AH – 331




(the "Company")



(the "Union")






There appeared on behalf of the Company:

R. Bateman – Human Resources Officer, Toronto

K. R. Peel – Assistant Regional Counsel, Toronto

A. E. Heft – Manager, Labour Relations, Toronto

B. Russell – Facility Maintenance Engineer - N.O.D. MacMillan Yard

B. McNelly – Signals and Communications Supervisor, MacMillan Yard

T. Withers – Administrative Assistant, Supply Management, Toronto

R. Currier – Special Agent CN Police, Toronto

C. Morgan – Labour Relations Officer, Toronto

And on behalf of the Union:

Francois Paroyan – Counsel

Fred Gillespie – Grievor

A. G. Cunningham – System General Chairman

John Platt – International Representative

Kevin Grivney – Local Representative


A hearing in this matter was held in Toronto on April 19, 1994.


This arbitration concerns a grievance against discharge for the theft and misappropriation of Company property. Following an investigation by CN police, and an internal disciplinary investigation conducted by the Company, leading signal maintainer F.R. .Gillespie was discharged from his employment for the theft of Company property on October 4, 1993. At all material times, Mr. Gillespie was employed as a leading signal maintainer at the Company’s MacMillan Yard in Toronto. The grievor acknowledges a degree of pilferage of Company property, but denies that he stole or misappropriated all of the Company property allegedly found in his possession. The Union submits that the Company did not have just cause for discharge, or alternatively that the penalty assessed was excessive in the circumstances.

The evidence discloses that on September 7, 1993, upon the advice of an informant, CN Police attended at a rooming house located at 203 Dunlop Street in Barrie. It is common ground that the rooming house is jointly owned by Mr. Gillespie and his former common law spouse. At that location, the police discovered a number of items, both outside and inside the house, which are the property of the Company. Included in the items discovered were a quantity of railway ties used for landscaping, a first aid kit, a box of staples, some 221 "CN" business envelopes, three pipe wrenches and fourteen new mop heads, also bearing tile Company logo.

The following day, after an interview of the grievor conducted at his place of work, the CN police attended with him at his residence in Waubashene, Ontario. At that location, the police found a larger quantity of railway ties, some of which were in use for landscaping and others which were stored under a tarpaulin. In addition, the police officers discovered a number of tools and implements belonging to the Company. these included three pipe wrenches, two ball peen hammers, a set of tie tongs, four shovels, a stapler and a broom. Further, they uncovered another first aid kit, several rolls of packing tape, a further 112 Company envelopes, a partial box of drinking water, a partial box of cloth towelling and a sheet of felt matting installed under a patio deck to keep down weeds. The list of items described herein is not intended to be exhaustive, but indicative of the kinds of items found in the grievor’s possession. There appears to be little dispute that the value of the Company property found on both premises is in excess of $2,000.

Mr. Gillespie admits to having stolen certain items while denying any wrongdoing in respect of others. He states, for example, that tools such as the pipe wrenches, the hammers, the shovels and the broom found at the two locations were "borrowed" from the Company’s facility at the MacMillan Yard. He states that he took the tools home, believing that he was not required to sign for them. According to Mr. Gillespie, while he had every intention of returning the tools after he was finished using them either at his residence in Waubashene or at the rooming house in Barrie, he simply forgot to do so. Certain items, such as the business envelopes and Company stapler, cannot be explained by the grievor, who maintains that he did not take them, and suspects that they were placed at the properties by someone else to incriminate him. Certain items, such as the mop heads and three stainless steel knives, Mr. Gillespie maintains he removed from MacMillan Yard when it was clear that they were going to be thrown out by crews responsible for cleaning out boarding cars. He does not deny, however, that he stole a number of the items, including the box of bottled water, the Company towels and the felt matting found under his deck.

The arbitrator has substantial difficulty with the account given by Mr. Gillespie with respect to the manner in which he acquired the extensive collection of Company property found at both the Barrie and Waubashene locations. Even if the arbitrator were prepared to assume, without finding, the validity of the grievor’s explanation that, as a general rule, employees at MacMillan Yard were not required to sign out small tools which they wished to bring home for their personal use, on the basis that the log book kept at MacMillan Yard to record the borrowing of tools by employees would tend to support Mr. Gillespie’s position that signing out is generally done for large power tools or similar equipment, there would still be grounds for serious concerns. Clearly, employees who take their own tools home, with or without making an entry in the log book, are fully expected to return them immediately after their personal use is completed. In that context, even if I should accept that Mr. Gillespie "borrowed" the pipe wrenches, hammers, shovels and broom, there was clearly a point in time at which he knew, or reasonably should have known that be had failed to return them and was, for all practical purposes, treating them as his own property. In that circumstance, he cannot, I think, deny having misappropriated those items for his own indefinite use, without any authorization from his employer. Further, even if it is true that certain items such as the first aid kit which Mr. Gillespie maintains was left in a vehicle which he purchased from the Company, or train order logs which he maintains were given to him by a supervisor, were acquired innocently, the preponderance of the evidence suggests a pattern of knowing misappropriation of other Company property on the part of Mr. Gillespie.

Perhaps the most serious incident of misappropriation concerns the manner in which Mr. Gillespie obtained a quantity of new railway ties, part of which were constructed as a retaining wall and part of which were stored on his property at Waubashene. According to Mr. Gillespie’s own account, he had previously purchased used ties from the Company, in approximately 1985, and was familiar with the procedure to be followed. He relates that in 1992 when he needed railway ties for his property at Waubashene, he "let the word out" among the employees at MacMillan Yard that he was interested in acquiring some railway ties. According to his evidence, he paid $600 to another employee, since deceased, who apparently delivered the ties to the grievor’s Waubashene property by means of a Company truck. Mr. Gillespie acknowledges that when he saw the ties, which were new and not used, he realized that there was, something highly irregular, and that the ties were in all likelihood stolen. According to his explanation, he did nothing, and indeed proceeded to use the ties, because he did not wish to get the other employee into trouble.

A review of the arbitral jurisprudence suggest that employees who are found in possession of the property of the employer tend to offer a number of explanations. The removal of goods destined to be thrown out as waste is not uncommon as an explanation, and neither is the borrowing of tools or equipment which the employee forgets to return.

As well, it is not uncommon for employees to be in possession of property which they maintain they did not realize was stolen. Further, employees sometimes candidly admit that employer property found in their possession was knowingly and deliberately stolen by them. Remarkably, the case of Mr. Gillespie involves virtually all of the foregoing kinds of explanations and admissions.

It may well be that with respect to some of the Company property found in Mr. Gillespie’s possession there was a degree of forgetfulness or indifference, which would suggest a motive short of deliberate theft on the grievor’s part. In the arbitrator’s view, however, those aspects of the case, however mitigating, still leave open to question the reliability of Mr. Gillespie in the handling of borrowed Company equipment, and indeed the degree to which he may be less than entirely honest with himself. Most significantly, however, the evidence discloses several acts of outright theft on the part of the grievor. A number of items of small value found in his home were, by his admission, stolen. Further, the felt ground cover which is of considerable value, was taken deliberately, and without colour of right. Lastly, Mr. Gillespie knowingly purchased and accepted delivery of a substantial quantity of railway ties which he had every reason to believe were stolen from the Company.

In the face of such evidence, it is difficult for the arbitrator to give substantial weight to the mitigating factors pleaded by the Union. The fact that certain items in Mr. Gillespie’s possession may have been acquired by an arguable colour of right is of questionable value in light of the undisputed evidence that a number of items, including those which were of the greatest monetary value, such as the ground cover and the new railway ties, were either deliberately stolen or acquired as property which the grievor knew had been wrongfully taken from the Company. Of equal concern is the apparent longevity of the pattern of misappropriation engaged in by Mr. Gillespie. His acquisition of tools, equipment and materials belonging to the Company, both small and large, for use at two different locations, belies any suggestion of misappropriation on his part as an isolated or uncharacteristic incident. The whole of the evidence suggests a pattern of conduct which gave the Company good cause to question the viability of the grievor’s employment relationship. In the arbitrator’s view, that is so notwithstanding the grievor’s 29 years of service to the Company. Long service is not a countervailing factor in a case of such protracted and deliberate dishonesty. (See CROA 150, 255, 806, 1165 and 2343). Regrettably, the arbitrator must come to the conclusion that the actions of Mr. Gillespie have irrevocably destroyed the bond of trust so fundamental to the employment relationship.

For the foregoing reasons, the grievance must be dismissed.

DATED at Toronto this 28th day of April, 1994.