asserted by the Employer.
10 Mr. Ismail’s evidence was that one of the drivers admitted that he had been “ripping [him] off” — by stealing cash fares. For the purposes of this decision, for privacy reasons, I propose to call this driver “Driver A.” Mr. Ismail testified that he saw a pattern of theft going as far back as the beginning of 2003. His view at the hearing was that Ms. Haigh either failed in her duties because she overlooked and failed to detect Driver A’s misconduct, or, more likely from his point of view, that she acted in collusion with Driver A for personal reasons. However, the basis for this “pattern” was, in his words, a “forensic accounting,” comparing cash performance on “the same position, the same season, the same work day” of Driver A in question with other drivers. The “forensic accounting” revealed an annual $4,000 “slippage” in the Company. I did not understand the evidence to be that this was all attributable to Driver A. Again and again in his evidence, directly or indirectly, Mr. Ismail suggested that Ms. Haigh had a personal intimate relationship with the driver and that was the reason for her alleged failure to deal appropriately with him. It was clear to me that his view was that she had acted in collusion with the driver and covered up for him.
11 There is no credible and reliable evidence before me to support the existence of the personal relationship intimated by the Employer. Ms. Haigh clearly denied it. The Employer suggested that she treated him differently, i.e. gave him preferential treatment over other drivers, including calling him, a few days before his termination in connection with the theft allegations, to remind him that he was late with his cash and to bring it in. Apparently, Driver A was late with cash for two days, June 12 and 13, 2004. Ms. haigh telephoned him to remind him to bring it in. The driver only returned the cash for June 12 through another driver out of the Vancouver depot. When Ms. telephoned him subsequently, he explained that he had kept the June 13 cash as “emergency funds” for a Victoria charter. Ms. Haigh told him that was inappropriate and contrary to Company policy. There was no issue that the June 13 cash was not been handed in. Ms. Haigh also telephoned Driver A to remind him to properly complete his time sheets. In Mr. Ismail’s view other drivers would not be treated this way. However, I am not persuaded that Ms. Haigh knew of the driver’s theft or that she somehow acted in collusion with him. Where dishonesty is alleged, clear and cogent evidence is required. The Employer’s evidence falls far short of that, and amounts to little more than speculation and conjecture.
12 The incidents that directly resulted in the termination of Ms. Haigh began on June 20, 2004. On that day, around 5:30 p.m., Mr. Ismail had a conversation at the Sechelt depot with Driver A, who claimed he was running out of tickets, and issued him four (4) books of tickets. Mr. Ismail said he left a note on Ms. Haigh’s desk to the effect that he had issued the ticket books to Driver A. Ms. Haigh denied seeing any such note and did not know that. Surprisingly, there is no mention of the note and leaving it on Ms. Haigh’s desk in the notes of the Employer’s subsequent investigation meetings. I am not satisfied that Ms. Haigh saw the note and, therefore, did not know the books of tickets had been issued. Ms. Haigh’s knowledge, or lack of knowledge, of the four books of tickets obviously puts the subsequent events in a very different context.
13 The following day, June 21, in the morning, Driver A returned to the Sechelt depot and a conversation took place that ultimately resulted in Ms. Haigh’s termination. This conversation involved Driver A, Ms. Colleen Ismail, the wife of Mr. Ismail, Ms. Jane Corbett, another employee of Malaspina, and Ms. Haigh. Driver A came into the office and spoke with Ms. Corbett. On the Employer’s evidence, she had been allocated the responsibility (by Ms. Haigh) for verifying the cash, ensuring that tickets and fares were correct and proper as per the destinations, and, subsequently, entering the data into the Company’s computers. On this date, Driver A brought his envelope with cash and tickets. He said he had hand-written a number of tickets. Later, the envelope was found to contain a number of tickets were hand-written tickets on note paper “stamped” with Malaspina’s name and address. The tickets indicated the fare and destination hand-written by Driver A. His explanation was that he had run out of tickets. According to Mr. Ismail, Ms. Corbett explained that Ms. Haigh came into the office, overheard the conversation, retrieved the envelope from Driver A and said “I’ll take care of it.” Ms. Corbett turned away to deal with another customer. Ms. Haigh then had a conversation with Driver A in her office regarding his time sheets. She denied taking the envelope.
14 I note that neither Ms. Ismail nor Ms. Corbett testified at the hearing, although the Employer entered a statement made by Ms. Corbett into evidence. Ms. Haigh denied saying that she would “take care of it.” She said she told Driver A that his conduct was unacceptable. In cross examination, she characterized his conduct as “stupid” and foolish” and admitted that her failure to bring this to the attention of Mr. Ismail was an error in judgement. In the circumstances, I am prepared to accept Ms. Haigh’s version of this event. It is the only direct evidence before me. As mentioned at the hearing, I am not going to decide a material point on hearsay evidence. I draw an adverse inference from the fact that the Employer did not call these two witnesses to testify to this very important factual allegation.
15 Mr. Ismail was not in the office at the time of this conversation. He was dealing with a bus breakdown. Accordingly, he was not a witness to the conversation. When he returned, he testified, he received the envelope from Ms. Corbett, inspected it, and found it to contain the hand-written tickets. Mr. Ismail was concerned, he explained, because the liability to the company and customers due to the “unofficial” tickets. Obviously, and quite reasonably, he was also concerned because of his suspicions that there was a problem with Driver A’s handling of cash.
16 The next day, June 22, Mr. Ismail said he spoke with Ms. Haigh and “asked her what she knew about it.” At first, he stated that he had not discussed the matter with Ms. Haigh before he met with Driver A. He changed that and said he met with her first. On his evidence, she said “[Driver A] came in, [he] had tickets made up on the way north on June 20 as he ran out of company tickets.” Mr. Ismail said he asked her what she planned to do, and she said she “will talk to him.” He responded that was “not proper procedure.” Ms. Haigh, according to Mr. Ismail, agreed that she told [Driver A] that she “would take care of it.” Mr. Ismail said she left him with the impression that “she was planning to deal with it later.” On Mr. Ismail’s recollection of the meeting, the note regarding the four books of tickets, apparently did not come up at this point. The note also, as noted above, apparently did not come up during the meeting the Employer had with Ms. Haigh regarding these allegations, on June 25, 2004. Mr. Ismail explained that this was an uncomfortable meeting. He said he let Ms. Haigh know that he would investigate the matter – – to “get to the bottom” — and for her to go home and wait for a call. Mr. Ismail said he felt let down and deceived by a “friend and ally” — a breach of trust.” Ms. Haigh said Mr. Ismail gave her 15 minutes to pack up her belongings and leave. He told her that “it’s going to be hard to get along without you — but I am going to do that.” Ms. Haigh felt she had been dismissed on that day. Subsequent correspondence from the Employer confirms that as the date of termination. On June 25, Ms. Haigh attended another meeting with Mr. Ismail and other Company employees. She remained dismissed.
17 On June 22, in the morning, Mr. Ismail also met with Driver A in the office. In the ensuing conversation, Driver A admitted to writing the tickets for “return customers,” worth some $480.00. Mr. Ismail went over the circumstances and told him that his “story didn’t make sense.” Ultimately, having been outside for fresh air, Driver A said “I’m sorry, it appears that I’m ripping off the company.” Asked how long, he started crying. On Mr. Ismail’s evidence, he said something to the effect that “it’s the only time.” Obviously, the Employer did not accept this and terminated the driver. Mr. Ismail drove him to the ferry and gave him $20.00 for “a cab.”
ISSUE(S)
18 The question before me is whether Malaspina had just cause for the termination of Ms. Haigh’s employment for the failure to report a driver who handed in “fabricated” tickets to the Employer.
ARGUMENT(S)
19 The Employer argues that it had just cause for the termination of Ms. Haigh’s employment. The Employer emphasizes Ms. Haigh’s senior role in its organization as a supervisor, responsible for payroll and cash. Cash is obviously important for the company, an intercity bus line, constituting some 30% of the revenues. “Accountability” and “trust” were key to the relationship on the evidence of the Employer’s witness, Mr. Ali Ismail, the president and principal of Malaspina. Ms. Haigh breached the trust relationship when she failed to report the driver who handed in “fake” tickets to attempt to cover up a cash shortage. The Employer argues that if MS. Haigh had advised Mr. Ismail immediately or on the first opportunity on June 21 or 22, 2004, then the conduct would not constitute “just cause.” Her conduct is insubordinate and disobedient. Her handling of the situation with Driver A and the “fabricated” tickets is a seriously dereliction of her duties as a manager and “gatekeeper” for the Company.
20 The Employer characterizes Ms. Haigh’s evidence as illogical and inconsistent. It makes no sense. Where there is a conflict in the evidence I should accept the Employer’s evidence. Ms. Haigh’s evidence and explanations are illogical, inconsistent and her story changed over time. The Employer argues, among others, that it makes no sense for Ms. Haigh to ask the driver come into her office to talk about time sheets and not address the “fabricated” tickets makes no sense.
21 Ms. Haigh denies the Company’s allegations. She says she had “no idea” that Driver A was stealing from the Company. She admits that it was an error in judgement no letting Mr. Ismail know about the “handwritten tickets.” Ms. Haigh says she was terminated on June 22, 2004.
ANALYSIS
22 In general terms, Section 230 of the Code provides that an employer, who terminates an employee who has completed more than three consecutive months of service, must give two weeks’ notice or pay in lieu of notice. Additionally, Section 235 of the Code generally provides for severance pay upon termination in the case of an employee who has completed twelve consecutive months of service. One exception to both of these provisions is “just cause”.
23 It is trite law that the Employer has the burden to prove “just cause” for termination. In Individual Employment Law (Irwin Law & Quicklaw 2000) Geoffrey England notes with respect to the standard of just cause:
Statutory adjudicators have developed remarkably similar standards of just cause to those applied by collective agreement arbitrators. …. Since the common law standards of just cause are also very similar to the arbitral standard in most (but not all) respects, there is a relatively high degree of conformity among the three legal regimes governing just cause for dismissal. …. To summarize, the notion of just cause in adjudication encompasses the following requirements: the employer must prove that the worker’s conduct has caused or is likely to cause substantial harm to the production process, the symbolic legitimacy of management’s authority to issue orders, or public confidence in the employer’s business; the penalty of dismissal must be proportional to the degree of harm suffered by the employer; appropriate corrective measures must have been followed in dismissals for misconduct and incompetence in order to give the employee a chance to rehabilitate …..
24 From my review of the unjust dismissal jurisprudence under the Canada Labour Code, there is a heavy onus on employers to follow what is commonly known as progressive discipline. That is also the case under employment standards legislation in British Columbia and other jurisdictions. The principles applied by the B.C. Employment Standards Tribunal have been summarized as follows (Kruger, BCEST #D003/97):
”1. The burden of proving the conduct of the employee justifies dismissal is on the employer.
- Most employment offenses are minor instances of misconduct by the employee not sufficient on their own to justify dismissal. Where the employer seeks to rely on what are instances of minor misconduct, it must show:
- A reasonable standard of performance was established and communicated to the employee;
- The employee was given a sufficient period of time to meet the required standard of performance and demonstrated they were unwilling to do so;
- The employee was adequately notified their employment was in jeopardy by a continuing failure to meet the standard; and
- The employee continued to be unwilling to meet the standard.
- Where the dismissal is related to the inability of the employee to meet the requirements of the job, and not to any misconduct, the tribunal will also look at the efforts made by the employer to train and instruct the employee and whether the employer has considered other options, such as transferring the employee to another available position within the capabilities of the employee.
- In exceptional circumstances, a single act of misconduct by an employee may be sufficiently serious to justify summary dismissal without the requirement of a warning. The tribunal has been guided by the common law on the question of whether the established facts justify such a dismissal.”
25 This case turns on whether or not the Employer had cause for the termination of Ms. Haigh’s employment based on a single incident of disobedience and insubordination, namely her failure to report to the Employer the conduct of Driver A. The Employer argues that a single act of disobedience or insubordination may justify dismissal if it is wilful or deliberate. The Oxford Canadian Dictionary (Toronto: Oxford University Press, 1998) defines “deliberate” as “ 1a intentional; done on purpose … . b fully considered; not impulsive…” It also defines “wilful” as “ 1 (of an action or state) intentional, deliberate…”
26 In my view, considering all of the evidence, Ms. Haigh’s conduct falls short of that standard. Clearly, the driver’s conduct warranted, at the very least, investigation on the part of the Employer. I appreciate why Mr. Ismail became suspicious of Ms. Haigh’s failure, as an employee with some supervisory responsibilities, to bring it to his attention. On the other hand, Mr. Ismail’s wife and another employee were present and knew that Driver A had handed in “fabricated,” or “handwritten,” tickets and what transpired was clearly not a secret. Ms. Ismail told her husband. The driver provided an explanation for the handwritten tickets, namely that he had run out of Company tickets. There is no direct evidence that Ms. Haigh knew that this could not be true. Ms. Haigh agreed that it was contrary to Company policy and, if the driver was short of tickets, he could have telephoned her, even at home. She testified that she told him it was unacceptable. Ms. Haigh had also on other occasions told the driver, for example, when he used cash receipts as “emergency funds” for a Charter trip that his conduct was unacceptable. It is, thus, common ground that the driver’s conduct was contrary to company policy and that his explanation was not acceptable.
27 Ms. Haigh denied that she told the driver that she “would take care of it” (or words to that effect). Those words would have been supportive of the proposition that Ms. Haigh acted with deliberation and wilfulness. As explained above, I do not accept the Employer’s version of the events on that point and draw an adverse inference from the Employer’s failure to call Ms. Ismail and Ms. Corbett to testify.
28 Moreover, while Ms. Haigh may ultimately have had soem supervisory responsibilities for tickets and receipts, cash and otherwise, Ms. Corbett’s was generally responsible for the initial steps in the process. On the Employer’s evidence, Ms. Corbett had been allocated the responsibility for verifying the cash, ensuring that tickets and fares were correct and proper as per the destinations, and, subsequently, entering the data into the Company’s computers. On Ms. Haigh’s explanation, her duties and responsibilities were far less clearly defined than the Employer’s evidence would lead me to believe. I think that Mr. Ismail was the “boss,” micro-managing when it suited him. Mr. Ismail had, on Ms. Haigh’s evidence, the responsibility for the drivers’ side of the operation, including discipline and scheduling. Mr. Ismail’s wife, for example, although largely ignored in his evidence, clearly had a some supervisory role in the Company. She purported to discipline Ms. Haigh and other employees on one occasion regarding the handling of cash and, thus, do not fit neatly into the picture of the organization that Mr. Ismail sought to draw for me. She informed her husband of the incident with Driver A. She took part in the Employer’s meetings to deal with Mr. Haigh’s termination. Although, I am concerned about Ms. Haigh’s failure to further discuss the “fabricated” tickets with Driver A, when she took him into her office immediately after being told to discuss time sheets. Mr. Ismail, in fact, testified that he was left with the impression, in the meeting with her on June 22, that she planned to deal with it [the situation with Driver A] at a later time. It is not clear to me, in the circumstances, that Mr. Haigh’s failure to immediately report to Mr. Ismail was deliberate or wilful.
29 As well, there is, in my view, no direct evidence for the proposition that Ms. Haigh knew that the driver’s explanation, that he had run out of Company tickets, was unlikely to be true. Mr. Ismail testified that he place a note on her desk with the information that he had issued four books of tickets to Driver A. Ms. Haigh denied she saw the note. The note may have disappeared from her desk before she saw it. There are many possible explanations. Had she known that the Driver A’s explanation was unlikely to be true, her conduct would obviously have taken on a different complexion.
30 As noted above, I do not accept that there is any credible direct evidence of a personal relationship between Ms. Haigh and the driver. I also do not accept the view, emphasized directly and indirectly by Mr. Ismail, that Ms. Haigh knew of the driver’s dishonest conduct and was in collusion with him and “covered up” Driver A’s conduct. As noted above, where dishonesty is alleged, clear and cogent evidence is required. The Employer’s evidence falls far short of that and amounts to little more than speculation and conjecture.
31 On the balance of probabilities and considering all of the evidence, I am not satisfied that the Employer has met its burden to show that it had just cause for the termination of Ms. Haigh. In my view, Mr. Ismail was firmly of the view that there was an inappropriate relationship between Ms. Haign and Driver A, and he acted on that view, terminating Ms. Haigh. In my view Ms. Haigh’s conduct was more likely, as she characterized it, an error in judgement.
ORDER
32 I order that the appeal be dismissed and the Payment Order, dated April 22, 2005, be confirmed.