It's often a best practice, but sometimes it's required by law
When employment-related disputes or incidents make the news, the story often refers to an ongoing or recently completed workplace investigation.
While a need to formally investigate alleged misconduct can sometimes be clear, apart from investigations mandated by statute there are few clear rules for when a formal investigation is needed.
However, where serious misconduct is being alleged, whether by management or by another employee, failing to properly investigate can increase the risk that resulting discipline - particularly termination for cause – will not be upheld. That is especially the case where an employee accused of serious misconduct is not given a chance to explain their actions.
Anytime an employer evaluates workplace misconduct, some kind of “investigation” is needed. However, we can differentiate between assessing an incident and conducting a more formal investigation, which is the focus of this article. The latter refers to investigations involving an appointed investigator, interviews with implicated parties, interviews with witnesses, and completion of an investigation report.
In certain cases, a formal investigation is required by law. Notably, employers regulated by Quebec, Ontario, and federal law are obligated to investigate where workplace violence or harassment is alleged.
For example, Ontario’s Occupational Health and Safety Act requires an employer to ensure that an investigation is conducted into incidents and complaints of workplace harassment that is appropriate in the circumstances. The federal Work Place Harassment and Violence Prevention Regulations establish an even more stringent regime for responding to allegations of workplace harassment, including: the employer’s obligation (via its “designated person”) to assess whether an alleged occurrence amounts to harassment as defined in the Canada Labour Code; and if the parties do not agree on whether harassment has occurred, appointment of an investigator at the employee’s discretion and employer’s cost.
When is a formal investigation best practice?
There are many more circumstances in which a formal investigation may not be required by statute but is nevertheless good practice. These circumstances usually entail two things: seriousness and uncertainty.
Workplace investigations, particularly those conducted by third parties, are disruptive, time-consuming, and (often) expensive. Thus, the need for a formal investigation is typically driven by the severity of the conduct alleged. At the same time, an investigation is usually only necessary if there is uncertainty over whether or the extent to which conduct was improper. Even the federal regulations only permit complainants to require an investigation if there is no agreement on whether harassment or violence has occurred.
Examples of situations in which an investigation may be needed include allegations of illegality (including whistleblowing), breaches of safety standards, harassment, violence, and discrimination. If an employee is found to have done any of these things, serious discipline - including termination - is likely to result. Therefore, the implicated employer must have a clear, reasonable basis for its decision. In situations in which an employee’s action is unclear or disputed, an investigation is often needed to reach something closer to the objective truth.
Who should be the investigator?
Confirming that a formal investigation is required is only the first step. An employer must also determine who should conduct the investigation.
In some cases, legislation demands that an investigation be conducted by a third party. For example, under the federal regulations, although an investigator is not necessarily required to be a third party, the obligation that the investigator either be agreed upon by the complainant or appointed from a Canadian Centre for Occupational Health and Safety list has that practical effect.
There is no common law rule dictating when an independent third party must conduct a workplace investigation. Therefore, apart from where a statute requires hiring an outside investigator, an employer has the discretion to conduct an investigation internally or bring an investigator from outside the organization to handle the task. That said, while there is no clear rule for when an outside investigator is needed, employers should look to third parties if they are concerned that implicated employees - whether the complainant, respondent, or both - may allege that an investigation conducted by existing employees is not independent. This is particularly so where an accused employee is a senior executive. Put simply, if a senior executive is implicated, it will be difficult for an internal investigator, be it an HR lead or someone else, to convince a complainant and, potentially, a court or tribunal, that their conclusions were truly objective and not coloured by internal influence.
Employers should also consider looking to an outside investigator if the investigation relates to particularly sensitive subject matter, such as sexual harassment, violence, theft, or fraud. These are situations in which employee witnesses may not feel comfortable to speaking honestly to an internal investigator but may be more honest with an outsider. While retaining an outside investigator can come at a substantial cost, doing so will often help employers better understand “what happened” in sensitive situations - better positioning the employer to act on the investigation’s findings.
Ultimately, whether or not a formal investigation, including one conducted by an outside party, is required will usually be a question that demands logic, judgment, and an assessment of risk. While the stakes may be higher, these are the same skills that counsel and HR decision-makers must frequently exercise in managing workplace conflict.
Kyle Lambert is a partner in the Litigation & Dispute Resolution and Employment & Labour Relations groups at McMillan LLP in Toronto.
