Inco worker fired for misappropriating company equipment

Ontario court says worker's actions destroyed company's trust, judge praises way Inco handled decision to terminate the employment relationship

An Ontario court has upheld the firing of an Inco worker who took company property without permission and attempted to cover it up.

Marcel Courchesne started working full-time for Inco in 1970. He began as a labourer, completed the apprentice millwright program and ultimately became a maintenance supervisor.

He was fired in 1998 following an investigation into company property that could not be found. Courchesne started an action for wrongful dismissal seeking damages in lieu of notice, an extension of the notice period for the way the termination was handled and punitive damages.

Company restructuring

In 1998 Inco was undergoing a major re-organization. Physical modifications were required to accommodate the workforce changes.

Courchesne was part of the team responsible for the renovation of one of the areas. As maintenance supervisor he was authorized to make purchases up to $100.

For anything exceeding that threshold he had to obtain the approval of his supervisor, Mike Mayhew. The purchasing system was automated and if an employee attempted a purchase beyond his authorization the request was automatically forwarded to the person who had the authority to approve the purchase.

Mayhew said he would receive about 100 spending requests everyday from the 20 to 25 people who reported to him directly. Mayhew’s approval limit was $30,000.

As long as Mayhew was familiar with the plan, the description of the item and the estimated cost, he generally approved the expense without further investigation. Mayhew said the approval system was based on trust.

Inco’s ‘Cardinal Rules’

Inco had a set of “Cardinal Rules” which were widely distributed and known by employees. Courchesne said he was aware of the rules. The rules defined theft as misappropriation of company property.

The rules also stated that: “Anyone violating a Cardinal Rule is at risk of losing his/her job on the first offense.”

Inco had what it called a “pass-out” system which allowed employees to take company property home if they satisfied their superiors that it no longer had a value to Inco. The system required the employee to make a request and set out the basis for the request.

Missing tiles

Courchesne decided to order new grey tiles for the floor of the line-up room renovation. He called the supplier directly and found a price for the tiles he wished to purchase. The purchase price was about $600.

He entered the purchase into the system. The request went to Mayhew and it was approved.

In mid-September Courchesne made arrangements with the supplier to pick up the tiles personally. He did this on his own time and had to drive out of his way to do so. The entire shrink-wrapped order of tiles was loaded with a forklift onto his truck. Courchesne brought the tiles home. He unwrapped and unloaded them by hand and stored them in his garage.

The next day he delivered the signed receipt to the warehouse where the details of the receipt were entered into the system.

The renovation project was completed in September. During that time, the floor of the line-up room was patched with the standard brown tiles used by Inco. The patch job took a week and was done by Courchesne’s crew, under his supervision. The new grey tiles were not used.

Irregularities investigated

In late November, Mayhew was told there appeared to be certain irregularities in Courchesne’s purchasing. Mayhew asked for a written report and received further details.

After reading the report he asked a group leader to determine if the items purchased had been installed. The group leader was not immediately sure the items had been installed, notably the grey tiles, a water pump, a microwave and certain plumbing fixtures.

Mayhew and the group leader went looking for the items and could not find them. Mayhew told the group leader to go find Courchesne and bring him into Mayhew’s office.

The group leader located Courchesne in the warehouse. Instead of going directly to Mayhew’s office, they had a long conversation. During this conversation, Courchesne admitted he had the tiles at home.

But Courchesne told the group leader that while he was making this admission to him, he would not make it to anyone else. Courchesne asked the group leader repeatedly if he could go home immediately and retrieve the tiles and bring them to work. He asked the group leader to tell Mayhew that he was unable to find him in the workplace.

The group leader was new in the position and told Courchesne he could not go home because that would put the group leader’s job in jeopardy. After more than an hour the group leader and Courchesne went to Mayhew’s office.

Courchesne told Mayhew the tiles were on the property but didn’t know exactly where. The group leader did not contradict him. The group leader testified he did not want Courchesne to think that he had been the one to turn him in.

That evening, after supper, Courchesne loaded up the tiles on his truck and brought them into the Inco warehouse. He left them in a visible place where they were discovered the next morning.

The next morning the group leader told Mayhew that Courchesne had given him different information about the tiles. Mayhew was upset by this revelation. He decided to take the weekend to think about how to handle the situation.

Mayhew and his supervisor decided to launch an investigation.

The investigation

The supervisor of plant protection launched an investigation. He was told to look at certain purchases including:

• faucets;

• stainless steel pipes;

• a water pump;

• tiles; and

• a microwave oven.

The investigators were supplied with invoices for each of the items and a photo of the items. They asked Courchesne if he had anything at home that belonged to Inco and if they could visit his home.

Courchesne agreed to the visit. On the way to his house, he asked the investigators if they wanted to visit his camp. They went to the camp and with Courchesne’s permission wnet into the main building, the pump house and an outbuilding.

In the outbuilding the investigators asked about a pump they could see. Courchesne said the pump was not the one they were looking for, but admitted it had come from Inco. He said it was a pump that was damaged, and that he had taken it home and refurbished it.

They then went to Courchesne’s house, where they went into the garage. They then returned to Inco. Courchesne told them the faucets they were looking for were in his locker and the microwave had been installed in the lunchroom. He also provided an explanation for the stainless steel pipe.

Courchesne handed over the faucets and then gave a statement to investigators.

Courchesne’s statement

Courchesne was cautioned before he gave the statement that he was not required to say anything but that if he did make a statement, it could be used in evidence at a future hearing.

The statement read in part:

“In September I purchased tiles for the new office facility. I picked up the tiles myself at the end of my shift at the supplier and loaded them into my own vehicle. I unloaded them in my garage until we were ready for the installation. The other planner went to a different tile. I did not bring them back to the plant immediately. I never took the time to return them. But I did when I was asked about them. I ordered a pump which I took to my camp and I’m sorry! I made a mistake! As far as the faucets and shower balance control, I ordered these to try something different in the staff dry shower on the wall side. These never left the property. The white enamel faucets were purchased for the line-up room, when Evans came with the cupboards they installed a sink and faucets. So these faucets were not required so I put these in my storage locker.”

The investigators reported to Mayhew on Dec. 1, 1998. At about the same time Courchesne was told he was suspended pending further investigation.

The company met with Courchesne twice during the suspension period. They gave him the results of the investigation and Courchesne provided certain explanations. With respect to the tiles, Courchesne had at least three different explanations:

• he didn’t want them to disappear from the warehouse;

• he didn’t want the planners to raise a ‘stink’ and he planned to use them to cover the floor which had been patched; or

• he would use them on a future job.

Courchesne acknowledged he could have used the company’s “pass-out” system to request the pump he took home, but did not do so. He said it was scrap and that he rebuilt it for his use. But he provided no explanation for not using the pass-out system.

The company then convened a peer review process with senior personnel, including a senior HR official, a general manager and an ombudsman. It was the consensus of the group that the pump and tiles had been in Courchesne’s possession without authorization.

A decision was made to terminate his employment on Dec. 8, 1998.

Court says dismissal warranted

Justice Patricia Hennessy of the Ontario Superior Court of Justice said Courchesne’s conduct violated Inco’s “Cardinal Rules” which were an essential term of the employment contract.

“His conduct also breached the faith necessary in the relationship with his supervisor,” she said. “Mayhew’s evidence that he approves approximately 100 requests a day, and that this system obviously is based on trust, leads to the conclusion that there would be a complete breakdown of the system if the superintendent could not trust a supervisor to be completely honest in his use of the purchasing system.”

Justice Hennessy said Courchesne’s conduct was “irreconcilable with the employment relationship.”

“Not once but twice he misappropriated property,” she said. “He went to a lot of trouble to bring the tiles home. It was not a spur of the moment act.”

When confronted, he tried to coax his group leader into letting him go home. He lied to Mayhem and then returned the tiles hoping he would not have to reveal where they had been.

“Throughout the investigation, Courchesne failed to respond or explain his actions with full candour,” said Justice Hennessy. “The employment relationship was irreparably damaged by his actions throughout. There is no way an employer could be expected to trust this employee again, and trust is fundamental to the relationship.”

She applauded the employer for its careful and deliberate decision-making process when it came to terminating Courchesne.

“They did not rush to judgment. Courchesne was given a number of opportunities to explain his conduct,” said Justice Hennessy. “Unfortunately, his explanations were illogical and inconsistent. They made no sense and there was no rational basis on which the employer could accept them.”

Absolutely no basis for Wallace damages

The court dismissed Courchesne’s lawsuit against Inco. But Justice Hennessy took extra time to comment on Courchesne’s request for extended notice for the way the termination was handled and his request for punitive damages.

“In this case, the employer was completely honest and forthright with (Courchesne),” she said. “They informed him of their concerns, they told him what purchases they were investigating. They asked him for explanations. They met with him privately a number of times and gave him the opportunity to respond to their findings. They did not mislead him in any way. They did not make allegations they could not support. There was no bad-faith motive behind their decision. Their communications with (Courchesne) were marked by candour and respect. The facts in this case and the actions of the employer do not justify a finding of extended notice.”

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