In a recent Federal Court decision, (Bank of Montreal v. Payne, 2012 FC 431), an employee’s dismissal was upheld due to his dishonesty during and after a workplace investigation. Mark Payne worked for the Bank of Montreal for over five years as Branch Manager until he was dismissed for cause in late November 2008. In September 2008, he was suspended with pay pending an investigation into a harassment complaint. Following the investigation, Payne was disciplined and demoted to a smaller branch as a result of his inappropriate behaviour which included yelling and making demeaning and inappropriate comments to subordinates.

In early November 2008, Payne was again suspended with pay while an investigation was conducted regarding his behaviour towards an assistant manager of one of BMO’s branches. During the investigation, BMO learned that the two had engaged in a consensual sexual relationship on bank premises during and after business hours and at the assistant manager’s home. This relationship had taken place both prior and during the first complaint and investigation and had continued even after Payne was disciplined.

This second investigation also revealed that Payne had discussed the first investigation with the assistant manager, in violation of the confidentiality commitment he had made during that investigation.

BMO decided to dismiss Payne for cause as he knowingly breached the confidentiality of the investigation and management practices by discussing it with the assistant manager; acted inappropriately on bank property during and after business hours; failed to meet the conditions and expectation of his earlier discipline; and breached BMO’s Code of Business Conduct and Ethics.

Payne filed a complaint alleging that he was unjustly dismissed. The adjudicator found that while Payne was deserving of discipline, progressive discipline required that something short of dismissal be imposed. The adjudicator ruled that Payne had been unjustly dismissed and ordered Payne to be reinstated.

BMO sought judicial review of the decision, seeking to set aside both the finding with respect to unjust dismissal and the remedy of reinstatement.

The Federal Court disagreed with the adjudicator’s findings, holding that given Payne’s behaviour, he was neither unjustly dismissed nor worthy of reinstatement. The Court noted that following the first investigation, Payne had been disciplined. Nevertheless, he continued to engage in an inappropriate sexual relationship on BMO’s premises and also divulged confidential information regarding the investigation to another employee. As Payne was a manager, whose role was to protect employees and the corporation and set an example for other employees with respect to bank policies, his indiscretions were even more damaging to the trust and authority invested in him by BMO. This meant that an ongoing employment relationship was not viable.

What does this mean for employers who conduct investigations?

  1. Conduct during and after an investigation may be relevant.

An employee’s conduct during and after an investigation may be relevant and can constitute grounds for a just cause dismissal. Most interestingly, here, the Court recognized that the employee’s obligation to maintain the confidentiality of the workplace investigation continued to exist well after the investigation was concluded.

  1. Be explicit about confidentiality provisions.

It is crucial that employers be explicit in terms of its expectations of confidentiality during and following a workplace investigation. This includes the fact of the investigation itself, information provided during the investigation interviews, as well as the overall investigation process. This should be in writing, and should be repeated at the beginning and end of each investigation interview and be reflected in the investigator’s notes. Some employers go so far as to have an employee sign a confidentiality agreement.

  1. More is expected of managers.

This case is part of a number of others which state there is a higher behavioural expectation of managers. This should be reflected in the employer’s policies, and in any training employers conduct on these policies.