We've said it before and we'll say it again - cross your "t"s and dot your "i"s when it comes to workplace investigations and documentation. If you don't, the matter may come back to bite you in a lawsuit. The following is a general overview of why a proper investigation and documentation of key items are so important.
Investigations in a nutshell
Recent case-law shows that when proper investigations do not occur, courts award increased damages. For example, in Schimp v. RCR Catering Ltd., the Nova Scotia Court of Appeal awarded 3.5 months in "exemplary damages" to a bartender terminated for alleged theft after a "cursory" and "negligent" investigation.
What happens when things go very wrong? Our recent blog Toxicity: Vulnerable Victims and Workplace Wrongs illustrates a case where an employee was awarded more than $850,000 after her allegation of sexual harassment resulted in a less than perfect investigation and where the grievor was essentially disciplined for complaining about the workplace issues she encountered.
Still not convinced you need to do a proper investigation?
Punitive damages are on the rise
Decision*
Pate Estate v. Galway-Cavendish and Harvey (Township) (2012: ONCA) (failure to provide employee with particulars of allegations against him or opportunity to respond)
Punitive Damages Award: $450,000
Decision*
Boucher v. Wal-Mart (2012: Jury) (employee reported workplace assaults by a co-worker – co-worker not reprimanded or disciplined in any way)
Punitive Damages Award: $1,000,000
Decision*
Higginson v. Babine Forest Products Ltd. and Hampton Lumber Mills Inc. (2012: Jury) (employer argued there was just cause, jury found no merit to these allegations)
Punitive Damages Award: $573,000
Decision*
McNeil v. Brewers Retail Inc. (2008: ONCA upholding jury award) (employer handed over some evidence to the policy, but not exculpatory evidence)
Punitive Damages Award: $500,000
*Note that the facts of these cases included more than issues relating to improper investigations, but are included to demonstrate that awards of this nature are on the rise.
Tips for a "proper investigation"
Court, arbitration, human rights and employment standards decisions over the last few years have identified specific points to keep in mind when conducting an investigation:
- If you have a policy, follow it.
- Get both sides of the story – interview thoroughly and impartially.
- Keep accurate records of what is said at interviews.
- Maintain confidentiality as needed and where possible and, at all times, be aware of the potential for workplace gossip.
- Preserve evidence (including emails, phone records, video surveillance, computer use data, social media content, etc.).
- Take pictures or have drawings where applicable – these can be very helpful during interviews and in explaining the outcome.
- Don't interview alone.
- Ensure internal investigation does not interfere with regulatory or criminal investigations.
- If harassment is an issue, consider moving the parties to different work locations during the investigation.
- Never jump to a conclusion ahead of time – keep everyone's "rights" in the forefront.
- The test of proving a 'wrong' is not the criminal "beyond a reasonable doubt", but the civil "balance of probabilities".
- Know when to involve legal counsel or assistance.
- Reach a conclusion, provide a full and accurate report with recommendations.
- Communicate what is necessary to the complainant.
Documentation basics
Written records of employment kept in personnel files include formal and informal recordkeeping about the employee. Both can be very important if the employee commences a lawsuit and you need to respond with proof of just cause or that the employee was paid for the overtime or vacation pay he or she is now claiming.
What to review prior to termination
Always review the employment contract. Is there a termination clause? Can you dismiss the employee, for any reason, by providing agreed to amount as notice? If there is a termination clause, will it hold up to judicial scrutiny? Not all termination clauses are created equal and this will probably be a key document you will want to discuss with counsel before termination occurs.
If you're alleging cause, consider whether you have everything you need to prove it. For a refresher, you may want to visit our Winter 2013 Atlantic Employers' Counsel dealing exclusively with the issue of just cause. Generally speaking, you will want to review the file to determine whether you could satisfy a court or tribunal that cause for termination existed. To arrive at that conclusion you must consider (a) any investigation report(s); (b) whether there is a policy at stake that needs to be followed; (c) whether there is a less drastic form of discipline available in the circumstances; and, of course, (d) what is best for the business. After your review, if you remain uncertain, you may want to get a second opinion.
Make sure you've reviewed everything. Is there another file you should be looking at that limits liability or raises any other risk for the employer? For example, is there a file dealing with attendance that is related to human rights issues which is kept separate from the employee's personnel file that needs to be considered?
The termination letter and what to keep after termination
The termination letter. If you're alleging cause, you should skip to the Reasons, References and Releases section of this edition for information on what should or should not go in a termination letter. If you're not, then your review of the file should have provided you with the information you need to assess an offer of reasonable notice, namely: (a) age; (b) length of service; (c) position and salary; and (d) education level. With this information in hand, the basics involved in determining statutory notice and common law notice will be somewhat easier than gazing in a crystal ball. For more on that process, go to How many weeks was that? You will also want to have a release ready to provide to the employee when you give him or her the termination letter. More on the dynamics of this will be covered in our sections on The Termination Meeting and Reasons, References and Releases.
What to keep after termination. A general rule to follow is to retain documents in the employee's personnel file that are relevant to his or her termination, or required by statute (e.g., employment standards) for the full period set out in the applicable provincial limitation legislation. Be aware that limitation periods are not uniform and there is some flexibility to extend time limits in various statutes. This means:
- The original contract of employment and any subsequent contracts.
- Policies and acknowledgements.
- Performance appraisals.
- Disciplinary letters.
- Overtime and vacation records.
- Attendance records.
- General tax information (e.g., ROE, T4).
What all of this means to you
The linchpins for a successful wrongful dismissal defence are thorough investigations and evidence (thorough documentation). Defences often fail where an investigation is found to be inadequate or where there is a failure to properly document. Punitive damages are also a new "favourite" when investigations fall short of what they should. What is "proper" has been shaped by courts, arbitrators and tribunals. Ignorance is not an excuse when it comes to either workplace investigations or documentation. The foregoing are the basics of what you need to know to make sure you're getting it right.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
