Employee’s wrongful dismissal claim defeated by secret recordings

The B.C. Court of Appeal dismissed a former Mercer Celgar financial analyst’s charge of wrongful dismissal, due to the fact the employee had made over 130 secret recordings of superiors and colleagues. The employee claimed he made the recordings initially to aid him in learning English, but also to act as evidence of alleged discrimination.

In the later years of his 10-year employment at the Castlegar-based Mercer, he also recorded HR professionals when he was disputing the company’s bonus award scheme.

Melanie Harmer, partner with McMillan LLP in Vancouver, said that the “extreme nature” of the employee’s recordings formed the basis of the court’s decision.

“The issue was there's a relationship of trust between the employer and the employee, and these surreptitious recordings were so numerous and over such a long time, that it amounted to something that sufficiently undermined the relationship of trust,” said Harmer.

“When the court is looking at it retrospectively, it can say that, had the employer known this at the time it terminated, it would have had grounds for cause.”

Employee alleged discrimination, wrongful dismissal based on ethnicity

The employee began making the recordings shortly after he was hired by Mercer in 2010. He alleged that while at the time he didn’t know it was discrimination, his direct supervisor regularly made comments he considered discriminatory based on his ethnicity, which was Russian.

“I felt that he was not treating me the same… I did have a much stronger accent than I have now at the time, and I felt that, you know, his request was justified there. I mean, I didn’t want to argue with him, and I didn’t know that it's not reasonable for a boss to – like, you know, to discriminate against a person because he’s from a different country,” he testified in court.

He did not however make any formal claims at that time about this manager’s behaviour, the court noted. Although the judge decided in favour of the employer in this case, Harmer advised HR to develop strong policies around privacy and ethics, as well as harassment.

The employee’s discrimination claims were found to be unevidenced by the appeals court, but his case is still with the Human Rights Tribunal.

“All important relationships have to have some element of trust – as far as the circumstances of this case, they are quite unusual,” said Harmer.

“He wasn't just recording meetings that were presentations, it was meetings with HR staff, meetings with other employees, which really goes to the heart of the trust relationship between the employer and the employee.”

Wrongful dismissal? HR professionals recorded during bonus award meetings

Over 10 years of employment with Mercer, the employee continued recording meetings and conversations as his relationships with colleagues and managers became more strained. He received two promotions during that time, being named ‘senior financial analyst’, given a raise to a salary of over $100,000 per year, and access to a management bonus program.

In 2019, the employee found out that everyone in his department received a raise except himself, scheduled a meeting with an HR manager, and recorded it – during that conversation, in which he alleged discrimination, he was told by the manager that he “could not complain of ‘discrimination’ based on the fact he had not received a raise,” court documents said.

During that time he also claimed to be working overtime without pay, which was not the case.

Things came to a head in 2020 when he took issue with how the management bonus award scheme was awarded. Particularly, he demanded to know how “personal performance” was determined, and also that the mill’s overall performance was a factor. He recorded two HR professionals during those meetings, which culminated in an email in which he threatened litigation. He was then terminated.

“In a scenario where there is a disagreement about an employee benefit or entitlement such as a bonus, HR should meet with the employee to discuss their concerns,” said Harmer.

“HR should, ideally, contact a lawyer in advance of any such meeting to understand their legal obligations under applicable employment legislation, the common law, or the employment agreement (depending on the situation) so that they are prepared for the meeting, understand any potential risks, and can properly address the employee’s concerns.”

Wrongful dismissal claim defeated due to secret recordings

The employee then filed claims of wrongful dismissal and discrimination based on ethnicity, with the Supreme Court of British Columbia, the Employment Standards Branch, and the B.C. Human Rights Tribunal, which is where the recordings were presented as evidence.

When Mercer became aware of the recordings, which numbered over 130, it decided that it had cause to terminate the employee, based on the principle of after-acquired clause.

The Supreme Court agreed, stating in its judgment that, “the plaintiff cannot invoke an irrational concern to support the reasonableness of surreptitious recordings that would otherwise be treated as destroying the trust between the plaintiff, his colleagues, and his employer.”

After-acquired cause granted - based on broken relationship of trust

The court pointed out that after-acquired cause is applied only with careful consideration, but due to the non-consensual, ongoing and self-beneficial nature of the employee’s actions, in this case it stood. Plus, he signed code of ethics policies with Mercer, and as an accountant was bound by the Chartered Professional Accountants of British Columbia Code of Conduct.

“In a digital age, where everybody has a smartphone able to record, this is something that employers are potentially going to face,” said Harmer.

“You can have workplace policies that deal with the use or misuse of confidential information, and have employees acknowledge seeing these policies, and have a copy of it and agree to abide by it.”

The second part of that is to actively enforce those policies, she said.

“If you discover that an employee has breached a policy, one of the steps you can take is to provide a written warning.”

The appeals court also concluded that to allow the employee’s cause for making surreptitious recordings would set a dangerous precedent, possibly encouraging other disgruntled employees to do the same. That circumstance would be damaging from a policy standpoint, the judge explained, as privacy issues are becoming increasingly prevalent in employment contexts.