Discount program leads to violations

United Airline workers’ ‘no evidence’ motion rejected by arbitrator in B.C. case
By John Dujay
|Canadian HR Reporter|Last Updated: 11/16/2016

Employee discounts were in the spotlight recently when four United Airlines workers in Vancouver were terminated because they were said to have unethically benefited from the company’s fare system.

An anonymous email was received Dec. 16, 2010, alleging two employees, Jennifer Thacker and Tony Scott, were overdoing it with the company’s “waivers and favours rule,” whereby an employee can purchase airline tickets for friends and family at a discount.

Toni Salvato-Pinto, senior investigator with corporate security, began an investigation into the allegations, and found one ticket purchased Dec. 31, 2008, by Thacker from Vancouver to San Francisco was scheduled to depart Jan. 14, 2009, but was then changed to Jan. 13, which meant the 14-day advance purchase discount was no longer in force. It was also rerouted to Chicago, then to Las Vegas.

The ticket was modified twice in a two-week period, but no fees were charged for the modifications.

Another flight booked for Scott’s parents included a 20 per cent employee discount. Again, it was modified though no extra fees were charged and the employee discount remained intact. It was also given an “invol” (involuntary) classification, which only happens if a flight is cancelled, usually due to weather.

However, Salvato-Pinto said this should never happen a month before the flight is scheduled, which it was. When a ticket is marked as involuntary, all of the relevant codes are overridden and further changes can easily be made.

In all, 63 violations of the rule were discovered by Salvato-Pinto in her investigation.

In the collective agreement under “rules of conduct for (International Association of Machinists and Aerospace Workers) IAMAW-represented employees,” it stated violations of certain rules may result in discharge. One of the rules called for no “inappropriate waiving of a fare rule or restriction.”

It also stated, “When providing travel services for yourself or your friends and family, any unauthorized deviation from established rules for pricing, issuance, exchange or refunding of tickets; any waiving of travel restrictions or other terms affecting the applicability of discount fares; and inappropriate upgrades of call-of-service; or any use of our computerized reservation system to improperly remove seats from inventory or block space on United or any other carrier is prohibited.”

In February 2011, seven employees were interviewed about their actions, and four were found to have committed violations.

Excuses, excuses

During the initial investigation, Ada Li, another employee, was found to have conducted 31 transactions that waived fees. Scott was questioned about 13 transactions, including one for Thacker. Katerina Sliacky was grilled over 10 transactions. And Thacker was probed about 29 airline ticket transactions.

All the employees testified they didn’t have adequate training on the ticket purchasing system, which they contended may have contributed to the lack of fees charged.

Salvato-Pinto was also advised by the workers that “everyone else was doing the same thing” so the fare manipulation shouldn’t be punishable.

One of the reinstated workers, identified only as “M.R.,” said she felt “pressured” by Thacker, Sliacky and Li not to add the differences in fees and service costs on various ticket purchases.

But a cheat sheet provided to ticket agents stated that employees must never “authorize fare-rule waivers,” except in a case of an error made by a ticket agent.

In dismissing the four workers, a June 2011 letter from Vancouver manager Nigel Newsome read, in part:

“You were involved in ticket transactions for either yourself or co-workers and friends. Tickets were purchased, and then subsequently the flights were changed to different dates, to higher and more expensive booking codes, with no collection of the fare increase due to the company. Further, change fees were waived.”

‘No evidence’ motion

The four workers filed a “no evidence” motion alleging previous testimony from Salvato-Pinto “amounts to hearsay — double, triple, quadruple hearsay if admitted for the truth of the content contained therein. They were not business records.”

The actual files that proved any alleged malfeasance were purged from United’s ticketing system, which is standard practice for the company.

But United countered the “no evidence” motion by saying hearsay was acceptable evidence in an arbitration hearing.

Arbitrator weighs in

Arbitrator Stan Lanyon agreed and he also ruled printouts produced during the investigation were to be considered valid business documents.

“These ticket transactions are records that were written, recorded and stored, contemporaneously with the events they described, and in United’s usual and ordinary course of its business. During the investigation, they were simply reproduced and printed.”

The four employees further argued that Salvato-Pinto was not an expert witness, so she could not be relied upon to testify as to the inner workings of the complicated United ticketing system, which involved three separate computer systems (one is for accounting, one is an auditor’s coupon, and the last one houses the passenger’s name and flight details).

Salvato-Pinto had 20 years of experience with United and had trained ticket takers but her testimony was based on her investigation, so she was not considered an expert witness, said Lanyon.

“However... (Salvato-)Pinto did provide the sufficient evidence that is capable of supporting a finding that the computer system at United, and the Apollo reservation system, were at all material times operating properly.”

The hearsay argument was dismissed by Lanyon.

“Further, contrary to the claims of the grievors, Ms. Pinto did not show any animosity towards them; rather, she remained consistent in her evidentiary task, which was to interpret these documents. She did so with both a professional and calm demeanour throughout her testimony.

“Her evidence does not amount to multiple levels of hearsay; rather, these documents fall within the exception to the hearsay rule under Sections 30 and 31 of the Canada Evidence Act, and therefore can be admitted for the truth of their contents.”

In the motion, the employees argued United management, in effect, accused them of committing fraud, which is a serious crime and, therefore, standards of evidence were not sufficient to initiate a termination.

But the employees were fired because of a violation of a specific rule, not fraud, said Lanyon.

“The grievors’ terminations were based on the violation of rule two (that) prohibits employees from deviating from the established rules and procedures with respect to providing travel services for themselves, their family and friends, and their co-workers.”

The four ex-employees were advised by the arbitrator to return for a future hearing and bring forth any supporting evidence.

“The grievors have the ability to re-argue the issues they have raised in their no-evidence motion,” said Lanyon.

Unfair labour practice

As an aside, a 2014 unfair labour practice hearing before the Canada Industrial Relations Board awarded the four workers $15,000 when it found the union IAMAW didn’t adequately represent them after the three other workers were reinstated.

“In this case, as already summarized, the complainants were never told ‘why’ their grievances would not be taken to
arbitration, other than with a boilerplate conclusion that their grievances would not be successful. Similarly, despite retaining legal counsel to send a lengthy demand letter, the IAMAW never responded,” said Graham Clarke, vice-chairperson of the board.

A series of emails was produced between Tania Canniff, IAMAW general chairperson, and the four workers in which they repeatedly requested information on why their case was not going to be fought any further by the union.

In July 2011, Canniff took compassionate leave from her job but she remained as the main point person for the case.

The three other workers were reinstated by United on Aug. 17. However, a Sept. 2 email
requesting further details on
why the three were reinstated,
and not the other four, was not answered by Canniff, who by then had returned to work.

A Nov. 2 letter from counsel representing the four workers was sent to IAMAW and subsequently ignored.

The ruling was considered exceptional in a number of ways.

“The board’s policy is generally not to award costs,” said Clarke.

“(However), the board has concerns when a trade union fails to tell a member its reasons for not proceeding to arbitration. How can a union member realistically file an internal union appeal if he/she has no idea why the union decided not to go to arbitration?”

In addition, the board ruled that any time limits specified in the collective agreement to request arbitration were waived.

Reference: United Airlines and IAMAW, District Lodge 140.

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