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Alberta court orders Industrial Alliance to disclose records related to workplace investigation in wrongful dismissal case

by HR Law Canada

The Court of King’s Bench of Alberta has ordered the disclosure of documents related to a wrongful dismissal lawsuit against Industrial Alliance Insurance and Financial Services.

The plaintiff, a former employee, had been terminated for cause following allegations of harassment within one of the defendant’s workplaces.

Industrial Alliance had engaged a human resources consultant to conduct an investigation into these allegations. The plaintiff sought the disclosure of various records and information generated during this investigation, arguing that they were essential for the case.

Industrial Alliance argued that the records were privileged, asserting both litigation privilege and solicitor-client privilege, as the investigation was purportedly conducted in anticipation of litigation and for the purpose of obtaining legal advice.

However, the court found that the defendant failed to establish that the records were created with the dominant purpose of litigation or that they were subject to solicitor-client privilege. In essence, the investigation and its findings were deemed not to be protected by privilege, primarily because the investigation also served non-privileged corporate operational objectives, including compliance with the company’s Respectful Workplace Policy.

Significantly, the court also found that Industrial Alliance had impliedly waived any privilege that might have applied by relying on the investigation’s findings in its defense. The court reasoned that fairness required the disclosure of the investigation materials since the defendant had used aspects of the investigation to justify the termination of the plaintiff’s employment.

As a result, the court ordered the defendant to disclose the name of the second complainant and the particulars of their allegations. Additionally, the defendant was instructed to provide copies of the investigation materials, excluding the final investigation report, to the plaintiff’s counsel.

This includes a complete set of communications from both complainants and any interview transcripts and notes that are within the defendant’s control.

This decision underscores the importance of transparency in the judicial process and highlights the limitations of asserting privilege over workplace investigation documents, especially when such investigations serve dual purposes beyond merely obtaining legal advice or preparing for litigation.

The ruling also emphasizes the court’s role in ensuring that dismissal actions are scrutinized fairly, providing a critical reminder to employers about the necessity of maintaining clear boundaries between operational investigations and privileged legal consultations.

For more information, see Prosser v Industrial Alliance Insurance, 2024 ABKB 87 (CanLII).

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