Overworked 27-year employee fired over expense report discrepancies that were honest mistakes
A former Canadian Pacific Railway (CPR) employee has been awarded almost $300,000 after the Alberta Court of Queen’s Bench found his firing for inaccurate expense accounts was wrongful dismissal.
Paul Chapell, 56, was hired by CPR out of high school in June 1972. He worked his way up over the years until he became assistant superintendent of the railroad’s Toronto yard by 1996. He did so well resolving train congestion in the busy yards that CPR asked him to join a team in Calgary that would help terminals across the country become more efficient with their rail traffic flow and congestion. Chapell accepted the position and, after living in Calgary hotels for a few months, moved his family to Calgary in July 1997.
In his new position on the project, Chapell designed workshops for the terminals and printed the workshop materials himself. He also handled administrative duties, including the tracking and submission of expenses. Expenses weren’t billed directly to CPR, so Chapell had to track expenses and cover them under his budget.
The project worked well and CPR expanded the number of workshops, increasing Chapell’s workload and travel demands. However, it didn’t provide him with any administrative support. Chapell asked for a corporate credit card to separate his own expenses from the project’s, but he was denied.
Over the course of the project, Chapell submitted 2,200 items in expense claims covering more than $200,000 in expenses for both himself and his team. Things were made more difficult by the fact he had some many responsibilities, he didn’t have a lot of time to work on administrative tasks. He also sometimes received bills long after his team had left an area and he found it difficult and time-consuming to go back through them to break down costs for budgetary purposes, as CPR’s format demanded.
By the time the project was winding up in June 1999, Chapell was significantly behind in submitting his expenses. He had a large pile of receipts for things like restaurants and hotels that he hadn’t gone through yet and had to reconcile with dates and charges. However, he felt CPR’s new computer system could detect duplicates on expense reports and believed the system would flag any mistakes he made.
Expense report audit found errors
On June 17, 1999, CPR’s internal auditor found irregularities in Chapell’s expense reports. An audit flagged 37 items totalling $9,000 that required investigation. It was also determined Chapell had missed submitting $2,871.22 of his expenses.
CPR’s director of HR held a “clarification meeting” with Chapell, during which a past incident with a co-worker off-site involving alcohol was brought up — Chapell hadn’t consumed alcohol since — as well as his financial situation in which he had to make payments to his ex-wife. CPR also tried to obtain confidential information about Chapell from the employee assistance program but was unsuccessful. Chapell wasn’t given advance notice of the 37 discrepancies in the expense reports and thought he would be discussing a handful of ones he had found himself.
Chapell said he had spent five days at the end of the project trying to put the receipts in order and that he thought the system would catch any errors. He said he didn’t knowingly make duplicate errors and he was overwhelmed with the amount of work on the project. However, CPR was suspicious of the duplicate entries and felt his references to a heavy workload was a way of evading its questioning. On Sept. 9, 1999, CPR terminated Chapell’s employment for cause.
The court found CPR was not prepared to consider the context of the circumstances under which the expense discrepancies occurred. It had fraud on its mind and didn’t want to consider the possibility Chapell was simply overwhelmed by the amount of work. It was also important to note Chapell had missed almost $3,000 of his own expenses, said the court.
The court found there was no just cause for dismissal as there was no evidence of intention to defraud CPR. The expense report errors were often on the same page and for small amounts. His work performance was otherwise very good and CPR failed to give him administrative support, which lent credence to Chapell’s claim the discrepancies were honest mistakes borne out of a hectic work environment.
The court found Chapell, as a management employee with 27 years of service who was valued, was entitled to 24 months’ pay in lieu of notice —more than $270,000 with bonuses, pension and benefits — as well as $20,000 in bad-faith damages for the mental distress CPR caused him in the way it accused him of fraud and pursued his dismissal.
