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Skip the Investigation and Risk Punitive Damages

In recent cases such as Smith v Vauxhall Co-Op Petroleum Limited, 2017 ABQB 525 and Garnett v Alberta Motor Association, 2017 ABPC 267, Alberta courts have cautioned employers about the importance of properly investigating complaints of impropriety in the workplace. We have seen that disciplining an alleged wrongdoer on the basis of an inadequate investigation can lead to sanctions by the courts. According to a recent Ontario decision, the effect of which shouldn’t come as a surprise, failing to investigate a complaint and then terminating the employment of the complainant is also not looked on favourably by the courts. In the case of Horner v 897469 Ontario Inc., 2018 ONSC 121, the Ontario Superior Court imposed monetary sanctions against an employer that, among other things, failed to conduct any type of investigation into allegations of workplace harassment.

The plaintiff, Wendy Horner, claimed she had been wrongfully dismissed and was entitled to damages in lieu of notice for a period of six months, as well as damages for violation of human rights, intentional infliction of mental suffering, and punitive and aggravated damages. As the defendant had been noted in default, the facts in the statement of claim were deemed admitted and the Court awarded damages in lieu of notice of $10,000. The balance of the claims proceeded to an uncontested trial.

Leading up to the termination, the plaintiff’s evidence was that throughout her employment, another employee (the “Employee”) harassed her, was intentionally rude to her and “routinely belittled” her, both when they were alone and with others. In December 2016, the plaintiff’s evidence was that the Employee deliberately elbowed her as she was attempting to move behind him in a hallway and then subsequently denied elbowing her intentionally, telling her to “take a pill.” She reported this to her direct supervisor. Two days later, the plaintiff needed and asked repeatedly to access a drawer that the Employee was standing in front of. The Employee turned to her, visibly angry, and said “can you not wait?” Afterwards, she was upset, told her direct supervisor that she thought that she should go home, to which the response was “saluting her” and saying “goodbye.”

On December 22, 2016, the Plaintiff spoke to the owner because she felt her concerns were not being taken seriously. She explained what happened and said she needed “time away.” The owner advised that she could take some time off and they would “figure this out in the new year.” On December 28, 2016 she received a termination letter, signed by the owner, dated December 22, 2016, stuck into the back door of her house. The termination letter provided that the date of the termination of her employment was December 22, 2016, and that:

Your position is been [sic] terminated with cause as result of your conduct. On December 22, 2016, you were at the retail counter and wanted access to a drawer that your fellow employee… was standing in front of. You lost your temper and angrily ranted against… while he was serving the customer. You have reacted in this unprofessional manner on other occasions and have been reprimanded for it. I cannot and will not condone this type of behaviour.

The Plaintiff, who was being treated for depression prior to termination, was subsequently diagnosed with acute depression, began medication which caused side effects such as nausea and fatigue, had sleep issues, started attending counselling, lost weight, and became reclusive and isolated.

Following Boucher v Wal-Mart Canada Corp., 2014 ONCA 419, the Court awarded $10,000 as punitive damages, stating:

I am satisfied on the evidence that the plaintiff was harassed in the workplace and that the employer, rather than investigating, terminated the plaintiff. As such, I find that the employer’s conduct was malicious, oppressive and high-handed and must be deterred.

Further, following Honda Canada Inc. v Keays, 2008 SCC 39, the Court awarded $20,000 in aggravated damages, stating:

In this case, rather than “figuring this out in the new year” as he told the plaintiff he would, the employer immediately terminated the plaintiff’s employment without further discussion and delivered a termination letter during the Christmas holidays by sticking a letter in the back door. The manner of the termination was beyond “cold and brusque”; it was cowardly.

Ultimately, the price paid by the employer for terminating the employee in the manner it chose, without conducting an investigation into the alleged harassment, was over $40,000, as the plaintiff was also awarded her legal costs. It would have been far more cost-effective for the employer to have investigated the allegations of harassment and taken appropriate action in the first place. Having a comprehensive policy for the investigation of workplace harassment is critically important. Taking care to make employees aware of applicable policies and procedures, and making sure supervisors and managers follow them, are also key to avoiding the pitfalls suffered by the employer in Horner. Field Law can assist with the formulation and implementation of these policies.

Be sure to stay tuned as Field Law will be offering a workshop on effective organizational response to allegations of misconduct and harassment in the workplace in the fall of 2018.