In 2014 the Supreme Court of Canada recognized a legal
obligation to perform contracts in good faith. Our blog on
that decision: Bhasin v. Hrynew, 2014 SCC
71 can be found
here. In 2016, that principle is being applied
in an ongoing Ontario Court action.
The Plaintiff, Rajesh Joshi, was employed by the Defendant,
National Bank of Canada, from 2009 until he got a new job with the
Bank of Montreal and tendered his resignation in June 2014.
Unbeknownst to Mr. Joshi, before his resignation, the National Bank
of Canada was conducting an internal investigation into allegations
of serious misconduct during his employment. Also unbeknownst
to Mr. Joshi, after his resignation the National Bank contacted the
Canadian Bankers Association Bank Crime Prevention and
Investigation Office (BCPIO) and added the Plaintiff's name to
that database. The BCPIO database is intended for member
banks to report individuals found guilty of serious banking
When BMO noticed that their new employee's name was on the
BCPIO database, it contacted the Defendant to ask about it.
The Defendant allegedly told BMO that Mr. Joshi had "resigned
before being met by an investigator" and that he
"falsified documents relating to mortgage application
files". The Plaintiff also alleged that the Defendant
advised a representative from CIBC that he had committed mortgage
The Defendant moved to have the Court strike the Plaintiff's
claims for intentional interference with economic relations, and
breach of the duty of good faith. The Court agreed with the
Bank on the first ground, but refused to strike the duty of good
The Defendant stated that since Mr. Joshi had resigned his
employment, there was no remaining contract that the Bank had to
perform in good faith. The Plaintiff of course disagreed,
stating that there are a number of contractual obligations that
continue even after the contract ends, both express and
implied. The Court sided with the Plaintiff I this regard,
stating in relevant part at paragraph 26:
 There is no doubt that the defendant owed a duty to perform
employment contractual obligations and without
misrepresentation. If an investigation into alleged
misconduct on the part of the plaintiff was ongoing during his
employment, it was, at a minimum, an implied contractual obligation
to afford the plaintiff due process and allow him to respond and/or
refute such allegations.
The Court ruled that given the allegation that the Bank did not
afford that opportunity to the Plaintiff, and in light of the
allegations of subsequent breaches including adding the
Plaintiff's name to the BCPIO database without proper
investigation and making representations to other member banks,
there was no reason to strike those allegations.
It is important to note that this decision is not a final ruling
on the bad faith claim, and the Court has not made any factual
findings yet. But more important to employers should be the
fact that the Court is willing to entertain claims that employers
have not properly conducted their investigations, not just in
wrongful dismissal claims, but now also in the context of the
relatively new legal obligation of good faith in contractual
Workplace investigations are often delicate undertakings.
Employers are well-advised to seek out legal advice to ensure that
their workplace investigations are being carried out properly, both
in terms of substance and procedure. The Ontario Court has
just sent a strong message for employers to heed: even after your
employee has resigned, you still owe them a duty to carry out their
contract in good faith. The following
lawyers at CCPartners are experienced in conducting
workplace investigations and can help ensure that your company
remains legally compliant in their employee relations.
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).