In February of this year, the law firm Borden Ladner Gervais obtained a favourable ruling in the matter Desaulniers v. Kleen-Flo Tumbler Industries Limited, 2025 QCTAT 471.
The ruling, issued by Québec’s Administrative Labour Tribunal (Tribunal administratif du travail), involved the dismissal of a senior manager for the misappropriation of gift cards and the disclosure of confidential information.
The senior manager had been employed with Kleen-Flo Tumbler Industries for 35 years and, during his last 10 years at the company, served as VP of Sales for Eastern Canada and the Maritimes. Part of his mandate was to manage a rewards program for clients. Under this program, salespeople were allowed to provide gift cards to clients who placed substantial orders for various company products.
In March 2019, Kleen-Flo discovered that a large number of gift cards had ended up in the hands of individuals who weren’t eligible. An investigation also revealed that the VP of Sales had secured thousands of dollars’ worth of gift cards for sales that had not closed, as well as for products that didn’t qualify under the program.
In April 2019, one of Kleen-Flo’s owners presented the VP of Sales with the results of the investigation. During this meeting, the VP admitted to the misappropriation. At this same meeting, he requested that the owner conclude the investigation, allow him to stay on, and retire at the end of the year. Initially, the owner was reluctant, but eventually yielded when the VP kept insisting.
In October 2019, the VP claimed that the company owed him indemnity in lieu of notice, due to the “elimination” (abolition) of his position at the end of the year. The owners initially ignored this request, but the VP followed up in December 2019, putting a $250,000 value on his claim – not in gift cards, but in real dollars.
Around the same time, one of the owners obtained a PowerPoint presentation that the VP had intended to share with Kleen-Flo’s largest client, which included highly confidential information such as production costs and profit margins. Additionally, the VP asked the client to hire his services as a consultant or project manager. As a result, the employer dismissed the VP for a serious reason.
The tribunal on ‘senior staff’
In January 2020, the former VP filed two complaints with the Commission des normes, de l’équité, de la santé et de la sécurité du travail (CNESST) – one for dismissal without good and sufficient cause, and another for forced retirement.
After 20 days of hearings between 2022 and 2024, the Tribunal dismissed the two complaints. Starting with an assessment of the parties’ credibility, it found the employer’s witnesses and their versions of events to be “more convincing, coherent and balanced” (plus probantes, cohérentes et pondérées), while the complainant’s testimony was deemed lacking, containing multiple implausible statements and denial of evidence.
Regarding the forced retirement claim, the Tribunal held that there was no evidence that it was the employer’s practice to require employees of a certain age to retire, nor that age had been a factor in the termination decision.
Regarding the notice claim, the key question was whether the VP qualified as “senior managerial staff” (cadre supérieur). If so, Québec’s Act respecting labour standards would preclude him from filing a complaint for dismissal without good and sufficient cause. Referencing, specifically, his autonomy in his duties and his participation in decision-making at Kleen-Flo, the Tribunal concluded that the complainant was indeed a “senior manager.”
Lessons for employers
The Tribunal could have stopped there but considered it desirable and beneficial for everyone (souhaitable et à l’avantage de tous) that it weigh in on all the issues at hand, specifically the allegations of gift card misappropriation and the disclosure of sensitive, confidential, and proprietary information. Its decision included the following:
Misappropriation of employer property: Even if there is no clear evidence that an employee misappropriated their employer’s property for personal gain, the act of misappropriation itself can lead to dismissal for cause. This is especially true when an employee holds a position where a high level of honesty and integrity is expected. Such behaviour constitutes wilful misconduct, which can justify an exception to the typical steps of progressive discipline. In other words, there is a higher standard of conduct for employees at a senior manager level, and their misconduct can deprive them of the “right” to progressive discipline – depending on the circumstances, the employer may proceed directly with termination.
Intention to retire: While Ontario case law requires that resignations be clear and unequivocal to be valid (English v. Manulife Financial Corporation), and that employers must confirm the unequivocal resignation in writing if there are any factors that could make the resignation notice unclear, the Tribunal held that even without written confirmation of an employee’s intention to resign or retire on a specific date, witness testimony, material evidence, and the employee’s communications can lead to the conclusion that the employee intended to do so.
Senior manager status: The Tribunal, referring to the Court of Appeal’s decision in Delgadillo v. Blinds To Go Inc., held that an employee’s active involvement in or participation in decision-making may be sufficient to consider the employee a “senior manager.” This is a noteworthy point: while organizations typically have a formal structure, there is often an informal hierarchy as well. Following the Tribunal’s line of reasoning, an employee without a managerial or executive title could be considered “senior management” if their counsel, based on their personality, tenure, or specific skill or expertise, was sought for key decisions. Even more interestingly, the Tribunal stated that an employee does not need to have the right to veto decisions to be considered part of the decision-making process.
