Privacy Law & Computer
Investigations
Bettina Burgess
Ross Wells
Computer Surveillance
• Types Available:
• Spyware: enables employers to view computer
activities from a separate website, including laptops in
another country
• Keystroke monitoring: records keystrokes and prints
out report showing e-mails, files transferred,
documents printed, and applications run
• Cyber spying: Internet searches and logging onto the
employee’s social networking sites
2
Computer Surveillance
Legislation
• Personal Information Protection and Electronic
Documents Act (“PIPEDA”)
• Only applies to federally regulated employers
• No similar legislation in Ontario yet for provincially
regulated employers
• Municipal Freedom of Information and Protection of
Privacy Act
• provides an exclusion for records relating to employment
4
PIPEDA
• “Personal Information” is broadly defined, as
information about an identifiable individual, but does
not include the name, title or business address or
telephone number of an employee of an
organization
• This definition is being amended, and when passed
will no longer exclude “the name, title or business
address or telephone number of an employee of an
organization”
5
PIPEDA
• The new amendments to PIPEDA provide that the
collection, use and/or disclosure of the employee’s
personal information without the employee’s
knowledge or consent may be permitted if such
information was produced to the employer by the
employee in the course of employment and the
collection, use and/or disclosure of the personal
information is consistent with the purpose for which it
was produced by the employee
6
PIPEDA
• Under the new amendments, employers will also be
permitted to collect, use, and/or disclose the
personal information of their employees without
consent if the collection, use or disclosure is
necessary to establish, manage or terminate an
employment relationship
• The employer must first inform the employee that the
personal information will be or may be collected,
used or disclosed for those purposes.
7
PIPEDA
• Presently, employers may collect and use the
personal information of employees without consent
of the employee if there are reasonable grounds to
believe that the personal information may be useful
in an investigation of the violation of an agreement
or any laws in Canada.
• This does not provide an unfettered right of
employers to collect and use information obtained
from computer monitoring.
8
Common Law Privacy Rights
• Common Law:
• Until recently, it was generally understood that there
was no right to privacy at common law and no tort of
invasion of privacy
• Two 2011 decisions have changed the landscape:
• R v. Cole
• Jones v. Tsige
9
R. v. Cole: Employees May Have a Reasonable
Expectation of Privacy
• An employee may have a reasonable expectation of
privacy when it comes to computer use at work,
even where such use is viewing porn on the
employer’s computers
• Qualification: This case dealt with Charter rights that
are not triggered in the private sector
• Points to be taken from R. v. Cole: implement very
clear policies
10
Jones v. Tsige Tort of Intrusion of Seclusion
• Prior to Jones v. Tsige: No court would definitively
rule that there was no tort of invasion of privacy, but
conversely, no appellate court would find that there
was one.
• Superior Court of Justice, 2010: There is no free
standing right to privacy of common law. This is an
area of law that should be developed by statute.
• Court of Appeal, 2011: There is a tort of intrusion of
seclusion giving rise to common law protection of
privacy rights.
11
Test for Intrusion of Seclusion
1. The defendant’s conduct must be intentional or
reckless
2. The defendant must have invaded without lawful
justifications the plaintiff’s private affairs or
concerns
3. A reasonable person would regard the invasion as
highly offensive causing distress, humiliation or
anguish
4. Proof of harm is presumed – no need to prove
economic loss
12
Computer Monitoring Inappropriate E-mails
Jessica had been employed by ABC Co. for three years. She was a bit
of trouble maker and did not get along well with her co-workers. One coworker complained that Jessica was spreading rumours about her having
an affair with another employee. The employer had policies prohibiting
personal use of the company computer. The employer decided to start
surreptitiously monitoring Jessica’s e-mails and found that she frequently
e-mailed her friends, family and boyfriend in which she would say
extremely derogatory things about her company and co-workers, and
also make violent references, such as, “I am going to go postal” and “I
want to bring a gun to work and shoot everyone.” On the basis of these
e-mails, ABC Co. terminated Jessica’s employment for cause. Jessica
grieved the termination.
Who was successful – Jessica or ABC Co.?
Computer Monitoring Inappropriate E-mails
Answer: Jessica
• Employees may expect some degree of privacy
when it comes to personal e-mail communications,
but there should never be any expectation of
absolute privacy by virtue of the very nature of email – you never know where it will end up
• Before resorting to surreptitious monitoring and
termination of employment, the employer must first
confront the employee and demand that the
employee stop the conduct
14
Computer Monitoring Inappropriate E-mails
• If the employer is going to use monitoring, it should
notify the employee
• The employee was reinstated
15
Computer Monitoring Time Theft and Viewing Porn
Andrew was employed with ABC Co. for 27 years in a
senior role. Through the IT department’s usual bandwidth
scan, they determined that Andrew was spending an
inordinate amount of time on the Internet. Upon further
investigation, it was discovered that Andrew would spend
between 50% to 100% of his working day viewing
various Internet sites, including porn sites, had
downloaded over 300 sexually explicit images, and had
emailed several of them to his home computer. ABC Co.
terminated Andrew’s employment citing time theft and
violation of the company’s computer use policies in
viewing porn while at work.
Was Andrew’s termination upheld?
Computer Monitoring Time Theft and Viewing Porn
• Answer: No. Andrew was reinstated.
• Inordinate use of computer systems for personal use
in not tantamount to time theft.
• Time theft is reserved for cases where employee’s
falsify time records.
• Although viewing porn during working hours, and
spending inordinate amounts of time on the Internet
were clear violations of many of the companies
policies, termination of employment was too harsh
given his years of service and otherwise good
working record.
17
Best Practices
• Establish policies setting out:
• No expectation of privacy – passwords do not equal private
• Types of monitoring that may be engaged
• The purpose for which monitoring may take place: maintain integrity of
systems, investigation of employee misconduct
• Information collected: whatever the employee has viewed, created or
downloaded
• Where information will be stored
• Who will have access to the information
• When and how it will be destroyed
• Company owns the data, even if personal to the employee
• Acceptable and unacceptable personal use
• Consequences for violating the policy
• Make the policies known to the employee – simply posting policies on the
company’s internet is not sufficient
• Consistently enforce the policies or they become meaningless
18
Best Practices
• Determine an appropriate goal or purpose before
monitoring employee computer use
• Consider all less privacy-intrusive alternatives and
document alternatives considered, and reasons for
rejecting them
• Where appropriate, inform employees prior to
implementing surveillance
• Obtain consent where appropriate – policy
acknowledgment ideal
19
Best Practices
• Capture as little information as possible
• Limit access to senior executives/management on a
need to know basis only
• Ensure secure storage
• Destroy information as soon as it is no longer
needed
• Stay on top of the law – privacy law is continually
changing
20
Thank You
Bettina Burgess
Tel: 519-569-4557
Email: bettina.burgess@gowlings.com
Ross Wells
Tel: 519-575-7513
Email: ross.wells@gowlings.com
montréal  ottawa  toronto  hamilton  waterloo region  calgary  vancouver  beijing  moscow  london
Employment and Labour
Law: Investigating
Workplace Accidents
John Illingworth
Jordan Smith
Overview – Legal Procedures Triggered by a
Workplace Accident
• WSIB Implications
• MOL Inspection
−Power and Authority of the Inspector
−Prosecutions
−Appealing an Inspector’s Order
• Preparing an Internal Investigation Report
23
Workplace Accident – WSIB Implications
• Workplace Safety and Insurance Act:
−s. 21: “An employer shall notify the Board within three
days after learning of an accident to a worker
employed by him, her or it if the accident necessitates
health care or results in the worker not being able to
earn full wages”
−Fine for failure to comply
−Form 7: opportunity to note any objections to Workers
Claim
24
Workplace Accidents – WSIB Implications
• WSIA Defines “accidents” as:
a) a wilful and intentional act, not being the act of the
worker,
b) a chance event occasioned by a physical or natural
cause, and
c) disablement arising out of and in the course of
employment
• “A personal injury by accident occurs in the course
of employment if the surrounding circumstances
relating to place, time, and activity indicate that the
accident was work related.” (WSIB Operation Policy
Manual Doc. No. 15-02-02)
25
WSIB – Cost Transfer
• Cost Transfer – was the accident caused in part by
the negligence of another employer? (i.e. a
subcontractor)
−s. 84: “If the WSIB finds that an accident or disease to
a Schedule 1 worker was caused by the negligence of
another Schedule 1 worker or employer, the WSIB
may charge all or part of the claim costs to the
negligent employer’s cost record.”
26
MOL Involvement – What to do When the
Inspector Arrives
27
MOL Inspectors
• OHS Inspectors may enter the workplace at any
time, with few exceptions, however, they are most
likely to enter because:
−A worker has filed a complaint with the MOL regarding
working conditions;
−The MOL has received an injury or incident report from
the employer; or
−The OHS Inspector is conducting a random inspection.
28
MOL Inspector Field Visits
• 2009/2010
−Construction: 30,604
−Industrial: 48,304
−Mining: 3,884
−Other sectors: 5,800
“The 2009-10 enforcement data reflects a decrease in
field activity due to health and safety inspector
vacancies. The Ministry undertook a significant
recruitment process with the hiring of 42 new
inspectors during the year.”
(source: MOL website)
29
MOL Prosecutions
• 2008/2009
−1,303 Convictions for violations of the Occupational
Health and Safety Act
−$14,136,060 in fines imposed
−$9,892 Stop Work Orders issued
(Source MOL website)
30
Lost Time
− 557 fatalities registered; an average of 10.7
workers per week
− 80,863 accepted lost time claims (Schedule 1&2)
− 172,122 accepted no lost time claims (Schedule
1&2)
− The average duration of Wage Loss Benefits was
14 days
(Source WSIB Statistical Supplement 2006)
31
MOL Inspectors
Obstruction of an OHS Officer
• Offence under the OHSA and Criminal Code
− Blocking or restricting access to a work site
− Failing to provide copies of records or documents requested
by an OHS Officer
− Refusing to provide or providing false information or a false
statement
− Encouraging others to provide a false statement
− Disturbing the scene of an accident, except when
authorized
− Interfering with the execution of a search warrant or the
service of an order
32
Can Others Participate in the Investigation when the
MOL Inspector arrives at worksite?
Other parties to Assist with Inspections
• Constructor/employer shall afford a worker
committee member, HSR or worker selected by
trade union/other workers the opportunity to
accompany an inspector
• Employer should request but has no legal right to
accompany inspector
33
What Powers does an Inspector have when entering
a worksite?
Powers of Inspection – Section 54 OHSA
• Take up or use machinery, materials, biological,
chemical or physical agents
• Conduct or require employer to conduct health and
safety testing
• Require production of drawings, specifications,
licences, documents and reports, and to inspect,
examine, copy and remove same
• Be accompanied and assisted by persons with
professional knowledge
• Take photographs and video
34
What Powers does an Inspector have when entering
a worksite?
• Make inquiries of any person separate and apart from
another person
• Require equipment or machinery to be tested by
professional engineer
• Require report bearing seal of professional engineer
regarding safety of equipment, machinery, and facilities
• Require report regarding evaluation conducted by
personnel with professional knowledge of biological,
chemical, or physical agents
• Require production of training materials for workers or
supervisors
35
When does an inspection become an investigation?
• R. v. Jarvis, [2002] 3 S.C.R. 757
−Important to recognize the distinction between an
“Inspection” and an “Investigation”; the latter triggers
the adversarial relationship with the state and affords
certain protections and rights under the Canadian
Charter of Rights and Freedoms
−Powers available to officers conducting inspections
must be relinquished once the predominant purpose of
a particular inquiry is to determine penal liability
36
What Rights do Individuals and Corporations have
during an Investigation?
• Rights under the Charter of Rights and Freedoms for
persons under Investigation:
−Right to retain and instruct legal counsel
−Freedom from unreasonable search and seizure
−Freedom from unlawful detention
−Right of an individual suspect to remain silent
37
When must an OHS Inspector caution an individual
about the right to counsel?
• Subsection 10(b) of the Charter of Rights and
Freedoms:
−“everyone has the right on arrest or detention to
retain and instruct counsel without delay and to be
informed of that right”
• Designed to cover the situation of initial arrest or
detention
• Right is engaged to prior to actual laying of charges
• Imposes duty on investigators to cease questions
until accused has fair opportunity to exercise the
right
38
When must an OHS Inspector caution an individual
about the right to counsel?
• R. v. Therens, [1985] 1 S.C.R. 613
−Section 10 rights under the Charter are engaged not
only on arrest, but on “detention”, which includes any
restraint of liberty other than arrest where a person
may reasonably require legal counsel
−A “detention” extends beyond physical restraint to
situations where an agent of the state assumes control
over a person’s movement by some command that
may have a significant legal consequence but prevents
the person from seeking legal assitance
39
Does a Supervisor have the right to remain silent?
Request for Statement
• If requested to provide a statement, failure to
provide the statement can constitute an offence
• Identify whether the MOL intends on laying charges
against the employer or any individual
• If asked to provide a written statement, ask to
contact legal counsel prior to providing statement
• Ask to have counsel present during the statement
• Do not waive any rights under the Charter
40
Does a Supervisor have the right to remain silent?
Request for Statement
• Do not answer or speak for others, if you do not
know the answers, say so
• Listen to the question and do not answer questions
that you do not understand
−Ask for clarification
• Answer the question asked do not provide additional
information or expand into other topics
• Tell the truth
41
Does a supervisor have the right to remain silent?
Request for Statement
• Ask for a copy of any written statement given to the OHS
Officer
• After statement has been provided, immediately make
notes in relation to the interview
− When and at what location did it occur, seating
arrangements, questions asked and answers provided,
comments and statements made by the OHS Officer about
the accident and the investigation, tone and demeanor of
the OHS Officer and questions asked
− Send a copy of the statement and your notes in relation to it
to senior management and counsel
• Statement is admissible as evidence
42
When does an inspector Require a Warrant to enter
your Workplace?
• Where the predominant purpose of a particular
inquiry is the determination of penal liability
• When the inquiry in question engages the
adversarial relationship between the person under
investigation and the state
−OHS Officer is gathering evidence for the purpose of
determining whether to recommend a prosecution
−Primary focus is no longer the protection of workers
either at the worksite being inspected or workers in the
industry
43
Appealing an Inspector’s Order
• Employers, constructors, licensees, owners, workers and
trade unions may all have a right to appeal. An appeal
must be filed within 30 calendar days of the date of the
Order was issued
• Appeals are made to the Ontario Labour Relations Board
(OLRB)
• OLRB has legal procedures for handling appeal of orders
• Need to apply to suspend Order pending appeal
• Mediation with labour relations officer available through
OLRB
• Legal counsel recommended to address appeal
44
Appealing an Inspector’s Order
OLRB is empowered to provide the following remedies
on appeal of an Order:
• Substitute findings
• Rescind order
• Affirm order
• Make new order
45
Appealing an Inspector’s Order
Proper preparation for Inspector’s attendance can
assist in the event of Orders are later appealed:
• Ensure all managers and supervisors understand
the implication of OHS Inspector’s Orders and the
right to appeal
• Ensure a written procedure has been developed and
communicated to all managers and supervisors
outlining the organization’s policy and steps to follow
upon attendance and the receipt of an Order
46
Appealing an Inspector’s Order
Steps Following the Attendance of the OHS Inspector
• Verify whether any Orders were issued;
• Obtain the Orders in writing before the Inspector
leaves the premises;
• Review the written Orders for completion and
accuracy;
• Post the Orders in a conspicuous location where it is
likely to come to the attention of workers;
47
Appealing an Inspector’s Order
• Ensure that a copy of the Orders are provided to senior
management;
• Review the orders with senior management and legal
counsel;
• Confirm whether there are grounds/reasons to appeal:
− Order as written lacks legal basis
•
−
ie. Against wrong party or without evidentiary basis
Compliance Order is difficult or impossible
•
ie. Budgetary or project time line
− Pre-emptive responses to possibility of OHS or
Criminal Code Charges
48
Appealing an Inspector’s Order
• Confirm whether an application for suspension of the
Orders are necessary. If they are, have legal
counsel prepare applications to the OLRB
immediately;
• Determine compliance strategy;
• Gather all evidence in support of the grounds to
appeal;
• Ensure a copy of the Notice of Appeal is posted in
the workplace with the Orders; and
• Provide a copy of the Notice of Appeal is provided to
the JHSC or HSR and senior management
49
Appealing an Inspector’s Order
Failure to Appeal an Order may result in an:
• increased likelihood of charges being laid
• inability to complain at a later time
• adverse inference at trial
50
General Guidelines for Dealing with MOL Inspectors
Golden Rule when Dealing with OHS Officer
Be Polite and Respectful
• Officers are fulfilling an important role working to protect
workers
• Remember it is the Officer that puts forward the
Recommendations for a Prosecution
• The attitude and cooperation of a party are factors that will be
considered by the Crown when deciding whether to proceed
with a prosecution
• A poor attitude may result in charges against you personally
as well as your employer
During inspection do not agree or disagree with OHS
Officer as this may constitute an admission
51
Accident Report Writing
• Investigation Report writing is not independent of
techniques used during the investigations stage, but
it does require some different tools
• Gathering information and processing information
• Investigation vs. drawing conclusions and making
recommendations
52
Investigation Reports
Topics of Discussion
• Purpose of the Report
• Reviewing Evidence and Setting out the Report
• Effective Writing
• Pitfalls
53
Purpose of the Report
Objectives
• There are several potential overlapping objectives in
creating an Investigation Report:
−To assist in determining the cause of an incident
−To convey or share the result of an investigation
−To assist in or provide recommendations for action
−To attribute blame
−To provide a means to judge the investigation and its
conclusions
• Primary objectives for the use of the report will
change with the stakeholder
54
Purpose of the Report
Before beginning, ask yourself:
• Who is your audience?
• Understand their expertise and their limitations
• Now, who else is going to be your audience?
• Who could potentially be reviewing this report?
• Consider what their objectives may be
• Who are you?
• What is your expertise?
• What are your limitations?
• Overreaching
55
Purpose of the Report
• External Use vs. Internal Reports
• Control of the Document
• Can a Report be protected by Privilege?
• Contemplation of Litigation Privilege
• Solicitor Client Privilege
• Establishing and maintaining privilege
• Circulation
• R. v. Bruce Power Inc.
56
Purpose of Report
R. v. Bruce Power Inc. (ONCA)
− Investigation report was privileged, but came into
possession of the prosecutor
− Investigation report contained items that “could well
be used to the disadvantage and prejudice of the
defendants”
− Court questioned potential effect on witness
testimony and prosecutor’s strategy
57
Purpose of Report
R. v. Bruce Power Inc. (ONCA)
• “When the Crown comes into possession of a
defence document that is protected by solicitor-client
and litigation privilege, prejudice to the defence will
be presumed. The presumption, however, is
rebuttable.”
• In this case, the evidence did not rebut the
resumption and the charges were stayed
58
Setting Out the Report
• Evidence
•
•
•
•
•
Is your investigation complete?
Statements/Interviews with Witnesses
Collection and Review of Physical Evidence
Expert opinions/reports
Follow-up investigation
59
Setting Out the Report
• Reviewing the Evidence
−What is relevant?
−What evidence is similar or repetitive?
−What evidence does not support your conclusion?
• What do you do with it?
−What questions are left unanswered by the evidence?
• Are there answers available by follow-up?
60
Setting Out the Report
• Assumptions
• What are they?
• How did they effect the investigation?
• How do they impact the Report?
• The W’s
•
•
•
•
•
What happened (incident, chronology of events)
Where
When
Who (company, supervisors, victim, witnesses, etc.)
How (what exactly went wrong)
61
Effective Writing
• Format
•
•
•
•
•
•
•
•
Executive summaries
Background
Chronology of Events
List of Witnesses
Use of Imbedded Photos
Use of Charts/Graphs
Glossaries and References
Using Attachments
62
Pitfalls and Traps
• BIAS
• Always consider Bias before you even begin
−The events may be tragic
−Witnesses may be emotional
−Families want justice
−Superiors want results
−Preventative action now seems obvious
• The human element will always impact on your
investigation: how you listen, how you process
information, how you communicate your findings,
and the conclusion you draw
63
Writing Investigation Reports
QUESTIONS
64
Thank You
John P. Illingworth
Tel: 519-575-7507
Email: john.illingworth@gowlings.com
Jordan Smith
Tel: 519-575-7519
Email: jordan.smith@gowlings.com
montréal  ottawa  toronto  hamilton  waterloo region  calgary  vancouver  beijing  moscow  london
TO USE OR NOT TO USE?
Independent Medical Evaluations
Jackie Sampson-Stewart
Owner / President of ACE, BHScPT, Bkin
Louise Lachowskyj
Quality Assurance – Clinical Technical Advisor
Registered Nurse
WHO IS…
Alliance Of Clinical Evaluators …
is a network of medical and healthcare specialists who provide various
independent medical evaluations and recommendations to the
insurance, medico-legal, employer and corporate markets.
What is an Independent Medical Examination?
The 5 W’s of IMEs
 WHY … your rational/suspicion
 WHEN … to intervene
 WHAT … type of Assessment needed
 WHO … the right Assessor
 WHERE … jobsite/offsite
IME Services:




Independent Medical Examination (IME)
Physical Demands Analysis (PDA)
Job Site Analysis (JSA)
Functional Abilities Evaluation (FAE)
The Malingering Employee
 Vague doctor’s note for absenteeism
 Time off does not correlate with injury
 Past history
ACE Occupational Health & Wellness Division …
can help create a positive workplace culture, build employee morale
and increase productivity, ultimately resulting in a healthy bottom line.
Our services encompass your needs for Employee Health, Return to
Work, facilitation of Short-Term and Long-Term Disability needs, and
Corporate Health.
FACT:
Mental disabilities such as stress and depression were the
leading cause of disability in the labour force in 2005, which
accounted for over $8 billion in productivity losses in 2006.
(Wilson et al., 2011)
FACT:
Employees exposed to workplace health promotion program
showed a 14% decrease in disability days over a two year period,
as compared to employees not exposed to the program.
(Bachmann, 2002) .
Employer Services:





Post Offer Pre-Employment Screen
Psychometric Testing
Ergonomics
Stress Management
Team Building
Over Eager Employee
 Vague doctor’s note for return to work
 No/minimal restrictions that do not
correlate with the injury
 Employee history
CONCLUSIONS
Alliance of Clinical Evaluators
46 Jackson St. East, Hamilton ON, L8N 1L1
www. acemedicalexams.ca
info@acemedicalexams.ca
1-888-577-0223
QUESTIONS?
THANK YOU
Investigating Employee
Fraud
Christopher M. Andree - Gowlings
Karen Grogan, CA•IFA, CBV - KPMG
April 17, 2012
AGENDA
•
•
•
•
•
Forensic Accountant
Employment and Labour Lawyer
Immediate issues to be addressed
Investigation process
Advantages of a thorough objective
investigation
• Consequences of a poor investigation
• Examples
• Q&A
GOALS
• Gain some knowledge to help identify issues
• Strategies for managing stakeholder
expectations
• Strategies for recovering any losses
• Strategies for avoiding negative consequences
• Get answers to your questions
• Laugh at least once during the presentation
Forensic Accountant
• Forensic – “of or prepared for the court of law”
• Matters involving numbers/ accounting
• Fraud, Losses, Matrimonial
• Independent and Objective
• Skills and Experience
• Investigation Process
• Interviewing Techniques
• Preparation of report of alleged fraud
• Expert Witness in Court
• Credentials/ credibility
• Formal Training
Employment and Labour Lawyer
• Trusted Advisor
• Strategic advice to determine steps to be taken upon
suspicion of fraud
• Strategic advice to manage stakeholder expectations
• Strategic advice during investigation and following
completion of investigation
• Negotiation
• Suspect and his / her counsel
• Advocate
• Legal action by business or suspect
Typical Fraud Scenario
• Controller (Kristin)
• Hard worker / overtime / no vacations
• Crashed BMW on way to work from her newly
purchased lavish home
• Unexpectedly off work 2 to 3 months
• Clerk (Alyse)
•
•
•
•
Perceived loyalty to Kristin
Not capable of filling Kristin’s role
Uncooperative with Matt (Kristin’s replacement)
Complains to HR that Matt is condescending and
incompetent
Typical Fraud Scenario
• Kristin’s Replacement (Matt)
• Takes over Kristin’s duties temporarily
• Notices unusual transfers between groups and
supplier accounts
• Difficulty reconciling bank
• Discovers invoice from BB Enterprises for “Consulting”
• Note from Kristin – “provide cheque to me directly as will
see owner next week”
• Originally pleasant and patient with Alyse, but is now
complaining to HR that her continued actions will make
timely reporting of financial results impossible
Typical Fraud Scenario
• Human Resources (Jennifer)
• Believes Matt is both competent and respectful
• Confused by Alyse’s behaviour which is inconsistent
with her usual demeanor
• Accounting is one of the very few things at which she
does not excel
• Operations Manager (Billy G. Gruff)
• You’ve worked with him (or will in the future), but his
name was different
Typical Fraud Scenario
• Meeting involving Alyse, Matt, Billy and Jennifer
• Kristin called to say she heard from Alyse that Matt is messing
things up
• Kristin reports she is feeling much better and is ready to return
• Billy does not recognize BB as a supplier
• Alyse accuses Matt of harassment/ bullying and storms out
• Billy accuses Kristin of fraud and instructs Jennifer to:
• Immediately fire Kristin for cause
• Immediately report Kristin to the police
• Withhold Kristin’s wages and vacation pay
• Contact the business’ corporate lawyer to sue Kristin for
repayment of last year’s bonus
• Immediately fire Alyse for fraud/ conspiracy/ incompetence
Immediate Issues to be Determined
•
•
•
•
Termination of Kristin’s employment
Termination of Alyse’s employment
Contact police re criminal charges
Commence civil proceedings to recover losses
and wages
• Insurance issues
• Internal reporting/ policies
• Communications (internal and external)
Critical First Steps
• Determine Insurance Coverage
• Preserve all of your options
• Obtain the facts through thorough and objective
investigation
Insurance Issues
• Fidelity Insurance
• Does the business have such coverage
• Coverage
• Loss
• Cost of investigation
• Limits / Obligations
• Duty to report potential loss
• Employment Practices Liability Insurance
• Wrongful dismissal action
• Harassment complaint
Police Involvement
• When to involve police
• Impact on Staff
• Willingness of suspect to cooperate
• Allegation by suspect of over-reaction and prejudice
• Public disclosure of potential loss
• Discretion to investigate
• Investigation will proceed on police’s timeline
• Order for restitution more likely to be satisfied
Civil Action by Business
•
Cost of prosecuting and enforcing the claim is
on business
•
•
•
•
•
•
Legal costs
Time, energy, effort and distraction of management
Chances of actual recovery are uncertain
Public process
Police may decline to investigate if civil
proceedings are commenced
When to commence civil proceedings
Managing Stakeholder Expectations
•
•
•
•
•
Shareholders/ Funders
Board of Directors / sub-committees
Managers
Suspect’s colleagues and other employees
Suspect (and their counsel)
•
Status during investigation
•
•
•
Pay and benefits
Witnesses
Business partners (suppliers/ customers/
clients)
Investigation Process
1. Meet with Management / Legal Counsel
•
•
Background / Facts
Who retains investigator
2. Phased Approach
•
•
Review Period
Control of costs
3. Conduct preliminary interviews
•
•
Non-suspects (Alyse?)
2 people, Tape record
4. Gather & Preserve Evidence / Assets
•
•
•
Electronic – imaged hard drives / emails
Documents / Exhibits
Norwich Pharmaceutical Order / Anton Pillar Order
Investigation Process
5. Review & Analyze Information
•
•
•
Key word searches / emails
Accounting records, Bank documents
Funds tracing
6. Interview Suspect
•
•
•
Duty of employee to meet
Confession?
Opportunity to tell their side
7. Written Report / Document Brief
•
•
Expert Report
Evidence for Court
8. Meet with Insurance / Police and Legal Counsel
•
Ongoing
Result of Quality Investigation
• Evidence required by police
• Evidence required to commence civil action
• Evidence required to negotiate voluntary restitution
• Avoid threat of criminal proceedings (Crim. Code 141)
• Evidence required to defend action by suspect
• Wrongful dismissal/ constructive dismissal claim
• Evidence required to avoid additional damages
• Defamation, mental distress, punitive damages
• Evidence to defend action in alternate venue
• Human rights, OHS, WSIB
100
Employee Fraud – Example #1
Employee Fraud – Example #2
103
Result of a Flawed Investigation
• Criminal Charges dismissed
• Civil action for malicious prosecution, negligent
investigation and intentional infliction of mental distress
• McNeil v. Brewer’s Retail - $500,000 punitive damages
• Pate v. Galway-Cavendish - $550,000 punitive damages
• Correia v. Canac – HR Director’s personal liability
• Civil action to recover losses dismissed w/ costs
• Wrongful dismissal action successful
• Pay in lieu of notice, moral damages for mental
distress, punitive damages
• Cross-examination is no fun!
Thank You
Karen Grogan - KPMG
Tel:
(519) 747-8223
Email: kgrogan@kpmg.ca
Chris Andree - Gowlings
Tel:
(519) 575-7505
Email: chris.andree@gowlings.com
montréal  ottawa  toronto  hamilton  waterloo region  calgary  vancouver  beijing  moscow  london
Workplace Investigations
Presentation to Grand Valley HRPA
By P.A. Neena Gupta and Khiam Nong
Tuesday, April 17, 2012
When May the Need to Investigate Arise?
• Sexual harassment
• Bill 168 (Ontario) Workplace harassment
• Alleged criminal conduct
• Misconduct
• Health and safety incidents
Should an Investigation be Undertaken?
• Harassment
• Discrimination
• Misconduct or breach of internal corporate ethical guidelines
• Criminal conduct
• Serious personality conflict
• Has the problem already been resolved?
• Are there facts in dispute?
• Is this a case of innocent misunderstanding?
What if There is no Complaint?
• Beware of misconduct known by management
• Beware of the reluctant complainant
• Beware of the risk of turning a blind eye
• Beware of anonymous complaint
• All may require an investigation in response
Common Situation
John D. is extremely stressed. He comes to one of the
managers (not his direct boss) and appears to be venting
about being overworked, under-appreciated,
disrespected and generally unhappy. In the course of his
complaints, he comments that he feels like a “black
slave” and comments that the company has no other
black men in the office. When the manager asks him
what she can do to help, he simply says, “thanks for
listening, I really appreciate it. I don’t want to make a big
deal of it.” The manager knows that everyone is shorthanded due to cutbacks and a large order. What should
the manager do?
Selecting an Investigator
Factors to consider:
• neutrality
• training
• internal/external
• Ability to be timely and thorough
• Understand the differences between roles: the
investigator and the decision maker
• They don’t have to be the same
Investigation Step 1: Meet the Complainant
• Explain confidentiality and protection from reprisals
• Do not make guarantees of confidentiality that you
cannot keep
• Deliver a copy of the company policies
• Get details of the complaint, ideally in writing
• Prepare a summary of the complaint identifying the
allegations to be investigated
• Note: In some cases there will not be a complainant
[employer driven investigation]
Investigation Step 2: Meet the Respondent
• Explain confidentiality and protection from reprisals
• Deliver a copy of the company policy
• Deliver the summary of the complaint
• Get the Respondent’s side of the story, ideally in writing
and signed
• Take and keep notes
Investigation Step 3: Interview Witnesses
• Move the investigation along as promptly as possible
• Keep parties advised of time lines (and changes)
• Explain confidentiality and protection from reprisals
• Begin with background questions
• Keep notes
Investigation File Number 1
Maria F. did not get to go to the firm’s holiday party as she was stuck
researching, photocopying and collating on an emergency injunction.
Late that night at the photocopying machine, Partner X comes over
and is very sympathetic to her. He talks about how he had to work
late too, but then starts to talk about how much fun it was in the “old
days” to make out on the boardroom table and that she should really
take a few minutes off to discover how well made the firm’s tables
really are. Maria F. realizes Partner X is drunk and simply says, “I’ve
got to go and get these cases updated” and leaves. Maria F.
complains, however, that since then, she has received no work from
Partner X and that her review from Partner X indicated that “she did
not know how to engage in social conversations”, which was in her
mind manifestly unfair. She thinks that one of the other students
might have seen Partner X that evening, but doubts any one else
heard the conversation.
Pointers on proper questioning
• Explain in very general terms the nature of the
investigation, not who complained or what the complaint
was
• Begin with open questions: have you observed anything
unusual in the dealings between A and B?
• Later move to directed questions: Did you see a
particular interaction between A & B at the copy machine
on Tuesday December 13?
Leading v. Non-Leading questions
Assume there is a complaint by a worker, Dev, that his
boss, Ralph, refers to him as the “fag” or “gay guy.”
Although the worker is openly gay, he resents being
referred to by his sexual orientation, rather than by his
name or title.
A Bad Example: Leading the Witness
• Did you hear Ralph call Dev a “fag”?
A Good Example: General Questions Leading to Specific
Q. Have you heard Ralph describe, by use of slang,
homosexual or gay persons?
A. I have heard him use the word “fag”
Q. In what context?
A. I heard him use the word fag a number of times
Q. Please tell me when you recall Ralph using the word fag
A. A number of times. I can’t be specific
Q. Did you ever hear Ralph call Dev a fag?
A. I’m not sure. He might have.
Investigation Step 4: Returning to Complainant or Respondent
• New information obtained in interviews may require you
to return to either the complainant or respondent to test
their version of facts or seek further evidence
• Consider documents that might help prove or disprove
aspects of case
Common Situation
Melissa A. complains that one of her subordinates, Ralph F. is
making false suggestions that she favours Frank S. over others
because of an affair between Melissa A. and Frank S. Melissa A.
denies any kind of personal relationship with Frank, but indicates
that he is an excellent employee and the complainer is a total
slacker and does not like to do “grunt work.”
Ralph F. denies spreading any rumours and only one employee,
Frank S., is willing to confirm hearing such talk. The investigator is
unable to decide who is telling the truth and therefore, discipline is
inappropriate. The company decides simply to move Ralph F to
another location, but does not get back to any of the parties with
what is done with the complaint itself.
Assessing Credibility: Throughout Steps 1, 2, 3 and 4
• Role of investigator is to decide: what happened?
• If stories conflict the investigator will assess credibility
• Factors in assessing credibility:
• self interest in the outcome vs. no interest
• Consistency (other witnesses, documents)
• plausibility
• demeanor of witness – but avoid cultural biases
• Prior history/records
• If the investigator cannot conclude what happened, then
the complaint has not been made out: burden of proof
Common Situation
Jennifer S. is known to be a demanding boss with high standards in
a very high-stress area in a retail operation. In her performance
review of one of her subordinates, she wrote that Michele K. is hardworking, conscientious, but does not seem to cope well with multiple
deadlines and might do better in a less stressful work environment.
Michele K. is upset during the performance review, as she did not
get a bonus she really wanted and felt she had earned. Three weeks
later she goes out on stress leave and makes a complaint of
disability discrimination. Jennifer S. denies any discrimination on the
basis of disability, but admits that she was aware that Michele K. had
taken a six-month leave of absence 18 months ago due to postpartum depression, but had returned back with a clean bill of health.
Everyone works in an “open concept” office area and co-workers
deny seeing anything abnormal in the interaction.
Completing the Job
• Investigation should lead to a report: what happened?
• Report need not be lengthy or detailed, but set out what
the investigator concluded
• The report may be evidence in a future legal proceeding
– have the report reviewed by legal counsel
• Unless subpoenaed in a proceeding, the report is
confidential, delivered to management
• Keep notes and records
Acting on the Report: No misconduct found
• Was the complaint made in apparent good faith?
• Assuming so, advise the Complainant and Respondent
that no misconduct was found
• Note that the investigation may turn up additional
information requiring attention or counseling or
workplace mediation
Acting on the Report: Misconduct Found
• Decision maker assesses proper response: disciplinary –
termination to warning, counseling, training?
• Respondent will learn the results through the decision
maker
• Complainant should be advised that complaint was found
to be valid; unless the result is obvious (termination), it is
confidential
• Keep notes!
Thank You
P.A. Neena Gupta,
Partner
Tel:
519-575-7501
Email: neena.gupta@
gowlings.com
Khiam Nong,
Associate
Tel:
519-575-7534
Email: khiam.nong@
gowlings.com
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