In Arora v. ICICI Bank of Canada, 2024 ONSC 4115, the Ontario Superior Court of Justice provided helpful commentary to understand what is required when employers engage in workplace investigations leading up to termination of employment for cause.

The Court re-affirmed that employees being investigated for misconduct do not have a free-standing right to a specific kind of investigation. Any flaws in an investigation go to the weight of evidence to establishing cause to terminate employment, but flaws are not relevant to the core underlying question of whether there was cause to terminate the employment. In other words, even in the absence of a proper investigation, an employee’s misconduct may still justify termination for cause.

The Court also provided helpful commentary on the enforceability of contractual provisions seeking to claw-back variable pay in the event of termination of employment.

Background

In Arora, the employee was a long-service employee having been with the defendant employer for 15 years. At the time of his termination, he held a senior position. As part of his obligations to the employer, he was required to refrain from competing with his employer or disclosing confidential information.

The employer’s internal data leakage prevention program flagged the employee’s emails for possible data leakage and other violations of the employment agreement which triggered an investigation.

The employee was called into a meeting with human resources professionals without warning who asked him questions regarding his email activity. The employee made two arguments for why this investigation was flawed. First, he claimed that he was not provided with advanced warning about the interview and that this contributed to his dishonesty when asked questions by his employer. Second, the employee had provided the names of other individuals engaged in similar activities internally and with competitors, who were not interviewed by the employer. The employer had decided to not interview these individuals to avoid conflict with the employer’s competitors.

An investigation Need Not Be Perfect

The court found that the investigation was adequate stating:

• An employee does not have a free-standing right to a certain kind of investigation. Specifically, an employer, given information during the course of an investigation does not need to interview every named individual if legitimate business concerns exist.
• Further, even if an investigation does have flaws, such flaws go to the weight of the evidence and not the underlying question of whether there was cause to terminate employment.
• Finally, the employee’s own dishonesty hindered the full effectiveness of the investigation and therefore could not subsequently be used by the employee to attack the adequacy of the investigation.

Key Takeaways

This decision serves as a reminder that an investigation does not need to be perfect, and that employees also play a role in creating an adequate investigation process.

If you have any questions regarding a workplace investigations, please do not hesitate to contact a member of our Labour & Employment team.

*A special thank you to Tish Lewis for her great help with this article.*