Issues in Litigation when Workplace Investigations are Conducted

  • January 30, 2015
  • BakerLaw
  • Comments Off on Issues in Litigation when Workplace Investigations are Conducted

Workplace investigations are becoming increasingly routine in the today’s business environment.  When a workplace investigation is conducted in an employment or human rights matter that ends up proceeding to litigation, the results of that investigation can be very valuable.  However, there are a number of issues of which an employee must be aware in terms of their rights with respect to the workplace investigation and its results, including:

  1. The workplace investigation must be fair;
  2. The employee must err on the side of caution and assume that the limitation period for preserving their legal rights is running while the workplace investigation is being conducted; and
  3. Unless explicitly stated to the contrary, the employee should assume the employer will claim the results of the workplace investigation as privileged and confidential.

Fairness

There is no common law duty imposed on employers to conduct workplace investigations when in receipt of a complaint. There is however a duty to investigate pursuant to a number of pieces of legislation, including human rights legislation, occupational health and safety legislation, and privacy legislation.  Moreover many employers have in place policies requiring them to conduct investigations on account of the fact that, even though they may not be under any legal duty, they run other risks for liability and damages that may result from failing to investigate (i.e. in wrongful dismissal cases).

Pursuant to their enacting legislation, human rights tribunals impose on employers a duty to investigate allegations of workplace discrimination (see, for example, Laskowska v. Marineland of Canada, 2005 HRTO 30 (link to decision); Harriott v. National Money Mart, 2010 HRTO 353 (link to decision)). The Tribunal in Laskowska found that the duty to investigate arises from the employer’s duty to ensure that it is operating a workplace free from discrimination. The Tribunal referenced Wall v. University of Waterloo (1995), 27 C.H.R.R. D/44 for the following criteria as to what constitutes ‘corporate reasonableness’:

The six criteria of corporate “reasonableness” in Wall have been adopted in previous decisions of the Board of Inquiry.  I adopt a conflated version of them.  The criteria are:
(1)   Awareness of issues of discrimination/harassment, Policy, Complaint Mechanism and Training: Was there an awareness of issues of discrimination and harassment in the workplace at the time of the incident? Was there a suitable anti-discrimination/harassment policy?  Was there a proper complaint mechanism in place?  Was adequate training given to management and employees;
(2)   Post-Complaint: Seriousness, Promptness, Taking Care of its Employee, Investigation and Action:  Once an internal complaint was made, did the employer treat it seriously?  Did it deal with the matter promptly and sensitively?  Did it reasonably investigate and act; and
(3)    Resolution of the Complaint (including providing the Complainant with a Healthy Work Environment) and Communication:  Did the employer provide a reasonable resolution in the circumstances? If the complainant chose to return to work, could the employer provide her/him with a healthy, discrimination-free work environment?  Did it communicate its findings and actions to the complainant?
While the above three elements are of a general nature, their application must retain some flexibility to take into account the unique facts of each case.  The standard is one of reasonableness, not correctness or perfection.  There may have been several options – all reasonable – open to the employer.  The employer need not satisfy each element in every case in order to be judged to have acted reasonably, although that would be the exception rather than the norm.  One must look at each element individually and then in the aggregate before passing judgment on whether the employer acted reasonably.

 

In terms of workplace investigations in response to a complaint that is against a particular employee, while the courts have established that at common law employers are not required to provide employees with access to natural justice (see, for example, Leach v Canadian Blood Services, 2001 ABQB 54 (link to decision)), and have refused to recognize a tort of negligent investigation against employers (see, for example,  Correia v Canac Kitchens, 2008 ONCA 506 (link to decision)), the case law also establishes that courts and tribunals are informed by whether investigations follow basic principles of fairness and natural justice. For instance, in Leach v Canadian Blood Services, the Court found the following factors qualified as fair:

However, although I am critical of the handling of the first interview with Ms. M. I was impressed by the fairness and thoroughness of the rest of the investigation. Mr. Leach was notified about the complaint; given a copy of the Harassment Policy to review; given time to ponder about his position before the next meeting; given a copy of the complaint; given the opportunity to respond to the e-mail; given an opportunity to respond to the written complaint, and he was asked, right from the beginning, whether he wanted to have his legal counsel attend the meetings. Detailed minutes of the meeting were kept. Overall, Mr. Leach was given ample opportunity to give his version of events and he categorically denied there were any incidents. Given all of these circumstances, there was no procedural unfairness.

The Courts have found that not only will failure to conduct a fair investigation potentially result in an employer’s inability to demonstrate just cause, it may also have consequences in the form of an extended notice period where the lack of procedural fairness is particularly egregious (Wallace v United Grain Growers [1997] 3 S.C.R. 701 (link to decision); Honda Canada Inc. v Keays [2008] SCC 39 (link to decision)).

Limitation Periods

While Boards and Tribunals have consistently recognized an employer’s duty to investigate a complaint pursuant to their source legislation, and a duty to do so promptly (see, for example,Laskowska v. Marineland of Canada, 2005 HRTO 30 (link to decision)), there is no bright line test as to timelines and moreover, Boards and Tribunals also recognize that some investigations can take a long time (see, for example, Re: AFG Industries Ltd. and Aluminum Brick and Glass Workers Union (1998), 75 L.A.C. (4th) 336 (link to decision)).

The issue then arises that the employee risks missing the limitation period to bring legal proceedings while awaiting the results of an investigation, especially in the case of limitation periods that are shorter than the basic two-year limitation period in civil proceedings, such as the Human Rights Tribunal of Ontario’s one-year limitation period.

The Human Rights Tribunal of Ontario sets a high onus on applicants to establish that any delay in applying was incurred in ‘good faith’ (see, for example, Klein v Toronto Zionist Council, 2009 HRTO 241 (link to decision)).  The case law is clear that to establish that the delay was incurred in good faith, an applicant must show something more than an absence of bad faith, but rather “a reasonable explanation” as to why he or she did not pursue her rights in a timely manner.  The reasons for this high threshold are the potential prejudice to the respondent as well as the principle that human rights claims should be dealt with justly and expeditiously, and as such applicants are required to act with due diligence and file an application within one year.

In regard to potential prejudice, it may seem arguable that since the employer has failed to respond to a complaint within the Tribunal’s one-year limitation period, the employer would not suffer substantial prejudice given that (1) the investigation is ongoing and fresh in the employer’s mind, and (2) the employer’s lack of timeliness is the reason the applicant missed the limitation period.  However, this argument has consistently been rejected by the Tribunal, primarily based on due diligence reasons.

In regard to due diligence, the Tribunal in Leizer v Knight, 2013 HRTO 1652 (link to decision) noted that in determining the issue of good faith, the Tribunal considers many factors, among which is whether the applicant was able to raise allegations in other venues during the period in question. In that case, the applicant submitted that the main reason for the delay in filing was the fault of the employer, as she was awaiting and relying on the internal complaint process.  The Tribunal found at para 26 this was not an adequate good faith reason:

The Tribunal has emphasized the fact that a person is pursuing other avenues or waiting for other proceedings to conclude before pursuing one’s rights under the Code will generally not constitute a valid explanation  for delay in filing an application: see Cartier,  supra; Hatibovic-Kofman v. Royal College of Dental Surgeons of Ontario, 2010 HRTO 1578 (CanLII) and Huo v. University of Western Ontario, 2012 HRTO 198 (CanLII).

The Tribunal has consistently found that if it is clear that an applicant is well aware of his or her rights and is actively advancing them and taking timely steps through other avenues and proceedings,  there is nothing to prevent him or her from initiating a human rights complaint, especially where the other proceedings involve parallel concerns (see, for example, Corrigan v Peterborough Victoria Northumberland and Clarington Catholic School District School Board, 2008 HRTO 424 (link to decision); Quimado v S.A. Armostrong, 2008 HRTO 110 (link to decision); Doyle v Canarm, 2009 HRTO 674 (link to decision)).

In terms of the two-year “basic limitation period” for initiating most court proceedings, section 4 of the Limitations Act 2002 (link to Act) reads as follows: “Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.”  Therefore, the legislation allows only the exceptions to the basic limitation period that are provided for in the Act (i.e. the provisions in section 7 dealing with incapable persons, the provisions in section 10 dealing with assaults and sexual assaults.)

There appears to be no legislated exception that would suspend or postpone the basic limitation period based on the pursuit of a separate but similar proceeding in another court or tribunal.  However, section 11, ‘Attempted Resolution’ provides an exemption as follows:

  1. (1)If a person with a claim and a person against whom the claim is made have agreed to have an independent third party resolve the claim or assist them in resolving it, the limitation periods established by sections 4 and 15 do not run from the date the agreement is made until,

(a) the date the claim is resolved;

(b) the date the attempted resolution process is terminated; or

(c) the date a party terminates or withdraws from the agreement.

 (2)  For greater certainty, a person or entity that provides resolution of claims or assistance in resolving claims, on an impartial basis, is an independent third party no matter how it is funded.

The case law on this provision suggests that it is only going to be applied when an actual mediator is hired or the Alternative Dispute Resolution process commenced – the person must be an independent third party agreed to by both parties to resolve the claim or assist in resolving it.  It is not clear that an external counsel hired by the employer for the purposes of a workplace investigation would fall under such a category.

Privilege

Privilege with respect to workplace investigations is an issue that has not been fully canvassed by the courts and tribunals.  Based on the limited case law available, the issue of privilege will depend on the particular facts of a case, such as whether the investigator was internal or external to the employer, or the nature of the retainer arrangement between the employer and the investigator.

In many cases, investigations are conducted by external legal counsel. The issue of solicitor-client privilege then arises. The contradictory policy objectives of encouraging broad disclosure while protecting solicitor-client communications was considered in General Accident Assurance Co. v. Chrusz, 1999 CanLII 7320 (link to decision), at paras 66-67:

These issues bring to the forefront two antithetical principles, both of which are accepted as fundamental to the civil litigation process.  One principle, the right to full and timely discovery of the opposing party’s case, rests on the premise that full access to all the facts on both sides of a lawsuit facilitates the early and just resolution of that suit.  The other principle, the right of a party to maintain the confidentiality of client-solicitor communications, and sometimes communications involving third parties, rests on the equally fundamental tenet that the confidentiality of those communications is essential to the maintenance of a just and effective justice system.  The tension between the two principles is described by Lamer C.J.C. in R. v. Gruenke (1991), 1991 CanLII 40 (SCC), 67 C.C.C. (3d) 289 at 305:

The prima facie protection for solicitor-client communications is based on the fact that the relationship and the communications between solicitor-and-client are essential to the effective operation of the legal system.  Such communications are inextricably linked with the very system which desires the disclosure of the communication.

In attempting to reconcile these principles, I do not start from the premise that one principle, access to all the facts, is a good thing in that it promotes the search for truth and that the other principle, confidentiality, is a necessary evil to be tolerated only in the clearest of situations.  Both principles have a positive value to the community and individuals, and when viewed from a broad prospective, both serve the goal of ascertaining truth by means which are consistent with the important societal values of fairness, personal autonomy and access to justice.

 

The British Columbia Court of Appeal looked at the issue of solicitor-client privilege (both ‘legal advice privilege’ and ‘litigation privilege’) in the investigation context in College of Physicians of B.C. v British Columbia (Information and Privacy Commissioner) 2002 B.C.C.A 665 (link to decision). The Court found that legal advice privilege arises only when the external legal counsel is acting in his or her capacity as a lawyer – i.e. conducting an investigation to ascertain facts upon which to base a legal opinion to give the client  (see, for example, Gower v Tolko Manitoba Inc. [2001] M.J. No. 39 (Man. C.A.)(link to decision).  There is no privilege protecting communications to or from the lawyer when he or she acts only as an investigator.

In regard to litigation privilege as it relates to investigations, the Court in College of Physicians of B.C. v British Columbia (Information and Privacy Commissioner) 2002 B.C.C.A 665 (link to decision) found that “it applies to communications between the lawyer and the client, and also between the lawyer and third parties, where the dominant purpose for the communication is litigation.” The question in these cases is whether litigation was in reasonable prospect when the employer was investigating the employee’s complaint (see, for example, College of Physicians of B.C. v British Columbia (Information and Privacy Commissioner) 2002 B.C.C.A 665 (link to decision); Ed Miller Sales & Rentals Ltd. v. Caterpillar Tractor Co., 1988 ABCA 282 (CanLII), [1988] A.J. No. 810 (Alta.C.A.)(QL) (link to decision)Bank Leu AG v. Gaming Lottery Corp., [2000] O.J. No. 1137 (Ont.Div.Ct.)(QL) (link to decision); and In Re Sealed Case, 856 F.2d 268 (D.C.Cir. 1988) (link to decision)).

The Human Rights Tribunal of Ontario has subsequently adopted the analysis from both General Accident Assurance Co. v. Chrusz, 1999 CanLII 7320 and College of Physicians of B.C. v British Columbia (Information and Privacy Commissioner) 2002 B.C.C.A 655 (see, for example,  Lastella v. Oakville Hydro Corporation, 2009 HRTO 1806 (link to decision); Hogan v. Ontario (Health & Long Term Care), 2003 HRTO 16 (link to decision).

The wording of the retainer agreement in these cases is an important factor. In Wilson v Favelle (1994), 26 C.P.C. (3d) 273 (B.C.S.C) (link to decision), the court decided that wording of the retainer demonstrated that the lawyer retained to investigate a complaint was not hired to give legal advice pursuant to her investigation, as was being argued, but rather was asked to provide advice regarding “any violations of standards of conduct for public service employees.”  That said, the Manitoba Court of Appeal held in Gower v Tolko Manitoba Inc. [2001] M.J. No. 39 (Man. C.A.)(link to decision) that while “the retainer letter is a strong piece of evidence that the investigation was related to the rendering of legal advice”, as was the case there, “the retainer letter would not be determinative if there was evidence that pointed to the opposite conclusion”.

In regard to non-legal investigators, it is unlikely that their findings would fall under the protection of any category of privilege. However it is less clear if the investigator was retained by external legal counsel and the results of the investigation are provided directly to external legal counsel.  In College of Physicians of B.C. v British Columbia (Information and Privacy Commissioner) 2002 B.C.C.A 665 (link to decision), the court considered whether legal advice privilege extends to communications between the lawyer and third parties. The Courts noted that the finding in General Accident Assurance Co. v. Chrusz, 1999 CanLII 7320 (link to decision) that privilege is extended to third party communications only in limited circumstances –  the third party’s role must be integral to the maintenance or operation of the solicitor-client relationship.  However, such reports prepared by third parties may still be subject to litigation privilege again if the dominant purpose was in contemplation of litigation.

If privilege over the final report has been waived, it has been held that an employer cannot attempt to subsequently place restrictions over the potential uses of the report (see, for example, Ontario Hydro and C.U.P.B., Loc. 1000, [1988] O.L.A.A. No. 95 (Brent, Switzman, Abbott)(link to decision)).

The employer also risks waiving privilege of an investigation report when it discloses part of the report to the employee. Furthermore, when an employer does choose to waive privilege over the investigation report, it also risks beings required to disclose supporting documents that were used in producing the report (see, for example, Ontario (Ministry of Correctional Services) and O.P.S.E.U. (Knight), [1994] O.G.S.B.A. No. 2 (link to decision)).   However, Reis v CIBC Mortgages Inc., [2011] O.J. No. 1778 (Ont. S.C.J.)(link to decision) has been cited for the principle that not all supporting documents will be considered as losing their privilege when privilege over the final report is waived.   Generally, supporting documents may be ordered to be disclosed when they are “intricately connected” to the document in question or where they relate to the same facts (see, for example, R v Basi, 2009 BCSC 777 (link to decision)). The courts have in the past made reference to the principle outlined in Sopinka, Lederman & Bryan, The Law of Evidence in Canada, §14.122 that “if the privilege is waived, then production of all documents relating to the acts contained in the communication will be ordered.”

Clearly there are many issues to consider when a workplace investigation is being conducted or has been conducted in relation to the facts of a legal proceeding.  Bakerlaw has extensive experience in human rights and employment litigation. For more information on your human rights in employment, services, and housing, please feel free to contact us (link).

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