SHP - 444




(the "Company")



(the "Union")



SOLE ARBITRATOR: P. Colleen Suche, Q.C.



B. R. McDonagh – National Representative

Glenn Michalchuk – Vice President, Prairie Region


K. E. Webb – Manager, Labour Relations


A hearing in this matter was held in Winnipeg on October 23, 1996.



This arbitration concerns the dismissal of the Grievor, Joseph Kostek, from his position as a Labourer with the Company. An Interim Award was issued on September 23, 1996, which addressed the admissibility of certain evidence: The hearing into the merits of the matter was held in Winnipeg on October 23, 1996.

The Grievor was dismissed on January 13, 1995. The Form 104 issued to the Grievor states as follows:

Please be advised that you have been DISMISSED for your involvement wtth theft of Company property as evidenced by the discovery of numerous items of Company property, identified in CP Police General Occurrence Report #TM94121601, at your place of residence on December 20, 1994, Winnipeg, Manitoba.

As detailed in the Interim Award, on December 20, 1994, two investigators employed by CP Police attended at the Grievor’s home looking for Company property. A number of items were seized. Other items, although consistent with property owned by the Company, could not absolutely be identified as such, and were not seized. As a result of the lnvestigation, the Grievor was charged with possession of stolen goods.

At the hearing of this matter, the items recovered were submitted in evidence, namely:

1 CP Switch Lantern

1 CP Hard Hat and Shield

1 First Aid Kit Container

3 Pair and 2 Single CP Gloves

1 Black Welding Apron

2 Locomotive Reserver Handles

1 Stubby Snap-on Screw Driver

1 Socket Extension

A brass cutting torch and 51 pairs of cotton work gloves, which had been seized by the investigators, were subsequently returned to the Grievor as they could not positively be identified as Company property. The Company indicated at the hearing that these items would not be included as part of its case against the Grievor.

The Grievor attended an investigation meeting on December 27, 1995. Derek Goulay, the Facility Manager for Weston Shops, and Glenn Michalchuk, Regional Vice- President of the Union were also present. The Grievor was asked for his explanation of the situation. Michalchuk advised that the Grievor would not answer any questions until the criminal charge had been resolved. He indicated that the Grievor and Union would be prepared to answer any questions the Company might have at that time.

At the hearing, Michalchuk testified that prior to the investigation meeting he discussed the situation with the Grievor’s lawyer, who had not had an opportunity to speak to the Grievor and was leaving immediately for vacation. He advised Michachuk that the Grievor should not say anything to the Company. Since the Company had not given the Union any assurance that the information would not be used to assist the police, Michalchuk felt obliged to follow the lawyer’s advice.

The Grievor’s trial of the criminal charge was held on March 22, 1996. As detailed in the Interim Award, the charge was dismissed. There was, however, no further communication between the Grievor and the Company. Mr. Michalchuk testified that after the criminal proceedings he decided to proceed to arbitration because his dealings with the Company led him to the conclusion it was not interested in discussing the matter further. This conclusion was based on the fact that he had written the Company shortly after the Grievors dismissal requesting that it reconsider its decision. The Company refused to do so. I note, however, that the letter from the Company (which was filed at the hearing) , did not simply say that it would not reconsider it position. Rather, it indicated that absent an honest and candid explanation from the Grievor, the Company was left to conclude that the Grievor had committed an act of theft, which was something it had consistently considered grounds for dismissal.

At the hearing, the Grievor gave his explanation of events for the first time. He was employed as a carman in September, 1981 when he was part of a mass layoff. The items which were filed as exhibit’s had all been issued to him for his personal use on the job. At the time the layoff notices were issued, the Grievors supervisor told all laid off employees to empty their lockers and take their tools and personal equipment with them. The Grievor did so, with the understanding that these items were to be returned when he was re-recalled. As it happened, the Grievor was not recalled to Weston Shop yard. Approximately 18 months later, he was recalled as a labourer to the Diesel Shop. As a result these items were not required for his job, so he did not retum them. They remained in his garage until they were seized by the investigators. He claims he neverthought about returning them.

Two other members of the Union testified as to their experience during mass layoffs. They confirmed that it was the Company’s practice to either discard personal equipment if they were left in a locker or alternatively, to tell employees to take such equipment home and return it when they were recalled.

Theft (and related forms of dishonesty may be the most serious of employment misconduct. It strikes at the heart of the employment relationship, and only in unusual circumstances, will arbitrators reinstate employees dismissed for this. In the often quoted passage from Phillips Cables Ltd. (1974), 6 L.A.C. {2d) 35, the Board observed:

… In a very general sense, honesty is a touchstone to viable employer-employee relationships. If employees must be constantly watched to ensure that they honestly report their comings and going, or to insure that valuable tools, material and equipment are not stolen. the industrial enterprise will soon be operated on the model of penal a institution. In other words, employee good falth and honesty is one important ingredient in both industrial democracy and the fostering of a more co-operative labour refations climate.

The Board feels that these are the sentiments underlying the arbitral castigation of dishonest conduct. Arbitrators are not equating the role of a plant to that of a church. Rather, they are insuring that the role of the plant will not evolve into a role resembling that of a penal institution.

Based on the evidence presented, I must conclude that the Grievor did not steal the property in issue. By his own admission, his continued possession of the property was unauthorized. However, his wrongdoing is limited to failing to return the equipment when he was recalled. I do not consider this to be nearly as serious as theft or other types of unauthorized possession of Company property.

What is troubling, however, and in some ways of greater concern, is the fact that at no time until the Grievor testified was the Company offered any explanation as to why this properfy was in his possession. Due to the very serious nature of an act of theft, it is a well accepted principle of arbitral law that when found in possession of an employer’s property, an employee is obliged to provide an explanation of the situation. Failure to do so in and of itself has been held to be grounds for discharge. I would not go that far, particularly since in this case the decision to say nothing was based on legal advice. However, until the Company received an innocent explanation, it was perfectly reasonable for it to make the assumption that the Grievor had stolen the property. Further, not only was it open to thee Grievor to give his explanation to the Company after his trial without any risk, he made a point of saying he would do so. His continued silence would, understandably, be viewed with suspicion by the Company.

In the circumstances, I am of the view that the Grievor should be reinstated. However, because he failed to give an explanation to the Company of the circumstances whereby he had Company property in his possession, the reinstatement will be as of the date of this Award, with seniority, but without lost wages or benefits since his dismissal.

I will retain jurisdiction in the event there are any difficulties in the interpretation, application or implementation of this Award.

Dated at Winnipeg this 25th day of November 1996.

(signed) P. COLLEEN SUCHE, Q.C.