Winds of investigatory change are blowing through courts and workplaces. Less then a decade ago, unfounded complaints made against a manager could justify stripping him or her of supervisory duties and bar an action for constructive dismissal. These employees had no right to know the details of the complaints against them, nor were they entitled to give a response. Simply put, procedural fairness received little consideration in the non-unionized workplace.
Now, however, with new human rights and occupational health and safety laws that put employers under a duty to investigate discrimination and harassment claims, courts are becoming aware of improper investigations carried out under the guise of other HR functions.
An Ontario court recently ruled on this topic in Chandran v. National Bank of Canada when it held that a senior manager demoted pursuant to an employee satisfaction survey had actually been constructively dismissed because of, among other things, improper workplace investigation procedures.
Adrian Chandran had worked for National Bank for 18 years, eventually reaching the level of Senior Manager of the Vaughn Commercial banking Centre. When his direct superior – Gary Flowers – joined the Bank, Flowers was given a mandate to improve employee performance at the Vaughn branch which had been sub-par. To this end, Flowers asked the branch’s HR manager to conduct an employee satisfaction survey.
The HR manager met with employees individually and took notes about their experiences at the branch. She did not ask employees to keep their discussions confidential, nor did she ask that they refrain from discussing the survey with other employees. When the HR manager reported her results, she noted that nine out of eleven employees at the branch had made “unsolicited” comments against Chandran. These comments included allegations that Chandran:
- Made bullying remarks;
- Displayed volatile behaviour;
- Embarassed employees in front of others; and
- Engaged in bullying behavior.
The HR manager reported that in response to this behaviour, some employees had sought legal advice.
As a result of the survey, Flowers concluded it was likely necessary to remove Chandran’s supervisory duties, however he wanted to hear what Chandran had to say first. Unless somehow exculpated, however, Flowers decided Chandran’s behaviour would be in breach of both the Bank’s policies on professional conduct and harassment/discrimination.
Flowers and the HR manager met with Chandran and told him about the allegations. The HR manager used her notes to convey the general nature of the allegations, but refused to disclose any specific information, including who made them. Flowers and the HR manager later testified that they thought a general overview of the allegations protected the complainants’ interests while giving Chandran enough information to respond. Chandran denied the allegations both in the meeting and in a subsequent letter.
The Bank responded to Chandran’s denial not with further investigation efforts, but rather with a disciplinary letter which chastised a “senior manager” for the “serious impact [his] behaviour had on…the general morale of the office”. The letter referenced the conduct alleged, and expressed dismay that Chandran “did not take any responsibility for [his] actions”. The letter concluded with a transfer to one of two non-supervisory jobs and put Chandran, in effect, on probation.
Chandran sued for constructive dismissal.
Improper Investigation Was a Breach of Trust
Although the court found constructive dismissal based on the survey’s disciplinary consequences, it emphasized that the manner the survey was conducted in was an egregious breach of trust.
Chandran argued, and the court agreed, that the Bank reached its conclusion that he was “guilty” of the alleged misconduct and breaches of policy without ever investigating the complaints’ merits. This lack of fair dealing and due process deprived Chandran of an opportunity to defend himself against serious allegations that ultimately quashed an otherwise stellar 18-year career with the Bank. As noted by the court, Chandran was justified in losing all faith in his employer when it threatened to terminate him if he engaged in “any further behaviour of the type he had already been found guilty of”.
Although the Bank argued it was never under any duty to investigate, the court nonetheless held its failure to do so and the consequences that followed were serious enough to fundamentally breach the employment contract.
Notably, the court singled out the Bank’s human resources staff for their handling of the matter. Evidence and testimony showed both a lack of forethought about the discipline that was summarily imposed on Chandran, as well as insensitivities about how the Bank’s employees handled – or rather did not handle – the investigation.
What Can Employers Do to Protect Themselves?
As courts familiarize themselves with the degree of procedural fairness that employees are now entitled to, it is important that employers be able to demonstrate due diligence and good faith in their investigation efforts. Although case law is mixed on whether purely good faith can exculpate an employer who nonetheless botches an investigation, the availability of specializing investigation training programs likely means employers will be held to an increasingly higher standard.
Chandran already stands in stark contrast to similar cases from less than a decade ago. There is no doubt the workplace’s legal landscape is changing. What has your organization done to prepare?
Heenan Blaikie’s labour and employment group offers both in-house and public training sessions on how to conduct lawful and effective workplace investigations. Contact us about your in-house training needs, or click here to register for the next public training session in January, 2012.