If an employee takes a secret recording, is it grounds for cause dismissal?

Exclusive to Canadian HR Reporter from Rudner Law.

In a recent decision out of Alberta, the court dealt with a situation that has become quite common in workplaces across Canada: an employee recording conversations at work without the other party's knowledge or consent.

Specifically, the court in Rooney v GSL Chevrolet Cadillac addressed whether or not an employer could dismiss an employee who engages in such secret recording for just cause.

Background

In this case, the employee brought a claim against his employer alleging that he had been constructively dismissed as a result of fundamental changes that were unilaterally made to his role, resulting in a significant decrease in his overall compensation. The employer had also placed him on three separate unpaid suspensions.

There was no written contract of employment, so the employer did not have a contractual right to use this form of discipline.

The employer denied that it had made any substantial changes to the employee's employment, and argued that it had the right to "reasonably discipline" the employee, including suspending him without pay.

In an interesting turn of events, at the commencement of the trial, the employer sought permission to amend its Statement of Defence to allege that it had after-acquired cause to terminate the employee's employment. The basis of this allegation was the fact that the employee had surreptitiously recorded discussions between himself and his supervisors, which the employer had only learned about in the course of the litigation.

Recording conversations

The court in Rooney denied the employer's request to amend its Statement of Defence, due in part to its "inordinate delay" in making the request as the trial was commencing when the employment relationship had been terminated, and legal proceedings commenced, over 12 years earlier. Nevertheless, the court considered the merits of the employer's claim of after-acquired cause in its decision.

The court noted that "recording conversations in the workplace will often cause irreparable damage to the relationship of trust between employee and employer and be just cause for termination." The court relied on previous cases that had dealt with this topic, including Shalagin v Mercer Celgar Limited Partnership, a 2022 decision out of British Columbia.

In Shalagin, an employee was dismissed without cause and subsequently filed a wrongful dismissal claim against his former employer, along with an Employment Standards Act complaint and a human rights complaint. As part of these various actions, the employee disclosed that he had made a large number of surreptitious recordings of certain meetings, workplace conversations and presentations. Many of these he claimed to have recorded to assist him in learning English, but the later recordings he acknowledged had been made specifically "to create a record" of his interactions arising from his concerns about his entitlement to a bonus and his allegations of discrimination and bullying in the workplace.

Based on this and other information learned after the employee's dismissal, the employer took the position that it had cause to dismiss the employee.

The court agreed that the surreptitious recordings constituted just cause for the dismissal, noting that the employee "knew it was wrong, if not legally, at least ethically". It is notable that, in this case, the employee held a professional role as a chartered professional accountant and was subject to ethical standards outside of those imposed on him through the employer's own workplace policies. The court also noted that there was simply no reason for the employee to have made the recordings, as it found his claims regarding his bonus and allegations of discrimination to be without meri.  

Although noting the comments from Shalagin with approval, the court in Rooney reached the opposite conclusion and would have dismissed the employer's claim of after-acquired cause. There were two key differences in this case from the court's perspective:

1. The employer had no workplace policies that prohibited the recording of conversations with fellow employees that was brought to the attention of the employee (in Shalagin, the employer relied on a Code of Business Conduct and Ethics as well as a confidentiality policy); and
2. In Rooney, the relationship between the employer and the employee was already strained at the time the first recording was made due to the employer's actions. In other words, the court considered the employee to have a good reason to record the conversations.

The court noted that the employee had begun recording these conversations only after it became clear to him that his role was being materially changed and that he was being subjected to unwarranted disciplinary action. As a result, the court felt that the recordings were justified, and would therefore not support a finding of after-acquired cause.

Conclusion

The court held that the employer had constructively dismissed the employee by materially changing his role and suspending him without pay without contractual authority, noting that "unauthorized discipline can constitute constructive dismissal". The employee was awarded 18 months plus $460 for unpaid vacation pay, plus interest.

Although the employer was unsuccessful in Rooney, this case is quite helpful for employers. This decision confirms that employers may have a strong argument for just cause dismissal of an employee where a) there is a clear policy prohibiting the recording of other employees in the workplace which is brought to the attention of the employee, and b) the employee breaches such a policy without justifiable reason. This decision highlights how beneficial it can be to have written policies in place which staff are familiar with and understand.

Of course, employers must keep in mind that there is never a guarantee when it comes to a finding of just cause. Each case will be assessed on an individual basis, considering the full context of each situation. We recommend that employers always speak with an employment lawyer before proceeding with a termination for just cause.

Brittany A. Taylor is a partner at Rudner Law in Toronto. She can be reached at (416) 864-8500 or [email protected].