DECISION OF THE GENERAL MANAGER LIQUOR CONTROL AND LICENSING BRANCH IN THE MATTER OF

Transcription

1 DECISION OF THE GENERAL MANAGER LIQUOR CONTROL AND LICENSING BRANCH IN THE MATTER OF A hearing pursuant to Section 51 of The Liquor Control and Licensing Act, S.B.C. 2015, c. 19 Licensee: Case: For the Licensee: For the Branch: General Manager s Delegate: Stonewater Group of Franchises Ltd. dba Mr. Mikes Steakhouse & Bar 9324 Alaska Road Fort St. John, BC EH Darren Flintoff Maria Caduhada Nerys Poole Date of Hearing: April 11, 2018 Date of Decision: May 7, 2018 Liquor Control and Licensing Branch Mailing Address: PO Box 9292 Stn Prov Govt Victoria BC V8W 9J8 Telephone: Facsimile: Location: Fourth Floor, 3350 Douglas Street Victoria BC

2 EH Mr. Mikes Steakhouse & Bar May 7, 2018 INTRODUCTION Stonewater Group of Franchises Ltd., dba Mr. Mikes Steakhouse & Bar (the licensee ) holds Food Primary licence number (the licence ). Mr. Mikes Steakhouse & Bar (the restaurant ) is located at 9324 Alaska Road in Fort St. John. The licence specifies hours of liquor service daily, from 9:00 a.m. to midnight. Darren Flintoff is a principal of the corporate licensee and appeared at the hearing as the licensee s representative. The licence is, as are all liquor licenses issued in the province, subject to the terms and conditions contained in the publication "Food Primary Terms and Conditions (the "Guide"). (Exhibit 1, tab 12) The licensee is alleged to have contravened Liquor Control and Licensing Act S.B.C c. 19 (the Act ) on October 19, 2017, by selling liquor to a minor who was acting as an agent of the branch under the Minors as Agents Program ( MAP ). The licensee admits that its server sold liquor to the minor agent. However, the licensee disputes the finding of a contravention, on the basis that its policies, practices, procedures and training establish a defence of due diligence. For the purposes of this hearing, and in accordance with section 5 of the Act, the general manager has delegated to me the powers, duties and functions provided to the general manager by section 51 of the Act and Part 6 of the Liquor Control and Licensing Regulation.

3 EH Mr. Mikes Steakhouse & Bar May 7, 2018 ALLEGED CONTRAVENTION AND PROPOSED PENALTY The Liquor Control and Licensing Branch's (the "branch") allegations and proposed penalty are set out in the Notice of Enforcement Action dated December 1, 2017 (the "NOEA"). (Exhibit 1, tab 1) The branch alleges that, on October 19, 2017, the licensee contravened section 77(1)(a) of the Act, by selling, giving or otherwise supplying liquor to a minor. The range of penalties for a first contravention of this type is a 10 to 15 day licence suspension and/or a $7,500 to $10,000 monetary penalty (item 3 of Schedule 2 of the Liquor Control and Licensing Regulation). The branch recommends either a ten day suspension or a monetary penalty of $7,500. RELEVANT STATUTORY PROVISIONS Liquor Control and Licensing Act, S.B.C. 2015, c. 19 Supplying liquor to minors 77 (1) Subject to the regulations, a person must not (a) sell, give or otherwise supply liquor to a minor, ISSUES 1. Did the contravention occur? 2. If so, has the Licensee established a defence to the contravention? 3. If the contravention is proven, what penalty, if any, is appropriate? EXHIBITS Exhibit 1: Branch book of documents, tabs 1 to 16 Exhibit 2: Statements of the host, 2 servers and the restaurant leader Exhibit 3: Serving It Right certificates for the restaurant employees Exhibit 4: Record of Employees completing the Mikes Best Academy course Exhibit 5: One page re. Minors from Mikes Best Academy manual Exhibit 6: Responsible Alcohol Service - excerpt from Urban Lodge Manual

4 EH Mr. Mikes Steakhouse & Bar May 7, 2018 Exhibit 7: Copies of photos of signs in the restaurant Exhibit 8: The Non-Negotiables page from orientation manual Exhibit 9: Monthly sign-off pages Dec. 2017, Jan. Feb. and March 2018 Exhibit 10: Minutes of Conference Calls beginning Dec.5, 2017 WITNESSES The Branch called two witnesses: the liquor inspector who authored the NOEA and who was a member of the inspection team on October 19, 2017 (the first liquor inspector ) the liquor inspector who was part of the inspection team on October 19, 2017 and who issued the contravention notice (the second liquor inspector ) The licensee called three witnesses: Director of Operations for the Stonewater Group (the Director of Operations ) Restaurant Leader 1 Restaurant Leader 2 THE FACTS OF THE ALLEGED CONTRAVENTION The licensee does not dispute that its server served alcohol to the minor agent. However, the licensee has submitted a statement from the server that suggests the server had assumed a previous server had already asked the minor agent for identification. I will review the contravention as set out in the NOEA, in the statements of the minor agent and in the testimony of the two liquor inspectors. I will review the server s statement under the licensee s evidence. On October 19, 2017, branch liquor inspectors conducted minor agent program inspections to test compliance at various licensed liquor establishments in Fort St. John. Three branch liquor inspectors accompanied the minor agent. At the beginning of the shift, one of the liquor inspectors photographed the minor agent and his identification to confirm he was 17 years of age on October 19, 2017 (Exhibit 1, tab 6).

5 EH Mr. Mikes Steakhouse & Bar May 7, 2018 At approximately 5:36 p.m., the minor agent entered the restaurant. A few seconds later, the first liquor inspector and the third liquor inspector followed closely behind him. The minor agent sat down at a nearby table. The first liquor inspector had a clear unobstructed view of the minor agent. He could not hear the conversation between the server and the minor agent. At about 5:45 p.m., he observed the minor agent order a drink from a server later identified as the server who served the minor agent (the server ). A few minutes later, a different girl, shorter in stature, brought two glasses of water, placed them down and left. At 5:50 p.m. the server brought one bottle of Budweiser beer and placed it in front of the minor agent. As soon as the server left, the minor agent stood up and left the restaurant. The third liquor inspector followed the minor agent out of the restaurant. The first liquor inspector called a server to come over and asked her to bring a manager. He then showed the manager his card and called in the second liquor inspector who had been waiting in the vehicle outside. The second liquor inspector photographed the bottle of beer on the table where the minor agent had been sitting. (Exhibit 1, tab 7) She then spoke with Restaurant Leader 2 and informed her of the contravention of selling to a minor. The first liquor inspector asked for the liquor licence, a copy of the liquor sale receipt and the server s Serving It Right certificate. Restaurant Leader 2 produced the server s Serving It Right number. The first liquor inspector verified this via the Serving It Right database. The second liquor inspector paid for the Budweiser beer and retained the receipt. She issued the Contravention Notice to the Restaurant Leader who acknowledged receiving it with her signature. (Exhibit 1, tab 9) The minor agent filled out the observation form and his statement in the vehicle. (Exhibit 1, tabs 4 and 5) In the observation form, the minor agent stated: got a bottle of Budweiser from blonde female at no point asked for ID. In his statement dated 5:51 p.m., he said: At 17:45 the tall woman with blonde hair [the server] came back. I said that I was waiting for a girl to come sit with me so I said could I get a water and then I waited. The tall blonde woman came back at 17:48 with two waters, had a

6 EH Mr. Mikes Steakhouse & Bar May 7, 2018 conversation about the Budweiser, then she left again and one minute later she came back with a Budweiser and I left the building at 17:50. The minor agent did not testify at the hearing and was not subject to cross-examination. EVIDENCE LICENSEE The Contravention As noted, the licensee accepts that its server served alcohol to a minor agent. The licensee submitted a statement from the server about her dealings with the minor agent. The server did not testify at the hearing and therefore was not subject to crossexamination. Her statement reads: [The server] went to table #1, introduced herself and told guest about the change in the menu. She asked the guest what he would like to drink. The guest asked for 2 waters and said he was waiting for another guest to arrive. [The server] asked if there was anything else that she could grab him and he said no, he would just wait for the other guest to arrive. She went to the bar and got the waters and delivered them to the table. She asked again if there was anything else she could bring and he said no. [The server] then went to walk the rest of her section and help out on expo. As she was walking past table #1 the guest said, Is my Budweiser on the way? [The server] said, Has she not brought it yet? (referring to another staff member that must have taken the order). [The server] said she would go check the bar and when it wasn t there she went to the computer to see that it wasn t rung in. Right away she rang it in and brought it to the table. The guest said thank you, I m still waiting for my friend. She continued to work the rest of her section until [Restaurant Leader 2] approached her and was told of the situation. She had to get her Drivers License and SIR# for the Liquor Inspector.

7 EH Mr. Mikes Steakhouse & Bar May 7, 2018 Licensee s Policies, Procedures and Training The licensee s witnesses gave evidence about the policies and procedures of the restaurant, the management of the restaurant, the training given to new hires, ongoing training and the implementation of the policies in the restaurant. Serving It Right Certificates All new hires must have their Serving It Right certificates prior to starting on their own. The licensee provided copies of the Serving It Right certificates for all staff. (Exhibit 3) Staff Training The two restaurant leaders gave evidence about the orientation and training process for new hires. Both restaurant leaders testified that all new hires spend one to two hours on orientation in the restaurant with one of them. They review all the manuals, discuss them together and do a walk through the restaurant. They talk about where the liquor is stored, who is allowed to serve liquor, e.g. a host without a SIR certificate cannot serve liquor. Restaurant Leader 1 referred to the emphasis they place in their training and orientation on the importance of responsible alcohol service. He stated they emphasize that as a Food Primary licence, food is their main priority, not alcohol. After the orientation session, the new hire goes through two to three weeks of training, depending on whether a new hire is part-time or fulltime. It does not matter what experience a new hire may have; all new hires in the restaurant must go thru the same training process. This training involves three shadowing shifts where the new hire walks with the trainer for three shifts and then does two reverse shifts, while the trainer walks with and observes the new hire. The new hire starts on her own with a section of only three tables, while the trainers or restaurant leaders are there to observe and provide further guidance. Restaurant Leader 2 stated that the length of the training depends on how

8 EH Mr. Mikes Steakhouse & Bar May 7, 2018 quickly a new hire understands and implements the processes. If the trainer feels the new hire needs additional shifts before starting on her own on the floor, the trainer asks for this. Restaurant Leader 1 said they provide the new hires with daily coaching, sometimes as a group, or one on one as needed. Restaurant Leader 1 stated that they have trainers who train the new hires, who are employees who have been working in the restaurant and have experience. The two restaurant leaders are responsible to ensure the trainers receive the necessary coaching and training before they are allowed to train new hires. The trainers guide the new hires through the various processes and practices in the restaurant, such as how to greet guests, announcing the specials, liquor regulations, etc. The restaurant has online training manuals that trainers follow when working with new hires. These training manuals have different sections for the different positions in the restaurant. The manual includes a checklist for the trainer to review with a new hire and a test for the new hires to take at completion of training. According to the testimony of the Director of Operations, the online testing includes two questions out of eight about minors and identification requirements. The questions are drawn from Exhibit 5, the one page excerpt from Mikes Best Academy manual. The Director of Operations said staff must sign a page saying they have read and understood the manual. The licensee did not provide a copy of this. A server must have expediting training first, i.e. in the presentation of the food. A restaurant leader directs new servers on proper presentation and the various seating at different tables. A new server usually undergoes three shifts of training specific to the server position. This is after the initial three shifts of training related to the presentation and distribution of food. Servers and bartenders are trained about the legal requirements and restrictions on serving liquor. Trainers explain about the liquor laws and their enforcement, including identifying intoxicated guests and how to request ID of guests who appear to be under 30. Throughout the process, all new hires, from hosts to servers to bartenders, are trained in learning how to read guests with respect to intoxication issues.

9 EH Mr. Mikes Steakhouse & Bar May 7, 2018 Since the contravention, employees are required to redo this online training and test every three months. Prior to the contravention, employees were required to take this online training every year. The licensee produced one and two page excerpts from each of the different manuals. (Exhibits 5 and 6) The licensee did not produce the complete training manuals or the table of contents. Restaurant Leader 2 testified about the ongoing training the restaurant provides to its staff. After a new employee s first three months, management conducts a performance appraisal with the new employee and then every year, management conducts performance appraisals of each employee. She also emphasized the one on one coaching that occurs on a regular basis as needed. She stated this happens all the time and may be as basic as giving someone praise for something. On the flip side, they will remind someone who is observed making a mistake; they will ask that employee to come to the office to deal with the situation. When asked in cross-examination if management holds a training session specific to service to minors and how to request ID, she stated that there are no training sessions specific to that, but they talk about how to avoid service to minors all the time. Restaurant Leader 1 referred to the daily coaching they give to staff on how to ID properly. Management tells staff, if they are unsure about requesting ID, to ask and/or to come to a leader for support. Policy re. Requests for Identification The three witnesses for the licensee gave different responses to the age at which employees are trained to ask for identification. The Director of Operations stated that the policy is to ask anyone who appears to be under the age of 25. Restaurant Leader 1 testified that, at the time of the contravention, the policy in the restaurant was to request identification of anyone who appeared to be under 25. He testified that, after the contravention, in December of 2017, this policy changed to requesting ID of anyone who appeared to be under 30.

10 EH Mr. Mikes Steakhouse & Bar May 7, 2018 Restaurant Leader 2 testified that the policy was under 30 at the time of the contravention and she has always trained new employees to ask for ID of anyone appearing to be under 30. Her evidence is supported by the manual excerpt (Exhibit 6) referred to below which indicates the restaurant was following a policy of under 30 in January of She stated that they are very strict with their ID requirements. Their reputation in Fort St. John is that they always request ID and do not permit service if people show up without it. She recounted when a former staff member came into the restaurant without his ID and wanted to be served alcohol. Although the staff knew him and knew he was over 19, he had to go home to get his identification before being served. Policy Manuals The licensee provided excerpt pages from the two manuals they use in the restaurant. The one page from Mikes Best Academy (Exhibit 5) addresses the law on service to minors and the consequences if a minor is served. ID requirements are set out with the type of ID that is acceptable to prove someone is 19 or over. This one page offers ways to verify identification and concludes with instructions on cooperation with liquor inspectors and the rules around retention of identification if thought to be false. In bold in the middle of the page is the statement: It is MR MIKES POLICY to ask anyone appearing to be under the age of 30 for proof of identification. Exhibit 6 is a copy of two pages from Mr Mikes Urban Lodge Manual and is headed Serving Alcohol Responsibly. MRMIKES Steakhouse Casual is at the top right of the first page, with footers indicating a date of Jan 2015 This section of the manual discusses the requirement that all servers of liquor must have the Serving It Right certificate. There is instruction on how and what a server must do with respect to avoiding over-service, preventing drunk driving, and withholding service from an intoxicated guest. The next section addresses the issue of avoiding service to minors:

11 EH Mr. Mikes Steakhouse & Bar May 7, 2018 We also must ensure we: o Do not serve minors o We always ask anyone who appears to be under the age of 30 for two pieces of identification to verify their age. o The FIRST ID must be government issued and include a photo and date of birth. (Example: Driver s Licence, Passport) o The SECOND ID must include imprint of name and a signature of picture (Example: Credit Card, Transit Pro Pass, CARE CARD) o As per the non-negotiables outlined in the ORIENTATION, failure to meet the above requirements could result in termination of employment. o Having two pieces of ID does not guarantee liquor service. If there are any doubts about the guest s ID, please do not serve them liquor and speak to you [sic] Manager/Leader on duty immediately. The remainder of this section reviews possible signs of intoxication, intervention strategies when dealing with possible intoxication, how to effectively cut off alcohol service, with a final point saying: Your manager/leader will always support you if you choose to cut someone off. The licensee submitted a one pager titled The Non Negotiables. (Exhibit 8) This is part of the orientation manual. The footer on this one page is MR MIKES NEW TEAM MEMBER ORIENTATION. The introductory paragraph states: We ve developed a list of Rules that are Non-Negotiable. In short, do anything on this list and you get fired... no warnings, no discussion. Doing anything on the list hurts our Guests and your colleagues. So please just don t. If you re not certain what one or more of these mean, please ask a member of your management/leadership team. Number 21 on this list is Serving alcohol to a minor, whether intentionally or unintentionally.

12 EH Mr. Mikes Steakhouse & Bar May 7, 2018 Consequences for Server who served the minor Despite the non-negotiables form that the server signed, the server was not terminated. Restaurant Leader 1 testified about why this server was not terminated immediately. He stated that, after the contravention, their first initiative was automatic termination. Instead, after consultation with management, they decided to suspend her for two weeks. After her contravention, Restaurant Leader 1 discussed the incident with her and her belief that the minor agent had been previously served and IDed by another server. The server explained this was why she did not request ID of him. Based on her explanation, management decided to use this as a coaching opportunity for the server and other staff. She served the suspension of two weeks, was issued a written warning in her file and was instructed to make sure this did not happen again. Restaurant Leader 2 testified about the server and her dealings with her after the contravention. She stated that the server was very hardworking and very committed to the job. She said that, prior to this incident, she had had no issues with the server s work performance or during her training program. The server was very distraught by what happened on October 19, The server told Restaurant Leader 2 that, if the minor agent had ordered the Budweiser initially from her, she would have requested ID. The server believed that someone had already requested and verified ID. Restaurant Leader 2 stated she pulled her off the floor immediately after the incident and called in Restaurant Leader 1. Reminders re. Checking for Identification Both restaurant leaders testified about the pre-shift meetings that are held twice a day, before each shift. One of the restaurant leaders conducts these meetings. Apart from updates on drink specials or food items, they always give reminders about the importance of requesting identification.

13 EH Mr. Mikes Steakhouse & Bar May 7, 2018 The communications white board, located on the service stand and visible to all, has a list of items to discuss at any given pre-shift meeting and always includes a reminder about ID checking. Restaurant Leader 2 testified about this white board and how they use it to remind staff to double ID guests. They often mention the potential fines on the ID board. She said they are constantly reminding staff to check IDs. The restaurant leaders testified about the group chat messaging system. They use this to reach all employees on their cell phones to send reminders about things and to reinforce messages, such as ID checking. The restaurant leaders are able to check to see if employees are participating and reviewing any messages. It is mandatory for all staff to check these messages. When asked if it was a regular thing to mention ID checking, Restaurant Leader 1 stated that he might have to go through a month of messages to find reminders about ID policy. The communications white board includes reminders on ID checking on a regular basis. They use this to ensure all staff are aware of the importance of ID checking. Role of Management Restaurant Leader 2 testified about the presence of a leader on the floor at all times. Regular staff are never there on their own. There is always a manager or one of the leaders on duty. The managers and leaders ensure that they watch the tables. She said they touch every table as they go through the restaurant to make sure everything is good. She stated that she often makes a second request for ID from a table if she has any doubts about whether it was done. She said staff know they have a very hands-on management style and that they can come to managers or the leaders if they have any questions. Meetings and Minutes In addition to the daily pre-shift meetings, management has regular conference call meetings with the managers, assistant managers and restaurant leaders in the Stonewater Group of restaurants. The licensee submitted minutes of the conference

14 EH Mr. Mikes Steakhouse & Bar May 7, 2018 calls held December 5, 2017, January 16, 2018, February 27, 2018, and March 1, 2018, all dates after the contravention. The licensee did not submit copies of minutes of these meetings before the contravention. The record of the conversation shows that the Director of Operations reminded others on the call about the monthly sign-off sheet and ensuring employees all sign. The restaurant has weekly in house management staff meetings. Management holds mandatory general staff meetings every three months. They close the restaurant early on a Sunday to hold these meetings. If an employee misses a meeting for a legitimate excuse, management will sit down with the employee to review what was discussed at the meeting. Minutes of these staff meetings are available in the office if an employee wishes to see them. Monthly Sign-Off Sheet (Exhibit 9) The licensee submitted this for the months of December 2017, and January, February and March of 2018, with employees signatures indicating the employee had read the content and had discussed the content with their manager/supervisor in a pre-shift meeting or one-on-one coaching session. The monthly sign-off sheet includes a reminder about checking ID of anyone who looks under 30 and the types of ID required to prove age. A statement in bold and underlined reads: If the person cannot produce two pieces of acceptable identification that proves they are 19 or older, you must refuse service. A reminder under the Manager/Leader sign off states: Manager sign off once all team members have read and been trained on this material. Managers/leaders are responsible for ensuring the team is trained on this material. Management introduced this sign-off sheet after the contravention. Logbook The Director of Operations stated that the restaurant has a logbook. Certain team members are trained in how to document any incidents. The licensee did not bring a copy of any entries in the logbook.

15 EH Mr. Mikes Steakhouse & Bar May 7, 2018 Restaurant Leader 1 referred to the logbook and said that restaurant leaders and staff will record incidents together in the logbook. They do not allow employees alone to record incidents. A restaurant leader will always record an incident in consultation with an employee. Restaurant Leader 1 stated that Restaurant Leader 2 recorded the incident on October 19, He stated that her record of the incident is her statement in Exhibit 2. Awareness of MAP Both restaurant leaders testified that they are very aware of the MAP and that they informed all staff about the MAP. When asked in cross-examination about whether they had discussed MAP before the incident with everyone, Restaurant leader 2 s response was yes, definitely. Signage The licensee submitted copies of photos of signs in the restaurant. (Exhibit 7) The signs include: o a branch notice about possible fines for staff if selling liquor to a minor o a branch notice about the 2 pieces of ID that are required o a sign saying It s the Law, and my Job o a sign saying Hard to Tell, Have to Ask o a sign on the bar indicating 19 in large letters and saying You must be 19 or older to purchase LIQUOR and the types of ID required to prove age Restaurant s Reputation Restaurant Leader 2 stated she has been in the restaurant industry for many years, she stated that Stonewater takes responsible alcohol service to another level. They discuss liquor issues on a daily basis. She stated that she feels the restaurant goes above and beyond to train the staff and to ensure a reputable business. She said they are proud to be considered the hard asses in town because of their reputation for ID checking and monitoring intoxication.

16 EH Mr. Mikes Steakhouse & Bar May 7, 2018 SUBMISSIONS BRANCH The licensee does not dispute that an employee served the minor agent. The licensee has contravened section 77(1)(a) of the Act. The branch advocate submits that the licensee s evidence does not establish a defence of due diligence. The server s statement that she relied on a mistaken assumption that someone else asked for ID of the minor agent illustrates that the training of staff is inadequate. Staff should be cautious and ask again if any doubt. The branch advocate notes the absence of some documentation to support the licensee s defence: no copies of the chat messages sent to staff, no photo of the white board showing ID is emphasized, no documents to demonstrate the questions in the testing of employees. In addition, the restaurant does not have signs or prompts at the till to indicate the acceptable birthdate year of someone 19 or over, or to prompt staff to ask for ID. She submits that the licensee s compliance history shows a contravention of serving minors in 2013, and that this further illustrates weaknesses in the licensee s systems. A penalty is justified and she recommends the proposed penalty in the NOEA. SUBMISSIONS LICENSEE The licensee agrees that the contravention of serving a minor occurred. However, the licensee submits that the actions of the minor agent were misleading in that the server believed that his order had been taken and therefore the previous server already had asked him for ID. He acknowledges that this does not excuse the service to the minor, but submits this was an unfortunate but honest mistake by a server who had been well trained. The licensee s training processes, both initial training and ongoing, its policies and constant reminders to staff about ID requests support a defence of due diligence. If I find the due diligence defence fails, the licensee prefers a fine over a suspension.

17 EH Mr. Mikes Steakhouse & Bar May 7, 2018 REASONS AND DECISION Contravention The licensee has admitted that the contravention of section 77(1)(a) occurred on October 19, Although admitting to the fact that a server sold the liquor to a minor, the licensee expressed concerns about the exchange between the server and the minor agent. I find that the evidence is clear: the server served the minor agent a Budweiser beer. The licensee alleged in the hearing that there was an element of confusion that he described as entrapment. Based on the statements of the minor agent and the server, I agree there was an element of confusion surrounding the sequence of events leading up to the service of the Budweiser. I do not agree this amounts to entrapment. Licensees are charged with ensuring their employees do not serve minors. The minor agent s description of what occurred could be a scenario a server might meet at anytime in the restaurant. I find that the licensee contravened section 77(1)(a) of the Act by selling liquor to a minor. Due Diligence The licensee is entitled to a defence if it can be shown that it was duly diligent in taking reasonable steps to prevent the contravention from occurring. The licensee submits that it has a full defence to the contravention as the evidence of its training, policies, practices, and procedures establishes the licensee s due diligence. The licensee must not only establish procedures to identify and deal with problems, it must ensure that those procedures are consistently acted upon and problems are dealt with.

18 EH Mr. Mikes Steakhouse & Bar May 7, 2018 The leading case is: R v. Sault Ste. Marie (1979) 2 SCR 1299, where at page 1331, Dickson, J. sets out the test of due diligence: The due diligence which must be established is that of the accused alone. Where an employer is charged in respect of an act committed by an employee acting in the course of employment, the question will be whether the act took place without the accused s direction or approval, thus negating wilful involvement of the accused, and whether the accused exercised all reasonable care by establishing a proper system to prevent commission of the offence and by taking reasonable steps to ensure the effective operation of the system. The availability of the defence to a corporation will depend on whether such due diligence was taken by those who are the directing mind and will of the corporation, whose acts are therefore in law the acts of the corporation itself. The BC Supreme Court, in Beverly Corners Liquor Store Ltd. v. British Columbia (Liquor Control and Licensing Branch), 2012 BCSC 1851, considered and clarified the application of the defence of due diligence in the context of the sale of liquor to a minor contrary to the Liquor Control and Licensing Act (see paragraphs 41 to 44). In these circumstances, the defence of due diligence is to be considered in two stages: 1. Whether the employee who made the sale was a directing mind of the licensee if so, the defence of due diligence is not available and the inquiry stops there. 2. If the employee who made the sale was not a directing mind of the licensee (and there is no requirement that a directing mind must be on the premises when the sale is made), then the questions to be considered and answered are whether the licensee had: a. implemented adequate training and other systems to prevent the contravention (the sale of liquor to minors); and, b. taken reasonable steps to ensure the effective application of that education and the operation of those systems. Both of these issues are factual, and will depend on the evidence presented. The onus is on a licensee to establish on a balance of probabilities that it had exercised all reasonable care by establishing adequate training and other systems and ensuring effective application of them.

19 EH Mr. Mikes Steakhouse & Bar May 7, 2018 Directing Mind The first question to answer in determining a defence of due diligence is whether the employee who made the sale to the minor was the directing mind of the licensee. The server was not a directing mind of the licensee. I therefore turn to the question as to whether the licensee has established a proper system to avoid such contraventions and whether the licensee has taken reasonable steps to ensure the effective operation of its systems. Adequate training The licensee has established the following training process for its new hires: All new hires must have their Serving It Right certificate prior to working on their own; Restaurant leaders spend an hour or two on orientation with new hires, reviewing all the manuals and doing a walk through the restaurant, before any training on the floor; Trainers emphasize the importance of Responsible Alcohol Service and review Exhibits 5 and 6; Trainers are given a checklist to ensure they review all the key requirements with any new hire; New hires have two to three weeks of training, first shadowing a trainer for three shifts and then being shadowed by the trainer for two to three shifts; The trainer reviews the policies and procedures in the restaurant with the new hire; New hires take a test at the end of the training which includes a few questions on ID requests and minors; Performance appraisals for new hires occur after three months and then annually. The licensee provides ongoing training to its employees. Prior to the contravention, the licensee required employees to take an online Mikes Best Academy course on Responsible Alcohol Service every year. They are now required to take this course

20 EH Mr. Mikes Steakhouse & Bar May 7, 2018 every three months. The licensee submitted a page showing the names and completion dates of its employees who took the Mikes Best Academy Responsible Alcohol Service course. (Exhibit 4) With the exception of one, sixteen employees did not complete the course until early Another sixteen employees enrolled in the course after the contravention. I have some concerns about the documentation here as I would have liked to have seen a similar record for the time prior to the contravention, illustrating employees were required to complete the course on an annual basis as stated by the witnesses. Nevertheless I have accepted the verbal testimony that employees were required to take this course annually prior to the contravention and every three months after the contravention. The licensee s witnesses all emphasized the daily one on one coaching that occurs with staff. As a restaurant leader is always present in the restaurant, they are able to observe and to correct or praise staff as needed. Despite my comments about lack of documentation, I find that the training processes as stated by the witnesses are adequate. I find that the witness testimony of the regular one on one coaching is evidence that staff are constantly being provided with further training as needed and are being supported by management to follow the liquor laws. I note the absence in the evidence of any discussion of the serious consequences to minors if they consume alcohol. I recommend that the licensee include this in its training and orientation to demonstrate that, not only is it the law, but it is important to understand why it is the law. These serious consequences are set out in the NOEA and emphasize that supplying liquor to minors is a significant public safety issue because of: The effects of alcohol on growing bodies and developing minds The effects on individuals and society of irresponsible drinking behaviour learned at an early age A minor s lack of capacity to metabolize alcohol in the same manner as an adult therefore, liquor has a more intoxicating effect on minors, and Liquor is a significant factors in many crimes committed by youth, including serious driving offences, assault, sexual assault and theft.

21 EH Mr. Mikes Steakhouse & Bar May 7, 2018 I do not find that the absence of the above renders the training overall inadequate. I recommend however that it be included in the orientation and training, to remind employees of the reasons for the prohibition of sale of alcohol to minors. Policies of the Licensee re. ID Checking I find that the licensee s policy of requesting ID of anyone who may appear to be under 30 provides a safeguard to prevent service to minors. As noted under my review of the licensee s evidence, there were different statements from the witnesses as to how long the under 30 policy has been in place. I accept the testimony of Restaurant Leader 2 that she has always trained and followed a policy of under 30. This is supported by the date of Jan in the excerpt from the Urban Lodge manual titled Serving Alcohol Responsibly. (Exhibit 6) I remind the licensee that consistency in the message to its staff is important. Nevertheless, whether staff were applying the under 25 policy prior to the contravention or the under 30 policy, at the time of the contravention, the server applied neither policy as she told management that she was under the mistaken assumption that the minor agent had already been asked for ID. If the manual sets out a policy of asking for ID of anyone who appears to be under 30, then this is the policy to follow when training and coaching staff. Effective Implementation of the Policies re. ID Requests The next step in the due diligence analysis is the question as to whether the licensee has taken reasonable steps to ensure its staff consistently apply the training and the stated policies of the licensee. I find that the licensee has taken reasonable steps to ensure its staff request ID to avoid service to minors. These steps include: Pre-shift meetings which almost always include reminders abut ID checking Communications white board with written reminders about ID checking Chat messaging with occasional reminders about ID checking

22 EH Mr. Mikes Steakhouse & Bar May 7, 2018 Daily one on one coaching Presence of restaurant leaders on the floor to monitor staff and speak with them as needed Signage in the restaurant about service to minors Weekly management meetings where management are reminded of specific issues, including the importance of regular ID checking Conference call meetings with all the Stonewater Group restaurant managers, which often include reminders about ensuring staff are aware and following the ID policies Staff meetings every three months with minutes available for staff to review Awareness of the MAP Recording incidents in a logbook The licensee s representative stated at the hearing that he did not know what more they could do to avoid what happened here. In addition to my comment above under training, about including the consequences to minors, I have a few recommendations for the licensee to consider: Use of occasional secret shoppers to check that staff are making the requests of young-looking people Reminders to all staff to ask again, IF they are directly providing alcohol to a person who looks under 30, no matter who may have originally served the guest. Adding a branch sign with the traffic lights of red, yellow and green indicating the birthdate year at which someone is 19, not 19 or may be 19. I note the licensee has introduced a monthly sign-off sheet since the contravention. The licensee provided copies of these at the hearing. I find this to be further evidence of the licensee s commitments to improving its systems. I however have not considered this as evidence of due diligence because it occurred after the contravention. The non-negotiables form emphasizes to all employees that the licensee takes service to minors very seriously and that it warrants the most serious disciplinary action, i.e. immediate termination. I accept the reasons given by the witnesses for not terminating the server here and instead, giving her a two week suspension. However, if a non-

23 EH Mr. Mikes Steakhouse & Bar May 7, 2018 negotiables form is to have any teeth, a licensee must follow through and if not, must explain to its employees why it did not terminate an employee. I find that the failure to ask for ID of the minor agent on October 19, 2017 was an error of judgement on the part of the server. Despite her belief that the minor agent had ordered and been IDed by another server, the server here was the one providing the beer and when she saw that the order had not been entered on the computer, she failed to follow the restaurant s policy of requesting ID of anyone who looks under 30. I find that this error was not caused by poor training or the absence of a proper system or by the ineffective operation of the system established by the licensee. This was the mistake of the server. The fact that the mistake was made does not preclude a finding of due diligence. Although actions taken post-contravention do not provide evidence of due diligence at the time of a contravention, I find that the actions taken by the licensee postcontravention indicate the general concern the licensee has for ensuring its employees are following the rules. I find that the licensee s staff endeavour to ensure a safe and responsible environment in the restaurant and strive to prevent any liquor contraventions. As has been noted in other branch decisions, the due diligence standard is not one of perfection, but of adequate training and systems. As with most training programs and systems, there are improvements that the licensee can make. I have noted a few suggested improvements. On balance, however, I am satisfied that the evidence demonstrates that the licensee has adequate training and systems in place with respect to contraventions of section 77(1)(a) of the Act. I have noted in this decision the absence of some of the written documentation in the evidence. I remind this licensee and other licensees that in making a defence for its due diligence, the onus lies on the licensee to ensure it provides all the necessary evidence, both verbal testimony and written evidence.

24 EH Mr. Mikes Steakhouse & Bar May 7, 2018 In conclusion, I find that the licensee has met the onus of establishing a defence of due diligence and thus has a complete defence to the contravention of section 77(1)(a) of the Act. Original signed by Nerys Poole Date: May 7, 2018 General Manager s Delegate cc: Liquor Control and Licensing Branch, Surrey Office Attn: Rupi Gill, Regional Manager Liquor Control and Licensing Branch, Vancouver Office Attn: Maria Caduhada, Branch Advocate