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In the Courts: Judge tosses wrongful dismissal case over $250 in meal expenses

Used-car company exec expensed meals with his wife, claiming he was with employees
The B.C. Supreme Court in Vancouver

As it turns out, you can get fired for compensating yourself for $250 worth of meals – particularly if you’re dishonest about it afterwards.

Todd Mechalchuk found that out the hard way after being let go from his position as president of operations at Galaxy Motors (1990) Ltd., according to a recent B.C. Supreme Court decision.

Mechalchuk sued the Vancouver Island-based group of auto and RV dealerships for wrongful dismissal, but Justice Gordon Weatherill dismissed his claim on April 20.

According to Weatherill’s decision, 43-year-old Mechalchuk began his career as a car salesperson in 2003 at an Edmonton Dodge dealership and worked his way up the ladder. He became a sales manager for AutoCanada in 2012 and eventually landed in the position of general manager for Galaxy Motors’ auto dealerships in 2020.

Galaxy Motors operates five used-car dealers in Langford, Colwood, Duncan, Nanaimo, and Courtenay; and two RV dealerships in Langford and Parksville, according to the decision.

Mechalchuk had proven successful at the company, Weatherill noted, and earned a monthly salary of $30,000 and a bonus structure based on Galaxy Motors’ income.

The owner died a month after Mechalchuk signed his employment agreement. Amy Jones, the owner’s niece who had worked at Galaxy Motors since 2001, inherited the company along with her brother, according to the decision.

Mechalchuk testified that he’d never been questioned by the former owner about the expenses he submitted and was always paid for them, and that he was never informed of policies around reimbursing alcohol for business meetings.

The company’s chief financial officer testified that he required expense receipts to include names of people involved but that he generally assumed the names were accurate.

But in June 2022, Mechalchuk, his wife, several managers, their spouses and Jones went to a restaurant. Mechalchuk and his wife testified that Jones agreed it was a team-building exercise and therefore a business expense.

The CFO also testified he’d heard from another employee that Jones approved it.

However, Jones denied considering it to be a company event and thought Mechalchuk was being generous when he paid the bill and that submitting it as an expense was “ludicrous,” Weatherill wrote in the decision.

She rejected that business expense before looking into other expenses Mechalchuk made and testified in court that several stood out.

Weatherill specifically focused on two receipts for meals on June 15 and 16, 2022, at Parksville restaurants. Mechalchuk initially claimed to have eaten with employees on those bills.

But Mechalchuk admitted in court that he’d eaten on those two occasions with his wife instead.

Jones and her brother presented a slideshow to Mechalchuk in July 2022 that included relevant clauses of his employment contract and news clippings about a person who had been convicted of fraud for business expense claims. The two went on to accuse Mechalchuk of fraud, according to the decision.

Mechalchuk was fired two days later.

Jones alleged Mechalchuk denied expensing the dinner with his wife.

While Mechalchuk rejected the alleged denial, Weatherill found Jones’ testimony to be more convincing. That counted against Mechalchuk in court – while deception unto itself isn’t necessarily a fireable offence, a deliberate act to conceal it is more damning, the judge noted.

“Although the total amount of the Parksville restaurant dinner and breakfast receipts (approximately $250) was relatively small, the misconduct went to the very root of the plaintiff’s employment relationship with the defendant. He was in the most senior management position at the defendant. His position commanded a high level of authority, responsibility and trust,” Weatherill wrote.

“His conduct was such that the defendant’s loss of faith and trust in him was justified.”

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