Question

Electronics Source Agency Ltd. was a manufacturers’ sales representative that operated branch offices in most major population centers across Canada. In 1995, the corporation hired Felix as its senior Sale Manager for a large metropolitan city, an important sales area of the corporation. At the time of hiring, Felix had advised the President of the corporation that he had extensive sales experience in the sale of electronics, and the previous year had incorporated his own corporation with a view to establishing an electronics sales agency similar to the President’s company, but had decided not to proceed with the project. Felix and the President had no further discussion of Felix’s corporation, and proceeded to negotiate a written agreement that provided Felix with an annual salary of $150,000 year. The agreement was for indefinite hiring, but provided that either the employer or Felix could terminate the agreement on 6 month’s notice. Felix was very successful in his position as Sales Manager of the Metropolitan office for his first year on the job, but during the second year, he discovered that a large U.S. electronic manufacturer was seeking a manufacturer’s representative for its products in Canada. Based on this information, Felix decided to contact the U.S. manufacturer with a view to becoming the manufacturer’s representative in Canada, not for his employer, but for his own corporation that was presently dormant. Using his employer’s computer, he prepared an extensive Power Point presentation, incorporating a great deal of market information concerning the Metropolitan sales area as well as the Canadian market as a whole. The presentation required a significant amount of time, and Felix remained home from work for a week on the pretence of being ill with the flu while he completed the presentation. When his presentation was ready for presentation to the U.S. Manufacturer, he contacted the company, and a date two weeks hence was set for his presentation. A week before the presentation was to be made, the President of Electronics Source Agency Ltd. was made aware of the intentions of Felix. Rather than confront Felix immediately, the President decided to wait and see if Felix would inform him of his intentions, but Felix did not, and the day before Felix was to make his presentation to the U.S. Manufacturer, the President confronted Felix, and demanded an explanation. Felix admitted that it was his intention to make the presentation on behalf of his own company, and explained that he intended to resign if the presentation was successful. The President then advised Felix that he was dismissed, effective immediately. Felix proceeded with his presentation to the U.S. Manufacturer, but it was unsuccessful. Felix then took legal action against his employer, claiming wrongful dismissal. Discuss the arguments that may be raised by Felix and Electronics Source Agency Ltd. Render a decision.

Answer 1

In this specific case Electronics Source Agency Ltd. can justify the immediate termination of Felix with the following arguments:

1. Electronics Source Agency Ltd. can cite the just clause as per Canadian employment regulation.In this particular case, Felix first of all used Electronics Source Agency Ltd computer for his personal work/gain without informing and he completely lied for his own gain. Which is simply a breach of trust that can invoke just clause of lying to the employer.

2. Felix used not only his employer resource(computer) for making presentation which is not part of his job and solely aimed for his alternative job application, he breached the dala privacy also. He extensively used great deal of market information concerning the Metropolitan sales area. Those data were his employer's confidential business data and strategy, what he used for personal gain wrongfully.He took sick leave lying his employer and utilized that time for his personal gain, again a clear case of lying and breach of trust, perfect candidate for applying just clause.

3. Felix did everything for either alernative employment or his dormant organization favor being employed on Electronics Source Agency Ltd.. Even being caught, he accepted his failure to comply with the employment trust, another case of intentional disregard of rules or instructions.

Legal action taken by Felix in this case can't be justified because he intentionally breach employer trust, misused employer resources, lying. Only after being unsuccesful with his new job application he challeged the dismissal. If he could had been successful with his presentation with U.S based firm, he certainly could haven't cotested the dismissal as he agreed to resign being selected for alternative opportunity.

Only after losing in both side, he was in distress and invoked the employment termination contract.

However it is not clarified in this case, whether these immediate termination clause were part of his contract or not, in this case, invocation of just clauses by Electronics Source Agency Ltd. could have been successfully defended in court based on Felix's chain of action, intention.

So, if we had to take any decision in this case, we could have clearly accepted the immediate termination implemented by Electronics Source Agency Ltd.. All the activities, intentions of Felix just made this existing employment impossible to continue. So, just clause was properly invoked by Electronics Source Agency Ltd. in Felix's immediate termination.