The Significant (and Avoidable) Costs of a Poorly Run Workplace Investigation
Previously printed in the LexisNexis Labour Notes Newsletter.
A recent decision of the Ontario Court of Appeal acts as a cautionary tale for all employers when it comes to conducting (or not conducting) workplace investigations.
Melissa Doyle worked for Zochem Inc. in a supervisory role for approximately nine years. She was the only woman in the plant and, at the time of her dismissal, had long endured sexual harassment by the Maintenance Supervisor at the company.
This harassment came to a head at a production meeting where the Maintenance Supervisor and another employee (both of whom knew that Doyle’s employment was due to be terminated shortly) demeaned and belittled her in front of a number of other employees. She left the meeting in tears and filed a complaint with the Assistant General Manager.
Despite being inexperienced in workplace investigations, the Assistant General Manager conducted the investigation, which was ultimately described as “cursory” by the Court. The investigation took one day, and Doyle was never given the opportunity to provide a statement in the course of the investigation and not told its results.
Five days after the filing of the complaint, Doyle’s employment was terminated.
Subsequent to the end of her employment, Doyle spiraled into a major depressive disorder with anxiety.
Ontario Superior Court of Justice
Doyle filed a wrongful dismissal claim and sought a broad range of damages, including aggravated and punitive damages and damages for breach of the Ontario Human Rights Code. Zochem responded by pleading after-acquired cause.
Finding no evidence of after-acquired cause, the Court ruled in favour of Doyle and awarded her ten months of notice as well as $60,000 in moral damages and $25,000 in human rights damages. The Court found support for such damages in a number of factors, including, most significantly, the investigation of Doyle’s harassment complaint.
Ontario Court of Appeal
On appeal, Zochem took issue with the damages awarded, asserting that the moral and human rights damages allowed Doyle to “double-dip”. Zochem argued that the same conduct led to both damages awards and, in awarding moral damages, the Court should not have given consideration to, among other things, the investigation into the harassment complaint on the basis that the company’s dismissal decision had been made prior to the filing of the complaint.
The Court of Appeal disagreed with Zochem and dismissed the appeal in its entirety, making the following observations:
- In awarding moral damages, the employer’s conduct as a whole (rather than just the conduct at the very moment of termination) and its impact on the employee should be considered, such that it was appropriate for the Court to view the “cursory investigation and attendant dismissal” of Doyle’s harassment complaint as a relevant consideration. This was especially so given the temporal proximity to her dismissal and the impact of the company’s conduct on Doyle.
- In awarding moral and human rights damages, the Court was not allowing “double-dipping”. Even though both awards were the result of the same or similar misconduct, the damages served different purposes: moral damages are awarded as a result of the unfair or bad faith manner of dismissal; and human rights damages are awarded to compensate “for the intrinsic value of the infringement of rights under the Code”.
Lessons for Employers
While it is not clear why Zochem chose not to conduct a fulsome investigation of Doyle’s harassment complaint, it is not a stretch to suggest that the company may have felt that a full investigation was unnecessary as the decision had already been made to terminate Doyle’s employment at the time of her complaint.
This case serves as a clear warning of the significant and costly consequences of the course of action (or inaction) taken by Zochem and should motivate employers to ensure that workplace investigations are conducted in a comprehensive and professional manner.
In particular, in conducting workplace investigations, employers should:
- Thoroughly investigate all complaints of workplace harassment;
- Ensure that investigators are experienced and objective;
- Consider retaining an external investigator, particularly where the allegations being investigated may amount to prohibited conduct under human rights or workers’ compensation legislation; and
- Ensure that all parties to a complaint, and all material witnesses, are interviewed and given the opportunity to make statements prior to the completion of the investigation.
Had Zochem gone through these steps, it likely would have taken a different approach to Doyle’s dismissal and probably would have been able to avoid the significant damages awarded against it.
 Doyle v. Zochem Inc., 2017 ONCA 130.
 A more comprehensive overview of the facts of this case can be found in the February 2017 edition of the Labour Notes newsletter.
 Doyle v. Zochem Inc., 2017 ONSC 920.