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Workplace Investigators: Check Your Insurance

As long-standing as it is, the law relating to employment and wrongful dismissal really doesn’t experience many ground-breaking changes. One brand new development, however, will have private investigators checking their insurance policy.
The Ontario Court of Appeal has re-framed the tort of negligent investigation in a way which permits employees to sue a private investigator hired by their employer. If the investigator performs its function in a negligent manner, such that the employee suffers a loss, the employee may pursue a remedy directly from the investigator.
This result arose out of a set of circumstances which, if they hadn’t had such a negative effect on the employee, would be comical. Joao Correia, 62, worked for Canac Kitchens, a division of Kohler Ltd. and was a long-serving supervisory employee.
Canac suspected there had been theft and drug dealing occurring at its plant. As a result, they retained a private investigation firm named Aston Associates to place an undercover agent in Canac’s workforce. The agent was put on the factory floor and managed to identify several employees allegedly engaged in theft and drug dealing.
As a result of Aston’s investigation, Mr. Correia was brought into Canac’s human resources office, accused of theft, and fired for just cause. He was then led into another office and arrested by police.
The problem with the investigation, firing, and arrest was that Mr. Correia was innocent. Through a series of errors right out of an Abbott & Costello movie, he had been confused with another employee who had a similar name (but who was almost forty years younger).
Although the real suspect had been described in one of Aston’s reports as being in his “mid 20s” and Aston had provided a videotape of the real suspect and a photocopy of his identification badge, his name became confused with that of Mr. Correia. Nobody took the opportunity to double-check the identity of the employee being dismissed by showing the undercover agent his photo (although photos of all employees were in Canac’s files).
As the Court stated, had anyone involved “taken the time to carefully read the Aston investigative reports it would have been apparent that the twenty-something year old suspect was not the plaintiff, a sixty two year old long time employee whose name is spelt differently”.
Mr. Correia spent 3 hours in jail and another four months under a cloud of suspicion until the Crown finally dropped the criminal charge. Canac later offered to reinstate Correia to his employment, but (not surprisingly) he was too devastated by the entire experience to return. He sued Aston, Canac, and Canac’s head of human resources.
The Court of Appeal relied on the freshly-minted tort of negligent investigation which, in 2007, was recognized by the Supreme Court of Canada as applying to police officers. That tort imposes on police officers a duty of care owed to suspects being investigated by the police. The question in Mr. Correia’s case was whether that reasoning could be extended to private investigators in the workplace setting.
The Court determined that Mr. Correia had high interests at stake and that it could be reasonably foreseeable in these circumstances that negligent conduct by the investigator and the employer in identifying the real perpetrator would cause him harm. It also determined that existing forms of wrongful dismissal damages might not fully compensate for the losses suffered in this type of case.
The Court concluded that the fact that private investigation firms perform quasi-policing functions, but with limited oversight or lines of redress for those injured by their activities, strongly favours extending tort liability to them. It saw no “incoherence” in requiring a private investigator to be careful in its investigation.
The Court was not asked to assess whether Aston or Canac had actually breached their duty of care towards Mr. Correia, only to determine whether such a duty of care might exist. A subsequent trial will determine whether the named defendants were, in fact, negligent.
In the meantime, consultants who provide services in the context of a workplace investigation would be well-served by conducting a review of their insurance coverage. Mr. Correia may be the first employee traveling this road to recovery of damages, but he surely won’t be the last.
Robert Smithson is a partner at Pushor Mitchell LLP in Kelowna practicing exclusively in the area of labour and employment law. For more information about his practice, log on to