Employer fails to show sufficient evidence that suspicious transaction was fraudulent. The employee was reinstated after he paid the money back.
A postal worker was fired after forensic accounting discovered that his wife cashed a substantial post office cheque made out to a business he operated with his wife.
Hired in 1986, H.A. worked for the post office as an Analyst in the Contract Compliance Operations department. He had a discipline-free record when he was fired on October 2, 2009.
On September 30, 2009, H.A. was given 24 hours notice that he was to attend an interview to discuss allegations that funds had been misappropriated from the Corporation. His request for further information about the nature of the interview was denied.
Two forensic accountants, two union representatives and a human resources manager attended the meeting with H.A.
H.A. was informed that records of a questionable post office cheque for about $3,000 made out to a Gas Bar had surfaced during the course of an investigation into H.A.’s manager.
Financial irregularities
The manager was being investigated for financial irregularities and a pattern of inappropriate manipulation of the employer’s computer system. The transaction that produced the cheque in question fit the profile of the transactions that were being investigated.
The employer discovered that H.A. and the Gas Bar shared the same address. In fact, records revealed, H.A. and his wife were the proprietors of the Gas Bar.
H.A. confirmed that he had a good relationship with his manager and that they had social contact outside the workplace.
H.A. was shown screen images illustrating how the employer’s software had been manipulated to produce the cheque.
H.A. could not explain why the post office would be issuing a cheque in that amount to his business. He also could not answer whether or not his manager had told him about the cheque. H.A. did not respond directly to a question about whether or not there was an agreement to split the proceeds of the cheque. He said he could recall no conversations with his manager to that effect.
In the opinion of the accountant, H.A. was belligerent during the interview and reluctant and unhelpful about searching for records that would support an alternate explanation.
Two days later H.A. was fired. The letter of termination from the employer traced the cheque from its generation to its redemption by H.A.’s wife. The letter referenced H.A.’s inability or unwillingness to properly account for the cheque.
The employer said it was left with no alternative but to conclude that H.A. had misappropriated corporate funds for personal gain. In doing so, H.A. had irrevocably severed the necessary bonds of trust and responsibility at the heart of the employment relationship.
The union grieved.
The employer had not met the burden of proof necessary to establish any intent on H.A.’s part to misappropriate funds, the union said. Nor was any evidence presented to show that H.A. was aware that his wife had deposited the cheque into the business account. If H.A. was defensive during the interview, it was understandable given that the employer had leveled serious allegations against him with little warning.
Employer reimbursed
A cheque from the Gas Bar for the full amount of the misplaced funds was returned to the employer on the final day of the hearing.
The Arbitrator agreed that the employer had provided no evidence to show that H.A. had been involved in the development of the cheque or that he was aware that the funds were deposited in his business account.
There was no question, the Arbitrator said, that the employer had grounds to suspect H.A. “However, suspicions alone are not sufficient to meet the burden of proof imposed on employers in cases of discipline and discharge. In such cases, the employer must have proof that will establish on the balance of probabilities that there is just cause for its actions.”
The employer did not have sufficient evidence in this case, the Arbitrator said.
There was nothing to connect H.A. to any involvement in the creation of the cheque. Social contact outside of work between H.A. and his manager did not by itself support the theory that there was a conspiracy, the Arbitrator said. Moreover, there was no evidence to show that H.A. was aware that his wife had deposited the cheque.
The Arbitrator allowed that it was troubling that a cheque of that size might slip through the cracks, but it was possible that such an oversight could occur as a result of stress, as H.A.’s wife had testified.
However, H.A.’s failure to immediately reimburse the employer was a matter of particular concern, the Arbitrator said.
“Once employees become aware that they, or a business over which they exercise control, are in possession of employer funds to which they have no rightful claim, then it is incumbent upon them to return these funds to the employer as soon as possible.”
H.A.’s failure to return the funds until June 29, 2010 was a serious matter, the Arbitrator said.
While H.A. was to be reinstated with no loss of seniority, compensation for lost wages and benefits would be payable only from the date that he reimbursed the employer.
Reference: Canada Post Corporation and Public Service Alliance of Canada. D.D. Carter — Sole Arbitrator. P. Harewood for the Union and A. Smith for the Employer. October 28, 2010. 12 pp.
