Employers frequently rely on third party investigators for the investigation of workplace incidents, particularly as they relate to harassment in the workplace, as investigations can be time consuming and result in liability if not completed properly. However, it’s important that employers understand that a third party investigation may not be the end of the matter. Should the issue under investigation become the matter of human rights or civil litigation or grievance arbitration, the results of the investigation will not suffice as evidence of the facts in question. While investigations and their results can be useful tools for employers to make informed decisions about how to resolve workplace disputes, the issues will need to be independently considered and proven on their facts in any related hearing. Investigation reports and communications with investigators can also be subject to disclosure requirements and as such employers should approach such communications with caution. The recent arbitration decision in PUC Services Inc. v Power Workers’ Union, 2021 CanLII 12237 (ON LA), provides a helpful review of the law pertaining to third party investigations.
In this recent arbitration decision, the grievor alleged that the Director of Human Resources engaged in workplace violence by shoving them. The employer retained an external investigator, who concluded that the allegation was false and made in bad faith. The employer then engaged another external investigator, who came to that same conclusion. The employer then engaged another third party to conduct validity analysis on the interview transcripts from the two investigations. The validity analysis reports concluded that the allegation was not reliable and contained multiple indications of deception. The employer then sought an independent legal opinion and subsequently terminated the grievor’s employment.
Admissibility of Third-Party Reports
Arbitrator Parmar ruled that the validity analysis reports were not admissible as expert evidence. She discussed the test set out by the Supreme Court of Canada in R. v. Mohan,  2 SCR 9, and in particular, the necessity in assisting the trier of fact as a relevant criteria for the admissibility of expert evidence. She then highlighted jurisprudence to underscore that expert evidence addressing the issue credibility does not meet the test of necessity because that issue falls squarely within the expertise of the trier of fact.
The employer was permitted to rely on the fact that the validity analysis reports formed part of its basis for concluding that termination was warranted. However, any evidence that went beyond that, such as the results of the analysis and conclusions, was limited to the extent possible. In addition, any evidence that was admitted even though it went beyond the issue of the employer’s process, because it could not be separated from the evidence about the employer’s process, was given no weight. In similar fashion, the conclusions in the two investigation reports could only serve as evidence of the basis for the employer’s decision to terminate, and were not admissible as proof that the grievor, in bad faith, had made an allegation that was false.
Arbitrator Parmar went on to address the issue of litigation privilege in relation to the employer’s e-mail communications with investigators. The noted test for litigation privilege, from Cuddy Food Products v. UFCW, (1997) 63 L.A.C. (4th) 365 (Snow), requires that: a) the material was prepared at a time when litigation was pending or reasonably contemplated, and b) was prepared for the purposes of litigation, or that it must be the “dominant purpose” if it was prepared for multiple purposes.
Arbitrator Parmar did not accept that communications made between the first and second investigations were made in anticipation of litigation. She found that when the second investigation occurred, the employer was still determining what, if any, misconduct the grievor had engaged in. This was evidenced in the second investigation notice, which noted the first investigator’s indication that the grievor “potentially made a false complaint.” Arbitrator Parmar then found that even if one of the purposes of the second investigation was to bolster the employer’s position at future possible litigation, the dominant purpose was ensuring that there was a proper investigation so as to not discipline an employee without just cause.
Arbitrator Parmar concluded that she did not need to decide on whether the e-mail communications with third parties were subject to solicitor-client privilege. This is because, even if it existed, the employer waived solicitor-client privilege by voluntarily disclosing the investigation reports, when they could have resisted the production of those reports by asserting privilege. Once privilege is waived, it cannot be done selectively. As such, privilege for documents that clearly and directly relate to documents for which there has been waiver are also waived.
Arbitrator Parmar then discussed the admissibility of the legal opinion and whether or not it was subject to solicitor-client privilege. While the conclusions of the legal opinion were not admissible with respect to the issue of just cause, the legal opinion was deemed relevant to the issue of the validity of the employer’s decision-making process. Arbitrator Parmar concluded that while these types of opinions and advice are obviously subject to solicitor-client privilege, the employer made it very clear that it intentionally disclosed the legal opinion. As such, all communications in relation to that document are subject to disclosure.
Third-party reports will not satisfy the necessity component of the test for admissibility as expert evidence if the report is used to speak to the issue of credibility. This is because assessing credibility is the responsibility of the trier of fact. However, third-party reports and legal opinions are relevant to analyzing the decision-making process in concluding that termination was warranted.
Employer e-mail communications with investigators will not be subject to litigation privilege if after an investigation, the employer is still determining whether or not there was misconduct or if the dominant purpose of those e-mails was to ensure a proper investigation so as to not discipline an employee without just cause.
Once solicitor-client privilege is waived, it cannot be done selectively. If an employer voluntarily discloses third-party investigation reports, e-mails in relation to those reports might not be subject to solicitor-client privilege. However, while independent legal opinions are subject to solicitor-client privilege, the intentional disclosure of those legal opinions means that communications related to it are no longer subject to solicitor-client privilege.
PooranLaw will continue to monitor legal developments related to labour law and arbitrations. In the meantime, if you require legal assistance, we encourage you to reach out to your regular PooranLaw lawyer, or any member of our team.