Termination warranted for breach of trust

A courier driver was fired after a random audit revealed improper billing practices.

J.A. was a dependent contractor employed as a courier by Loomis Express. J.A. was hired in 2005. Previous discipline did not factor into his termination on July 4, 2011.

Like the other courier drivers employed by the company — both hourly employees and owner/operators — J.A. worked a regular route in a defined service area.

Couriers made regular pickups from customers at scheduled stops throughout the day and were also dispatched by pager to make other, unscheduled pickups in their respective areas.

J.A.’s day rate was calculated according to a formula that factored the density of his zone, or service area, the number of scheduled stops and the number of pieces that he picked up and delivered over the course of a day.

Waybills and handheld scanners were used to reconcile the tally and provide the data for a daily invoice.

J.A.’s $5.25 zone rate and $1.20 per-stop rate paid him a base rate of $6.45 per stop. Couriers were to bill only for stops that appeared on their regular route sheets or for stops where they had been sent to make a pickup.

However, couriers could also occasionally bill for “empty pickups” when they occurred. Empty pickups could happen when a regular customer did not have a package for pickup that day. An empty pick-up could also happen if a call-in pickup was not ready when the courier arrived. Couriers were expected to file exception sheets to account for empty pickups.

Position of trust

The couriers understood that they were working in a position of trust. They worked independently with minimal supervision. They handled cash and valuable merchandise in many small transactions.

Because it was not economically viable to oversee every transaction, the employer instead performed random audits on about 10 per cent of the invoices submitted by owner/operators.

While covering for J.A.’s supervisor, an area manager audited a number of J.A.’s invoices.

The manager discovered a number of cases where J.A. had charged for empty pickups. However, the pickups were neither scheduled nor called in and they happened to coincide with deliveries that were made to the same address at the same time. No exception sheets were filed to explain the empty pickups.

The manager concluded that J.A. was submitting fraudulent invoices. J.A was suspended pending further investigation.

Accompanied by a union representative, J.A. attended an investigative meeting on July 4, 2011. J.A. said that he made stops at non-scheduled and unbooked locations for promotional reasons to try to build up business. He then billed for those stops as empty pickups. He admitted that he had not been trained to conduct business that way and he could not explain why he failed to file exception sheets.

J.A. was fired. The union grieved.

Negligence that caused a loss

The union said that the company had not consistently applied its own policies. J.A. had been billing that way for more than one year and his invoices had not been questioned. J.A. could reasonably have believed that he was billing properly. Not only were his errors not brought to his attention, but J.A. was also regularly told that he was doing a good job. The union said that J.A.’s mistakes were not fraudulent but were rather properly characterized as negligence that caused a loss to the company. The union said that J.A. now understood the proper billing procedures. The employment relationship was not irreparably broken, the union said. J.A. deserved another chance.

The Arbitrator disagreed.

“I find [J.A.’s] explanation that he didn’t know what he was doing was wrong to be disingenuous and ultimately not credible. The reason he wasn’t caught sooner may well have been because of lax supervision. [J.A.’s supervisor] trusted him and liked him. With no exception sheets to go by he was not alerted to the existence of problem empty pickups. Lax supervision does not give an employee in a position of trust license to abuse that trust. On the contrary, where only 10 per cent of invoices can feasibly be audited a great deal of trust must be placed in the owner/operators.”

The Arbitrator dismissed as a “red herring” J.A.’s claim that he was not properly trained in a new billing methodology that was put in place in 2010. There was nothing in the new methodology to authorize J.A.’s practice of billing for empty pickups, the Arbitrator said.

“For all these reasons I find that [J.A.] knowingly inflated his route for billing purposes, causing a substantial loss to the Company over the 14 months that he worked on route 725. His breach of trust was flagrant and ongoing. There are no grounds to excuse or mitigate his behaviour…”

The grievance was dismissed.