Court upholds long-time supervisor’s dismissal for just cause

A recent decision of the Ontario Superior Court of Justice serves as a rare example in which the court upheld the dismissal of a long-service managerial employee for just cause.   

In Savarie v. Leon’s Furniture Ltd., 2022 ONSC 6116, the employee, John Savarie, was employed by the defendant, Leon’s Furniture Ltd. for almost 30 years until he was dismissed for just cause on Nov. 26, 2018. At the time of his dismissal, Savarie was 49 years old and employed as an area supervisor in which he was responsible for seven Ontario stores and approximately 350 employees. Throughout his tenure, Savarie had a clean disciplinary record apart from one incident in 1996.

However, Savarie became subject to a serious investigation after Leon’s discovered several business irregularities.

Over the course of the investigation, the company determined that Savarie had violated several company policies by engaging in various acts of misconduct, such as:

• Failing to disclose, as a potential conflict of interest, a romantic relationship he had with the owner of a company contracted by Leon’s to clean the company’s stores
• Directing a subordinate manager to dramatically reduce the price of two damaged chairs that he purchased for himself, and directing the same manager to arrange for Leon’s refinishers to come to his house to repair the chairs at Leon’s expense
• On multiple occasions, discounting Leon’s merchandise for himself and his friends to purchase without obtaining proper approval
• Allowing his romantic partner’s father to return a damaged recliner in place of a brand-new recliner and approving a full refund for the price of a new recliner. Savarie also allowed his romantic partner’s father to purchase the damaged recliner at a further reduced price and directed a subordinate manager to have the damaged recliner repaired by Leon’s refinishers at Leon’s expense.

An employer did not have to pay a fired worker statutory termination pay because the worker’s dishonesty and theft amounted to just cause, the Alberta Labour Relations Board ruled.

Employee felt ambushed

When Leon’s representatives first attempted to meet with Savarie to discuss the above allegations, he stormed out of the meeting because he felt he was being “ambushed” and his integrity was being questioned. On his way out, Savarie called the company’s then-vice-president of merchandising, Graeme Leon, a “f---ing asshole” (although Savarie claimed, at trial, that he used the term “f---ing idiot”).

About a week later, Savarie met with Leon’s representatives to resume the meeting, where he simply denied the allegations against him. The company’s representatives met with Savarie for a third time shortly thereafter, during which he was provided another opportunity to respond to the allegations. When Savarie declined to do so, he was dismissed for just cause.

Savarie brought an action for wrongful dismissal and sought damages in court. In response, Leon’s argued that Savarie had been properly dismissed for just cause and he was not entitled to any damages.

At trial, the court applied a two-step test to determine whether Savarie was appropriately dismissed for just cause. The first step was for the court to determine if Savarie engaged in misconduct.  The court held that he did, and that it came down to the credibility of the witnesses for the court to make its findings of fact. The court held that Savarie went to great lengths to discredit the evidence of the VP of merchandise, Leon, and claimed Leon held a personal animosity against Savarie.

A Nova Scotia Labour Board decision emphasized that just-cause dismissal requires timeliness and sufficient warning.

Company’s evidence consistent

However, the court found that the evidence of other company representatives – who had great relationships with Savarie – was consistent with the evidence of Leon. Therefore, where the evidence conflicted, the court preferred the evidence of the company’s witnesses over that of Savarie. The court found that Savarie clearly knew Leon’s policies and he was guilty of several incidents of misconduct due to his breaches of such policies over a lengthy period, including breach of trust, breach of ethics, and breach of integrity. The court held that Savarie defrauded the company for personal benefit and abused his position of authority.

In particular, the court held that one of the most egregious instances of Savarie’s misconduct involved his ordering a subordinate manager to mark down the price of the two damaged chairs he purchased for himself. Not only was the mark-down unauthorized, but he ordered the manager to arrange for Leon’s refinishers to repair the chairs at Leon’s expense without approval. The court held Savarie involved the manager in his inappropriate actions rather than mentoring her, contrary to his role of area supervisor.  

The second step was for the court to determine whether the nature and degree of Savarie’s misconduct warranted his dismissal for just cause. The court held that Savarie, as an area supervisor responsible for seven stores and hundreds of employees, was supposed to lead by example and follow and enforce all of Leon’s policies. As a result, Savarie’s misconduct “went to the very core of the employment relationship” to such a degree that it would be “impossible” for the company to ever trust him again, said the court. 

A long-term salesperson in his 60s received 21 months’ notice of dismissal in a BC Supreme Court decision.

Key takeaways

The Savarie case is a useful reminder to employers to conduct a thorough investigation into allegations of an employee’s misconduct and provide the accused employee with ample opportunity to respond to the allegations. Had Leon’s executives rushed to dismiss Savarie for just cause following his inappropriate behaviour after the first meeting, the outcome of this case could have been different. Employers must ensure that they handle suspected cases of employee misconduct with great care and attention to detail if, as a result of their investigation, they may need to dismiss for just cause.

The Savarie case also highlights the importance of employers establishing policies that are tailored to govern each employer’s unique operations and workforce. Such policies must clearly warn employees that violation of same may result in their dismissal for just cause. 

Finally, the Savarie case also suggests the courts will be more critical of employee misconduct if the employee at issue is a supervisor or manager responsible for subordinate employees. The court highlighted Savarie’s supervision of over 350 employees; his responsibility over enforcing company policies and leading staff by example; and his decision to involve subordinate staff in facilitating his own misconduct, in the court’s decision to uphold Savarie’s dismissal for just cause. 

An employer must pay 18 months’ notice for constructive dismissal to a long-term employee who was bumped to a lesser job, the Ontario Superior Court of Justice ruled.