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Company’s failure to properly investigate negative allegations relating to manager cost it case in court

Having just been advised of the less than impressive results of an “employee satisfaction survey” at the National Bank’s branch in Vaughan, On., Adrian Chandran, the senior manager at the branch, was in shock.

To Chandran’s dismay, many of his subordinates accused him of making condescending remarks, embarrassing others and behaving like a bully. Some claimed they contemplated seeking legal advice. Chandran asked for the specifics of those complaints so that he could defend himself, but his request was denied.

Convinced that Chandran’s supervisory duties should be taken away from him because of the complaints, the bank gave him the option of choosing between two available non-supervisory roles. Both alternative positions were at lower grade levels, although Chandran’s salary would not initially change. He was then warned that behaviour similar to that which led to the employee complaints would be grounds to terminate him for cause.

Chandran argued that either of the two alternative positions offered to him were tantamount to a demotion and that, based on the bank’s decision to discipline without first allowing him to defend himself, he had lost all trust in the bank. Chandran felt that he was entitled to leave but still entitled to severance.

At a recent trial, the court sided with Chandran. It concluded that one of the distinguishing features of this case was the bank’s decision to impose discipline against Chandran without a proper investigation. Although Chandran may have engaged in the conduct that he was accused of, the bank’s failure to properly investigate effectively prevented it from relying on that conduct at trial. This fact, coupled with Chandran’s perceived demotion, justified his resignation with pay. Chandran was awarded severance and his legal costs.

The human resources lessons are clear: employers should pause before blindly accepting allegations of harassment and bullying at work. As harassment is often in the eyes of the beholder, even the workplace bully should have a full and frank opportunity to defend himself. To do otherwise flirts with a significant lawsuit.

• Daniel Lublin is an employment lawyer with Whitten & Lublin LLP.

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