GSB# 2003-3923

UNION# OLB048/04

IN THE MATTER OF AN ARBITRATION

Under

THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT

Before

THE GRIEVANCE SETTLEMENT BOARD

BETWEEN

Ontario Liquor Boards Employees’ Union (Goncalves)

Union

• and -

The Crown in Right of Ontario (Liquor Control Board of Ontario)

Employer

BEFORE

Joseph D. Carrier

Vice-Chair

FOR THE UNION

Jackie Crawford Koskie Minsky LLP Barristers and Solicitors

FOR THE EMPLOYER

Gordon L. Fitzgerald Counsel Liquor Control Board of Ontario

Written Submissions

November 15, 2004.

Interim Award

The grievance before me relates to the discharge of John Goncalves an employee of the Liquor Control Board of Ontario. The grounds for the termination of the Grievor apparently had to do with the alleged improper use of the "air miles" program in which the Employer is a participant. Be that as it may, the issue currently before me relates to the admissibility of videotape evidence which the Employer seeks to introduce in the proceedings.

The Union challenges the introduction of the tapes on the following basis:

1. The Employer had no reasonable grounds to initiate surveillance of Mr. Goncalves;

2. The surveillance was not conducted in a reasonable manner;

3. The videotape material must be excluded because its collection and use would constitute an unreasonable intrusion into the Grievor's privacy.

The Employer takes the position that the videotape material should be admitted for the following reasons:

1. The material is relevant;

2. In Ontario there exists no right to privacy in employment settings, and even if such right exists the Grievor's privacy rights did not arise in the circumstances of this case;

3. Any issue concerning the reasonableness of grounds to institute surveillance do not arise on the facts of this case; and, if such test is appropriate, the Employer has satisfied such requirements;

4. From a practical standpoint based on labour relations considerations it would be inappropriate to disallow the introduction of the material.

The Background The tapes which the Employer seeks to introduce presumably provide images of the Grievor and customers of Store #10 where the Grievor worked during the relevant time. The tapes reflect transactions involving air miles cards allegedly processed by the Grievor during the month of December 2003. The circumstances resulting in the targeting of those tapes began on December 23^rd of that year.

The Grievor was a Customer Service Representative and had been working in Store #10 for the Employer since October 2003. On December 23^rd his Manager observed that he was wearing inappropriate attire (jeans) for work and directed him to leave the premises. The Grievor sought to stay until he had completed delivery of a purchase he had made on behalf of a customer who was expected to pick it up at the store. The Manager, Mr. Begley, reviewed the paperwork for the transaction to which the Grievor referred and noticed that an air miles card had been credited whereas the customer had not yet attended at the store. That seeming irregularity led to a series of inquiries by the Manager and his District Manager, Mr. Rafik Louli. Those investigations culminated in the discovery of a series of transactions involving air miles cards ostensibly belonging to the Grievor and/or his spouse. In particular, some of the more recent transactions during December of 2003 which took place at Store #10 could be traced through Company documentation to specific time frames. Those times were then linked to tapes which the Company had retained for the month of December. The video images of the participants in the transaction were apparently captured and could be viewed on tape which the Company had yet to erase. It is the tapes of several of such transactions which the Company seeks to introduce during these proceedings.

In its outline of the facts the Company provided the following information concerning the cameras in Store #10 and its practice with respect to the resulting videotapes:

"As part of the Employer's investigation, Mr. Louli also reviewed some videotapes. By way of background and to clarify the explanation provided in the Union's submissions, there are 32 cameras in Store 10 providing coverage of virtually the entire store. The cameras images are recorded simultaneously in a split screen format on three master videotapes. There is nothing surreptitious about the use of these cameras; they are there to protect LCBO employees, customers and assets and are visible to anyone in the Store. The tapes are retained for re-use on a monthly basis. Tapes are generally numbered 1 through 31, with the numbers corresponding to the days of the month. So for example, tapes numbered "1" are used on the first day of the month and then set aside until the first day of the next month when they are taped over. In effect, the system creates tapes with a "shelf-life" of one month.

After obtaining the FQA report referred to above and the Electronic Journals (receipts) from transactions processed by the grievor on the days in question, the Employer retrieved the videotapes still in its possession for dates on which there are impugned transactions. Specifically, the video tapes captured transactions involving Ms. Oducado's (Ms. Oducado is the spouse of the Grievor) card that were processed by the grievor on December 8, 9, 11 and 19, 2003. By matching the time on the videotape to the time on the receipts, the Employer was able to observe the customers involved in the impugned transactions. The customer making the purchase(s) on December 8 is another LCBO employee that works in Store 10. The customers involved in the other purchases are each different.

The foregoing should suffice as an outline of the facts relevant to and necessary for the decision respecting the challenged evidence. As indicated in the quotation from the Employer's submissions, the cameras are not hidden and all employees, if not all customers, would be aware of their presence and the fact their activities are being recorded, in particular, in the cash areas of the Store.

The Submissions The Union did not challenge the existence of the cameras in the workplace or rather in the Store nor did it challenge the use of videotapes in conjunction with those cameras. The Employer asserted that the cameras were there for the safety of the Store, the Store's property and the employees themselves. In the circumstances, the Union did not seek the removal of the cameras or the videotaping equipment from the Store. Rather, the Union challenged only the admissibility of the resulting evidence for those reasons which were identified earlier and which are repeated here as follows::

"1. The Employer had no reasonable grounds to initiate surveillance of Mr. Goncalves;

2. The surveillance was not conducted in a reasonable manner;

3. The Union submits that the videotape evidence must be excluded because its collection and use constitutes an unreasonable intrusion into Mr. Goncalves' privacy."

The Union's argument was based upon the following series of submissions:

1. Employees do enjoy a right to privacy in the workplace;

2. That the employee's right to privacy in the workplace may be encroached upon through surveillance where there are legitimate reasons to introduce monitors. The introduction of surveillance entails a balancing of interest between the employee's right to privacy and the Employer's interest including for instance the safety and security of the premises as well as that of the employees themselves;

3. The product of any such surveillance such as videotape evidence may only be used for the purposes for which the surveillance was introduced in the first instance;

4. In the case at hand although the purpose of the surveillance was legitimate in the first instance, that purpose would be perverted by the admission of the videotape evidence for purposes of discipline of an employee, in this case Mr. Goncalves. The introduction or admission of the videotape evidence would constitute a retroactive or a retrospective invalidation of such material evidence.

In counsel's words:

"In seeking to rely on these tapes for a purpose quite different from that for which they were made, the Employer retroactively eliminates the balancing test required in determining whether the surveillance is legitimate."

In support of its submissions the Union referred to the following cases:

1. Labatt Breweries and SGPWU Local 304 (1994), 1994 CanLII 18608 (ON LA), 42 LAC (4^th) 151 (Brandt)

2. Toronto Trasit Commission and AMTU Local 113 (1999), 1999 CanLII 35815 (ON LA), 95 LAC (4^th) 402 (Chapman)

3. Puretex Knitting Co. Ltd. And CTCU (1979), 1979 CanLII 4023 (ON LA), 23 LAC (2d) 14 (Ellis)

4. Michel G. Picher “Truth, Lies and Videotape: Employee Surveillance at Arbitration” [6 C.L.E.L.J] 346

5. Ross v. Rosedale Transport Ltd. [2003] C.L.A.D. No. 237 (Brunner)

6. Canadian Pacific Ltd. And B.M.W.E. (Chahal) (1996), 1996 CanLII 20387 (CA LA), 59 LAC (4^th) 111 (Picher)

7. Erwin Eastmond and Canadian Pacific Railway and Privacy Commissioner of Canada [2004] FC 852

The Employer's position was fourfold and set out succinctly in counsel's submissions as follows:

"The Employer's argument will be structured under the following four subject headings:

1. Relevance. The Number One rule governing the admissibility of evidence is relevance. There must be compelling reasons to exclude otherwise relevant and probative evidence from an arbitration hearing. There are no such reasons to exclude the evidence in this case and to do so would be inconsistent with the policy reasons underpinning s.48(12)(f) of the Ontario Labour Relations Act, 1995.

2. Right to Privacy. There is no right to privacy in employment settings governed by Ontario legislation. Alternatively, if there is any right to privacy in those employment settings, that right is not engaged by the facts of the present case.

3. Reasonableness Test. The reasonableness test that the Union asserts is applicable in the present case is based on questionable law and in any case is inapplicable to the facts in the present case. At most, the reasonableness test only applies to surreptitious surveillance undertaken away from the Employer's premises when the employee has a reasonable expectation of privacy. In the alternative, the Employer meets the reasonableness test applicable in these circumstances.

4. Practical Concerns. it would be bad for labour relations between the parties, undermine the integrity of the grievance procedure and be a breach of natural justice if the grievor were permitted to exclude evidence that may confirm or refute his defence to the Employer's case. Alternatively, if the evidence is excluded, there should be an adverse inference drawn against the Grievor."

In making its submissions the Employer referred to the following cases:

1. Re Greater Niagara Transit Commission and Amalgamated Transit Union, Local 1582 (1987), 61 O.. (2d) 565 (Div. Crt.)

2. Re Toronto Transit Commission and A.T.U., Loc. 113 (Russell), (1999), 1999 CanLII 35849 (ON LA), 88 L.A.C. (4^th) 109 (Shime) (Quicklaw copy)

3. Re Kimberly-Clark Inc. and I.W.A. Canada, Local 1-92-4 (1996), 1996 CanLII 17917 (ON LA), 66 L.A.C. (4^th) 266 (Bendel) (Quicklaw copy)

4. Re Toronto Transit Commission and A.T.U., Loc. 113 (Fallon), (1999), 1999 CanLII 35949 (ON LA), 79 L.A.C. (4^th) 85 (Solomatenko) (Quicklaw copy)

5. Re Transit Windsor and A.T.U., Loc. 616 (Orsi), (2001), 2001 CanLII 62142 (CA LA), 99 L.A.C. (4^th) 295, (Brandt) (Quicklaw copy)

6. Re Canadian Timken Ltd. And United Steelworkers of America, Local 4906 (Hutchin Grievance), (2001), 2001 CanLII 62100 (ON LA), 98 L.A.C. (4^th) 129 (Welling) (Quicklaw copy)

7. R v. Duarte (1990), 1990 CanLII 150 (SCC), 65 D.L.R. (4^th) 240 (S.C.C.) (Quicklaw copy)

The Decision As indicated earlier, the parties are in agreement that, in Ontario, there is no legislation directly affecting the issues at hand. Accordingly, if employees do enjoy a right to privacy in Ontario, it does not flow directly from any piece of legislation and, at best, may be implied from jurisprudence recognizing the existence of such a right. Before entering into an examination of the jurisprudence with respect to privacy rights of employees it is, I think, important to consider first what this case is not about in order to narrow the issues and focus on those elements concerning privacy which are relevant to the facts at hand.

To itemize, this case is not about:

1. Surreptitious surveillance of an employee's activities away from the workplace;

2. Surreptitious surveillance of employees within their workplace;

3. Surveillance cameras and videotapes the existence of which within the workplace have, as such, been challenged by the Union;

4. Accordingly and simply put, this is not a case in which the Grievor can say that he was surprised that his activities and those of customers with whom he was dealing were captured by cameras and simultaneously recorded on videotape.

Since the Union has made none of the challenges which I have outlined above, the only issue to be determined is whether or not the images captured on the videotapes recovered by the Employer should be admitted into evidence. Should they be refused on the basis contended for by the Union? That contention is that the use of the videotapes for what now amounts to disciplinary purposes would be improper. That argument is premised on the proposition that surveillance evidence within the workplace may be legitimate or justifiable for the purpose of the protection of the Employer's property and/or its employees; however, when it is attempted to rely on that evidence for other purposes such as the discipline of an employee, in this case the Grievor, it constitutes an unjustifiable invasion of his privacy rights. In such circumstances it is the Union's contention that it cannot be used for those purposes and should not be admitted in this hearing. Of course, in order for the Union to succeed it must first be determined that employees do have a right to privacy in the workplace. If so, what is the nature of that right and does it pertain in all circumstances? If, in the circumstances, the right to privacy does pertain, can it be relied upon to exclude from admission what is otherwise conceded to be relevant evidence? Indeed, in this case the Union does not argue that the evidence may be irrelevant; rather, as I understand the evidence, it might prove not only to be relevant but also capable of substantiating the explanation given by the Grievor for the impugned activity. What test, if any, should be applied to determine whether or not relevant evidence should be excluded because it constitutes a violation of employees’ privacy rights? Although I have identified several issues here which might be addressed in this case, it may prove unnecessary to determine all of them given the peculiar nature of the facts at hand. In particular, as indicated the Union has not challenged the existence of the cameras, the constant surveillance within the store or the recordings which are made. These it acknowledges might well constitute a reasonable intrusion into any privacy rights employees enjoy since they were introduced for the purpose of the safety of the store, the Employer's property and employees themselves.

I have reviewed the many cases submitted by counsel and, while they are helpful with respect to the various views of arbitrators regarding the existence of employees’ privacy rights, the vast majority of those cases dealt with surreptitious surveillance away from the workplace. Those were, therefore, of little assistance with respect to the specific issue raised by the Union here. Notwithstanding that, it is important to recognize the significance of those cases with respect to the existence or non-existence of employees’ privacy rights in general.

Having considered the various cases submitted, I am of the view that the analysis provided by arbitrator Owen Shime in the Toronto Transit Commission and Amalgamated Transit Union, Local 111 (Russell), 1999 CanLII 35849 (ON LA), 88 L.A.C. (4^th) 109 (O.B. Shime) released in November 1999 best canvasses the possible sources, aside from legislation, for an employee's right to privacy in Ontario. I concur with his finding at page 113 that there does exist an employee right to privacy in Ontario:

"While there is a distinction to be drawn between state surveillance and the "ordinary observation of others", and while the Charter cases have no application to cases such as this where the surveillance is conducted by private individuals, nonetheless, it is our view that the Supreme Court of Canada has recognized that there is a degree of privacy we can reasonably expect to enjoy in a free society."

According to Arbitrator Shime, whether or not an employee can avail himself of the protection of that right to privacy will depend upon an inquiry into whether or not the person or employee had a reasonable expectation of privacy in the location or in the particular circumstances. [See the bottom of page 113 and top of 114].

At that juncture in his decision, Arbitrator Shime (at the top of page 116) expressed "the view that the off duty surveillance of single employee who has made a potentially fraudulent claim differs from the situation where the employer seeks to videotape the entire workforce on or at the employer's work site." Accordingly, his subsequent findings are not specifically applicable to the facts at hand. However, his approach remains helpful and was endorsed by Arbitrator Brandt in his 2001 award involving Transit Windsor (supra). It was Arbitrator Brandt who authored the Labatts (supra) decision relied on in part by the Union here but from which approach the arbitrator himself resiled in the Transit Windsor case preferring instead the approach adopted by Arbitrator Shime.

Arbitrator Shime, having confirmed his view that employee privacy rights do exist in Ontario proceeds to examine the nature of the arbitral inquiry where surveillance evidence has resulted in discipline. At page 116 in addressing matters of discipline, he postulates a balancing of interests between employers and employees as follows:

"Arbitrators have always demanded that there be some element of due process where an employer disciplines or discharges an employee for just cause. The concept of "due process" is interwoven with the concept of "just cause". For example, arbitrators have always demanded that the employer spell out the grounds for discharge, or insisted that employees have proper union representation in discussions with the employer. Thus, as part of that due process, there is some basis for balancing the competing interests of the employer and the employee by requiring an employer to demonstrate that there was a reasonable basis for invading a person's privacy before such evidence is admitted. Given the issues at stake, and while we have acknowledged the difference between situations where the state is involved, it is our view that just as in criminal matters where the state may be required to obtain a judicial warrant before invading an individuals privacy, so too as a matter of arbitral due process should an employer demonstrate that the is a reasonable basis for surveillance before the employer intrudes on an employee's reasonable expectation of privacy."

Having identified those situations in which a balancing of interests would take place, Arbitrator Shime clarified that before assessing whether or not there was a reasonable basis for surveillance by the Employer it must first be clear that the employee possessed some right to privacy which in the circumstances required protection. At page 117 in addressing the right of the employee he states in the award:

"As we have indicated, we are prepared to require a precondition where that right may be infringed. The refusal to admit evidence must be grounded or based on some right possessed by the employee; is the only basis for either refusing evidence or requiring a precondition where the gathering of evidence is otherwise lawful and relevant."

After then acknowledging that targeting and following a person in a public location is distasteful, concludes (at top page 118) that:

"surveillance in a public place, even if it is an invasion of privacy, but where a person does not subjectively have a reasonably expectation of privacy, or where there is not an objectively reasonable expectation of privacy, does not rank high on the scale of privacy issues."

The Board allowed the surveillance evidence without requiring the employer to satisfy any precondition that there was a reasonable basis for the surveillance in the first instance. As to whether a location can be considered private or public, the Board felt that that issue was "best left to evolve in the arbitral case law because the possibility of many different kinds of circumstance that may arise".

While I am in agreement with Arbitrator Shime's view that an employee's expectation of privacy in a public place does not rate highly, that does not mean that it is totally insignificant or without merit whatsoever. In the case at hand, the retail area of the LCBO's store where the grievor worked was a relatively public area with open shelves and customers and staff milling about the entire store at random. In the circumstances, I would not rate the employee's right to privacy very highly. Indeed, it is doubtful that employees themselves would expect any significant degree of privacy in their activities within the open store. Be that as it may, there could well be some of their activities, even within that setting, that employees might reasonably consider private; for instance whispered conversations with co-workers. Therefore, employees might expect some small degree of privacy within even that public work setting.

Notwithstanding that employees might have some marginal expectation of privacy even within such a setting, that expectation must on balance give way to the Employer's interest in protecting the safety and security of its store and its employees at large. That the scales weigh in favour of the surveillance in this case is recognized within the Union's submissions as follows:

"LCBO employees accept, willingly or unwillingly, that surveillance breaches their privacy because the employer's interest in security – and the employee's interest in safety and security – is understood to be a justifiable interest counterbalancing the breach of privacy. In other words, the loss of privacy is exchanged for the increased security.

The exchange would be qualitatively different if the purpose of the surveillance was the random accumulation of information with the potential to be used as evidence for the discipline of employees, should discipline appear warranted at some later date.

In the Union's submission, had deliberate, individual surveillance of Mr. Goncalves been initiated on December 8^th, 9^th, 11^th and 19^th, before the events of December 23^rd, giving rise, in the Employer's account, to the investigation, the Employer would be unable to meet the test for reasonableness of surveillance and would not, therefore, be able to rely on the videotapes in this arbitration."

In all the circumstances it is clear that the surveillance and the videotaping of the surveillance is a justifiable incursion into any privacy rights of the employees. The question raised by the Union in the challenge is to the effect that the evidence is now being tendered for a purpose other than that for which it was collected. In short, the surveillance was for the security of the store and the employees and it is now being offered in support of the disciplinary measure against one of the employees whom it was originally intended to protect. This the Union contends is an inappropriate use of the video material which ought not to be countenanced at arbitration.

In support of that submission the Union relied on two cases, in particular, that Puretex Knitting Co. Limited (supra) and Liberty Smelting Works (cited within the Puretex Knitting case as Liberty Smelting Works (1962) Limited and U.A.W. Local 1470 (1972) 3 SAG 1035). However, each of those cases were interest arbitration cases and in neither of them was the company restrained completely from installing or maintaining surveillance cameras. Rather, as I understand the decisions, the arbitrators allowed some cameras and disallowed others depending on whether or not there was a reasonable basis for the surveillance. In the Puretex case where some of the cameras were allowed for the prevention of theft the arbitrator imposed a condition that "the use of the cameras was to be strictly limited to the prevention of theft". Presumably, that is the proposition upon which the Union relies in this case. However, even with that restriction, if there was an employee captured on camera engaged in an act of theft, it is doubtful that the evidence would be excluded or denied admissibility simply because it was now being used for disciplinary purposes. Be that as it may with respect to the Liberty Smelting case, there are no such restrictions or limitations on the use of surveillance cameras in the collective agreement before me. Furthermore, this is not an interest arbitration and the case must be decided within the context of the collective agreement at hand. In the circumstances, there is no basis for me to introduce a restriction on the use of the surveillance evidence when there is no significant challenge by the Union to the ongoing surveillance and videotaping in the store. As indicated earlier, that the Grievor's activities during an exchange with a customer or customers were captured on videotape could not constitute a surprise to him here. Accordingly, I do not accept either of the Puretex or Liberty Smelting cases as authority to justify refusing the admission of evidence which is relevant and germane to the issues before me.

In addition to the interest arbitration cases referred to, the Union in reply referred to a rights arbitration award in British Columbia. In Re Pope & Talbot Ltd. and Pulp, Paper and Woodworkers of Canada, Local 8 (2003) 2003 CanLII 89633 (BC LA), 123 LAC 4^th 115 (D.R. Munroe), the Union grieved the installation of a camera monitoring the position of "Barge Unloader" as an infringement of the worker’s privacy rights. Although that case was decided under the then recently proclaimed Personal Information Protection Act, the arbitrator did not regard the Act as altering the issue in the case before him. At page 125 of the award Arbitrator Munroe comments as follows:

"One begins with a clear appreciation that as between employer and employee, the latter's reasonable expectations of privacy are not set aside simply by the entering into of the employment relationship; and further, that while the Canadian Charter of Rights and Freedoms is not per se applicable to private sector disputes like this one, the values embedded in the Charter do appropriately influence the development of our common law and arbitral jurisprudence…

But just as employee's privacy interests require protection against the overzealous exercise of management rights, so also must an arbitrator acknowledge the employer's legitimate business and property interests. What is required, then, is a contextual and reasonable balancing of interests. There is no absolute rule affording precedence to one legitimate interest over the other. It is a question of whether the particular camera surveillance, in the purported exercise of a management right, is reasonable in the circumstances."

And later (at the bottom of page 25 and the top of page 126) he went no to note that:

"The union's institutional concerns about the camera surveillance, and the employee's personal subjective concerns, cannot per se override the employer's competing and legitimate business interests. But neither can those concerns be regarded as de minimis. Constant camera surveillance of an employee's productivity, whether that is the primary purpose or just incidental, would obviously be preoccupying and may understandably be regarded in some circumstances as a diminution of one's sense of personal dignity or privacy. Borrowing from Unisource, the threshold for determining the reasonableness of non-surreptitious video surveillance is lower than with surreptitious video surveillance; however, a meaningful threshold does exist."

In that case Arbitrator Munroe did not direct the removal of all cameras but did direct the restriction of the use of some of them so that employees were not under constant surveillance at their work stations 24 hours per day. Accordingly, the Arbitrator did place some restrictions on the surveillance cameras; however, he did so only after first finding that to some extent the surveillance did not have a reasonable basis. The Arbitrator therefore imposed limitations such that the surveillance would not unreasonably intrude upon the employee’s activities.

In my view, that decision is consistent with others referred to in this award. In particular it is not inconsistent with the decision of Arbitrator Shime which I have reviewed extensively earlier in this award. Rather, it is consistent with the proposition that even where employees have a reasonable expectation of privacy, those privacy rights may be superseded on balance where there is a reasonable basis for surveillance. It does not, however, support the proposition advanced by the Union to the effect that any evidence garnered by such surveillance, where the surveillance was initiated for some other purpose, may not be introduced into evidence to support discipline in an arbitration hearing.

In all the circumstances, since, upon a balancing of interests, the video surveillance was a reasonable intrusion upon the privacy rights of the Grievor here, and, since the tapes offered are relevant to the issues at hand, the Union's motion is not successful. Accordingly, the tapes, subject to appropriate identification, will be admitted into evidence in these proceedings.

DATED at Toronto this 11^th day of February 2005.