Auto dealer was right to fire manager for dishonesty: New Brunswick court

Body shop manager had repairs done to his car on company time, had supplier paint his car for free

A New Brunswick court upheld a car dealer’s decision to fire one of its senior managers after he had his car painted for free by a supplier and had work done on his car on company time.

Michael MacKay started working for a Ford dealership in Moncton, N.B., in June 1995. He was dismissed in April 2002.

At the time of his dismissal, MacKay held a senior management position as a service/body shop manager for which he was paid a minimum of $75,000 per year, which included salary, bonuses and benefits.

MacKay had been given an employee handbook, which explained some of the dealership’s policies. He also had a written employment contract. One of the terms of the contract stated as follows:

“A serious violation, by the employee, of Taylor For Sales Ltd.’s rules, regulations, practices, or policies, and in particular, but not limiting the generality of the foregoing, violation of Taylor Ford’s policies on harassment, discrimination or honesty will constitute just cause for dismissal without notice.”

Taylor Ford took the position that MacKay had been dismissed for cause for serious violations of its policies, including the policy on honesty.

The three incidents

There were three incidents that triggered MacKay’s dismissal, and they took place shortly before he was let go.

The first incident was the taking of stock for his personal use without getting permission or giving notice.

The second incident involved getting an employee of Taylor Ford to work on his personal car while on company time.

The third incident was the taking of a personal benefit by having one of Taylor Ford’s suppliers paint his car without charging him.

MacKay confessed to the first incident, where he took some clear coat for the painting of his car without getting permission or giving notice. He said he was going to have it replaced. The court accepted that evidence, since it was corroborated, and said that incident alone would not have justified MacKay’s dismissal.

MacKay also admitted to the third incident, when he had the sales representative of a paint company, which sold products to the dealership, paint his personal vehicle free of charge. That benefit had a value of at least $600.

The court said it was satisfied that his taking of that particular personal benefit was contrary to Taylor Ford’s policies.

But MacKay disputed the second incident — where it was alleged he had his car worked on during company time, a clear violation of the dealership’s policies.

MacKay said he personally paid the employee to do the work at a time when the garage was closed. That would have been acceptable under the dealership’s policies. But the employee in question said that although some of the work was done when the garage was closed and paid for by MacKay, some of the work was also done while the garage was open and he was being paid by the dealership.

“I prefer the evidence of (the employee) on that point,” said Justice Roger Savoie of the New Brunswick Court of Queen’s Bench in his decision. “He is not employed by (Taylor Ford) anymore and he impressed me as being truthful when he testified. He said that he was directed by (MacKay) to charge the time he worked on (MacKay’s) car to the work order of (Taylor Ford’s) plough truck.”

Justice Savoie said MacKay was also, at best, evasive when giving evidence as to the circumstances surrounding his dismissal by a previous employer, something that also hurt his credibility.

Before being fired, MacKay was given a chance to explain the three incidents referred to and he did not give a satisfactory explanation, the court said.

In concluding that Taylor Ford had just cause to dismiss MacKay, Justice Savoie made the following comments.

“As a senior manager, (MacKay) was in a position of authority and trust. As a result, he had to meet a high standard of honesty. Having a junior employee work on his personal car while being paid by the (dealership) did not meet that standard. That, together with having his car painted free of charge by a … supplier in violation of his employer’s policies, constituted a fundamental breach of his employment contract. The behaviour was such that the employment relationship could no longer viably subsist.”

What the court would have awarded MacKay

Had the court decided otherwise, that the dealership did not have just cause to dismiss MacKay for his conduct, it said six months’ notice (about $37,500) would have been appropriate, said Justice Savoie.

For more information see:

MacKay v. Taylor Ford Sales Ltd., 2005 CarswellNB 168, 2005 NBQB 134 (N.B. Q.B.)

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