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The importance of workplace investigations

As I head to Osgoode Professional Development for module 3 of the course that my partner and I are Directors of, HR Law for HR Professionals, I am contemplating one of the aspects of HR law that has changed significantly in recent years: investigations. When I first designed the course, approximately five years ago, investigations were a very minor point of one of the five modules. They are now the sole topic of a complete, one day module. The current reality is that HR professionals and HR lawyers spend much of their time dealing with the potential for, the handling of, and the assessment of investigations and the corresponding reports. Our courts have made it clear that employers have a duty to investigate allegations of misconduct before taking disciplinary action, and even, at least according to one judge, before dismissing an employee on a without cause basis. At the same time, employers have a duty to investigate any allegations of harassment.

In recent years, we have seen several court cases in which an employer’s failure to investigate allegations fairly has resulted in substantially increased liability on their part. Those failures have resulted in findings that just cause for dismissal had not been proven, and that the manner in which the employer had investigated allegations and carried out the dismissal warranted extraordinary damages. As a result, modern employers must be prepared to conduct investigations, and carry them out fairly and objectively.

One of the critical points that is repeated ad nauseum in my book, You’re Fired! Just Cause for Dismissal in Canada, is that when an employer is considering whether or not they have just cause to dismiss an employee, they cannot consider the alleged misconduct in isolation. Rather, even if misconduct is established, the employer must also establish that, bearing in mind all of the relevant circumstances, summary dismissal is a warranted and proportionate response. In other words, all relevant circumstances must be considered.

Given the above, employers should never react in haste or out of emotion when they learn of apparent employee misconduct. They must investigate, and that investigation must include an opportunity for the employee to respond to the allegations. Failing to give an employee that opportunity is a critical mistake.

In writing my book, as well as the bi-annual updates, one observation that I made is that the employee’s response when confronted with the allegations has become one of the most important factors in assessing whether the employment relationship has been irreparably harmed. That, essentially, is the question that a court is seeking to answer when assessing whether just cause for dismissal existed. By firing someone for cause, an employer is effectively taking the position that given all of the circumstances, they could no longer be expected to continue to employ the individual in question. Among other things, that will be based upon the position that the requisite degree of trust no longer exists.

As a result, courts will often scrutinize the employees conduct during the course of the investigation quite carefully. If the individual was forthright about the misconduct, ideally coming forward even before they are confronted, and if they offer reasonable explanations, are appropriately apologetic, and offer reasonable assurances that their misconduct was an anomaly that will not be repeated, courts will be more likely, all else being equal, to conclude that the individual should be given a second chance. Conversely, if the employee lies about the misconduct when confronted, or actively attempts to conceal their misconduct, courts will be more inclined, all else being equal, to conclude that the employee cannot be trusted and that summary dismissal is appropriate.

Sometimes, employers will ask whether it is really necessary that they engage in an investigation. Sometimes they do so because the facts seem to be so obvious. Nevertheless, I usually advise clients that they will almost always be better off by getting the accused employee’s response. It is possible that the employee will have a plausible explanation, either to demonstrate that there was no actual misconduct, but simply a misunderstanding, or that there was misconduct but that there are mitigating factors. Either way, it is far better for the employer to know about this before dismissal, rather than after. In one memorable incident, I was contacted by a good, long-term client. Normally, my dealings were with their Director of Human Resources. However, in this case it was the President that called, and he seemed to be in shock as he told me that the Director of HR had been seen stealing gifts from their company Christmas Toy Drive. He wanted to dismiss immediately, but I convinced him that an investigation should be carried out.

Once the Director of HR was confronted, it became clear that there was an innocent explanation: he was concerned that the items which had been collected for the toy drive were left unattended every day while their receptionist was out for lunch. In order to avoid anything going missing, he moved them to his office. Unfortunately, he was busy with meetings that afternoon and had not had the chance to replace them, nor had he told anyone of his intentions. Given his lengthy service and unblemished record, it was quite likely that he was telling the truth. Summarily dismissing him would not only have resulted in an embarrassing and costly lawsuit, it would also have cost this company a valued member of their leadership team.

In other cases, the employer might discover that the misconduct took place, but that there were mitigating circumstances, such as drug or alcohol addiction. While that may or may not lead to the conclusion that summary dismissal should not be pursued, it is better for the employer to know about this upfront, before they make their decision. In other cases, the employee will compound their errors by lying to the employer. If they do so, they will only give the employer more cause to dismiss, and therefore strengthen the employer’s case.

In the past, employers would sometimes decide that it would be simpler and more cost-effective to simply dismiss an employee suspected of misconduct on a without cause basis, rather than engage in a formal investigation. Given that, with the exception of unionized employees, employers are free to terminate the employment relationship at any time, so long as they provide sufficient notice or pay in lieu, this seemed to be a viable alternative. However, one recent Ontario Motions Court decision has suggested that an employer cannot dismiss, even on a without cause basis, in such circumstances. That would seem to be wrong, as it would result in an employee accused of misconduct having more job security then a typical employee. Nevertheless, it is an open issue at this time.

One question that I am often asked is whether it is necessary to bring in a professional investigator. The answer, like many in the context of employment law, is that it depends. It is certainly not necessary in all circumstances. Employers, along with their employment law counsel, should consider the nature of the allegations, the individuals involved, and the experience and availability of internal resources to conduct a proper investigation. In many cases, it will be feasible to do so internally. However, it is critical that the investigation be fair, objective and unbiased. Some of the cases in which employers have been found to have botched investigations have involved evidence that the employer prejudged the situation and effectively reached their conclusions before the investigation was complete, that the investigators selectively chose witnesses that they expected to confirm their suspicions and berated those that did not, prepared inaccurate reports designed to lead to the conclusion that the employee was guilty, and generally carried out the investigation with the purpose of proving the employee’s guilt, rather than objectively determining what happened. That is exactly the opposite of what is expected of today’s employer.

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Stuart Rudner, Rudner Law

Employment Lawyers and Mediators at Rudner Law
Stuart Rudner is a leading HR Lawyer, mediator and a founding partner of Rudner Law, a firm specializing in Canadian Employment Law. At Rudner Law, their approach is simple. They want to understand your circumstances, your concerns, and your goals. They will then ensure that you understand the legal regime along with your rights and obligations. Once that is done, they work with you to design a cost-effective strategy that meets your needs. They want to be your trusted advisor.Read more
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One thought on “The importance of workplace investigations
  • Kellie Auld says:

    As you mention Stuart, investigations are becoming a much larger part of the human resources tool kit. I recently did a workshop to discuss workplace investigations and of the 17 attendees, 14 had done workplace investigations and only 1 had any training in how to do an investigation. Definitely an area of much needed learning. So, even if employers would prefer to keep their investigations internal (and, in some cases this is completely fine) they should understand the seriousness of a flawed or impartial investigation. There are some instances in which calling in an external third party should be considered and one of the considerations that now must be made is in the area of the internal person being trained and impartial.