The importance of honesty in workplace investigations

In the recent case of Mittra v. Royal Bank of Canada et al., 2024 ONSC 636, the Superior Court of Justice in Ontario has ruled on the consequences of withholding the truth in workplace investigations, especially for senior employees.

The court's decision demonstrates that a fiduciary employee's deliberate intention to deceive workplace investigators about personal investments contravened the workplace code of conduct, resulting in after-acquired termination without cause. This case highlights fiduciary employees' duties of loyalty and avoidance of any conflicts of interest that may affect their employer.  

In 2024, Andrew Mittra, a former employee of the Royal Bank of Canada (RBC) and RBC Investor Services Trust in London, UK, found himself at the center of a workplace investigation. This investigation highlighted his financial entanglements with a co-worker, leading to accusations of misconduct and, ultimately, his termination. Mr. Mittra vehemently denied any wrongdoing, including violating RBC's conflict of interest policies or withholding information about his estate investments, which were the cited reasons for his termination.

While RBC did not terminate Mittra’s employment for cause at the time of his dismissal, after an examination for discovery, RBC amended its Statement of Defence to claim that Mittra deliberately misled investigators and that RBC had after-acquired cause to deny him any notice of termination for violations to their policy. This amendment is central to this case and led to the conclusion that a fiduciary employee like Mittra must disclose any conflicting interests and obtain the employer's consent before engaging in activities. In the banking sector, senior employees such as Mittra are held to exceptionally high standards of integrity and honesty, which carry significant weight, and any breach of this trust can have serious legal consequences.

Dishonest conduct

In assessing Mittra’s dishonest conduct, the court looked to McKinley v. BC Tel. 2001 SCC 38. Following McKinley, a test was constructed to determine whether an employee has engaged in misconduct incompatible with the employment relationship’s fundamental terms. This test consists of:

• Determining the nature and extent of the misconduct
• Considering the surrounding circumstances
• Deciding whether dismissal is warranted.

RBC alleged that Mittra failed to provide accurate, complete, and timely information during its inquiry and investigation because his initial disclosures about his financial arrangements with his co-workers were incomplete. If this misconduct had been known to RBC at the time of Mittra’s dismissal, it would have significantly eroded RBC’s trust, leading to an irreparable rupture of the employment relationship. In this context, Mittra’s dishonesty, if known by RBC when he was dismissed, would undoubtedly constitute cause, highlighting the crucial role of trust in the workplace.

Credibility in workplace investigations

Assessing the evidence in its totality and understanding the distinction between veracity and accuracy are crucial to determining the credibility of participating parties. In reviewing the allegations, the workplace investigator is guided by the oral evidence of each witness and the relevant documents provided to them. Further, the workplace investigator assesses credibility by properly situating the evidence within its context and undertaking a multi-faceted analysis of all the relevant factors.

Credibility is crucial in workplace investigations; lying or omitting information can have serious consequences. Mittra failed to disclose details about his investments and falsely claimed he never discussed these investments despite emails proving otherwise. This destroyed the trust essential to the employment relationship and undermined his credibility. Additionally, Mittra told the investigator he understood the seriousness of a compliance investigation. He testified that he knew his co-worker was bankrupt and had borrowed money from others within RBC. Mittra knew that an investigation would assess his co-worker's financial dealings, yet he failed to disclose his dealings, violating company policy.

The court concluded that Mittra deliberately misled RBC investigators about his personal investments and ruled on the duty of honesty required of senior bankers. These findings are expected to be significant in future cases of employee dishonesty and are as follows:

• As a fiduciary employee, over and above the duties of good faith and fidelity owed to their employer are the duties of loyalty, candour, and scrupulous avoidance of actual or perceived conflicts of interest, including a duty to disclose all material information that may affect their employer's decisions.
• It was upheld “that the world of banking is very different from other areas because it requires at all levels absolute transparency, unimpeachable financial morality and complete objectivity” to maintain the employer confidence (Evans and Royal Bank of Canada, (1996) C.L.A.D. No. 1125).

The importance of honesty

After this case, an employer can feel empowered knowing that a persistent pattern of dishonesty, such as deliberately withholding material information regarding breaches of workplace policy, especially by employees in a position of power, can be valid grounds for dismissal without cause. Dowling v. Ontario (Workplace Safety and Insurance Board), 2004 CanLII 43692, outlined further considerations when assessing whether the misconduct is reconcilable with sustaining the employment relationship:

“This requires a consideration of the proven dishonest acts within the employment context to determine whether the misconduct is sufficiently serious that it would give rise to a breakdown in the employment relationship.”

This case is an important for employers for several reasons:

• It reinforces the already established obligations on fiduciary employees to act in good faith and without conflict of interest.
• It highlights that honesty matters during workplace investigations.
• If an employee is dishonest during the course of their employment or a workplace investigation, this may have serious consequences.

Alexa Saleski is a summer student at Turnpenney Milne LLP in Toronto.