IN THE SUPREME COURT OF BRITISH COLUMBIA
| Citation: | Carleton v. North Island Brewing Corporation, |
| 2017 BCSC 1133 | |
Between:
Fern Deirdre Carleton
Plaintiff
And
North Island Brewing Corporation
Defendant
Before: The Honourable Mr. Justice Baird
Reasons for Judgment
|
Counsel for the Plaintiff: |
M. McConchie |
| Counsel for the Defendant: | I. Petersen |
| Place and Dates of Trial: | Campbell River, B.C.
June 7 & 8, 2017 |
| Place and Date of Judgment: | Campbell River, B.C.
July 4, 2017 |
Introduction
[1] This is a wrongful dismissal action. The plaintiff worked for the defendant company, which operates a “you brew” beer, cider and wine shop in Campbell River, for approximately 20 years. She claims that she was dismissed from her employment in January 2015 without just cause. The defendant says that the plaintiff was justifiably dismissed for dishonest conduct.
Background
[2] At the time of her dismissal the plaintiff was in her early fifties. Her wage was $15 per hour. Her job with the company included customer service, sales, clerical work, wine production, and janitorial duties. She worked four days per week, eight hours per day.
[3] The employment contract between the parties was an oral one. It included the usual implied terms that the plaintiff would act honestly and in good faith, obey reasonable directions and policies, and not do anything to damage or destroy the trust and confidence between the parties.
[4] The defendant bears the onus of establishing that it had just cause to dismiss the plaintiff. The grounds for termination given at trial were that the plaintiff gave away the defendant’s merchandise to customers without permission or payment and that she took merchandise from inventory and bartered it with one of the defendant’s customers, a man called E.H., for personal gain.
[5] The defendant company was founded in approximately 1994. One of the original owners, Mr. Peter Schulz, testified at trial. The plaintiff was one of the company’s first employees and she worked with Mr. Schultz on a daily basis. While the two of them worked together they enjoyed friendly relations and the plaintiff was a trusted employee.
[6] The evidence suggests that Mr. Schultz’s involvement in the company’s daily affairs diminished over time and the plaintiff took a more central role in operations. She became the de facto shop manager, whether or not she was officially given this title, and had supervisory duties over the two or three other people who worked there.
[7] By all accounts this was an informal workplace where there weren’t written rules or guidelines. Company policies and practices emerged on an ad hoc basis in the form of verbal advice or admonitions. Now and again Mr. Schultz had to lay down the law — he referred to one time, for example, when employees were abusing their staff purchasing discount privileges and needed to be reined in — but in the main the company ran smoothly and harmoniously.
[8] In 2011 Mr. Schultz and his partners sold the company to Jason Gjesdal, who owns and operates the business now. He inherited the company’s existing employees including the plaintiff. The plaintiff trained him in brewing methods and showed him how the business ran. They got along well enough at first but over time the relationship soured to the extent that, towards the end of 2014, Mr. Gjesdal was giving serious thought to firing the plaintiff.
[9] Mr. Gjesdal referred to a number of reasons for this. He said that the plaintiff failed to follow directions, especially when it came to policies limiting the amount of wine and beer that she could brew on premises for her own consumption. He also claimed that she failed, though asked repeatedly, to train him to use the company’s invoicing system.
[10] Mr. Gjesdal alleged, furthermore, that he dealt occasionally with customers who expected discounts because the plaintiff had offered them on previous occasions. It rankled him that customers seemed surprised to learn that he, and not the plaintiff, was the owner of the business, and that certain of them expected him to fall in line with practices of the plaintiff’s devising, such as pricing discounts, which he had not approved. His suspicions were heightened on another occasion when he had dealings with a customer who told him that the plaintiff had given her free merchandise.
[11] The customers referred to were not called as witnesses and none of the allegations were put to the plaintiff or relied upon as justification for dismissal. I refer to them merely to explain how relations between the plaintiff and Mr. Gjesdal deteriorated. Mr. Gjesdal was wary and suspicious of the plaintiff. He thought she was cutting corners. He was on the lookout for evidence of her unauthorised discounting or giving away company product. Before long, in this context, the plaintiff committed a single act of alleged dishonesty that led to her dismissal.
[12] This occurred one Thursday in November 2014, when Mr. Gjesdal saw the plaintiff giving a port wine kit free of charge to a friend of hers named Hoffman. He had attended the shop with the plaintiff’s husband. Mr. Gjesdal watched as the plaintiff loaded this kit into Mr. Hoffman’s car. He confirmed that no money was received for it, and the plaintiff admitted this in her testimony. She added, in fact, that she had done the same thing on a number of previous occasions.
[13] Mr. Gjesdal took no immediate action. He struck me as a person who dislikes confrontation. He mulled things over for a number of weeks before deciding to let the plaintiff go in early January 2015. The reason given was that the plaintiff had a “conflict of interest” with one of the company’s customers, but Mr. Gjesdal conceded at trial that this was only to “soften the blow”. His real reason for severing the relationship was the Hoffman incident. The plaintiff confirmed that this was part of their discussion concerning her dismissal, but in any event, an employer may dismiss an employee giving the wrong reason as long as just cause existed for dismissal at the time: Carr v. Fama Holdings Ltd., (1989) 63 D.L.R. (4th) 25 at p. 32.
[14] When the plaintiff filed the present lawsuit Mr. Gjesdal decided to look for additional evidence of wrongdoing to assist in his defence. An employer may rely on any just cause, even if its existence was not known to the employer at the time of discharge: see, for example, Lake Ontario Portland Cement Co. Ltd. v. Groner, [1961] S.C.R. 553 at p. 564. Another staff member told Mr. Gjesdal that on a number of occasions the plaintiff had bartered company inventory with their customer, E.H., in return for orthotic footwear. In due course the plaintiff admitted that this was true. She testified, however, that she purchased the bartered wine kits using her staff discount, and thus had property in the items and could do with them as she pleased. Mr. Gjesdal’s position was that the plaintiff stole the items.
Discussion
[15] The plaintiff argued that the grounds advanced by Mr. Gjesdal did not amount to just cause for her termination. She did not dispute that she occasionally gave away wine and beer kits, but testified that this was only after they had “expired”. She explained that the wine kits had a “best before” date and once that date was past, the kits had no value and could not be offered for sale.
[16] The plaintiff testified that during Mr. Schultz’s ownership a policy was established that expired wine kits could be taken by employees and given away. For some reason she assumed that this practice would be acceptable to Mr. Gjesdal. She told me, in short, that she had done no wrong, or that the company had condoned her conduct. In any event, she argued that termination was far too drastic a step to take against a long-serving employee for such footling transgressions.
[17] The principal problem faced by the plaintiff during this trial — and a serious one, too — is that Mr. Schultz flatly denied enacting such a policy. Furthermore, he told me that the beer and wine kits don’t “expire”. There is no “best before” date printed on the packaging. The only ingredient in them that goes off is yeast, he said, and whether this has happened cannot be determined without opening the kits. He never gave anyone permission to give away company property for any reason. He was obviously surprised that the plaintiff had been doing this and annoyed by her claim that he had sanctioned it.
[18] The plaintiff admitted that she traded wine kits for orthotics on four separate occasions in 2002, 2004, 2008 and 2010. Here, as well, she testified that Mr. Schultz established a policy permitting this. Years ago, she said, Mr. Schultz told his employees that, because the job came with no other “perks”, they could take wine kits from inventory and barter them for goods and services elsewhere. She claimed that, in announcing this policy, Mr. Schultz had given the specific example of trading wine kits for automobile repairs.
[19] Once again Mr. Schultz emphatically denied the existence of such a policy and clearly thought the very idea was nonsense. He never talked about trading wine kits with auto mechanics or anyone else. The only “perk” that company employees enjoyed on his watch was a 10 per cent discount on purchases and his permission to brew wine and beer on site as long as it was for their own personal consumption. There were no other policies governing employee acquisition of company property.
[20] Mr. Schultz struck me as a perfectly straightforward and honest person. He was completely independent, in the sense that he has long since sold the business and has no interest in its present affairs. He was not the least bit partisan as between plaintiff and defendant. He bore no ill-will to the plaintiff and was not a friend or ally to Mr. Gjesdal. I have confidence in the truthfulness and accuracy of his testimony. His courtroom demeanour indicated that he was chagrinned and disappointed to discover that the plaintiff had been pilfering behind his back.
[21] There is no room to conclude that Mr. Schultz might have a faulty recollection of things — no reason, that is, for thinking that he may have forgotten giving his staff permission to take company property in the circumstances described by the plaintiff. I am persuaded, to the contrary, that he never authorised any such thing, and that the plaintiff’s claims that he did are a fabrication.
[22] I accept Mr. Schultz’s testimony and reject the plaintiff’s on two key items of dispute in this case, namely, that she was authorised to give away “expired” product, and that company policy permitted employees to barter or trade inventory for personal benefit. I find that the plaintiff was never told by anyone that she could engage in activities of this sort and that what she was doing, instead, was stealing from her employer.
[23] I have taken into account the plaintiff’s testimony that she purchased the wine kits traded for orthotics. There is an absence of evidence contradicting this assertion concerning the earlier transactions in 2002, 2004 and 2008, and I am prepared,
although not without considerable suspicion, to give the plaintiff the benefit of the doubt when it comes to them.
[24] With respect to the 2010 bartering incident, however, the plaintiff conceded that she provided the customer E.H. with a specific type of red wine kit that she brewed for him on the premises. However, the company invoicing system, which records all staff purchases as well as customer sales, contains no record that she paid for it. Such paperwork as the plaintiff filled out to identify the customer’s batch on site, and to indicate that it had been paid for, was marked with an invoice number in the plaintiff’s handwriting that related to an entirely different transaction with another customer. It was put to the plaintiff in cross-examination that she had inscribed the wrong invoice number to “cover her tracks”, which she denied, but when she was asked point blank if she had paid for the wine kit she answered, curiously, “I don’t recall”.
[25] On all of the evidence, I think it likely that over many years the plaintiff became well settled in her job, and especially as she became increasingly responsible for the day to day management of the company’s operations, she was able to persuade herself that to take occasional liberties with her employer’s property was not a big deal. I am satisfied that on a number of occasions she misappropriated company property without the owner’s consent or colour of right, including on the occasion where she gave away the port kit to her friend Mr. Hoffman, and also in the 2010 orthotics trade when, to make matters worse, she filled out misleading paperwork to conceal her wrongdoing.
[26] Having considered McKinley v. BC Tel, [2001] 2 S.C.R. 161 at para. 49, the evidence establishes to my satisfaction that the plaintiff engaged in deceitful conduct. The remaining question is whether the nature and degree of the dishonesty warranted dismissal. In this connection, it was said on the plaintiff’s behalf that the alleged defalcations were minor and that, when measured against two decades of service, dismissal was a disproportionate response. At most, it was argued, the plaintiff’s conduct amounted to poor judgment.
[27] I must consider the context of the alleged misconduct and determine whether the employee’s dishonesty gave rise to a breakdown in the employment relationship justifying summary dismissal: Obeng v. Canada Safeway Limited, 2009 BCSC 8 at para. 32. The legal test for just cause is whether the plaintiff conducted herself in a way that is fundamentally antithetical to the continuation of the employment relationship: Smith v. Pacific Coast Terminals Co. Ltd., 2017 BCCA 197 at para. 27.
[28] While I am not about to suggest that the plaintiff’s misconduct constituted anything more than petty larceny, nevertheless, in my view, it showed a sense of entitlement and disregard for the defendant that struck at the very heart of the employment contract. It wasn’t so much the magnitude of the plaintiff’s misconduct that proved fatal to the plaintiff’s relationship with Mr. Gjesdal, but the fact that she felt entitled to engage in it and was found, in the end, to have done so repeatedly: see, once again, Lake Ontario Portland Cement Co. Ltd. at p. 564.
[29] The plaintiff breached the principles of good faith and trust that are vital to the survival of any employment relationship. It is no good to say “it was only a few wine kits here and there”. The plaintiff’s dishonesty exposed during this trial was of a nature that I have concluded was fundamentally inconsistent with her obligation to her employer. Confidence in her was justifiably lost and her summary dismissal was warranted.
[30] The case is dismissed with costs.
“Baird J.”