Many employers are familiar with the traditional scenario in which an investigation is initiated. In those situations, a formal complaint is filed by an employee under a human rights or respect at work policy. The employer, acting on its own, or through the use of an external investigator, obtains the details of the allegations by interviewing the complainant. The respondent is interviewed as well, after having been given the particulars of the allegations. Witness interviews may also be conducted.

However, what is the acceptable process when an employer commences an inquiry which is investigation like, but arises in a situation without a formal complaint? A recent case, Chandran v. National Bank, [2011] O.J. No. 1895, gives us insight into problems employers may face when proceeding in these types of circumstances, particularly when the outcome is potentially prejudicial to an employee whose conduct may become the subject matter of the inquiry.

In this case, a Senior Manager was given a mandate to improve employee performance at one of the Bank’s branches because it was performing below expectations. In order to do so, he asked the Manager of Human Resources to conduct an employee satisfaction survey as there were perceived problems with employee morale at the location.

The survey consisted of interviewing the employees at the branch. At the end of the process, the Manger of Human Resources provided the Senior Manager with the results of her survey. She told him that 9 of the 11 people she had interviewed had commented that the Senior Manager at the Branch, Mr. Chandran, had made condescending remarks, exhibited volatile behaviour, embarrassed employees in front of others and had engaged in bullying behaviours. Mr. Chandran had been employed by the Bank for 18 years.

The Senior Manager concluded that based on this information, Mr. Chandran’s supervisory duties should be removed. Before making the final decision, both he and the Manager of Human Resources met with Mr. Chandran and informed him about the general allegations against him. At trial, Mr. Chandran testified he denied the general allegations but asked for particulars of the substance of the allegations so that he could be able to defend himself. The Bank refused.

Mr. Chandran then received a disciplinary letter, which provided him the option of choosing between two nonsupervisory roles. He was also warned that further behaviour of the kind conducted would be grounds to terminate him for cause.

Mr. Chandran argued that the Bank had reached its conclusions about his conduct without having conducted a proper investigation, and without having given him an opportunity to properly respond to the allegations. This resulted in his constructive dismissal. He left the Bank’s employ and sued for damages. On its part, the Bank argued that under these circumstances, it had no obligation to investigate, since the subject matter of the allegations was not related to its human rights policy. It also argued that because Mr. Chandran had been offered two similar positions, no constructive dismissal had occurred. It also asserted that Mr. Chandran failed to mitigate his damages when he refused to accept the alternative positions offered to him.

“Mr. Chandran argued that the Bank had reached its conclusions about his conduct without having conducted a proper investigation, and without having given him an opportunity to properly respond to the allegations”

“...I find that the actions of the Bank in reaching such serious findings of misconduct, the imposition of discipline and the mandatory transfer to alternate positions (with lesser terms and conditions of employment) goes to the root of the employment contract and a fundamental breach of the employment agreement, which constitutes a constructive dismissal.”

The Court agreed with Mr. Chandran. It stated that:

Mr. Chandran testified that he has lost all trust in the Bank to deal with him in a fair and professional manner...I find that the actions of the Bank in reaching such serious findings of misconduct, the imposition of discipline and the mandatory transfer to alternate positions (with lesser terms and conditions of employment) goes to the root of the employment contract and a fundamental breach of the employment agreement, which constitutes a constructive dismissal.”

Mr. Chandran was awarded eighteen months pay in lieu of notice, reduced to fourteen months as a result of his mitigation.

WHAT DOES THIS MEAN FOR EMPLOYERS?

  1. In this case, a finding of fact regarding Mr Chandran’s behaviour was made without having given him the substance of the allegations against him and an opportunity to respond. This turned out to be an unreliable factual foundation on which to proceed to discipline him. If an employer wishes to act based on information it has received regarding inappropriate employee behaviour, particularly when such actions will have significant impact on the employee in question, it is prudent for the employer to provide detailed allegations of the behaviour to the employee for response, before taking such action.
  2. Employers who engage in survey like inquiries should be prepared to change course to a more formal type of investigation if the survey reveals alleged behaviour that is contrary to its policies, and identifies an individual or individuals who are allegedly responsible for such behaviour.
  3. Employers may still wish to conduct surveys or 360 reviews and provide participants with promises of confidentiality. Employers must be very cautious in how they use the information that comes to them as a result of these processes, and if it relates to an alleged employee breach of policy, not to jump to factual conclusions.