Dec 7, 2023 from HRD Canada
As workers in many industries have gained more power to voice grievances about their employers, coworkers, management, and the environment, workplace investigations have become very routine for many. Although many workers might anticipate a fair investigation, they could be shocked to learn the extent of their employer’s duty to “protect” them both during and following an internal investigation.
The courts determined that workplace inquiries must follow a fair procedure that benefits all parties. The results of an investigation may be relevant in legal and regulatory proceedings, requiring a close examination of the procedures used and the conclusions reached. In the worst-case scenario, workers may assume that their employer has a “duty of care” and is liable for an improper investigation which influences the decision to penalize or fire them. However, this assumption is incorrect.
The standard of care that an ordinary, reasonable, and practical person would be expected to provide in the same situation is known as the duty of care. Courts frequently take into account whether a duty of care is owed and, if so, whether breaching this duty subjects an individual or a business to further liability for damages. The two parties’ relationship has a significant impact on the obligation of care one has to the other.
Employers are not required to provide employees with a duty of care when conducting internal investigations into employee behaviour, according to a recent ruling from the British Columbia Supreme Court (BCSC). On the other hand, decision-makers may be held accountable if they individually commit a tort during or after an investigation’s conclusions. The reasoning for this is outlined in the case of Salina v. Investors Group, 2023 BCSC 86.
The Case of Salina v. Investors Group
According to a 2002 consulting agreement, Sergio Salina served as an independent contractor rather than an employee while working as an investment advisor for Investors Group Financial Services Inc.. Both Salina and the Investors Group were members of the Mutual Fund Dealers Association of Canada (MFDA) and were subject to the British Columbia Securities Act as well as the MFDA regulations, practice standards, rules, and bylaws applied.
The MFDA opened an investigation into Salina in December 2016 for allegedly breaking investment rules and regulations, especially involving high-risk transactions involving his senior clientele. Additionally, the Investors Group’s supervision of Salina’s activities was looked into by the MFDA. In compliance with its reporting duties as an MFDA member and as part of the regulatory investigation, the Investors Group gave the MFDA information. Among the materials supplied was the information from its internal investigation.
While the MFDA inquiry was still proceeding in May 2018, Salina was fired by the Investors Group for cause. Salina claimed that he was an employee rather than an independent contractor in his 2002 consulting agreement and filed a legal lawsuit for wrongful termination. Furthermore, Salina contended that the Investors Group had a duty of care to him as an employee and that it had violated that responsibility in two ways:
- It conducted a negligent internal investigation regarding his work
- It filed false information to the MFDA
In this case, the court based its decisions on whether or not Salina had legitimate cause of action rather than basing the findings on the findings of fact.
A Summary of the Law
The Ontario Court of Appeal upheld in Correia v. Canac Kitchens, 2008 ONCA 506, that an employee’s conduct during a careless internal investigation is not subject to civil (tort) liability.
Salina argued that the MFDA’s quasi-judicial hearing into his conduct was justified by the Investors Group’s workplace investigation and that he was entitled to the same duty of care against negligence that police officers provide to suspects in their investigations (Hill v. Hamilton-Wentworth Regional Police Services Board, 2007 SCC 41). The MFDA’s mission is, at least in part, to regulate in the public interest. The investigation conducted by the MFDA had a quasi-judicial role connected to the public interest, which makes it unique. As a result, the Investors Group inquiry and the material that was subsequently given to the MFDA were neither your typical workplace investigation or its repercussions.
Two of Salina’s claims were dismissed by the court as potential causes of action. The first being the negligent internal workplace investigation, and second was the allegedly negligent information sent to MFDA. Salina sued for wrongful dismissal, and the court accepted the claims of bad faith and unlawful interference with economic relations.
Internal Investigations Impact on the Duty of Care
It was stated by the court that an employer who conducts a negligent internal investigation does not owe duty of care to said employee. The main reasons considered were policy related, such as the importance of reporting wrongdoing even in circumstances where reporting may be mistaken and an employee may be disciplined or face other consequences.
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