Zero Tolerance for Violations of Discount Policies

A recent decision from the Nova Scotia Labour Relations Board (NSLRB) confirmed that an employee who improperly uses an employee discount can be terminated.

The employee had 11 years of service with the hotel employer and was dismissed for cause when he used the employee discount improperly on behalf of a friend. The Employee Discount card had conditions attached to it that permitted a discounted room rate to certain classes of family and friends. The employee reserved rooms at the discounted rate, but the individuals staying in the rooms were not within the class of family and friends who were entitled to the discount rate.

In making its decision, the NSLRB noted that the retail sector is especially vulnerable to losses through policy breaches by employees. The NSLRB found that the employee knew or should have known the consequences for breach of the policy and that progressive discipline was not appropriate: The improper use of the employee discount policy is a breach of trust and misrepresentation that goes to the root of the employment relationship.

Some of our retail unionized stores have employee discount programs.

Similar to the above case, these employers have a policy associated with the employee discount that an employee has to agree and acknowledge, often in writing.

A claim that the employee receiving the discount did not understand, read and/or could not remember the terms of the discount policy is unlikely to be persuasive before an arbitrator. In fact, in this case the NSLRB found that the employee could have asked questions about the employee discount policy.

Some losses from employee policy discount breaches can be quite minimal but this type of argument is also unlikely to be persuasive to an arbitrator. Courts and arbitrators have long recognized the importance of strict adherence to employee discount policies largely on the basis of the trust that is inherent in the employee/employer relationship as well as the privilege and trust in receiving an employee discount card.

If you receive an employee discount be aware of the policy and the terms that go along with it. The consequences of misusing your discount could be termination. And remember, friends don’t ask friends to use their employee discount improperly.

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