As I have put it, suspension is not a neutral act and the fact of suspension renders the employee’s situation untenable.

Worse, even at a new place of employment, if co-workers learn (often by an anonymous letter) that the person had been accused of misconduct in a previous job, the employee can never regain their career footing.

All that is true even if the employee is found to have been entirely innocent. But what if they are, indeed, innocent, but the investigator negligently finds them to be at fault? What recourse does an employee have against their employer for conducting a negligent investigation?

A recent decision of the B.C. Supreme Court involved a case commenced by Sergio Salina, an investment advisor, against the Investors Group Financial Services.

Investors Group’s compliance department had investigated Salina, relating to services he had provided to one of its clients, to determine whether he had violated any of its rules and provided its findings to the Mutual Fund Dealers Association of Canada. Salina was subsequently fired for cause after 27 years and sued for wrongful dismissal, for his allegation that the company had negligently conducted its investigation and for reporting inaccurate information to the MFDA.

Since Investors Group had a regulatory obligation to make the report to the MFDA, it was ultimately conceded that Investors had no obligation to Salina respecting the information it reported. The court held that, as long as such information is provided to a regulatory body in a confidential way concerning a member’s conduct, it is absolutely privileged and the party providing the information can never be sued by the member/employee affected. The court left open the possibility of such a lawsuit if it could be proved that the information was provided maliciously without an honest belief in its truth. But otherwise, it cannot be sued.

This issue of a negligent investigation had been previously discussed by the Ontario Court of Appeal when a company retained a private investigation firm to investigate suspicions of drug dealing and theft against one of its employees. As a result of a negligent investigation, the employee was erroneously accused, dismissed and arrested by the police, who had been contacted by the investigator.

The court held that the investigation firm could be liable for negligent investigation because the firm “was in the business of investigation, performing functions analogous to those performed by police.” However, the court said that “different considerations apply when considering the potential liability of an employer … even one that embarks upon a criminal investigation of its employee.”

Based on this and other precedents, the court in Salina held that “there is no duty of care owed to an employee by an employer who conducts a negligent internal investigation of the employee.”

The court noted that this did not necessarily apply to an individual decision-maker whose investigation was not merely negligent but actually malicious.

I have often talked about the various disadvantages of using external investigators and the benefits of using your own employees, trained in the fairly simple art of workplace investigations. This suggests another one. Subject to the employee being unable to prove that one of the corporate decision-makers acted, not merely negligently but maliciously toward them, an employer cannot be sued for a negligent investigation. But an outside firm of workplace investigators appears to have no such legal protection if they are careless in their craft since they are in the business of investigation.

The dystopian nightmare of workplace investigations, where employees are accused of misconduct, deprived of the presumption of innocence and subject to purgatory, even when entirely innocent, has another branch — the inability generally to sue even if it was conducted negligently. The only recourse is that the employee can still sue the employer for wrongful dismissal and clear their name that way. The investigator’s findings are no shield for the employer as the judge has to hear the evidence and make up its own mind, unclouded by whatever the investigator’s findings were.

But what an unfortunate incentive to have to sue!