Communication failure ends in termination

Manager’s continued refusal to implement company policies just cause for dismissal

Peter Graham, president and majority shareholder of Raymond & Heller Ltd., a retail store for fine oriental carpets, decided to expand his business. Originally the Ottawa area was serviced by a store in Montreal, but in 1991 a new store was opened in Ottawa. Mr. Graham hired Douglas Mair to be the store manager.

Although Mr. Mair was the store manager, Mr. Graham made many decisions. For example Mr. Graham signed the lease for the Ottawa operation, provided all inventories and hired the employees. All new stock was purchased by Mr. Graham through the Montreal office from international sources. Every Friday Mr. Graham would travel from Montreal to Ottawa to meet with Mr. Mair to discuss operations, customer needs, store policies and to transport some goods back and forth. Mr. Mair was also in regular communication with Mr. Graham by telephone and facsimile.

In addition to selling carpets, the store also undertook cleaning, repairs and appraisals of fine oriental carpets. All of this work was sent to Montreal. The rugs were either brought to the Ottawa store by customers or picked up by the delivery service and then transported to Montreal for the work to be performed.

From time to time, Mr. Graham provided Mr. Mair with written policy directives for the Ottawa operations which were expected to be followed and implemented. It was the responsibility of Mr. Mair to ensure that these policies were implemented at the Ottawa store. Mr. Graham did not deal directly with the Ottawa employees other than Mr. Mair and occasionally the assistant manager.

In August and September 1999 tensions escalated between Mr. Graham and Mr. Mair to the point that Mr. Mair’s employment ended. Problems began on Aug. 13, when Mr. Graham attended at the store for his usual Friday visit. He witnessed Mr. Mair providing written spot-cleaning instructions to a customer who had recently purchased a rug from the store. This was in direct contradiction of one of the store’s policies. Mr. Graham tried to intervene which angered Mr. Mair. After the customer left Mr. Mair told Mr. Graham not to interfere in his dealings with customers again.

Over the next month memos were passed between Mr. Graham and Mr. Mair relating to their work relationship. Mr. Mair wanted Mr. Graham to cease attending the store, liquidate the store or Mr. Mair would tender his resignation. Mr. Mair stated that Mr. Graham’s “abusing, disrespectful behaviour is unprofessional and completely unacceptable.” Mr. Graham sought a meeting with Mr. Mair. A meeting occurred on Aug. 18 in the Ottawa store. At that meeting Mr. Graham reviewed many problems and policies. He attempted to resolve the differences with Mr. Mair. Unfortunately Mr. Mair did not agree to his suggestions and policies.

Following this meeting Mr. Graham prepared a binder containing all of the policies that had been developed over time. In a letter dated Aug. 31, 1999, Mr. Graham informed Mr. Mair that his operating instructions must be implemented. If he continued to disregard them it would be impossible for Mr. Mair to continue to be employed as manager at the Ottawa store.

A second letter was sent on Sept. 2 again inquiring of Mr. Mair as to whether he was prepared to agree to implement store policies. The letter also indicated that Mr. Graham’s confidence in Mr. Mair’s ability to continue to manage the Ottawa store had been destroyed and that Mr. Mair would be terminated from the position as store manager. Mr. Mair did not respond to this letter, nor did he agree to implement the policies.

On Sept. 3, Mr. Graham attended at the Ottawa store. He presented Mr. Mair with four options: he could resign; receive a letter of dismissal; accept layoff without pay for four days to think about and decide whether or not he was prepared to accept Mr. Graham’s instructions and sign a document acknowledging that ignoring such instructions would result in immediate dismissal; or he could obtain other employment during the layoff period. Mr. Mair tried to discuss matters with Mr. Graham who refused, so Mr. Mair left the store.

The next day he faxed a letter to Mr. Graham indicating that the entire staff had tendered their resignations and that the store was closed. He offered his letter of resignation conditional upon receipt of a letter of reference and severance of one week’s pay for each year of service.

Mr. Graham attended at the store on Sept. 5. He did a complete inventory and changed the alarm code. On Sept. 7, Mr. Mair returned to the store in an attempt to resolve the impasse and to discuss matters. Mr. Graham directed him to his lawyer.

In the wrongful dismissal action brought by Mr. Mair, Mr. Graham argued that Mr. Mair had quit. The Court did not accept that argument. However the Court did accept that there was just cause to dismiss Mr. Mair for his continual failure to implement the policies imposed by Mr. Graham.

The action for wrongful dismissal was dismissed.

For more information:

Mair v. Raymond & Heller Ltée/Ltd., Ontario Superior Court of Justice, Docket No. 00-CV-12804, Feb. 8/02.

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