The recent media attention focusing on workplace sexual harassment has rightly brought this issue to the forefront of employment law. The remedies available to the person victimized in such a manner have been discussed in a prior article.

The Duty to Investigate

This issue raises, however, not only what the victim might do to seek redress but also what the employer must do to insure a proper investigation of this issue and the risks which may befall it, should it fail in this obligation.

Ontario law[1] mandates an anti-harassment policy be in place by the employer and also that the employer must conduct an immediate and effective neutral investigation.[2] This law, ironically, serves the interests of not only the accuser victim but also the employer.

A second issue and one related to the above, is that all parties must be alert to the distinct possibility that the allegations of harassment may be invented and malicious. It would be naive to believe that all such assertions are made honestly and in good faith. A properly conducted investigation might reveal a sinister motive behind the complaint.

Consequences of a Flawed Investigation to the Accused & the Victim

Should an employer terminate the alleged offender based on serious allegations of wrongdoing absent such a neutral and unbiased investigation, it will find itself facing a dramatic damage award for incremental damages over and above the usual wrongful dismissal sum.

Trial decisions have shown a general theme of significant damage awards against the employer when the investigative technique used has been unfair, or there has been no investigation undertaken at all.

Each case, however, does reflect a universal theme, that the allegations of misconduct are of a grave nature, a flawed investigation has followed and serious harm has been suffered by the innocent party.

Significant sums have been awarded for punitive damages such as $450,000^[3], $100,000^[4], $50,000^{[5] [6]}.Handsome sums have been awarded for aggravated damages such as $200,000^[7], $125,000^[8], $85,000^[9] $75,000^[10], $50,000^[11], $30,000^[12], and $20,000^[13].

The accused offender may well be terminated based on allegations of sexual harassment which are unproven at trial. He or she may win a wrongful dismissal claim but will fail in a claim for additional damages when a proper investigation has been conducted. This is a very important issue to the employer and indeed to overall fairness to all parties concerned.

Sexual harassment cases may take on a different dimension as the victimized plaintiff may also assert that the failure to conduct a speedy and effective investigation has led to a continuum of the damages.

The City of Calgary case involved a successful plea for past and future lost income, apart from a “general damage” award. The case was unusual as the parties had agreed that all forms of potential relief, human rights, arbitral and common law would be determined collectively by the arbitrator. The finding was made that the failure to investigate promptly added to the plaintiff’s emotional turmoil, which ultimately prevented the complainant from permanently returning to work.

All of the above background is important as the award, apart from $125,000 for what was, in essence, aggravated damages, also allowed for additional sums of lost past income of $125,000, a future income loss of $500,000 and a future pension loss of $65,000.^[14]

This is reflective of the same motivator for prompt steps to investigate a complaint particularly of this nature, in which the conduct may be a continuum.^[15]

This context takes the failure to investigate to a new level of significance. It is not purely a matter of a flawed investigation coming to an incorrect or biased result. Now, the failure to investigate itself has exacerbated the very damage the process was intended to stop.

All this being so, the right to prove the case to date has been undeterred by the failure of the company to investigate or to investigate fairly.^[16]

Invented Allegations of Sexual Harassment

Persons making fictitious allegations of sexual improprieties will suffer two potential adverse consequences. In a workplace setting, such conduct will surely result in termination of employment for just cause.

Secondly, an action for defamation may follow against the makers of the allegations. In such a case, the accusers will be shielded by the defence of qualified privilege, which can only be defeated by the plaintiff proving that the allegations have been made with malice. This privilege allows immunity to the maker of the statement, even though defamatory, in certain situations such as reporting of a wrongdoing in this context.

Such was the decision of the Alberta Court of Appeal in its 2011 decision of Elgert v Home Hardware which upheld the trial decision. The trial had been before a jury which found that the two female alleged victims had acted maliciously, hence depriving them of the defence of qualified privilege. One of the women was found to have made the allegations due to disciplinary action taken against her work colleague boyfriend by the man accused of sexual harassment. Damages were awarded against them in the sums of $50,000 and $10,000 for defamation.

Get Advice Before You Act

Sexual harassment cases have taken on a new dimension in recent months. Employers are often caught in the middle of an emotional conflict, often unware of whom is right. The company must tread carefully to assure the confidence of all parties caught in the issue and indeed of its entire staff. For the victim, legal advice must be the cornerstone of his or her actions. For the alleged offender, the same must be true. Should you are dealing with such complicated matters, you will know that it is important to obtain legal advice from competent employment law counsel.

Contact the offices of Toronto employment lawyers Grosman Gale Fletcher Hopkins. We regularly advise employees and employers on legal workplace issues. Contact us online or by phone at 416 364 9599 to schedule a consultation.

[1] Ontario’s Occupational Health and Safety Act

[2] Such is also the case with the Canada Labour Code, section 247.1.

[3] Pate v Galway, Ontario Court of Appeal 2013

[4] Boucher v Walmart Ontario Court of Appeal 2014, Downham v County of Lennox and Addington 2005, Ontario SC trial;  Tl’azt’en First Nation v Joseph 2013, Federal Court upholding the adjudicator’s award under the Canada Labour Code

[5] Elgert v Home Hardware Alberta Court of Appeal 2011

[6] An early case to award punitive damages due to the lack of a fair process was that of the 1992 decision of the Ontario Court of Appeal in Francis v CIBC. The Court of Appeal did set aside the award of aggravated damages made at trial as no medical evidence was introduced to support this claim. It did, however, double the punitive damage award to $40,000 and maintained the trial award of solicitor-client costs.

[7] Boucher v Walmart above

[8] City of Calgary v CUPE 2013 The damages in this case were described as general damages but are to the same effect.

[9] Tl’azt’en First Nation v Joseph, above

[10] Pate v Galway Ontario Supreme Court, trial level 2009 on first instance

[11] Downham above

[12] Lau v Royal Bank of Canada 2015 S.C.B.C. (reversed on appeal)

[13] Chapell v CPR June 2010

[14] These numbers are not arithmetically precise.

[15] As discussed above re  Harriott v National Money Mart

[16] Pitt J. came to this conclusion in Quirola v Xerox Canada Inc, [1996] 16 CCEL (2d) 235, CLLC 210-019 (Ont Ct J (Gen Div))