Common Pitfalls of Workplace Investigations

November 13, 2012

Conducting workplace investigations is an important but sometimes haphazard job of employers.  Whether to address allegations of workplace misconduct or performance issues, employers need to approach complaints and investigations in a fair and objective manner.

Conducting thorough workplace investigations is simply good business practice.  A proper investigation should be an exercise in fair and objective fact finding.  The object of the investigation should be to discover all of the relevant facts and evidence to place the employer in a position to make the best decision for its business.  With a thorough understanding of the facts surrounding a complaint, an employer will be able to fully assess the pros and cons of its decision, and also have the best chance of justifying its decision should the complaint lead to a hearing before a court, arbitrator or other tribunal.

Employers should gather all of the facts and evidence in a timely manner prior to taking any action on a complaint.  Decisions to discipline or to terminate employees for cause should not be taken without undertaking a proper investigation, particularly for allegations of serious misconduct such as fraud or other criminal conduct.  Failing to conduct a proper investigation exposes employers to the risk that they will not be able to justify their decisions to discipline or terminate.  In the case of terminations, the courts have held that it is an implied term of every employment contract that an employer will act in good faith in the manner of dismissal.  Conducting a proper investigation prior to termination for cause goes a long way towards discharging the employer’s obligations in this regard.

Employers should also remember that allegations of employee misconduct may have serious ramifications for the employee or employees involved.  For instance, allegations of misconduct often lead to stigma for the subject of the allegations.  Therefore, employers should treat any such allegations seriously. The more serious the allegations, the more important it will be for an employer to conduct a fair and thorough investigation.

There have been several recent cases where substantial damage awards have been issued against employers as a result of poor investigations into complaints of employee misconduct.

In Vernon v. British Columbia (Liquor Distribution Branch), a senior store manager with 30 years’ service brought an action for wrongful dismissal against her former employer in the B.C. Supreme Court.  The employer unsuccessfully argued that it had just cause for dismissal based on alleged workplace misconduct, including claims of bullying and harassment.

The Court was very critical of the manner in which the employer conducted its investigation.  It found that the investigation was flawed as being neither objective nor fair.  As a result, the Court awarded 18 months pay in lieu of notice, special damages, aggravated damages of $35,000 and punitive damages of $50,000 against the employer.

The Court found that the investigation was flawed from the start. The person appointed to investigate was a labour relations advisor who had previously counseled the plaintiff regarding various employment issues, including matters relating to the complainant in that case.  The investigator was not impartial and should not have been in charge of the investigation. Furthermore, the Court found that the investigation was conducted unfairly.  The senior store manager was subjected to interrogation, without being given the opportunity to fully answer each complaint made against her.  In fact, many of the complaints made against the store manager remained unproven by the time the employer had decided to terminate her employment.  The report on which the decision to terminate was based did not mention that she had admitted to and apologized for some of her harsh manner and promised to improve it.

The Vernon case serves as a cautionary tale about the significant risks facing employers who do not conduct proper workplace investigations.

The following are some critical elements to every successful workplace investigation to help avoid common pitfalls:

Conduct investigations promptly:

The timing of an investigation is important because the failure to conduct it in a timely manner may be considered prejudicial to the employee and, furthermore, an employer’s credibility may be hurt for failing to address an issue promptly.

Investigations should be fair and objective:

Appoint an impartial investigator.  An employer may wish to consider retaining an outside expert who can remain impartial throughout the investigation process.  Employers must refuse the temptation to dispense with proper investigations, even where there appears to be overwhelming evidence against an employee.   Seemingly clear cut cases may not turn out to be so if mitigating or exculpatory factors are later discovered.

Investigations are not fair if the subject of the complaint is not heard:

Investigations can involve many steps, including obtaining witness statements and conducting witness interviews.  However, a key part of every workplace investigation is to allow the subject of the complaint to tell his side of the story.  Fairness dictates that the subject of a complaint should receive proper and timely notification of each and every allegation made against him.  The subject of the complaint should be given sufficient time to consider each allegation, and the opportunity to meaningfully respond.

Keep good records of the investigation:

Failure to keep good records may later hurt an employer’s chances at justifying any decisions respecting alleged workplace misconduct.  Keeping a good record not only enhances the employer’s credibility but it may also be used later to impeach an employee’s position.

Conclusion

Employers are poorly served by those who conduct haphazard workplace investigations.  Not only do they risk jeopardizing the effort and results of the investigation, resulting in time and resources lost, there are many legal ramifications for failing to conduct proper workplace investigations.  Employers will be asked to account for their decisions down the road, and should be able to do so with confidence that a fair and proper workplace investigation has been conducted.

Disclaimer

This publication is provided as an information service and may include items reported from other sources. We do not warrant its accuracy. This information is not meant as legal opinion or advice.

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