[1999] OLRB REP. JULY/AUGUST 632
3671-98-ES; 3495-98-ES Loretta Nelda Poulin, Mike George Poulin 0/a James Bay Wild Fruit Applicants v. Tanya-Lyn Swayne, Jennifer Lepage and Ministry of Labour, Responding Parties; James Bay Wild Fruit, Applicant v. Patrick Theriault and Ministry of Labour, Responding Parties
Employment Standards Act - Board finding that employer had no authority to deduct monies from wages of its employees and that document relied on by employer was not a "written authorization of an employee" under Regulation 325 under the Employment Standards Act permitting employer to set-off against wages - Board upholding Employment Standards Officer's Orders to Pay
BEFORE: Gail Misra, Vice Chair.
APPEARANCES: Loretta Poulin and Denis Ippersiel for the applicants; Tanya Swayne and Jennifer Lepage for the responding parties in Board File No. 3671-98-ES; Gilles Lapalme and Patrick Theriault for the responding party in Board File No. 3945-98-ES; no one appearing for the Ministry of Labour.
DECISION OF THE BOARD; August 23, 1999
These are employer appeals of Orders to Pay issued by an Employment Standards Officer. Order to Pay No. 48150 issued on November 9, 1998 in the amount of $798.75 and was made with respect to Ms. Swayne and Ms. Lepage. In this case the employer was found to have made unauthorized deductions from these employees' paycheques. Order to Pay No. 48229 issued on January 15, 1999,and was made with respect to Mr. Theriault. In Mr. Theriault's case the employer was found to have illegally withheld the employee's last four weeks of wages and vacation pay.
A Hearing into these two matters was held in North Bay on August 12, 1999. Prior to the commencement of the hearing Mr. Poulin called me in the hearing room and indicated he was in Toronto at the Ontario Food Terminal. He asked to participate in the hearing by speakerphone. I indicated to him that that was not acceptable as this is a legal proceeding in which the parties have the right to see who they are dealing with and to cross-examine that person if necessary. In addition, the Vice-Chair needs to see the demeanor of the parties and witnesses in order to make decisions regarding credibility. After some argumentative comments, Mr. Poulin spoke to his wife, Ms. Loretta Poulin, who was present at the hearing. Ms. Poulin and the company accountant, Mr. Denis Ippersiel were present to represent James Bay Wild Fruit. Notwithstanding the ruling regarding participation by speakerphone, Mr. Poulin called the hearing room again some minutes later to ask again through his wife that he beallowed to listen to the proceedings by speakerphone. I indicated to Ms. Poulin that in the normal course I may allow a person to listen in on the case in this manner, but given Mr. Poulin's earlier argumentative outbursts to me, I was not convinced that he would be able to simply listen to the case without interrupting. Ms. Poulin conveyed to Mr. Poulin that he could nto listen in, indicated to him that she and Mr. Ippersiel were representing the company, and encouraged him not to call again. Mr. Poulin did not telephone again and the hearing commenced. It is noteworthy that the hearing went from about 9:45 a.m. until almost 4 p.m. so it in al likelihood would have been impractical for someone to sit at a phone for that period of time.
The employer witnesses were Ms. Poulin and Mr. Ippersiel. Ms. Poulin had never met any of the employees in question and had very little contact with the actual purchasing operation. She works out of North Bay. Mr. Ippersiel has been the employer's accountant for the 1998 and 1999 berry seasons. He was not the accountant in 1997, when Ms. Swayne and Ms. Lepage had deductions made. Mr. Ippersiel has made his best efforts to try to reconstruct what took place in 1997, using the spreadsheets, which form part of the employer's records. Mr. Poulin, the drivers for the two seasons in question, and the previous accountant did not testify before me. Each of the three employees testified. I found all of the witnesses to be credible and am satisfied that they each gave their evidence to the best of their recollection or ability to reconstruct what had taken place. As will become obvious, there were some problems with the documents relied upon because no one could attest to some of the markings and chnages made on them.
Mike and Loretta Poulin operate James Bay Wild Fruit ("James Bay"). It is a seasonal wild blueberry operation in which the Poulins hire employees to staff booths in Sudbury, those employees buy wild blueberries from pickers, and the Poulins then sell the blueberries both wholesale and retail.
The company sets up three purchasing stations in the Sudbury area. One person staffs each station at any time. A station both buys the fruit from the pickers and sells pickers empty baskets if they want to purchase the company's baskets before they begin picking. Employees are expected to make up the baskets while waiting for pickers. A driver goes around to each station to give the staff their float of money, and picks up blueberries that have been purchased. At the end of a day an employee should have completed a number of spread sheets showing such general information as the name of the employee, the date, the location of the station, and the employee's times in and out. More specific information regarding the opening cash balance, sale of baskets, money received to add to the float, blueberry costs and cash totals are also recorded. For each purchase of blueberries from a picker the employee must list the quantity in quarts, the price paid per quart, the total price paid, and a running balance of both the quarts accumulated and the money spent. A separate sheet records lOUs, which the employee may have had to give out if she or he ran out of cash. lOUs were not recorded anywhere on the actual spread sheets, so that the accumulated cost would be misleading as the employee would not in fact have paid out that amount. Or alternatively, on any given day, a picker may come to cash in an IOU and the accumulated cost would not be indicative of the actual money paid out that day. At the end of the season, or the buyer's tenure with the employer, a calculation is made of the money received by that buyer to purchase blueberries, plus any monies for baskets sold to pickers, minus any amounts paid out for purchases. Any shortage is deducted from the employee's last paycheque.
At the top of each spread sheet there were the following two statements with spaces for signatures:
I am responsible for all shortages and discrepancies:
I am responsible for new cash balance:
- In 1997 Ms. Swayne and Ms. Lepage worked for James Bay as buyers. For both young women it was their first real summer job and they were around 15 or 16 years of age at the time. Ms. Swayne worked from July 20 to August 26, 1997. Ms. Lepage worked from July 5 to August 9, 1997. Ms. Swayne signed a "Non-disclosure & Non-competition Agreement" near the beginning of her tenure with James Bay. Ms. Lepage, on her mother's advice, refused to sign such a document. One sentence inthe document states:
I also agree to be held liable for any discrepancies in either cash or merchandise.
The employer made deductions of a total of $104.75 from Ms. Lepage, and $594.00 from Ms. Swayne. There was extensive and somewhat inconclusive evidence regarding the amounts that the employer claims these employees were responsible for because of shortages in their floats. The employees concede they may have been short on some of the days because of addition errors that caused them to pay out to pickers more than they should have. However, the employees do not accept some of the amounts attributed to them because their numbers on the summary sheets appear to have been changed by someone else. It is conceded by the employer that Mr. Ippersiel, the present accountant, was not working for James Bay at the time, and that the changes may have been made by either the accountant in the 1997, or by the driver who would have collected the daily summary sheets. As the employer did not call evidence to explain the changed numbers, it is dificult to rely on the summary sheets.
Mr. Theriault worked for James Bay as a buyer from June 22 to August 21, 1998. He was 15 years old at the time and was working at his first summer job. At the end of his tenure with James Bay the employer refused to pay him for his last four weeks of work or his vacation pay because Mr. Poulin claimed that Mr. Theriault had stolen money from the company. The employer therefore withheld $2,077.33 in wages and $184.27 in vacation pay for a total of $2,261.60 from Mr. Theriault.
The employer states that Mr. Theriault had no significant cash shortages until August 7, 1998. Between August 7 and August 8, 1998 James Bay claims tht Mr. Theriault cannot account for a significant amount of money. It appears that at the end of the day on August 5 Mr. Theriault had $2,798 in cash, so that is what apparently opened with on August 6 morning. He received $2,000 in cash from a driver that day, bringing his cash on hand to $4,798. He purchased blueberries for $2,045, which should have meant he had a balance of cash of $2,573. That number is noted on his summary sheet, but appears to have been crossed out by someone and $2,713.10 was recorded (approximately $40 less).
The next day's opening balance is a diferent number again, $2,060.12, and is about $653 less than what Mr. Theriault had noted the evening before. It is impossible for me to satisfy myself about where the numbers may have gone wrong as James Bay has not provided me with enough documentation to actually recreate Mr. Theriault's costs over the course of the two days. I was not provided with the listing of lOUs given or paid out, and I was not given all of the sheets recording Mr. Theriault's blueberry purchases on August 7. While the summary sheet says Mr. Theriault purchased $1,841.12 in blueberries, the sheet provided to me only shows about $300 being spent. There is no dispute that James Bay got the number of quarts of blueberries it should have, so that means there must have been other summary sheets showing blueberries purchased.
I have also reviewed the "North Star Collecting Station Summary 1998" and am unable to reconstruct what may have happened. In my view the problem may have begun some days before the employer claims it did. It looks like there was a great disjunction between what Mr. Theriault's actual cash and the balance he should have had from August 4, 1998 on. From Jun 22 up to that point there was only a $200 to $400 difference between what Mr. Theriault had on hand as cash and what his balance should have been. As the numbers went up and down in that range every day, it is entirely conceivable that the differences were due to LOUs that were out. However, from August 4, on the disjunction between the balance and the actual cash rose to over $1,200 and then up to about $2,000. The employer's summary claims that on August 4 Mr. Theriault received $4,500 in cash. However, the employer has not provided that day's sheet or the driver's summary of monies given to buyers, so Mr. Theriault did not have the opportunity to check the employer's number in this regard. Since that is where the significant divergence began, it seems that it would have been prudent for James Bay to have established the chain from at least that point forward.
I am not satisfied that James Bay has established how it came to the view that by August 21, 1998 Mr. Theriault was short by $2,034.20. The employer in this case has made the very serious allegation of theft against a young man beginning his working life. In cases where an employer is claiming fraud or theft, it is incumbent on that employer to provide the adjudicator with cogent proof to support the allegation. As the employer told me repeatedly at the hearing, one cannot look at one day in isolatiion but must look at the totals over the course of the employee's tenure. However, James Bay has only given me five days of summaries from Mr. Theriault's two months of employment. It was brought to my attention that on one day a driver had signed that he had given Mr. Theriault a certain amount of money, but Mr. Theriault had noted he had received a different amount. It threfore appears that one cannot rely on any one source of information in this case. In order to satisfy myself that monies had apparently disappeared while under Mr. Theriault's control, I would have had to be satisfied that every amount of money that the employer alleges was given to Mr. Theriault, and that had been recorded in its computer-generated summary, had in fact been received by Mr. Theriault. I would also have had to see where all sales of baskets, and purchases of blueberries were noted, and the IOU sheets.
It was Mr. Theriault's evidence, completely unchallenged by James Bay, that he had been told by Mr. Poulin that he should borrow money when necessary from a storeowner near the booth. He was also to pay that storeowner back as he got cash from the driver. James Bay produced no documentation to show how that arrangement, or indeed the lOUs, worked. I therefore have no way of assessing whether the storeowner may have received more money than he should have, thereby causing Mr. Theriault's cash to be short.
Mr. Theriault gave unchallenged evidence that Mr. Poulin had called his home and accused him, and his parents, of theft. When Mr. Theriault had indicated he wanted the police involved if there was a theft charge being made, Mr. Poulin declined, and suggested he wanted to keep the police out of it. No charges were ever laid against Mr. Theriault. Yet, Mr. Pouling instructed Mr. Ippersiel not to pay Mr. Theriault for his last month of work for James Bay, therby withholding from the emplyee over $2,000 in wages earned. Ms. Swayne was also accused of stealing money from the employer. All three employees, who it should be noted worked two different summers, testified about how Mr. Poulin would not allow them to take any breaks and would make harassing phone calls to them. It is their unchallenged evidence that Mr. Poulin would call at their homes in the early hours of the morning and would regularly berate them for their stupidity, would curse at them, and would tell they they were never going to get anywhere in the world. Ms. Swayne's father and aunt tried to speak to Mr. Poulin to get him to stop this type of harassing behaviour, but to no avail.
As is obvious from the above, the accounting documentatiion relied upon by the employer is confusing and incomplete, and I have found it to be unreliable. I am therefore unable to find what, if anything, Mr. Theriault was short in his cash by the end of his tenure at James Bay.
DECISION
The two questions to be answered in this case are whether James Bay had the authority to deduct the monies it did from the wages of the three employees in question, and if it did have that authorization, whether it has substantiated the amounts which it did deduct.
Section 8 of the Employment Standards Act states as follows:
Except as permitted by the regulations, no employer shall claim a set-off against wages, make a claim against wages for liquidated or unliquidated damages or retain, cause to be returned to the employer, or accept, directly or indirectly, any wages payable to an employee.
Adjudicators and referees have found that this section of the Act prohibits and employer from making deductions from an employee's wages for errors in the employee's performance of his or her duties. Similarly it has been found that an employer cannot deduct the value of cash shortages where the employee has failed to give written authorization for the deduction from wages. In making an assessment in each case the adjudicator or referee must look at the particular written authorization executed by the employee and relied upon by the employer. (See for example Maxwell Cleaners Ltd., (ESC 103, May 21, 1974, Brockenshire) and Tavares, (ESC 1197, April 13, 1982, Aggarwal).
Section 14 of Regulation 325 addresses when an employer may set off or deduct monies from the wages of an employee. It states:
(1) Despite section 8 of the Act, an employer may set off against, deduct from, claim or make a claim against or rtain or accept the wages of an employee where,
(a) a statute provides;
(b) an order or judgment of a court so requires; or
(b) subject to subsection (2), a written authorization
of the employee so permits
or directs.
(2) No written authorization of an employee shall entitle an employer to set off against, deduct from, retain, claim or accept wages for faulty workmanship, or for cash shortages or loss of property of the employer where a person other than the employee has access to the cash or property.
In Scott McCullough and Caversham Co. Ltd., (ESC 95-178, October 23, 1995, Muir) the adjudicator/referee reiterated that a blanket authorization from a prospective employee to an employer permitting the employer to make deductions of unspecified amounts, as a result of unspecified future occurrences, was not a written authorization within the meaning of the regulation quoted above. James Bay relies upon the document signed by Jennifer Lepage as a blanket authorization. However, in accordance with the jurisprudence, I find that that document did not authorize the employer to make any deductions from Ms. Lepage's wages. The document did not specify the amount to be deducted as it was clearly prospective in nature, and was subject to future unspecified occurrences. Further, it made no mention of deductions being made from wages, but rather simply said that the person signing the document would be "held liable for discrepancies in either cash or merchandise".
In Cave rsham, cited above, and other cases preceding that decision, adjudicator/referees have also found that even if an employee has given written authorization for deduction from wages, there can be no set off or deductiion from the employee's wages for faulty workmanship. Thus, even if James Bay had received an acceptable authorization to deduct monies from employee wages, it could not have made deductions for the buyer's acceptance of sub-standard blueberries. I note that there was
evidence that one deduction made from Ms. Lepage's wages was for having accepted poor quality blueberries. That was an unauthorized deduction.
James Bay has relied on the daily summary sheet which requires the employee to sign a statement saying that she or he is responsible for all shortages and discrepancies and for the new cash balance. However, adjudicator/referees have found that a general authorization given in advance of the actual cash shortage can never be "written authorization" within the meaning of the regulation, no matter how often it is given. (See 4451173 Ontario Inc., ESC 3021, April 8, 1992, Brown). I agree with the decision in that case and am of the view that James Bay cannot rely on the general statement on each of the forms that the employees must complete. Given the nature of this business and how records are kept, when they sign those forms the employees have no idea what the employer is going to later claim is a shortage. Furthermore, there is nothing in the statement signed that would alert the signer to the fact that the employer is going to deduct shortages or the cost of discrepancies from their wages.
I note for the record that the employees in these cases were very young workers who were working at their first significant summer jobs. In my view Mr. Poulin attempted to take advantage of their age and naivete, and their lack of knowledge about about their minimal rights as workers. It is unfortunate that their first experience of employment was such a negative one, however, they are to be commended for ascertaining their rights and pursuing this process.
For the reasons outline above I find that James Bay did not have any of the employee's authorizations to make the deductions from wages which it made. Given my finding in this regard it is unnecessary to reiterate my concerns about the documentation upon which the employer was seeking to prove the shortages. I hereby uphold the Employment Standards Officer's Orders to Pay and request that the Director of Employment Standards distribute the monies held in trust, along with any accrued interest to Tanva-Lvn Swavne. Jennifer Lena~e and Patrick Theriault.