by HOWARD LEVITT

Howard Levitt is senior partner of Levitt LLP, (levittllp.ca) employment and labour lawyers. He practises employment law in eight provinces.

7 Dec 2011

Employers needn’t fear legal repercussions when using right to demand accountability

British Columbia Canada: Workers can’t use lawyer to derail investigation

Threatening to sue one’s employer is the ultimate career killer, as Sukhwinder Grewal found out.

Grewal, the manager of various Khalsa Credit Union branches in British Columbia’s lower mainland, was proud of her achievements. Under her watch, loans and deposits increased while delinquencies fell.

Dalhir Sohi, chief executive of Khalsa Credit Union, was less impressed. He was critical of her on a number of fronts including lack of punctuality, giving preferred rates on certain loans and being disrespectful at a head office meeting. Grewal responded aggressively to his criticisms.

Matters came to a head when Sohi discovered that Grewal’s own mortgage was renewed prior to its expiry, without penalty, under what appeared to be irregular circumstances. She also appeared to have obtained an unauthorized, below market, interest rate. When Sohi requested Grewal meet with him to answer questions, she left on sick leave for 10 months.

On her return, two meetings were scheduled before Grewal agreed to be interviewed.

When she finally attended, she failed to answer critical questions.

The day after the investigatory meeting, a letter arrived from Grewal’s counsel. It accused Sohi of making baseless accusations against Grewal and demanded they be withdrawn and Sohi apologize. Otherwise, the letter threatened, she would sue him and the credit union.

Not prepared to apologize, Sohi did not respond, prompting another letter of demand from Grewal’s counsel, this time accusing the credit union of having engaged in bad faith. It referred to Sohi’s allegations as spurious and meant to humiliate Grewal and concluded with a request to clarify whether she had been terminated.

This time the Credit Union answered. In light of Grewal’s willingness to make unfounded attacks against her employer, her counsel was informed, she had effectively resigned. Grewal sued for wrongful dismissal.

Rejecting the employer’s contention Grewal had resigned, Justice R.B.T. Goepel nonetheless found the credit union had cause for dismissal. The accusatory letters from her counsel were not only disrespectful and inaccurate, but had destroyed the employment relationship.

Grewal had to assume responsibility for the irreparable harm she inflicted on the employment relationship by having counsel send the letters. After 15 years of service, she had only herself to blame for walking away without compensation.

The decision ensures employers need not be paralysed by possible legal repercussions.

If you discover evidence of misconduct, do not be afraid to investigate. Sohi had grounds to suspect Grewal and was within his rights to demand accountability.

It is not defamatory to inform an employee of the accusations against her, nor is anything wrong with advising senior management or a board of directors of concerns about an employee and an ongoing investigation.

Employees must answer questions regarding their conduct at work. They cannot decline to respond.

The tactic of having a lawyer write a letter attacking the employer’s integrity or right to conduct an investigation will boomerang. An employee cannot hide behind a lawyer in an effort to derail a legitimate investigation. When an employee’s counsel attacks the employer’s good faith, without cause, I invariably ensure it is used both as part of the defence and at the trial.