Hospitality industry 'requires high level of trust in employees'
“Trust is essential in an employment relationship, regardless of the industry, and the employer has to have trust in the employee to act within the scope of their job and their authority. Once that trust is gone, that opens the door for termination.”
So says Trevor Thomas, a labour and employment lawyer at Ascent Employment Law in Vancouver, after an arbitrator upheld the firing of a hotel server for the theft of $14.
The worker was a server in a seasonal cocktail lounge at the Rosewood Hotel in Vancouver. She was hired in November 2021.
The Rosewood is an upscale facility that trains staff in providing exceptional service to guests. All of its food and beverage inventory was tracked by a point of sale (POS) system that employees used when guests made purchases.
Employees had to account for every item in the hotel’s inventory. Items ordered but cancelled before being served were recorded as a void. If a guest didn’t accept something that was ordered and served, the server could replace the item without charge and record it as an “allowance.” Complimentary items were also marked as an allowance. The hotel absorbed the cost of allowanced items in the food and beverage inventory.
Discipline for not following procedure
On June 3, 2023, the hotel issued a written reminder to the worker for adding in an automatic gratuity to a customer’s bill, which was contrary to the hotel’s procedures. Such a gratuity was only to be added to tables of seven or more people, but the worker had done it for a table of four because the guest paying the check had been rude.
On Aug. 31, the worker served a “secret shopper” who was there with a guest to conduct integrity auditor operations at the hotel. The secret shopper ordered three rounds of cocktails. They also asked for sparkling water and she brought bottled sparkling water. They clarified that they wanted soda water instead of paying $7 for the bottled kind.
When the worker brought the bill for the first round, she took $42 for the bill and, at the POS station, entered $14 for their tequila as an allowanced item to make up for the confusion. She put the new total in the billfold and returned it to the secret shopper, although she didn’t tell the guests that the tequila had been taken off the bill. Her manager later initialled the allowanced transaction.
The audit integrity company generated a report on the secret shopper’s transactions compared to the hotel’s records. It noticed that the second and third rounds of drinks were rung in properly, but the first transaction wasn’t recorded as the secret shopper had reported. The secret shopper had paid the full bill – with a photo of the check - but the transaction indicated that the tequila had been allowanced.
On Sept. 29, the worker was called into a meeting with the hotel’s human resources manager and the director of food and beverage. They discussed the Aug. 31 transactions and the worker asked for surveillance video or the shopper’s report to help jog her memory. However, neither was provided.
Theft investigation interview
The worker wasn’t able to explain why she didn’t give the secret shopper a corrected check when she allowanced the tequila and the director noted that the standard practice was to allowance the item causing dissatisfaction – in this case, it should have been the bottled sparkling water, not the tequila.
On Oct. 3, the hotel terminated the worker’s employment for theft. The union grieved, arguing that there was no cause for termination or even proof of a cash handling infraction, as the worker properly recorded the allowance and had it approved by a manager. It also pointed out that the worker didn’t receive any formal training on cash handling, and she was denied a chance to properly recall the events of Aug. 31 because she wasn’t shown the video or the shopper’s report.
The worker also said there was pressure from hotel management to hit all quality assurance standards and to offer exceptional service to guests. She said she provided the secret shopper and their guest with a complementary drink to improve their experience and offset their displeasure with getting the bottled sparkling water.
The arbitrator noted that the test for any discipline or dismissal was established in the 1997 Wm. Scott decision by the BC Labour Relations Board – the employer must prove there was just cause for some form of discipline, was the discipline imposed excessive, and what alternative discipline should be substituted if it was excessive?
The arbitrator found that the worker didn’t try to conceal the $14 tequila allowance from her manager and she followed the cash handling procedure regarding allowances. However, she didn’t let the shopper know the tequila was complementary when she returned the billfold and didn’t mention it during the subsequent rounds, the arbitrator said, adding that getting managerial approval for an allowance but not telling the guest “creates an opening for a server to benefit personally,” particularly for a cash transaction.
Employee theft despite union objections
The arbitrator also found that the worker accounted for the tequila inventory but she didn’t have to account for the $14 she didn’t return to the customer. It was likely that the worker kept that $14, said the arbitrator.
The arbitrator disagreed with the union that the lack of formal cash handling training was a factor, as the worker didn’t show any confusion about how allowances were handled and she followed the procedure properly.
“Despite the union's arguments, the worker actually had a good idea of how things were to be done with regard to handling cash and providing patrons with the correct amount on the bill,” says Thomas. “So even if it was true that she didn't get the full extent of the training required, the arbitrator believed that she had sufficient training on how to perform the job and the expectations from the employer - at the end of the day, she actually knew what she was doing.”
The arbitrator agreed that the hotel should have provided the video footage for the worker to respond to, but found that it didn’t outweigh the evidence of the worker’s conduct and the fact that she was aware of the hotel’s policies.
The fact that the hotel didn’t provide the report or the surveillance video and give the worker an opportunity to respond was concerning even though it was successful in the case, according to Thomas.
“There was a gap in time and the union had asked for copies of the surveillance video and some other stuff relating to the actual day of the alleged offense, and that was not provided - I think that wasn’t terribly fair in the process,” he says. “At the end of the day, it didn't really guide the arbitrator’s decision, but from an employer's perspective, when you're dealing with matters of employees violating a policy or procedure, or theft, it's always good to give the employee a fair opportunity to respond by providing them with the details of the alleged acts.”
High level of trust in service industry
The arbitrator considered that the worker was a short-service employee and had been previously disciplined for inappropriately adding an automatic gratuity to a guest’s check. The previous incident “reflected the same kind of cavalier attitude toward the employer’s guests and its property,” said the arbitrator.
The arbitrator noted that the amount involved was small at $14, but “theft in the food and beverage industry is treated as a very serious offence” because employees work largely without supervision. As a result, the arbitrator determined that termination was not excessive, as the worker breached “the fundamental requirement of honesty.” The grievance was dismissed.
“In this case, the [service and hospitality] industry that they operate in was a key factor [justifying dismissal],” says Thomas. “It requires a higher level of trust because the employer is providing the employee with a lot of discretion and autonomy to work with cash and there are lots of opportunities in the job to do things that you're not supposed to in handling cash.
“There's the potential for acting inappropriately when you're dealing with cash, so the industry requires a higher level of trust in employees.”
See 801 West Georgia Ltd. v. Unite Here, Local 40, 2024 CanLII 28867.
