But court finds no cause for dismissal, awards $250,000
“It's okay for employers to have concerns about romantic relationships in the workplace, particularly when those relationships occur at the level of management – but they have to act on those concerns.”
So says Rich Appiah, an employment lawyer and principal with Appiah Law in Toronto, after an Ontario long-term care home was ordered to pay nearly $250,000 to a former executive it fired for a workplace romance.
The worker was employed with Markhaven, a long-term care facility in Markham, Ont. Hired in 1995, she was promoted to the position of executive director in 2012. The worker was the highest-ranking employee of Markhaven with a fiduciary relationship to the company.
Markhaven contracted with an outside company called Marquise to support the dietary needs of residents and to perform housekeeping and laundry services.
In 2014, Markhaven reached an agreement to have a Marquise employee who was acting as the manager of food services – and who Marquise considered one of its best managers - to take on an expanded role of also managing the laundry and housekeeping. The new position was director of support services (DOSS) and the employee assumed the new responsbilities on Nov. 1.
Commenced romantic relationship
The management group at Markhaven worked closely together and the worker entered into a romantic relationship with the new DOSS in January 2015.
The worker spoke with Markhaven’s director of human resources about whether there were any issues with the relationship, and the HR director said there was no policy prohibiting it – there had been other workplace relationships, including a previous executive director who had their spouse report to them.
In May 2015, the board of directors received a complaint about the relationship through an anonymous telephone call. There was some sentiment that the relationship undermined Markhaven’s reputation, but no one raised the issue with the worker.
Markhaven received a second complaint in July, but nothing was done until Nov. 3, when the board forwarded its communications about it to legal counsel. Markhaven launched an investigation and retained a third-party information technologist to capture the worker’s email accounts.
Workplace romances are increasing, despite the rise of remote work, according to a survey.
Employer condoned relationship
Markhaven faced trouble from the start, as it had already known about the relationship for some time, says Appiah.
“There were instances in which the relationship was brought to the attention of the board of directors and the board didn't act upon that knowledge prior to commencing an investigation,” he says. “If properly counselled, [Markhaven] would have considered the fact that it knew about the relationship and whether an investigation was even necessary in the first place, because it had condoned the relationship for a period of time already.”
On Nov. 25, a Markhaven director made a complaint about “ongoing issues” with the DOSS and the timing of his appointment in relation to becoming involved with the worker. The complainant was advised against false accusations, and she said that she didn’t want to be part of any future investigation.
On Dec. 2, Markhaven advised the worker that the board was going to obtain legal advice and there would be “an independent third-party investigation.” However, it didn’t mention that the third-party investigators were linked to Markhaven’s legal counsel.
The worker was also advised to keep the matter confidential and was reminded of her duty as “an officer and fiduciary of the corporation to be forthcoming and honest.”
A New Brunswick court upheld the firing of a worker for lying about his workplace relationship.
Relationship ended
The worker felt that it would be difficult to not discuss the matter with the DOSS, so she ended their romantic relationship.
Around this time, the worker deleted several emails from her inbox, including some between her and the DOSS on both personal and work-related subjects, although she later maintained that this was part of her regular duties to keep her inbox manageable. She also believed that all emails were backed up.
An investigator interviewed the DOSS at a Tim Hortons restaurant where employees went for meals and breaks. The investigator indicated that the interview was “in a remote section,” but the DOSS said it was “by the main entrance.”
The investigator also asked the worker to meet at the Tim Hortons and made it clear that the investigation was related to the hiring of the DOSS and her relationship with him. The worker asked to meet in a more confidential place and clarified that the DOSS was actually an employee of Marquise and it was that company that had placed him in that role. She also said that there had been no romantic relationship at the time of his appointment in November 2014.
The investigators met with the worker and her lawyer on Jan. 25, 2016. For the first time, they asked her directly if she had a romantic relationship with the DOSS and she confirmed it.
Afterwards, the worker expressed concerns over the manner and scope of the investigation, as she was concerned that it had expanded to scrutiny of her conduct after the DOSS’s appointment and whether she was being forthcoming.
The RCMP drafted a policy requiring disclosure of workplace relationships in the wake of sexual harassment and discrimination allegations.
Suspended, then fired
On Feb. 17, the worker was suspended with pay on the basis of her admission of the relationship “while he was subject to your supervising authority.”
The board of directors terminated the worker’s employment on March 11, effective May 6, 2016. The worker went on short-term disability benefits due to emotional stress from the matter, which later became long-term disability benefits.
The worker also filed an action for wrongful dismissal.
The court noted that Markhaven relied on the worker’s fiduciary duty to be honest and forthcoming and asserted that she was not honest after being placed under investigation.
The court found that the decision to create the position of DOSS was done in consultation with Markhaven’s HR manager and the colleague’s actual employer, Marquise. It was also in recognition of the fact that the colleague was one of Marquise’s best managers and happened before the romantic relationship with the worker, said the court.
The court also found that Markhaven’s board of directors became aware of the romantic relationship in May 2015 and did nothing. This was condonation of the relationship, particularly since the worker was told that there was no policy prohibiting it, the court said.
It can be difficult to ban workplace relationships, but there should at least be a policy requiring disclosure, says an employment lawyer.
Problematic investigation
In addition, the investigation began before Markhaven informed the worker, as it looked into her emails before formally telling her in December 2015. Still, the worker answered questions about the relationship truthfully and accurately and there was no breach of her fiduciary duty, the court said.
The court pointed to other problems with the investigation, including not keeping it confidential by holding an interview in a Tim Hortons, expanding the scope beyond its original mandate, and not disclosing the third-party investigators’ link with its counsel.
“When an employer conducts an investigation, the mandate that triggered the investigation has to be clear to the employer so that the investigation unfolds in an orderly manner and it has to be clear to the employee so she knows what allegations she needs to respond to,” says Appiah. “And it doesn't seem that the mandate was clear to the employer or the worker.”
The court determined that there was no cause for dismissal and the worker was entitled to 22 months’ reasonable notice. In addition, the worker was entitled to her 2015 bonus, RRSP contributions, and benefits for the notice period.
The two key elements in the worker’s favour were that there was no policy discouraging romantic relationships in the workplace and Markhaven had foreknowledge of the relationship, says Appiah, adding that the court found that the worker was forthright in the course of the investigation.
“If [the worker] had lied during the course of the investigation about the relationship, the employer would have had a better argument that dismissal for cause was warranted, even in the absence of a policy or condonation, because courts consider lying to be a severe offense,” he says. “But in this case, the court found that she was forthright - it almost seems like the employer was looking for a reason to terminate the executive director’s employment.”
The court also considered evidence that the investigation and wrongful dismissal negatively affected the worker’s health and awarded $50,000 in bad-faith and moral damages. Once the worker’s disability benefits and income from other employment during the notice period were deducted, Markhaven was ordered to pay the worker $244,852.
