Termination excessive for shortcut practiced by other employees; worker honest when questioned
A British Columbia arbitrator has reinstated with a one-month suspension a worker who was fired for misappropriation of funds but actually just failed to follow standard policies and procedures.
The worker was a server at Rosewood Hotel Georgia, a luxury hotel in Vancouver. He was hired in 2015, when he received and read the hotel’s guidebook for employees that contained all its policies including accurate reporting standards for food and beverage employees. He also received training on the point-of-sale (POS) software used in the hotel’s bars, which required food and drink to be rung in before being served to guests.
Servers were also expected to collect a float from the basement case office, although the worker soon learned that this wasn’t normal practice. Instead, servers managed their own floats and, at the end of their shift, tipped out a portion of their net sales to bartenders, barbacks, the host team, and the dishwashing steward.
Hotel policy also stipulated that the bar server and bartender must generate a “cash out” summary at the end of shift, with tips earned on credit card sales recorded by the employee on a “due back” form that was submitted to the hotel and paid out to the employee the next business day.
The worker maintained a $450 float with a combination of bills and coins for his end-of-shift tip-out. He added any cash tips to his float during the shaft, but learned from another server that cash sales could be consolidated into a single charge that he could pay with his own credit card so he could add the cash to his float. This allowed him to skip the end-of-shift cash drop process - which involved completing a form and another employee signing it - but it involved keeping a check open during the shift.
Investigation triggered by cash issues
On Aug. 28, 2023, a secret integrity auditor visited the rooftop lounge where the worker was on duty. The worker served a drink with a $13.80 bill and the auditor left $20 in cash. The worker reallocated the check to a different table and kept it open. Later in the shift, the worker paid for two drinks consumed by friends and, at the end of the shift, he combined their check with the open auditor’s check and paid the total of $59.80 with his personal credit card so he could avoid the cash drop process.
On Sept. 13, the director ran a cashier tender report for the day the auditor was at the rooftop lounge. The worker had sales from credit cards, debit cards, and room charges, but no cash sales recorded. The director investigated further and found that a check for the drink was opened at the time the auditor was there and then was combined with two other drinks paid by a credit card six hours later.
The director was concerned because the hotel’s policies stipulated that cash purchases should be closed within a half-hour and reported at the end of an employee’s shift. He wasn’t aware of employees using the credit-card consolidation of cash bills to avoid the cash drop process and it wasn’t sanctioned by the hotel.
On Sept. 29, the director met with the worker, who immediately told the director that he had paid for the auditor’s drink with his credit card and the informal process for keeping a check open. He said he thought it was an acceptable workaround because a manager had seen him do it and told him it was a smart move. However, the director said he shouldn’t be doing it and the worker agreed that he wouldn’t anymore. Other than the convenience of avoiding the cash drop, the worker said there was no personal benefit except perhaps collecting loyalty points on his credit card. He provided his credit card number so the director could look into his transactions.
Suspension pending investigation
The director suspended the worker pending further investigation and confirmed that the combined check was paid with the worker’s credit card. He ran a report and discovered that the worker’s credit card had been used for 27 other charges since March, although some were mid-shift when the worker said he bought food or drink or was there as a guest.
On Oct. 5, the worker’s employment was terminated for “a pattern of planned policy violations that any reasonable person could conclude would lead to the loss/misappropriation of company assets (cash) to your benefit.” The termination letter referred to two dozen incidents of using his personal credit card to cover “what you claim to be the total amount of cash receipts.” It also cited leaving cash transactions open for an entire shift, which was a breach of hotel policies that “significantly increases the odds that there is an error that is negative to the hotel while creating a cash benefit for you.”
The termination letter also accused the worker of trying to cover up his actions, earning points on his credit card with a direct cost to the hotel, and being dishonest by saying he didn’t realize that credit card companies charge fees to the hotel – the worker was from Australia, where the practice wasn’t common.
The union grieved the termination.
The arbitrator found that there was no documentation of the credit card payments and the worker explained a few of them as buying food or drink mid-shift. While the worker didn’t meet the accurate reporting standards in the employer’s guidebook, the evidence was that this was an open, common, and informal practice by servers, as was having personal floats.
No theft, just failure to follow policy
The arbitrator also found that using a personal float and personal credit card was not appropriating cash or theft, as the only money the worker took was from tips – he submitted payment for all sales. In addition, the worker followed the cash drop process when he received cash payments, but he sometimes took a shortcut that he didn’t believe had any cost or harm to the hotel, the arbitrator said.
The arbitrator noted that the hotel relied on server honesty and accurate reporting and the worker didn’t consider the impact of his choices on the hotel’s need for “orderly and efficient conduct of business,” but his conduct wasn’t a pattern of enrichment or “clandestine behaviour intended to simply gain loyalty points” on his credit card. The worker didn’t intend to steal and his conduct was not theft – rather, it was ignoring the policy for accurate reporting and the cash drop process, the arbitrator said.
“For this single instance [Aug. 28] and the unknown number of other incidences, which [the worker] willingly acknowledged, dismissal was an excessive disciplinary response in all of the circumstances,” said the arbitrator. “His forthrightness and co-operation demonstrate a viable and healthy employment relationship can be re-established.
The hotel was ordered to reinstate the worker with compensation for lost wages and benefits, minus a disciplinary suspension of one month. See Unite Here, Local 40 v. Rosewood Hotel Georgia (801 West Georgia Ltd.), 2024 CanLII 15499.
