J. 1989 S.H. No. 67911 IN THE SUPREME COURT OF NOVA SCOTIATRIAL DIVISION BETWEEN: CHARLES TAYLOR and SEARS CANADA INC., body corporate Defendant HEARD: At Halifax, Nova Scotia, before the Honourable Madam Justice Elizabeth Roscoe, Supreme Court of Nova Scotia, Trial Division, on December and 6, 1989. DECISION: January 29, 1990 COUNSEL: Robert Murrant, Q.C., for the plaintiff; Thomas P. Donovan, for the defendant. ROSCOE, J. This is an action for damages for wrongful dismissal by the plaintiff, Charles Taylor, against the defendant, Sears Canada Inc.. Mr. Taylor, who is 53 years old, was employed by Sears as driver and driver's helper. He began his employment with Sears in September, 1954 and worked there until May, 1963 when he left on his own accord. He resumed his employment with Sears in May, 1969 and continued until December 5, 1988 when he was dismissed without notice. His continuous service with Sears was almost 20 years and his total period of employment was 28 years. The defendant operates large retail department store and catalogue sales business in Halifax. As driver or driver's helper, the plaintiff's responsibilities included delivery of merchandise and pick up of returned merchandise. Each day of the week he travelled different route. At the time of his dismissal, he and another employee, Mr. Hartlen, were operating large goods delivery truck in the metropolitan Halifax area. After loading their truck each morning and planning their route for the day, they were to deliver all of the merchandise and, in some cases, unpack it for the customer. The goods they were delivering were, for the most part, large pieces of furniture and appliances. It was also necessary to pick up goods that were being returned or exchanged by the customers and return them to the Sears warehouse. At the end of the day, it was necessary for them to account for their receipts and items that were not able to be delivered because the customer was not at home. The regular hours of work were 7:45 a.m. to 3:45 p.m. After 3:45 p.m., the drivers and helpers were paid time and half for overtime. Each driver and helper was entitled to fifteen minute break in the morning and forty‑five minute break for lunch. On December 5, 1988 the defendant dismissed the plaintiff from his employment for his "disregard of company policy related to hours of work and overtime". The defendant acknowledged that the plaintiff had been good employee for most of his time with the company and admitted that many Sears customers, over the years, had commented favourably about Mr. Taylor. The parties also agree that Mr. Taylor was, in fact, dismissed from his employment without notice, and that he was employed for an indefinite term. The issue, therefore, is whether or not the defendant was justified in dismissing the plaintiff. With respect to the burden of proof, the onus is upon the defendant to prove, on the balance of probabilities, that there was just cause for the dismissal of the plaintiff. It is apparent, from the testimony of Mr. Taylor and three other Sears drivers who testified on his behalf, that it was the practice of the drivers and helpers to arrive at the Sears warehouse at approximately 7:15 a.m. to 7:30 a.m. each morning. They indicated that they began working at that time, even though they were not paid until 7:45 a.m. After the drivers had their trucks loaded, they would leave Sears at approximately 9:00 a.m. and then all go to the same nearby restaurant for their morning break. The drivers admitted that this break was often longer than the allotted fifteen minutes, as most of them would have breakfast at that point. This practice, of all of the drivers meeting at the same restaurant for breakfast, was long standing and was something that the drivers' supervisors had periodically, through the years, tried to discourage. With respect to Mr. Taylor, he and his partner would, later in the day, have their lunch break, which he admitted sometimes extended beyond forty‑five minutes. If the deliveries were not completed by 3:45 p.m., the drivers were pre‑authorized to work overtime, and from 3:45 p.m. on were paid at the rate of one and one half times their hourly wage. The defendant claims that, by taking longer than authorized break in the morning and again at lunch time, the plaintiff, on those days when he claimed overtime, was unjustified in claiming that portion of the overtime which resulted from unauthorized breaks. The plaintiff submits that the overtime was justified, since he began work earlier than required each morning and he and his partner, Mr. Hartlen, worked at faster rate than required and, therefore, made up for any additional time spent on breaks. The history of the disciplinary process, involving the plaintiff, starts in March, 1986. Until that time, the plaintiff apparently had excellent periodic reviews with his superiors. On March 14, 1986 Mr. Taylor was disciplined by his supervisor for having left his truck parked on Main Avenue in Fairview for one hour and forty‑five minutes while he was having lunch at the Red Fox Beveridge Room few miles away. The record of the interview indicates that Mr. Taylor was advised that his lunch period was to be only forty‑five minutes and that it must be adhered to at all times. Under suggested action to be taken, the record of the interview indicates: "Adhere to lunch and break schedules. Do not stray from assigned delivery routes. Truck to be in sight of or in safe leave area at all times, properly secured. To be reviewed in 30 days. Repeat could lead to serious action or possible suspension." At his regular performance review in April, 1986, the manager noted that Mr. Taylor "finds it very difficult to accept change and can be very vocal and obnoxious in his opinions." The next time the break and lunch periods became an issue was in August, 1988 when all of the drivers and helpers were called to meeting with their supervisors with respect to this problem. The drivers and helpers were told not to congregate at the same restaurant for their morning break and to adhere to the rules regarding fifteen minute break in the morning and forty‑five minute break for lunch. They were told that their trucks would be under surveillance and disciplinary actions would be taken against those drivers who failed to abide by company policy with respect to breaks. In September, 1988, Mr. Taylor was the subject of corrective interview by his supervisor for failure to abide by the policy with respect to breaks. The record of that interview indicates that the following was discussed: "The abuse of personal break time at the expense of delivery efficiency, to the amount of an observed and recorded three hrs three min. over two week surveillance period, in which the employees total overtime amounted to three hours fifteen min. The level of abuse recorded, and the accompanying lack of concern regarding it, and the overtime directly generated by it, indicated somewhat of breach of faith on the part of this senior employee, and find this personally as well as professionally disappointing, since this attitude adversely affects not only the dept. financially, but service to customers as well." Under suggested action to be taken, the record of the interview indicates: “Ongoing random surveillance to be carried out to ensure employee's compliance with company established guidlines for coffee lunch breaks and performance will be reviewed on monthly basis for next months. Positive compliance with company requirements is necessary to ensure no further corrective action. Although the record of the corrective interview does not say so, the management personnel who attended the meeting, Mr. Corscadden, the metro delivery manager, and Mr. Hubley, the distribution supervisor, both testified that they told the plaintiff if he did not correct his behaviour, possible termination would be recommended. Mr. Taylor, on the other hand, although agreeing that he had breached the break policy prior to this corrective interview in September, did not acknowledge, at the trial, that he was advised that possible termination could result from further abuse. However, at his discovery examination, the plaintiff did admit that possible dismissal was discussed at the corrective interview in September. Following the corrective interview in September, 1988, continued random surveillance of the delivery personnel was undertaken by Sears. On November 24, 1988, Mr. Taylor and his partner, Mr. Hartlen, were kept under surveillance for their entire working day by Mr. Rick Irving, an off‑duty policeman hired by Sears. Mr. Taylor and Mr. Hartlen took twenty‑six minute break at restaurant in Halifax in the morning, after loading their truck. Their route that day took them to Hubbards, West Dover, Glen Margaret, Seabright, Tantallon and other communities on the St. Margaret's Bay Road. They took thirty‑six minute lunch break at take‑out restaurant in Glen Haven, so their total break time exceeded the limit by two minutes. Then, at 4:31 p.m. Mr. Taylor and Mr. Hartlen stopped at the Seabreeze Inn in Queensland and took case of beer into the Inn. They stayed there for forty minutes and returned to Sears at 5:50 p.m. Mr. Taylor and Mr. Hartlen both claimed two and one‑half hours of overtime on that day, of which forty‑two minutes was obviously unjustified. Mr. Taylor, while testifying, admitted that portion of the overtime claimed that day was unjustified, however, he indicated that he and his partner earned the additional break at the Seabreeze by working faster earlier in the day and by beginning earlier than was required that morning. Mr. Hubley and Mr. Corscadden, decided to recommend that Mr. Taylor's employment be terminated after receiving the information about the November 24th surveillance report. However, when they approached Mr. Giffin, the area personnel manager of Sears, Mr. Giffin indicated that further surveillance should be undertaken. On December 1, 1988, while on the Hubbards route, Mr. Taylor and Mr. Hartlen were, again, subject to surveillance. On that day, Mr. Taylor and Mr. Hartlen took fifteen minute break in the morning before heading out of the city. Later in the morning, the surveillance team stopped following the delivery truck because they were afraid that they had been seen by the occupants. They did not observe the length of the lunch break that day. The surveillance team, which consisted of Mr. Irving, Ms. Day, Sears employee from the Dartmouth store, and Mr. Singer, the resource protection manager, proceeded to spot near the Seabreeze Inn in Queensland and waited for the plaintiff's truck to drive by. Apparently, the truck approached the Seabreeze Inn from another direction and they did not actually see it arrive there. However, at 3:35 p.m., they saw that the truck was parked at the Seabreeze. Ms. Day entered the Seabreeze and found the plaintiff and Mr. Hartlen visiting friend of theirs and consuming beer. When Mr. Taylor and his partner left the Seabreeze Inn at approximately 4:30 p.m., they were apprehended by Mr. Singer and told to leave the truck there. They were driven back to Halifax in Mr. Singer's car. Mr. Hartlen and Mr. Taylor were suspended on December 1st, pending further investigation of the incident. It was determined later that Mr. Taylor and Mr. Hartlen still had two deliveries to make that day when they had stopped at the Seabreeze Inn. In written statement given upon their return to Sears on December 1st, Mr. Taylor and Mr. Hartlen indicated they had taken twenty minute coffee break in the morning and twenty‑five minute lunch break at noon. They said they stopped at the Seabreeze Inn at 3:30 p.m. and each had two bottles of beer while they played crib with friend. Mr. Giffin testified that, upon receiving the information about the surveillance on December 1, 1988, he consulted with personnel officials in Toronto and the decision was made to terminate employment of the plaintiff and Mr. Hartlen. Although Mr. Giffin said he and the people in Toronto only took into account the interview of March, 1986, the group meeting in August, 1988, the corrective interview in September, 1988 and the observed events of November 24th and December 1, 1988, it was apparent that other incorrect information had been sent to the managers in Toronto. The incorrect information included report that indicated Mr. Taylor had been placed under surveillance because of possible theft from the truck and another report that indicated that Mr. Taylor had been on the truck with Mr. Hartlen on November 17, 1988 when an unauthorized stop of more than one hour was made at the Seabreeze Inn and unjustified overtime of one and one half hours had been claimed. Mr. Taylor was not at work, however, on November 17th and that report was, therefore, clearly wrong. Mr. Giffin testified that he and the people in Toronto knew that report was wrong and they disregarded it. While testifying, Mr. Taylor admitted that he had broken the rules by making the stops at the Seabreeze Inn and that he and his partner regularly stopped at the Seabreeze during their Hubbards route. He also agreed that some of the overtime claims he made, on the days he had the Hubbards route, were as result of stops at the Seabreeze Inn and were, therefore, unjustified. However, he did say that he thought it was fair that he be allowed to take longer breaks while on the Hubbards run because of the hard work involved and the speed at which he and his partner made the deliveries. However, he did not make any comment of that nature to his supervisors on either December 1st or at subsequent meeting with respect to his termination. The sole issue, therefore, is whether or not the defendant was justified in dismissing the plaintiff for his failure to abide by company policy with respect to breaks and overtime. The defendant submits that case law establishes that employers may summarily discharge an employee for breach of company rules. The defendant refers to Cardenas v. Canada Dry Ltd. (1985), 10 C.C.E.L. 1, where Whealy, D.C.J. said at page 7: "In my view, this was clearly case of termination for cause. The defendant company has shown great deal of patience, had spent time and effort in warning the plaintiff about the concerns of the employer, urging the plaintiff to change his ways, on two occasions the defendant had warned the plaintiff that his job was on the line should he not improve, and yet the history of tardiness and reporting for work, absenteeism for various causes, none of which should be considered misconduct, together with the repetitive accident record combine in my view, to demonstrate on overwhelming case of reluctant employer terminating an unreformable employee for cause." similar approach was applied in Kerley v. Iron Ore Company of Canada (1980), 30 Nfld. P.E.I.R. 293. In that case, the plaintiff had breached the employer's rule which stated that if worker missed three shifts without leave, termination was automatic. Noel, J. found that the defendant's requirements were reasonable and had been made known to the plaintiff and, therefore, his breach of the rule was willful disobedience and his dismissal, without notice, was justified. Breach of the employer's policies was also considered in Meaney v. Agnes Pratt Home (1989), 1989 CanLII 4847 (NL SC), 74 Nfld. P.E.I.R. 18, where Steele, J. said at page 26: "Breach of rules or company policies can also be cause for discharge. As mentioned by Levitt at page 103, generallyspeaking companies must establish the following factors in order for a breach of company rule to constitute cause for discharge:1. The rules must be distributed;2. The rules must be known by the employees;3. The rules must be consistently enforced by the company;4. The employees must be warned that they will be terminated if a rule is breached; and5. The rules must be reasonable." The text referred to by Steele, J., The Law of Dismissal in Canada, by Howard A. Levitt (1985), lists as well, two additional factors in order for breach of company rule to constitute just cause (p.104): "6. The implications of breaking the rules in question are sufficiently serious to justify termination; and7. Whether a reasonable excuse exists." will deal with each of these factors in relation to this case. 1. Were the rules distributed? Mr. Taylor and the other drivers who testified at the trial indicated that they had never received written copy of the policies with respect to breaks and overtime. Both Mr. Taylor and Mr. Hartlen had asked to see the policy but had never been provided with copy. At the trial, the plaintiff introduced, as exhibit 12, copy of booklet entitled Welcome to Sears dated December, 1983. In the opening pages of the booklet, it says its purpose is to provide new employees: "with some background on the history and organization of our Company, and also to acquaint you with our personnel philosophy, policies and benefits." On the page dealing with employee hours (page 32), it indicates: "Full Time employees who work the normal 7½ hour day are entitled to one 15‑minute relief period in each half of the working day ... You are paid for your relief periods of course, and are not required to make up the time." Following that there is weekly schedule of hours of work, but it is left blank, to be filled in apparently by the supervisor when new employee is hired. In addition, under employee hours, it says: "The normal length of meal period is There are exceptions to this for employees who work less than the normal work day. If there is any exception in your case, your manager will discuss it with you." On page 15, the booklet deals with overtime and supper allowance and says: "Overtime at the rate of time and one half is paid for time worked in excess of the normal work day as established in the unit. This overtime is paid whether the time worked is prior to the scheduled starting time or after the scheduled leaving time and is calculated in units of 15 minutes. Overtime work must be authorized in advance. Employees who have to work more than hour beyond their normally scheduled leaving time receive supper break and are paid supper allowance of $3.00." None of the drivers, who testified at the trial, had seen this booklet prior to the trial. Mr. Giffin indicated that the booklet did not apply to delivery personnel since their hours of work were clearly established to be eight hours day with one hour in breaks. Delivery personnel, he indicated, were well aware that they were not entitled to be paid for work prior to the official starting time of 7:45 a.m. but were entitled to leave work prior to 3:45 p.m. if their deliveries were completed. Neither Mr. Giffin nor the other supervisors were able to produce written policy with respect to the hours of work and overtime for delivery personnel. With respect to this first factor, find that the rules, in this case, were not distributed, in writing, to Sears' drivers. Although the rules with respect to lunch and overtime may not have been generally distributed, in writing, to all employees, Mr. Taylor had copy of his 1986 recorded interview which indicated lunch period was forty‑five minutes and must be adhered to at all times. He had attended the special meeting of all drivers in August, 1988 where breaks and overtime were specifically discussed, and at his September, 1988 corrective interview, these rules were again discussed with him personally by his supervisor. 2. Were the rules known by the employees? The evidence clearly establishes that Mr. Taylor and the other drivers all knew that their hours of work were 7:45 a.m. to 3:45 p.m., that they would not be paid for arriving at work early, that they were entitled to fifteen minute coffee break and forty‑five minute lunch break, that they would be paid time and half for work performed after 3:45 p.m. and, if they worked beyond 4:45 p.m., they would be entitled to supper allowance. All of the drivers also knew that it was not necessary for them to seek authorization for overtime. They were, in fact, preauthorized to work beyond 3:45 p.m. 3. Were the rules consistantly enforced by the company? It is apparent that Mr. Taylor and the other drivers had been abusing their break time for several years and the company, apparently, did nothing about it. There was no evidence, though, indicating that management, in fact, knew of the long term abuse of break times. Beginning with 1986, however, it is clear that the defendant was concerned with abuse of rules with respect to breaks, which is evidenced by the plaintiff's recorded interview in 1986. Documentation with respect to the driver's helper who was with Mr. Taylor when he took his extended lunch break at the Red Fox Tavern, indicates that he too was disciplined as result. In August, 1988, all of the drivers and helpers were summoned to meeting where it was explained that longer than permitted breaks and unjustified overtime would no longer be tolerated. Subsequent to that meeting, in addition to the corrective interviews held with Mr. Taylor and Mr. Hartlen, many of the other drivers and helpers were spoken to with respect to breaches of the policy. Mr. Taylor admitted that since 1988, the company was, in fact, consistently enforcing its rules with respect to breaks and overtime. The drivers were all well aware that continued surveillance would be taking place after the August meeting, the purpose of which was obviously to enforce the company rules. 4. Were the employees warned that they would be terminated if the rules were breached? The plaintiff submits that he was not given sufficient warning that termination would result if he was found to have breached the rules again. There is no doubt that the record of the corrective interview of September, 1988 does not refer to dismissal or termination. It only refers to "further corrective action". This is in contrast to Mr. Hartlen's corrective interview in September, which notes failure to comply with company requirements would result in "further corrective action and possible termination". Mr. Hartlen, however, testified that that sentence was added after he had signed the record of corrective interview. Mr. Taylor said, in his direct examination, he didn't really know what his supervisors meant by "corrective action" but he didn't feel threatened with dismissal. He thought that, after so many years of service, he would be entitled "to few errors in judgment". He said that, as result of the corrective interview, he knew that their coffee breaks were being observed so they "curtailed them to quite degree". However, on cross‑examination, Mr. Taylor was quite evasive, saying at first he didn't recall the corrective interview in September, but admitted that it obviously took place. He admitted that everyone was warned at the August meeting that further breaches of the policies would not be tolerated and that he was told at the September interview that "further breaches would not be tolerated". He then said that he did not recall the word "termination" being used, however, as indicated above, at his discovery, Mr. Taylor did admit that the word "dismissal" was used at the corrective interview in September. The question asked at the discovery was "Now, as result of that interview, what was your understanding as to what would occur if there was further abuse of break and lunch periods?" Answer "Possible dismissal, suppose." That answer is consistant with what Mr. Corscadden and Mr. Hubley said was discussed at the September interview. With respect to this factor, find that the evidence supports the conclusion that the employees in general, and Mr. Taylor specifically, were warned that future breaches of the breaks and overtime policy could lead to termination of employment. 5. Were the rules reasonable? The plaintiff submits that the policy, which denied an employee more than one hour total in breaks over ten to eleven hour day, is not reasonable. Plaintiff's counsel refer to November 24th as an example of ten to eleven hour day. However, the first assumption they make is that Mr. Taylor began work at 7:15 a.m. that day, of which there was no evidence. But even if he had, it was clearly established, at the trial, that beginning prior to 7:45 a.m. was not encouraged or requested by the employer. An additional forty‑two minutes of that day was due to the unauthorized stop at the Seabreeze Inn. Had Mr. Taylor returned to Sears after completing his deliveries, he would have presumably arrived back at Sears at approximately 5:10 p.m. Given that the hours of work were approved and requested by the drivers, that an unpaid supper break was allowed, if requested, and that the employee was paid at higher rate for overtime, do not find that the rules with respect to breaks and overtime were unreasonable. 6. Were the implications of breaking the rules in question sufficiently serious to justify termination? Mr. Giffin testified that since the delivery personnel were not under direct supervision during their working hours, the company had to depend on their total honesty and integrity with respect to claiming overtime. He also testified that Sears operated on two percent profit margin and, therefore, if an employee claimed $20.00 of overtime, it was necessary for Sears to have $1,000.00 in sales to recover the overtime. He also testified that Sears has 50,000 employees in Canada, and if every employee disregarded the overtime policies, the impact on the compay would be devastating. Mr. Taylor's counsel, in their submissions, attempt to color the transgressions of Mr. Taylor as insignificant, being few minutes here and few minutes there. However, given the admissions of Mr. Taylor, that he stopped in at the Seabreeze Inn on most Thursdays, when he did the Hubbards run and claimed overtime for the time he spent there and given the fact that the company was treating the matter seriously, in light of the meeting and corrective interview, find that the implication of breaking the rules was sufficiently serious to justify termination. agree with the defendant's categorization of the breaches, at least those of November 24th and December 1, 1988, as being deliberate, dishonest and tantamount to theft from the employer. 7. Does reasonable excuse exist? Mr. Taylor did not present any excuse to his employer at the time of his corrective interview in September nor at his termination interview. The excuse presented at the trial, though, is that he was entitled to longer break because he had been working faster than required. Alternatively, his counsel has suggested, by using the Welcome to Sears booklet, that he was entitled to paid supper break and that's what he was doing when he was at the Seabreeze Inn on November 24th and December 1st. There was no evidence, however, presented by the plaintiff that, in fact, on any of the relevant dates, the additional breaks he took were for his meal. None of the drivers suggested that they thought they could be paid time and half while taking supper break. The plaintiff knew, or ought to have known, that it was not open to him to unilaterally determine when additional breaks were justified on the basis of productivity and, therefore, find that no reasonable excuse has been offerred for the breach of policies. Of the seven factors listed above, I find that the defendant company has satisfied the onus with respect to six of the factors. do not find that the failure to distribute the rules, in writing, in this particular case, is crucial. There is no question that all of the drivers knew the hours of work and the overtime policies and, in fact, Mr. Taylor and the others attended special meeting to draw the policies to their attention in August, 1988. Mr. Taylor and the other drivers were also told, at that meeting, that further breaches of the policies would not be tolerated. Unfortunately, Mr. Taylor chose not to abide by the policies of his employer. He breached those policies in August, 1988 and as result, was disciplined by the corrective interview in September. He was advised that further surveillance would take place and on both days that he was under surveillance, he took longer than authorized breaks, consumed alcohol during the work day and submitted claims for overtime which were unjustified and basically dishonest. I find that the defendant has proven that the plaintiff's dismissal was justified and would, therefore, dismiss the plaintiff's claim will receive submissions from counsel with respect to costs, if requested. J. HALIFAX, NOVA SCOTIA January 29th, 1990 1989 S.H. No. 67911 IN THE SUPREME COURT OF NOVA SCOTIA TRIAL DIVISION BETWEEN: CHARLES TAYLOR and SEARS CANADA INC., body corporate
This was an action for damages for wrongful dismissal. The plaintiff had worked for 28 years for the defendant as a driver making deliveries to customers. The defendant dismissed the plaintiff for 'disregard of company policy related to hours of work and overtime'. The plaintiff had taken longer coffee and lunch breaks than were allowed, and had taken unauthorized breaks for which he had then been paid overtime by the defendant. For the defendant, that the dismissal was justified. The court considered seven factors in assessing whether the defendant had discharged the onus upon it to prove on the balance of probabilities that there was just cause for the dismissal including whether the rules of the company had been distributed to the plaintiff, if the plaintiff was aware of the rules, whether the rules were consistently enforced, whether the plaintiff was properly warned of the consequences of breaching the rules, if the rules were reasonable, whether the breaches were sufficiently serious to justify termination, and whether a reasonable excuse existed for breaching the rules.