The Cost of Not Conducting a Proper Workplace Investigation

Sep 14, 2016

There are many contexts in which an employer may have to conduct an investigation. For example, the Occupational Health & Safety Act now requires employers to have a written workplace harassment investigation procedure in place. The Ministry of Labour has taken the position that the person assigned to investigate workplace harassment complaints “must receive information and instruction on how to conduct an investigation appropriate in the circumstances…”

For various reasons, I believe almost all organizations should employ at least one person who is trained on how to conduct a proper workplace investigation.

Accordingly, I have asked JMJ Workplace Investigation Law LLP to put together a one day workplace investigation program: October 20, 2016 in Barrie &  October 21, 2016 in Toronto. The cost is $ 299 per person.

To register, please call or email my colleague, Nadia Halum, at 647-955-9894 or [email protected]. If you need more convincing, you can read about a recent case from British Columbia where aggravated damages were awarded in part due to the employer’s flawed investigation into employee misconduct.

Facts

In Lau v Royal Bank of Canada, RBC fired Mr. Lau, a five-year employee,  for just cause after one of his clients filed a complaint about a transaction Mr. Lau had assisted her with. The client had agreed to modify the way her bank holdings would be invested, however, contrary to bank policy, Mr. Lau processed the transaction as new money instead of retained money.

RBC’s corporate investigation services team (“CIS”) was called in. Mr. Lau apologised and immediately acknowledged that he had tracked the sale improperly. However, he claimed that he had followed the instructions of a colleague, Anson Tse, who was also allegedly at the client meeting. During the investigation, it was discovered that several other employees had also been improperly tracking their sales data, and many claimed that Mr. Tse had told them to do so.

There was conflicting evidence regarding who was present at the client meeting. The client said she had met only with Mr. Lau, and Mr. Tse initially said he was at the meeting but later said he had not been there. There was also video surveillance footage that supposedly showed Mr. Tse had not been in Lau’s office.

On the basis of CIS’s investigation, the bank fired Mr. Lau for just cause and submitted a report to the BC Securities Commission which listed Mr. Lau’s “falsification of bank records and failing to tell the truth when questioned regarding… a session with a client” as the reasons for his termination. Mr. Lau experienced difficulty finding employment at a different bank.

At trial, the judge was very critical of the bank’s investigation, particularly the fact that the bank produced no copy of the recorded interview between CIS and Mr Lau, that Mr. Lau was never given an opportunity to view the video or respond to it, despite having asked to see it and that the client’s statement was not put to him.

In addition to awarding nine months’ worth of pay in lieu of notice, the court awarded $30,000 in aggravated damages for breaching their duty of good faith in the manner of dismissal.

Lessons to be Learned

  1. An employer’s breach of the duty of good faith in the manner of dismissal may lead to an award for aggravated damages in addition to damages for wrongful dismissal. One way in which an employer may be found to breach this duty is by failing to conduct a proper investigation.
  2. If the person conducting the investigation is properly trained, there is a greater likelihood that a court will conclude that it was appropriate in the circumstances.
  3. If the person assigned to investigate a workplace harassment complaint has not received appropriate training then since September 8, 2016 the Ministry of Labour has had the power to order the employer to hire an external investigator at the employer’s expense.

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

 

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