COURT FILE NO.: CV-19-58746
DATE: 2022-10-28
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
John Savarie
Plaintiff
– and –
Leon’s Furniture Limited
Defendant
Bradley Troup, counsel for the Plaintiff
Hina Saeed, counsel for the Defendant
HEARD: October 3, 4, 5, 6, 7, 11, and 12, 2022
THE HONOURABLE JUSTICE L. M. WALTERS
REASONS FOR DECISION
OVERview
[1] This is an action for damages arising from the plaintiff’s alleged wrongful dismissal from the defendant corporation. The defendant argues that the plaintiff was terminated for just cause and asks that the action be dismissed.
THE PARTIES
[2] The plaintiff, John Savarie (“John”), was employed by the defendant from May 29, 1989 until his termination on November 26, 2018 after some twenty-nine years and six months of employment. At the time of termination, he was an area supervisor responsible for seven Ontario stores. He was 49 years of age. Over the almost thirty years of the plaintiff’s employment, he had only been the subject of one disciplinary action, in 1996. Otherwise, he was highly regarded and in a very senior position.
[3] The defendant, Leon’s Furniture Limited (“Leon’s”), is a corporation carrying on business in the province of Ontario. Leon’s sells a wide array of merchandise including furniture, major appliances, and home electronics.
BACKGROUND FACTS
[4] As area supervisor of seven stores in Ontario, the plaintiff was responsible for the Welland location. The general manager of the Welland store was Tom Dunn (“Tom” or “Mr. Dunn”). Tom reported directly to John.
[5] In September 2018, the plaintiff was advised that the Welland store showed a negative margin and John was asked by Mike Walsh (“Mike”), the now president and CEO of Leon’s, to investigate how this happened.
[6] John’s investigation disclosed that a customer received a full refund on a purchase. The furniture was then placed in the markdown centre and was sold below cost, resulting in the margin erosion.
[7] More information was requested by Graeme Leon (“Graeme”), the then vice president of merchandising.
[8] The investigation disclosed other irregularities on the part of Mr. Dunn. In the course of this investigation, a series of purchases made by John for other people surfaced. The focus of the investigation then shifted to the plaintiff. Mike asked Graeme to conduct the investigation of the plaintiff.
[9] The results of Graeme’s investigation were presented to Mike, who asked for a meeting with the plaintiff to give John the opportunity to respond to the allegations.
[10] The meeting took place on November 1, 2018 at the Welland store. At the end of that meeting, Graeme suspended John without pay because John refused to answer questions, stormed out of the meeting, and swore an obscenity at Graeme.
[11] The second meeting took place on November 9, 2018 in Toronto. A final meeting was held on November 23, 2018. At that time, Mike provided the plaintiff with a letter and terminated John’s employment for cause effective November 26, 2018.
ISSUES FOR THE COURT TO DETERMINE
Was the plaintiff guilty of any misconduct?
If so, was the misconduct such that it justified summary dismissal or did it warrant some other form of punishment?
In the absence of gross misconduct, what was the reasonable notice period?
What are the damages arising from this dismissal?
THE EVIDENCE
[12] The first meeting on November 1, 2018 was very emotional and did not last long. According to the plaintiff, he felt he was being ambushed and his integrity questioned. He didn’t want to say anything before he spoke with a lawyer. In addition to John, present at the meeting were Mike, Graeme, Luke Leon (“Luke”) and Todd Empey (“Todd”). The Leon’s executives testified that they felt John was refusing to cooperate and answer their questions.
[13] According to the plaintiff’s evidence, Graeme asked him if he would cooperate with the police, and he said yes. He was then asked if he would take a lie detector test and he refused.
[14] Graeme, Mike, and Luke all testified that the plaintiff was never asked to take a lie detector test. Graeme testified that he knew this is against the provisions of the Employment Standards Act and he told John this.
[15] All three Leon’s executives testified that Graeme told John he could not ask him to take a lie detector test but in his experience sometimes the police would. John left the meeting after calling Graeme a “fucking asshole”. John was told that, if he left the meeting, he would be suspended without pay.
[16] In contradiction to the evidence of Graeme, Mike and Luke, John said he called Graeme a “fucking idiot”.
[17] Mike and Luke went after John and told him that he needed to come back to the meeting. Mike told John to take the weekend to think about it.
[18] John was suspended without pay after this meeting.
[19] On November 2, 2018, John was served a letter from Mike outlining Leon’s position. Mike requested a further meeting with John to provide him an opportunity to answer their questions.
[20] John responded by email to Mike and apologized for his behaviour on November 1, 2018. He agreed to continue with the meeting. He asked to have the questions in advance so that he would be prepared as he said he wasn’t sure what he was being accused of. He never received any questions.
[21] The second meeting was held on November 9, 2018. Present at the meeting were John, Graeme, Luke, and Todd.
[22] According to Graeme, each of the concerns and allegations of Leon’s were put to the plaintiff. John’s responses were “I didn’t do it”, “I don’t recall”, or “someone else is lying”.
[23] John testified that he answered the questions but Graeme didn’t like the answers. According to his evidence, Graeme again asked him if he was willing to take a lie detector test. John further testified that Graeme told him that he had two options: one, to resign and receive the benefit of shares which would vest in early December, or two, to be terminated immediately.
[24] The evidence of Graeme and Luke dispute this version of events. Both of them testified that there was never any request to take a lie detector test, nor was John pressured into resigning in order to get the shares that would vest in December.
[25] A final meeting was held on November 23, 2018 with Mike and Luke being present. According to John, at that meeting he was provided with a letter advising that he was terminated for cause effective November 26, 2018. Mike testified that he asked John if he had anything further to say and, when he didn’t, Mike made the decision to terminate John for cause.
[26] The reasons for termination are set out in Leon’s statement of defence at paragraphs 16 to 20. These allegations were put to the plaintiff in the course of the trial.
[27] Before going through the allegations and the plaintiff’s explanation or response to same, it is important to set out the company policies that Leon’s relies upon in support of its claim that John was terminated for cause.
[28] Three of the policies in question are the Code of Business Conduct and Ethics, the Conflict of Interest Policy, and the Markdown & Service Policy.
[29] The Conflict of Interest Policy sets out that:
Associates must:
• Avoid any situation that is or may become a conflict of interest or potential conflict between their personal interests and Leon’s interests;
• Not own or be associated with any portion of a business that supplies to Leon’s without obtaining prior authorization from the executive;
• Avoid any circumstance or situations, including personal relationships, which may compromise the judgment and ability of the associate to act with integrity and in the best interest of Leon’s;
• Make full and prompt disclosure of real or potential conflicts to their immediate supervisor.
[30] Leon’s Code of Business Conduct and Ethics provides:
Leon’s expects and requires ethical behaviour from all associates and directors. Furthermore, you must engage in and promote honest and ethical conduct, including handling actual or apparent conflicts of interest in an ethical manner, and must act with honesty and integrity.
A conflict of interest exists when your personal interests interfere with, or give the appearance of interfering with, the interests of Leon’s. In the best interests of the Company, you must avoid actual or apparent conflicts between your private interests and those of the Company, including receiving improper personal benefits as a result of your position. In addition, you should not use corporate assets, information, or your position for personal gain.
[31] Leon’s Markdown & Service policy provides:
• All sales are AS IS, FINAL SALE, NO SERVICE AND NO REFUNDS. This must be written on every sales order that is completed for an item sold from the Markdown Centre.
[32] As an area supervisor, the plaintiff was responsible for ensuring the policies were adhered to and enforced. The plaintiff acknowledged he knew the policies and he knew he was subject to them himself. John indicated he also knew violation of company policies could result in discipline up to and including termination.
[33] I will now go through each incident of alleged misconduct by the plaintiff.
A. CLEANING CONTRACT WITH ECO CLEANING SERVICES
[34] Eco Cleaning Services was owned by Elise Walsh (“Elise”). Elise was the plaintiff’s common-law spouse. Elise had her first cleaning contract with Leon’s in approximately June of 2016. She obtained a contract for cleaning the store in Niagara-on-the-Lake. Elise testified that, at the time that she began working for Leon’s, she had not yet met the plaintiff. Her evidence and John’s was that they met in September 2016.
[35] John and Elise both testified that John had nothing to do with the negotiations of her contracts with Leon’s. John also denied he had anything to do with the Welland store offering Elise a contract for cleaning.
[36] Exhibit 4, tab 35, contains an email between Elise and John dated January 24, 2017 wherein Elise asked John, “If you feel I should add window washing into the contract, I can arrange this to be done in the spring and fall.” John could not recall his response to this email.
[37] Mike Lawrence testified that Elise presented herself at the Niagara-on-the-Lake store several times promoting her company. She provided a written quote, which Mike Lawrence said he gave to John. John told him the quote was too high. John offered her a reduced contract and Eco began providing cleaning services at the store. Elise and John began dating shortly thereafter.
[38] Graeme and Mike testified that John was obligated to report this personal relationship with Elise to the head office. John did not do this. This was a clear breach of the Conflict of Interest Policy.
[39] The evidence of Calvin Leon, the manager of the Welland store, is that John told him about Elise, recommended her for the Welland position, and provided him with the contract. Calvin Leon indicated he had nothing to do with the negotiation of that contract, and he only forwarded it to head office where it was approved.
[40] The contracts in issue were not signed by John but by the corporation’s solicitor. In the normal course, area supervisors do not get involved in the hiring of staff for any particular store.
B. JOHN ALLOWED ELISE WALSH TO USE LEON’S PREMISES FOR MARKETING OF HER OWN PRODUCTS
[41] Elise, John, and Frank Benevento (“Frank”) all testified that Elise did not get permission from anyone to hold a sales demonstration in the store. Frank testified that she told him she was having a staff meeting. He did not discuss this matter with John at any time. John testified that he knew nothing about this demonstration and in fact he was away on vacation when the event occurred. Elise gave the exact same testimony.
[42] Elise was very candid and admitted that she did not get permission from anyone to hold this sales demonstration in the Leon’s store. She acknowledged that it was clearly inappropriate and against company policy.
C. THE PLAINTIFF DISCOUNTED LEON’S PRODUCTS FOR HIMSELF AND OTHERS WITHOUT THE PROPER APPROVAL
[43] Leon’s company policy regarding the purchase of markdown items was contained in an email from Graeme on January 17, 2012. Specifically, that memorandum stated:
• Markdown sales to non-managerial associates must be approved by the Area Supervisor and S&P prior to pick up.
• Any merchandise reduced in price including items in Markdown purchases by any salaried manager, including the general Manager, must be approved by the Area Supervisor and S&P.
• Personal goods being returned to the store by any salaried manager for credit, refund, or reselection, must be approved by the Area Supervisor as well as S&P without exception.
[44] Again, John acknowledged he was aware of the policy and knew it applied to him.
[45] In contravention of this policy, the defendant alleges five separate instances wherein the plaintiff flagrantly disobeyed the policy.
[46] The first instance involved a dining set the plaintiff purchased for himself in October 2016.
[47] Two chairs were returned to the store because, according to the plaintiff, they were damaged. John testified that he did not even see the chairs and that the delivery man returned them directly to the store as damaged beyond repair.
[48] The plaintiff received a full refund for these chairs and reordered two new chairs which he paid full price for.
[49] The plaintiff testified that, the same day, he saw the two damaged chairs and asked an employee if they could be fixed. The chair legs were glued, and the chairs were placed in markdown by him. The plaintiff told the service manager, Teresa Bokzyl (“Teresa”), to price the chairs at $39 each, which was an amount significantly less than the cost value of the chairs. John purchased both.
[50] The plaintiff acknowledged that he failed to report his purchase of these two chairs to head office and failed to obtain the approval as required by Leon’s policy. His explanation was that he did not want to bother the manager.
[51] John denied that he arranged to have Leon’s refinishers attend at his home to refinish the broken chairs. Instead, he said the refinishers were there to touch up a tabletop, and while they were at his house, he asked them to touch up the chairs.
[52] This evidence was contradicted by Teresa, who stated that the invoice for refinishing the two chairs had nothing to do with the tabletop. The invoice for this refinishing is found at exhibit 6, tab 111.
[53] The next allegation relates to nine separate items purchased between 2017 and 2018 in the name of Rob Cefaratti (“Mr. Cefaratti”), a personal friend of the plaintiff.
[54] At tab 70 of exhibit 5, there are nine sales orders in the name of Mr. Cefaratti. All items were sold for less than cost, all prices were approved by John, and all purchases were paid for by John’s credit card. Often, these items were picked up and delivered by John himself.
[55] The plaintiff testified that he did not price these items, he only approved the price on the various furniture tags. He was purchasing the items for a friend, and therefore they were not his items and he was not obliged to report the sales to anyone.
[56] Mr. Cefaratti testified that he received several items that the plaintiff had picked out for him. He could not recall exact items. He never saw the items; they were purchased for his sons. He didn’t know or care about the conditions of the items, as he trusted the plaintiff. He always repaid the plaintiff in cash.
[57] The evidence of Graeme, Mike and Luke was that these purchases were made by John. The only connection to Mr. Cefaratti was the name on the sales order. Otherwise, John sought out, picked, approved the price of, and paid for the items with his own credit card. All of these purchases required the approval of head office. That did not occur.
[58] Graeme testified that if the items were priced by another manager as testified to by John and just approved by him, then John had a positive obligation to speak with those managers in the different stores to find out why they were not complying with the markdown policy of Leon’s. Several of the items were placed into markdown and purchased the very same day. All of the nine items were purchased below cost. John had a duty to coach the individual managers or report them to head office, which he did not do.
[59] The next allegation relates to chairs purchased by Elise Walsh’s father.
[60] The plaintiff testified that David Walsh (“Mr. Walsh”), Elise’s father, purchased two recliners. The first was purchased from markdown on March 16, 2018. It had been moved to markdown that same day. John approved the price.
[61] John stated that he got an email from Teresa who indicated that Mr. Walsh wished to purchase the chair that was now in markdown. When asked what price, John told her to “take care of him”. In other words, he wanted her to give Mr. Walsh a good price because he had previously purchased a lot of other products from the store.
[62] The markdown chair was purchased on March 16, 2018.
[63] On March 17, 2018, Mr. Walsh purchased another recliner at full price. John approved the price on the tag. It was not necessary for him to receive approval as he was not purchasing the chair.
[64] John testified that he did not recall arranging to have the chairs refinished.
[65] The evidence of Graeme and Luke was that the plaintiff approved the sale to Mr. Walsh of a chair in markdown. The next day, Mr. Walsh purchased an identical, undamaged chair at full price. John advised the store service manager that the new chair was damaged and had to be returned. John approved the return. Instead of the chair purchased at full price, it was the marked-down, damaged chair which was returned by Mr. Walsh. Mr. Walsh received a full refund. This returned chair was placed in markdown on April 5, 2018. On April 6, 2018, Mr. Walsh purchased this chair for $299. The price was approved by John.
[66] The evidence of Teresa, the service manager, was that John requested that both chairs be fixed by Leon’s refinishers at the expense of Leon’s. At tab 111 of exhibit 6 is a copy of that service order.
[67] In cross-examination, John acknowledged that if this was done it would be a breach of company policy, however, he indicated that sometimes, in the circumstances, this could be a service gesture for someone who had purchased a lot of other products from the store.
[68] The next allegation of misconduct relates to a golf tournament prize delivered to Tom Dunn.
[69] The plaintiff testified that Mr. Dunn was the organizer of a charity golf tournament wherein a bedroom suite obtained from Leon’s was offered as a prize. According to an internal memo, this bedroom set was ultimately delivered to Mr. Dunn’s residence. John, as Mr. Dunn’s area supervisor, should have approved this sale. In fact, Mr. Dunn never sought his approval. John was investigating this matter for the company, and he spoke with Tom and told him he had to provide proof that he had won the bedroom suite at the golf tournament. John never received this confirmation, and Tom resigned from the company before he could follow up.
[70] John confirmed that he received a text from Brandon Williams, who was the Leon’s employee that noted the bedroom set had left the storeroom on an internal memo instead of a sales order. It was when he received this information that he asked Tom Dunn to provide proof that he won the prize. He could not follow up with Mr. Dunn immediately as he was on vacation and then John was on vacation. John acknowledged that he did not report this incident to head office as he was awaiting information from Mr. Dunn, and he had not yet completed his investigation.
[71] The evidence of Graeme and Mike was that there was an expectation that, as an area supervisor, John would have immediately advised head office that a bedroom set had left the storeroom without a sales order. This was theft, and John did nothing.
[72] The last incident involved additional pieces of furniture purchased by Tom Dunn below cost.
[73] The evidence of the plaintiff is that he did not recall whether or not Tom Dunn purchased pieces of furniture without approval. However, once it was known, Mr. Dunn was asked to explain. This was the incident that resulted in a negative margin occurring. That investigation showed that Tom Dunn had provided a full refund on an item that John believed had been purchased in 2016. This information was passed on to Graeme. Thereafter, Graeme corrected him and advised him that in fact the refund related to an item that had been purchased some four years earlier which was not under warranty. The plaintiff apologized and advised that he was continuing with his investigation. However, his investigation was cut short because of Mr. Dunn’s resignation and his termination.
[74] The evidence of Graeme was that John provided incorrect information. He was either negligent in his investigation of the incident or untruthful in the information that he passed on to Graeme.
D. DAMAGED BEYOND REPAIR DESIGNATIONS
[75] The defendant alleges that, throughout 2017 and 2018, the plaintiff instructed store managers to designate products as “damaged beyond repair” instead of selling them in markdown.
[76] The evidence of the plaintiff was to deny this behaviour. Further, the plaintiff testified that this issue was never raised in any of the three meetings he had in November of 2018 prior to his termination.
[77] The defendant produced witnesses Frank Benevento and Dave Morneau, who both testified that they had been asked to “DBR” certain items at John’s request.
E. CHARITY EVENT ALTERCATION
[78] The last allegation against the plaintiff is that, at a charity golf tournament sponsored by Leon’s, the plaintiff got into an altercation with one of the golf marshals and pushed him to the ground.
[79] The plaintiff’s evidence is that he did push the marshal but only after the marshal aggressively advanced towards him and was yelling and swearing at him. His evidence of the incident was corroborated by Vince Pazcuzzi and Mike Lawrence.
[80] The defendant called the marshal, Ross Morrell, who testified that the plaintiff jumped out of his cart, barrelled over to where the marshal was standing, and pushed him. He denied ever getting in John’s face or swearing or yelling at him. He further testified he believed that John was drunk and indicated he could tell by the way he staggered over to him.
THE LAW
[81] There is no dispute regarding the applicable law in this situation.
[82] At common law, absent gross misconduct amounting to just cause, an employer who unilaterally terminates an employment relationship has a legal obligation to provide reasonable notice of the termination to the employee. Failure by the employer to provide the reasonable notice constitutes a breach of the employment contract. See: Bardal v. Globe and Mail Ltd. (1960), 1960 CanLII 294 (ON SC), 24 D.L.R. (2d) 140 (Ont. H. C.) at para. 21.
[83] In McKinley v. BC Tel, 2001 SCC 38, [2001] 2 S.C.R. 161, the Supreme Court of Canada set up a two-step test to apply in determining whether just cause exists. The court must not only consider whether the employee engaged in misconduct but, as importantly, whether the nature and degree of the misconduct warranted the employee’s summary dismissal.
[84] Further, the court found that, if misconduct is found, the court must apply the principle of proportionality as “an effective balance must be struck between civility of an employee’s misconduct and the sanction imposed”. At paragraph 57, Iacobucci J. stated, “I favour an analytical framework that examines each case on its own particular facts and circumstances, and considers the nature and seriousness of the dishonesty in order to assess whether it is reconcilable with sustaining the employment relationship. Such an approach mitigates the possibility that an employee will be unduly punished by the strict application of an unequivocal rule that equates all forms of dishonest behaviour with just cause for dismissal. At the same time, it would properly emphasize that dishonesty going to the core of the employment relationship carries the potential to warrant dismissal for just cause.”
[85] The legal onus rests with the employer to prove there was just cause for summary dismissal of an employee. A “higher degree of probability” is required when the employer alleges what amounts to dishonest conduct, theft, fraud, or breach of trust. The obligation to meet that heightened standard reflects the gravity of the consequences of such allegations. See: Hill v. Dow Chemical Canada Inc., 1993 CanLII 7097 (Ab. Q. B.).
DISCUSSION
[86] In determining the issues before the court, the credibility of key witnesses is very central to the court’s findings of fact.
[87] In this case, there were several occasions where the evidence of the plaintiff was contradicted by the evidence of the Leon’s employees. Of course, it is not the number of people that determines who’s evidence the court prefers, but the reliability of that evidence.
[88] The plaintiff went to great lengths to discredit the evidence of Graeme, suggesting that Graeme held a personal animosity against him. This was denied by Graeme. John and Graeme testified that some email passed between them wherein Graeme was upset or disappointed with John’s decision to transfer Graeme’s son to the Windsor store. The court was not shown this email. Neither Mike nor Luke was aware of any animosity between the two, and neither saw any evidence of hostility during the November 2018 meetings.
[89] Even if the court accepted the plaintiff’s suggestion, which it does not, the court still has the evidence of Mike and Luke, who by all accounts liked John and had good relations with him. They were both devastated when these allegations came to light.
[90] Both men denied that Graeme asked John to take a lie detector test. Luke denied that John was told he either had to resign to receive his shares or be terminated immediately. Both testified John refused to answer Graeme’s questions. In these circumstances, it is very difficult to accept John’s version of events as to what transpired on November 1, 9, and 23, 2018.
[91] As I go through the issues for the court to determine, there are times where John’s evidence defied credibility. The end result is that often, where John’s evidence conflicts with another, I have preferred the evidence of the other witness.
ISSUE 1: WAS THE PLAINTIFF GUILTY OF ANY MISCONDUCT?
[92] On the evidence before me, I am satisfied on a balance of probabilities that the plaintiff is guilty of several incidents of misconduct.
[93] It is clear that the plaintiff knew Leon’s policy respecting conflicts of interest, business ethics and conduct, and policies regarding markdown items.
[94] He admitted this. He testified that he followed the policies and enforced the policies in the stores that he supervised.
[95] John admitted he was in a relationship with Elise, who was the owner of Eco Cleaning Services which provided cleaning services to Leon’s. Yet, he did not disclose the relationship as a potential conflict of interest. This is a direct breach of the Conflict of Interest Policy. He says he didn’t know he had to report the relationship; however, this is not believable. As the person responsible for seven stores, and making sure all associates followed the corporation’s policies, it is absurd to think he didn’t know he had to report this relationship.
[96] In my view, one of the most egregious conducts I find the plaintiff engaged in was the breach of Leon’s policy regarding the purchase of products from markdown. One incident, involving two chairs he purchased himself, was admitted. However, to compound the problem of fixing the price of a markdown item for himself and not reporting it, he also got another manager, Teresa, involved in his inappropriate conduct. He told her the price to put the chairs at and he purchased them without advising head office. Further, he instructed Teresa to have service people attend at his home and repair the two chairs purchased from markdown which were not subject to free restoration or repair by Leon’s, in breach of another policy.
[97] Instead of mentoring Teresa, as he should have, John made her complicate to his inappropriate actions.
[98] I do not accept John’s evidence that the refinishers attended his home to repair the table which he had purchased at a regular price. The exhibits before the court, along with Teresa’s evidence, mention only the repair of two chairs and nothing about a tabletop. In addition, the court finds that the plaintiff has not been truthful in his evidence in how these two chairs were returned to the store. He testified the delivery man returned them because they were damaged, and he never saw them. He told Graeme, Luke and Todd that the chairs were put in the garbage.
[99] In contradiction, exhibit 4, tab 51 shows that the chairs were brought in by him. The same day, they were moved to markdown, priced by him and purchased by him.
[100] One of the more troubling incidents raised by the defendant involved the purchase by John of certain items for his friend, Mr. Cefaratti.
[101] In each case of the nine items presented to the court, the sales order was in the name of Mr. Cefaratti. However, the item was picked out by John, the price was approved by John, the item was paid for by John and was often picked up and delivered by John.
[102] Although Mr. Cefaratti testified that John purchased several items for him, he was unable to describe any of the items and testified that he always paid John in cash.
[103] I find that simply putting an individual’s name on the sales order does not make that individual the purchaser. I find that John was the de facto purchaser of all nine items. He was obligated to have these purchases authorized by head office.
[104] This does not mean that Mr. Cefaratti may not have been the individual who ultimately received the items.
[105] Exhibit 5, tab 70 is very telling. The screenshots of the various sales orders demonstrates that items were often transferred to markdown and purchased the next day at a price significantly below cost. Three different pieces of the same set were purchased from three different stores on the same day, all from markdown, all discounted below cost, and all approved by John. The plaintiff expects the court to believe that three different managers at three different stores chose items from the same set and coincidentally placed them into markdown for prices less than cost.
[106] John’s evidence in this regard defies credibility in the circumstances. This conduct involves very serious breaches of company policies over a significant period of time.
[107] Even if the court were to accept the plaintiff’s evidence that he did not purchase these items or price them, which it does not, then he completely abdicated his responsibility as an area supervisor. He should have questioned each of the managers involved as to why this was happening contrary to company policy. These managers should have been coached or reported to head office. Instead, nothing was done.
[108] The plaintiff has argued that the significant price markdown could very well be explained by the condition of the goods and the defendant has provided no evidence whatsoever as to what condition these items were in at the time of their purchase.
[109] The evidence of Luke was of significance to the court in this area. Luke testified that Leon’s had an operational policy of “cycle counting”. He indicated that each and every product in the warehouse and the showroom are scanned, and 20 percent of these items are scanned each day. The items located at exhibit 5, tab 70, were all cycle counted earlier in the week. During a cycle count, if a product is damaged, it must be pulled and the warehouse manager or store manager advised. In this case, the items referred to in tab 70 were cycle counted and moved on, which indicated there was no physical damage to the products.
[110] Graeme also testified that, although he did not see any of the items, some of them had been on the showroom floor which suggested they could not have been that damaged to necessitate such a reduced purchase price.
[111] Another serious breach of company policies and outright dishonesty is what occurred with the purchase of two recliner chairs by Elise’s father, David. The printed screenshots of those transactions make it clear that a damaged chair was returned in place of a new chair, and a full refund was received, approved by John.
[112] To make matters worse, the chairs purchased from markdown were then refinished at the expense of Leon’s, as approved by John, in direct contravention of Leon’s markdown policy.
[113] The foregoing examples are sufficient to satisfy the court John is guilty of serious misconduct over a lengthy period of time, including breach of trust, breach of ethics, and breach of integrity. I find that John defrauded his employer for personal benefit and abused his position of authority.
[114] There are other allegations and complaints made by the defendant, however, in my view, they do not reach a level of misconduct that would ever warrant an employee’s summary dismissal. In some cases, the court was not satisfied on a balance that misconduct occurred.
[115] Those allegations include the altercation with the golf marshal, Elise’s unauthorized use of the Leon’s store to promote her own products, Tom’s purchase of discounted furniture, and the demarcation of items to be damaged beyond repair so that they would not have to remain in markdown and sold.
ISSUE 2: IF SO, WAS THE MISCONDUCT SUCH THAT IT JUSTIFIED SUMMARY DISMISSAL, OR DID IT WARRANT SOME OTHER FORM OF PUNISHMENT?
[116] In applying the principles the Supreme Court of Canada set out in McKinley, I find that the nature and seriousness of the breaches and dishonesty are such that it is not reconcilable with sustaining the employment relationship. The plaintiff was the area supervisor, responsible for seven stores and some 350 employees. He was to lead by example. He was expected to follow and enforce all of Leon’s policies. In my view, his misconduct went to the very core of the employment relationship to such a degree that it would be impossible for the defendant to ever trust the plaintiff again.
[117] Of course, the court must consider all the circumstances, including the plaintiff’s age, his lengthy service and almost blemish free discipline record. The serious misconduct found by the court must be considered in context. The degree of trust placed in his hands by his employer, given his very senior position, and their expectation of honesty and loyalty must also be considered.
[118] On the totality of the evidence before me, I am satisfied that the defendant has met the legal onus to prove there was just cause for summary dismissal.
[119] I also find that summary dismissal was proportionate to the seriousness of the plaintiff’s misconduct. I find there was no lesser form of discipline appropriate in all the circumstances.
[120] The plaintiff’s action is dismissed.
[121] Order to go accordingly.
[122] If the parties are unable to agree on the issue of costs, they may provide me written submissions within thirty (30) days of today’s date, not to exceed five (5) pages in length to the judicial assistants’ email at St.Catharines.SCJJA@ontario.ca. If no such submissions are received, then the issue of costs will be deemed to have been resolved.
L. M. Walters, J.
Released: October 28, 2022
COURT FILE NO.: CV-19-58746
DATE: 2022-10-28
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
John Savarie
Plaintiff
– and –
Leon’s Furniture Limited
Defendant
REASONS FOR DECISION
L. M. Walters, J.
Released: October 28, 2022