Well, to be entirely accurate... Teachers and class staff in some specialized school programs have the authority to restrain and search students, provided that they have reasons to believe student pose danger to themselves or other students etc. The article doesn't provide enough details about the school or the program, so it is difficult to make fair judgements.
I was thinking about how I would have dealt with a similar situation, if I were a teacher in that class. It is probably a reasonable assumption that all of the students knew or saw who stole the phone off the table. Hence; I would have made them all re-take the test. If this were not an allowed alternative (e.g. a structured provincial test), I would have called the assistant principal into the class and talked to the students about the consequences of involving the police, if the offender doesn't confess. Tough one.
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