At common law, employers do not have a duty to investigate allegations of misconduct prior to dismissing an employee. However, having no duty to conduct investigations at common law does not necessarily mean that courts do not want to see those investigations taking place. In fact, if an employer is required to establish just cause for dismissing an employee, they may very well wish that they had conducted such an investigation anyway. Not conducting an investigation and not affording the employee a reasonable opportunity to respond to allegations of misconduct could make it much more difficult for an employer to discharge the burden of establishing cause for dismissal.

When to Conduct an Investigation: Mazanek v. Bill & Son Towing

The recent Ontario Superior Court decision Mazanek v. Bill & Son Towing provides an instructive example of when an employer should conduct an investigation prior to dismissal despite not having a duty under common law to do so.

At issue in this case was the summary dismissal of an employee who worked as a tow truck operator. The employer argued that there was cause for dismissal on the grounds that the employee was stealing gas. The employee was given no warnings and was not given an explanation at the time of his dismissal.

There were four drivers working for the company and each driver shared one company gas card to refill their trucks. In reviewing the fuel consumption for the company’s main truck, it was discovered that the fuel consumption was unusually high. The employee was terminated as a result of this high fuel consumption. A co-worker and fellow driver was also terminated, for the same reason.

The company possessed the burden of proving that there was just cause for the employee’s termination on a balance of probabilities. They failed to discharge this burden. One important reason why they failed to discharge this burden was because the investigation they performed was inadequate. The company’s investigation and internal review revealed that either the employee or the co-worker who was fired alongside him were the ones operating the truck at the time of the irregularly high fuel consumption. The company could not determine which of the two was responsible, so the company terminated both. The company did not bring the allegations of theft to the employee’s attention. They did not give the employee the opportunity to respond. They could have but did not take steps to obtain better evidence of the alleged theft before proceeding with the termination.

The Court found that the employer should have given the employee the opportunity to respond to the allegations, particularly where the allegations are serious. Allegations of theft, fraud, and sexual harassment were noted by the Court as being serious allegations deserving of such an opportunity to respond.

The investigation failed to establish just cause not only because it did not afford the employee with the chance to respond, but because it only revealed that the employee or his co-worker might have been the ones involved. This uncertainty was not enough to establish cause for termination. As such, the Court found there was no cause. Had the employer conducted a thorough investigation, they may have been able to show that the employee was the one stealing the gas and they may have been successful in demonstrating cause for dismissal.

Takeaway for Employers

Although employers generally do not have a duty at common law to investigate allegations of misconduct prior to the dismissal of an employee, the above case demonstrates that it may be pragmatic to conduct such an investigation in any event. If an employer were to find themselves having to defend their decision to terminate an employee in the context of a wrongful dismissal suit, they may benefit greatly from the support of a thorough investigation proving the misconduct alleged.