Legal Words
Pin It

Unfair investigations can get employers in hot water

By Rich Appiah

An Alberta employee was recently awarded $75,000 for the reputational harm and mental distress he suffered from an unfair workplace investigation into his alleged misconduct and his employer’s unfounded allegations of cause for his dismissal. The decision in Lalonde v. Sena Solid Waste is another caution that employers will suffer significant financial penalty if they dismiss their employees in bad faith.

Kerry Lalonde was a 56-year-old millwright who worked for Sena for approximately four years. Prior to his dismissal, he received no disciplinary warning or suspension. In fact, in the months before he was let go, Sena sent him a positive letter confirming that he had earned a merit-based increase to his compensation.

On June 13, 2012, after attending a routine maintenance meeting with staff including his supervisor and a worker named Adrian, Kerry obtained the usual work permit that authorized his work for the day. He also spoke with the safety supervisor, Mark Rosenberg, who wanted to know if Adrian had obtained a work permit. Kerry told Mark that he did not know if Adrian had done so.

Later that day, Kerry was called to a meeting with maintenance manager Victor Geogan. During the meeting, Victor alleged that Kerry put Adrian’s life in danger by allowing Adrian to work without a permit. Victor also suggested that Kerry failed to follow his supervisor’s direction concerning the disposal of scrap metal, implying that Kerry had taken the metal without permission.

At trial, Kerry demonstrated that he was never assigned to supervise Adrian and did not know that Adrian had no work permit. With respect to the disposal of the scrap metal, Kerry explained that his supervisor decided to tidy the warehouse and emptied bins containing the metal into a larger bin. Contrary to Sena’s allegations, Kerry did not disobey any direction of his supervisor.

Unfortunately for Kerry, when Victor confronted him, Kerry was not given an opportunity to respond to Victor’s criticisms. Instead, Kerry was suspended with pay and escorted from the facility. During his suspension, he attempted to communicate his version of events in writing and by phone. The company did not respond to him. In the intervening period, he needed to take a stress-related medical leave of absence.

When his leave ended, Kerry received a letter from Sena advising him that his employment was being terminated immediately for cause due to his failure to follow safety procedures and his supervisor’s instructions. Kerry again attempted to explain events to the company. Sena responded by suggesting that it had conducted an investigation and found that Kerry had engaged in misconduct.

Kerry sued the company claiming pay in lieu of notice of termination as well as aggravated damages for Sena’s mistreatment of him. In a lengthy Statement of Defence, the company attempted to justify Kerry’s dismissal for cause. Nevertheless, as the trial opened in May 2017, approximately five years after Kerry’s lawsuit started, the company withdrew its allegations.

The court held that Kerry would be entitled to aggravated damages if he could demonstrate that the manner in which he was dismissed caused mental distress that was within the contemplation of the parties. Citing the Supreme Court of Canada’s seminal decision in Keays v. Honda Canada Inc., the court underscored examples of conduct resulting in compensable damages, including “attacking [an] employee’s reputation by declarations made at the time of dismissal, misrepresentation regarding the reason for the decision, or dismissal meant to deprive an employee of a pension benefit or other right…”

The court awarded Kerry aggravated damages amounting to $75,000 (in addition to six months’ pay in lieu of common law notice of termination). In support of its decision, the court relied upon the following findings:

Kerry received no “procedural fairness” in the period leading up to his dismissal as the company ignored his version of events and other evidence that supported it.

The evidence suggested that Sena decided to dismiss Kerry within days of his suspension and this supported the conclusion that the investigation “was at best incompetent and unfair, and at worst a sham.”

Kerry’s EI benefits were delayed as a result of Sena’s allegations.

Sena’s mistreatment of Kerry affected his relationship with his spouse and caused him to be “depressed, miserable and uninterested in activities and relationships with family members.”

Kerry lived in small town and was publicly humiliated as rumours concerning his dismissal circulated in the community.

Sena advanced its allegations of cause for Kerry’s dismissal for an extended period of time.

Notably, Kerry’s medical evidence was not strong and included only his own testimony, an unchallenged letter from his wife and two doctor’s notes. No physician testified. In that context, his case serves as a warning to employers that courts will be sympathetic to employees claiming non-monetary losses after they have been dismissed for just cause without a fair hearing. Although case law suggests that investigations into misconduct do not need to be perfect, one-sided investigations and untenable allegations that cause reputational harm or mental distress will result in an award of damages. Sena learned this the hard way. 

Rich Appiah is principal at Appiah Law Employment and Labour Counsel.

Pin It