Enterprise Rent-a-Car manager’s steep discount to mother not cause for dismissal: court

A company that fired its manager for breach of policy couldn’t turn around and later claim he was also fired for dishonesty to support having terminated his employment

A company that fired its manager for breach of policy couldn’t turn around and later claim he was also fired for dishonesty to support having terminated his employment, the Alberta Provincial Court has ruled.

Justin White was the manager of an Enterprise Rent-A-Car Ltd. branch in Red Deer, Alta., for almost two years. In December 2003 he was called into a meeting and his employment was terminated. The only reason given was, “violation of company policy.”

At trial it was established White had leased vehicles to other employees and to his mother far below the established rate. White’s supervisor testified that at the December meeting White admitted he’d done so for other employees, but when asked if he’d rented a car to his mother at below the discounted rate he said he hadn’t.

When he was shown the rental contract his mother had signed he conceded he had and said he didn’t think it was a big deal.

The supervisor and a member of the company’s human resources department testified that had White answered the initial question truthfully he would only have been reprimanded. But because he was not honest they chose dismissal, they said, because the company cannot audit every branch regularly and needs to be able to trust its employees.

The court said for a company to establish that a breach of a rule constitutes just cause for termination, it must establish that the rule is reasonable, that it’s known by its employees and that it’s consistently enforced. Employees must also be warned they will be terminated if the rule is breached.

It was not disputed Enterprise had a written policy against these practices and it had been distributed to its employees. The court found, however, that the company had a history of tolerating policy breaches when it came to employee rentals. These breaches occurred in branches all over Alberta. Management trainees had even been taught by managers to write up rental contracts for employees in a manner that breached policy, the court said. At a meeting a few months before White’s dismissal, local managers had again been told they must adhere to policy. But no repercussions were discussed for failure to do so.

The court ruled it had not been made unequivocally clear to employees that dismissal was the penalty for failure to follow policy. Therefore, Enterprise did not meet all the requirements to justify dismissal for breach of company rules.

White had, in essence, been dismissed for dishonesty, not for breach of policy. The company’s policy allowed employees to be disciplined with termination for dishonesty and theft. But White had not been dismissed for that. He had been fired only for violation of company policy — renting to his mother at a reduced rate. That did not justify dismissal, the court said.

White was awarded $3,340 for four weeks’ notice, plus costs, disbursements and interest.

For more information see:

White v. Enterprise Rent-A-Car Ltd., 2005 CarswellAlta 1164 (Alta. Prov. Ct.)

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