Commission upholds dismissal for theft, despite no criminal conviction

Cases

Commission upholds dismissal for theft, despite no criminal conviction

In a case which demonstrates the dichotomy between the standard of proof in criminal and civil proceedings, the NSW Industrial Relations Commission has rejected an employee's claim she was unfairly dismissed for theft, despite the fact that she was cleared of criminal charges.

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In a case which demonstrates the dichotomy between the standard of proof in criminal and civil proceedings, the NSW Industrial Relations Commission has rejected an employee's claim she was unfairly dismissed for theft, despite the fact that she was cleared of criminal charges.

The bar attendant was accused of giving false refunds for packaged beer over a number of months at a cost to her employer of $8,000 and $9,000. While the criminal court judge found that problems with the club's cash-handling systems made it impossible to find with any certainty who caused the deficiencies, Deputy President Sams considered only whether there were any unusual transactions conducted when the employee was not on duty. As there were not, he concluded that on the balance of probabilities the allegations were proven and the club was justified in dismissing her.

The deputy president also made an observation on whether an employer has to wait for the result of criminal charges before acting in cases like this. He sad that in his opinion, there was 'no legal or moral obligation on an employer to retain an employee on full pay until criminal charges are determined'. Circumstances vary with each case, but the general position was as stated.

Background

The case involved an employee of the Cootamundra Ex-Services and Citizens Memorial Club Ltd who claimed she was unfairly dismissed from her position as part-time bar attendant after approximately $9,000 went missing from the till. She had been employed by the club for three years. There was no evidence of any complaint about her work performance, behaviour or attitude prior to her dismissal.

In early 2000, the club discovered that over many months there were unusual refund transactions involving packaged beer. The police were informed and an investigation began. The police interviewed the employee and she was later charged with seventy counts of obtaining money by deception. The specific allegations were that the employee falsely refunded multiple items of packaged beer on numerous occasions over a number of months and stole the money. The loss to the club was said to be between $8,000 and $9,000.

When the employee arrived for her shift after the police interview, she was met in the club's car park by management. She denied any involvement in the unusual transactions, but was told she would be stood down without pay until further notice. After union intervention her pay was restored while she remained on suspension as per the award.

Three weeks later she attended a disciplinary meeting at the club with her union delegate. She denied any wrongdoing and also said she may have pressed the wrong button on the till. That afternoon, club managers met with the police. While not provided with evidence obtained by the police, the club was informed the case against the employee was strong. The police advised the club not to speak to any staff about the matter as it might compromise the investigation.

The next day the club informed the employee she was dismissed. Her union delegate sought details of the suspect till transactions, but was told this data would be provided after checking with the police. The employee was provided with a termination letter that disclosed the reason for termination as 'failure to account'.

The criminal proceedings dismissed all charges against the employee. The court said that the prosecution had to prove beyond a reasonable doubt that she and only she was responsible for the deficiencies. However, it found the system in place at the time of the alleged offences made it impossible to find with any certainty who caused the deficiencies.

Despite the dismissal of the criminal charges, the club maintained its view that the employee was responsible for the cash discrepancies and refused to reinstate her.

Findings

Deputy President Sams said that in his view, the case pointedly demonstrated the dichotomy between the standard of proof in criminal and civil proceedings. In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities, compared to the more rigorous 'beyond all reasonable doubt' test applied to the criminal proceedings.

In considering whether the employee was guilty of misconduct, the deputy president first criticised the club for deficiencies in its cash-handling systems. However, he said notwithstanding the 'appallingly sloppy and unprofessional management' of the club at the time, the fact was that this fraud was on a monumental scale over many months. 'Whether a number of employees shared or inherited the till takings or whether the rosters were not completely accurate, does not address the more fundamental issue of when the refunds of packaged beer occurred.' He noted that all witnesses gave evidence that no customer had ever returned packaged beer for a refund. 'This, of course, is completely logical. Packaged beer would never be returned - unless in exceptional circumstances.'

Deputy President Sams said that in balancing the arguments for and against the employee, one question was decisive to his ultimate conclusion of the matter. 'Were there any unusual transactions conducted when the [employee] was not on duty? If there was, it would point to another person or persons acting, either independently or in concert with the [employee], to defraud the [club]. It seems to me the evidence is palpably clear. There were no unusual transactions when the [employee] was not on duty.'

The deputy president said that from his inspection of the till functions, he was convinced that it would not take very long at all for an enterprising employee (even by a process of trial and error), to work out how to use the refund function. He rejected the employee's evidence that she didn't know how to use the refund function and had never done so.

He said the club's inaccurate system for recording when employees took breaks was irrelevant because even though the actual times might have been a little out, it did not prove the employee was not on duty at the time. 'Indeed, there was no evidence that the [employee] was somewhere, other than in the club, when the unusual transactions were conducted.'

Deputy President Sams concluded: 'It seems to me to be an inescapable conclusion, on the balance of probabilities, that the allegations against the [employee] are proven. Her actions amounted to a fundamental breach of her obligations to act with good faith and fidelity.' He said in his opinion, dismissal of the employee was, not only reasonably open to the club, but the only appropriate response in the circumstances.

In terms of the procedural fairness of the dismissal, the deputy president said he had no doubt, with the benefit of hindsight, that the dismissal might well have been better handled by the club, but 'the gravity of the proven allegations against the [employee] far outweigh any procedural deficiencies.' He went on to say that in his opinion, there was 'no legal or moral obligation on an employer to retain an employee on full pay until criminal charges are determined'.

See: Humphries and Cootamundra Ex-Services and Citizens Memorial Club Limited [2002] NSWIRComm 225, (September 6, 2002).

 
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