A recent Ontario Superior Court of Justice decision highlights the importance of the duty of good faith owed by employees and the need for employers to conduct investigations in cases relating to employee misconduct.
Background
In the case of Arora v. ICICI Bank of Canada, Amit Arora, a long-standing employee with 15 years of service, was terminated following an internal investigation into his alleged misconduct. Mr. Arora, who held the position of Assistant Vice-President, played a key role in two of the bank’s products connected to foreign students.
The central issue was whether the bank had just cause to terminate Mr. Arora. The bank claimed that Mr. Arora, while still employed with the bank, used its resources and shared confidential proprietary information with its competitors and involved two of his subordinates in his plan to defect and establish a competing business.
Decision
Although the court concluded that Mr. Arora was not a fiduciary of the bank, he still owed the bank duties of good faith and loyalty. Mr. Arora’s conduct constituted a breach of those duties. When given the opportunity to explain himself both during an investigation meeting and through a subsequent letter, his dishonesty regarding his actions and intentions further reinforced the bank’s decision to terminate him for cause. On this basis, the court found that the dismissal was justified and Mr. Arora was not entitled to any damages.
Key takeaways
Employers should:
- Ensure that there is a set of clear policies on employees’ conduct involving confidential information and communicate it to their employees.
- Conduct thorough investigations in cases involving employee misconduct and ensure the process is well documented.
Employees should:
- Be mindful that they have a duty to act in good faith whether they are fiduciary or not. Using company resources and sharing confidential information with employer’s competitors for personal gain while still employed with the company will constitute a breach of those duties and can be sufficient grounds for termination.
- Be mindful that they are honest with their employers throughout internal investigations. Mr. Arora’s dishonesty when confronted about his actions and his failure to provide necessary information in the follow-up letter reinforced the bank’s position to terminate him with cause.
Workplace investigations into employee misconduct, particularly those involving breaches of trust and confidentiality, underscore the importance of acting in good faith. Both employers and employees have a legal duty to act in good faith and play crucial roles in maintaining a respectful, professional environment where confidential information is respected and protected.
If you have any questions regarding termination and workplace investigations, please do not hesitate to reach out to Rodney Employment Law at [email protected] or complete our contact form here.
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