In certain circumstances, employers are either legally required or advised to conduct an investigation prior to taking action. This may occur where there has been an incident or complaint of workplace harassment, or the employer is considering potential employee misconduct in the context of termination for cause.

Such investigations must be conducted thoroughly, and in a procedurally fair manner. Failure to do so can land the employer in hot water, as the recent decision of the Ontario Superior Court of Justice in Rutledge v. Markhaven Inc. shows.

Investigations into incidents and complaints of workplace harassment

An example of a situation in which an investigation is legally required is where there has been an incident or complaint of workplace harassment.

Under section 32.0.7 of the Ontario Occupational Health and Safety Act, employers have various duties relating to harassment, including conducting an investigation that is appropriate in the circumstances. The legislation states that the worker and the alleged harasser (if they are also a worker of the same employer) must be informed in writing of the investigation’s results and any corrective action that has or will be taken.

The Ontario Government has provided guidance on workplace harassment investigations which states that investigations should be undertaken promptly, be objective in the sense that the investigator was not involved in the incident and is not under the control of the alleged harasser, maintain confidentiality and be thorough. Provincial guidelines also state that:

“The person conducting the investigation can be internal to the workplace (e.g., supervisor, senior manager, human resources staff), work at another employer location (e.g. a corporate office) or may be someone external to the organization (such as a licensed private investigator, human resource professional, lawyer, or someone who holds some other professional designation).”

Investigations into employee misconduct

Investigations are also common when an employee is accused of misconduct that could justify termination for cause. An employer is entitled to terminate an employee for cause when they have engaged in sufficiently serious misconduct that is incompatible with the fundamental terms of the employment relationship.

An investigation into the nature and severity of the employee’s conduct might provide grounds for termination for cause, which can assist the employer if the employee later challenges the termination in proceedings for wrongful dismissal.

Being careless in an investigation can certainly harm an employer’s position and leave them vulnerable to litigation.

Plaintiff was investigated following a workplace relationship

Turning to the decision in Rutledge v. Markhaven Inc., an employee with 20 years of service brought a wrongful dismissal claim after being terminated in 2016. The plaintiff employee was the Executive Director of the defendant’s long-term care facility in Markham.

Issues began in mid-2014 when the employee was involved in a decision to promote a co-worker. The employee and another director met with a contractor that provided services to the facility, which resulted in the suggestion that an employee of the contractor take on additional duties for a raise of approximately $3,000 per year. After this co-worker was promoted, he and the employee began a romantic relationship.

The defendant employer received a complaint about the relationship in mid-2015. Approximately six months later, the Board began an investigation by forwarding emails relating to the complaint to its lawyer, who also represented the employer in the litigation.

Defendant terminated the plaintiff following the investigation

The employer retained an information technologist to capture the employee’s email accounts and advised the employee that an “independent third party investigation” would take place by an investigations business. This business was associated with the law firm retained by the employer. The employer told the Board, investigator and employee to try to keep the matter as confidential as possible.

The investigator then interviewed the co-worker at a Tim Hortons near the long-term care facility, which the employees often visited on breaks.

In response to a question, the employee denied that she had a relationship with the co-worker at the time of his promotion or at the time of the investigation. At a later meeting, she was asked whether they had ever had a relationship, and she said they had at some point in between those two times. Subsequently, the investigation expanded to include the employee’s conduct after the promotion.

The employee was suspended without pay due to her admission to the relationship and was later terminated.

Court criticized the nature of the investigation

Justice Dow found that the employer had no policy against workplace relationships, with similar romances condoned in the past. In addition, the promotion happened before any romantic relationship developed, and the promotion was in the employer’s best interest to respond to cost increases.

His Honour was also very critical of the employer’s handling of the investigation, stating:

“… [the defendant’s] investigation was not an independent third party investigation. It used an investigation business associated with its defence counsel. It secured information from [the plaintiff] without her prior knowledge. It failed to take reasonable or prudence [sic] steps to keep the matter confidential by conducting interviews of involved persons at the nearby Tim Hortons, where some of the 150 employees of [the defendant] took breaks and ate meals. Portions of the investigation file were not produced under the guise of solicitor-client privilege. The scope of the investigation was expanded from its stated mandate.”

Court awarded compensation for a reasonable notice period plus moral damages

His Honour found that the employee’s conduct had not entitled the employer to terminate her for cause.

The Court awarded the employee compensation corresponding to a reasonable notice period of 22 months. The Court also awarded the employee $50,000 in moral damages for the employer’s bad-faith conduct during the course of her dismissal.

Contact the Employment Lawyers at Grosman Gale Fletcher Hopkins LLP in Toronto for Advice on Workplace Investigations

The experienced employment and labour lawyers at Grosman Gale Fletcher Hopkins LLP regularly advise employers on their obligations when conducting workplace investigations, helping them to avoid common pitfalls. We also protect and defend the rights of employees, for example, after experiencing harassment in the workplace or when their conduct is being investigated by their employer. If you have concerns about a workplace investigation, please contact us through our online form or call us at 416.364.9599.