Grocery manager destroyed employment relationship

When will breaching a company rule justify discharge?

A Toronto-area grocery chain was justified in firing a dairy manager who took five items from the store without paying for them, an Ontario court has ruled.

Ray Agosta, 47, was the dairy manager at a Longo's grocery store. He was hired by Longo's on July 12, 1999, and fired on Feb. 12, 2004. Agosta supervised an assistant dairy manager and seven other employees. He was designated as a key holder, meaning he could open and close the store in certain circumstances, and undertook risk management duties. He had the authority to spend about $125,000 per week ordering inventory for his area of the store.

There were two major incidents that led to his dismissal. On Jan. 27, 2004, there were few customers at the store because of a snowstorm. On three occasions that day, Agosta asked the manager for permission to close the store early. The manager refused to close the store before its normal closing time.

But Agosta went ahead and closed the store early anyway and forgot to arm the security system before leaving.

The second incident occurred on Feb. 6, 2004. On that day, Agosta was captured on security cameras, and spotted by a loss prevention specialist, taking five items out of the store that he had not paid for. Agosta was approached by the loss prevention specialist about the items. Agosta told him the items were samples given to him by suppliers.

He then changed his story somewhat and said some were samples and some were items received in error. Agosta produced paperwork to back up his claim that Longo's had received credit for the items from suppliers. But it soon became apparent that the paperwork showed no reference to any of the items Agosta had taken from the store.

Per company policy, any employee removing items from the store — including stale-dated items, samples and items received in error — had to get permission from the store manager in advance regardless of whether or not a credit had been issued by the supplier.

Agosta offered no explanation in court for his failure to ask permission beyond saying that the manager was busy. He admitted knowing that, even if credit had been issued for the products, he was obliged to tell his superiors and obtain consent before removing Longo's property from the store without paying for it.

The value of the items taken by Agosta were minimal — they included things like yogurt and cream cheese. But Longo's argued the value of the items were irrelevant. It was the effect his actions had on the employment relationship that mattered.

Agosta enjoyed a special position at the grocery store, Longo's said. He was a department manager, a key holder and the primary loss prevention officer.

Longo's pointed out that the opportunity for theft in the retail grocery business is great. Grocery stores have razor-thin profit margins of just two or three per cent, so honesty and trustworthiness are critical hallmarks of employees, it said.

Justice Moore of the Ontario Superior Court of Justice said the employment relationship in this case was simply damaged beyond repair by Agosta’s actions.

“I conclude that the employment relationship has … been irreparably damaged by the conduct of (Agosta),” said Justice Moore. The facts were clear and dismissal for just cause was warranted.

For more information see:

Agosta v. Longo Brothers Fruit Markets Inc., 2006 CarswellOnt 3128 (Ont. S.C.J.)



When breaching a company rule will justify discharge

In the case above, Ray Agosta’s counsel argued that the practice of getting the store manager’s consent before removing Longo's product from the store was not uniformly followed and was not, therefore, enforceable.

At trial, the court was directed to the book The Law of Dismissal in Canada, written by Howard Levitt and published by Canada Law Book, where Levitt outlines a list of factors in order for breach of a company rule to constitute cause for discharge:

•the rules must be distributed;

•the rules must be known by the employees;

•the rules must be unambiguous;

•the rules must be consistently enforced by the company; and

•the rules must be enforced and, consequently, employees must be warned that they will be terminated if a rule is breached.

Agosta argued that Longo's did not comply with the above and, as such, his termination for cause should not be condoned. But the court disagreed.

“This assertion overlooks, however, the fact that (Agosta) knew, understood and consistently followed the requirement for manager consent to removal of store property,” the court said.

Agosta also argued that he had always told his superiors before and had always received consent to remove items from the store in the past. But that didn’t condone the behaviour either, the court said.

“That (the manager) always consented to (Agosta’s) requests in the past does not remove the requirement to seek consent or equate to condoning (his) conduct,” the court said.

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