'Employers should always make sure that they have a clear and publicly available complaint policy in place,' employment lawyers explain how to avoid post-termination discrimination claims
Terminating employees for misconduct can be a challenging “necessary evil” for HR professionals, and ensuring that their actions don’t lead to discrimination claims is even more critical, as demonstrated in a recent British Columbia Human Rights Tribunal (BCHRT) decision.
The decision, Bartender v. Finale Entertainment Inc., 2024, saw an employee’s complaint of racial discrimination dismissed; a positive outcome for the employer, but according to Chaylene Gallagher, professionalism and ethics instructor at the University of Alberta, under slightly different circumstances it could have easily gone the other way.
“In this case, the employer was able to pull the threads of various different circumstantial matters to convince the tribunal that there was a lack of discriminatory underpinnings,” she says.
The employer relied heavily on circumstantial evidence, including video footage and customer accounts. However, Gallagher points out that a more robust defense could have been established if the employer had maintained comprehensive records, such as a documented investigation report or a written warning before the alleged theft.
“They were able to do so in this instance. But that is certainly not always the case, particularly when tribunals are having to handle such a large volume of complaints,” she says.
Establishing employer evidence and credibility
The employee, a bartender who remained anonymous for the hearing to protect his reputation, was terminated by Finale Entertainment for alleged theft. The night club claimed he pocketed cash from a customer instead of processing it correctly, and presented as evidence video footage of the bartender putting cash in his tip jar that allegedly should have been rung up in the till, and statements from customers supporting the charge.
He was terminated without cause and told he would receive pay in lieu of notice, holiday pay, and a Record of Employment indicating "dismissal without cause."
The bartender filed the BCHRT claim, arguing that his termination was discriminatory, asserting that he was replaced by a “Chinese” employee (the employee was in fact Taiwanese, the Tribunal noted) and that Finale targeted him because he is white. He claimed that Finale’s charge of theft was a setup to cover racial discrimination.
He also claimed there was a pattern of preferential treatment towards Chinese and Asian employees at the club, and that a Chinese employee who had been disciplined for theft had gotten off easier.
“An employer doesn't know that they'll be able to demonstrate a complete lack of discriminatory underpinnings or indications, and their only hope in being able to demonstrate that is excellent documentary evidence,” says Gallagher, emphasizing the importance of thorough documentation in such cases.
“Every employer should be papering their files even more than they think is prudent, in order to document that there was no discriminatory reason.”
The Tribunal reviewed the evidence presented by both the complainant and the employer before deciding the bartender did not provide sufficient evidence to prove discrimination based on skin colour.
As the Tribunal stated, “the evidence does not support a conclusion that Finale hired the new employee to replace the bartender. Instead, I find that he was hired to fulfill management functions, which were unrelated to the Bartender’s position and core duties as a bartender.”
Proactive steps to minimize discrimination claims
In the Bartender case, the employee told the Tribunal he had been observing circumstances for some time that he felt were unfair or suspicious, but he did not vocalize his concerns until after he was dismissed.
Shannon Sproule, employment lawyer and investigator at Turnpenny Milne in Toronto, agrees that documentation is important, but adds that prevention is also a best policy – in particular, policies ensuring that employees who have complaints can comfortably lodge them early, rather than after it’s too late to mitigate.
“Employers should always make sure that they have a clear and publicly available complaint policy in place, they should make sure that all employees know that they abide by the Human Rights Code, and all employees know how to escalate concerns as well,” Sproule says.
“In a case like this, having a clear policy in place doesn't mean that the employee wouldn't have sued or filed a claim at the Human Rights Tribunal, but it at least means that you can say, ‘We provide all employees with the opportunity to let us know if they have concerns under the Human Rights Code, and this person opted not to let us know, and so this is the first time we're hearing about it.’”
This approach provides a defense for employers by showing they offered employees opportunities to raise concerns before escalation to a tribunal. Additionally, a general policy of frequent documentation can serve to prove fair treatment of employees in the case of a discrimination allegation.
“If you have nothing to show to explain how you treat other employees in comparison, who don’t share that same code characteristic, decisions can end in a different way, with the employee being successful,” Sproule says.
The significance of timing
One crucial factor in discrimination claims is timing.
“I have found that in human rights tribunals, timing is particularly persuasive,” Gallagher explains. To mitigate risks, employers should be mindful of the timeline surrounding terminations and new hires, especially when protected grounds could be a factor.
“For instance, if a discipline occurs very close to someone disclosing a protected ground, or very close to someone returning from a leave related to a protected ground, no matter how much other evidence is brought to the table, that timing is extremely persuasive for a complainant.”
In the Bartender case, the fact that the new employee started immediately after the termination favoured the complainant’s argument. However, the Tribunal accepted Finale’s evidence that the new hire was not meant to replace the outgoing bartender.
Understanding perception versus reality
Even with well-documented cases, HR leaders must recognize the gap between employer intentions and employee perceptions; as Gallagher explains, these claims often stem from a misunderstanding of employment rights rather than malicious intent.
“We always want to believe the best of people for sure. However, we do see these cases relatively frequently, where someone has been disciplined or terminated, and they claim, after the fact, that it was due to a protected ground,” she says.
“Most of this type of complaint is not malicious but is rather based on the very real frustration and fear of losing one's job, and the perception that it was for an improper reason.”
By maintaining open communication and ensuring that disciplinary actions are handled transparently and respectfully, employers can help minimize the perception that terminations are due to discriminatory motives. As Sproule adds, taking complaints seriously can go a long way towards preventing time-consuming and potentially reputationally damaging public hearings.
“At the end of the day, complaints will be taken seriously, and the ideal is to have some sort of complaint policy in place internally, so they can be dealt with first internally. But if that doesn't happen, then they will be dealt with at the tribunal level.”
