Shalagin v Mercer Celgar Limited Partnership, 2023 BCCA 373 is a British Columbia Court of Appeal decision upholding the trial decision that an Employer had after-acquired just cause for dismissal, as a result of surreptitious recordings taken by the Employee during his employment. The Employee unsuccessfully argued the clandestine recordings were taken for several justifiable purposes including personal English language training, pursuing a bonus, and to support of his allegation of discrimination in the workplace. This decision reaffirms the contextual analysis in establishing just cause for dismissal for dishonesty as well as the risk of taking surreptitious recordings in the workplace.
Facts
- The Employee was terminated without cause and commenced a civil claim for wrongful dismissal as well as a complaint of discrimination to the Human Right Tribunal.
- At the Human Rights hearing, the Employee disclosed he had made several surreptitious recordings in training sessions and later in meeting with his supervisor, coworkers and with human resources personnel.
- After learning of the recordings, the Employer amended their defence in the civil claim to include after-acquired cause for termination on the basis it “reveal[ed] a character of untrustworthiness, incompatible with continued employment…”
- At the trial for the civil claim, the BC Supreme Court held the Employer established just cause. The Employee appealed the trial decision.
- The facts in the civil claim include:
- The Employee emigrated from Russia in approximately 2002.
- The Employee obtained a Bachelor of Commerce degree and became a Chartered Professional Accountant (CPA) working in the pulp and paper industry.
- The Employee worked for the Employer for ten years as a financial analyst from 2010 to 2020.
- While there was no written employment contract, the Employer had workplace policies including the Code of Business Conduct and Ethics, Confidentiality Policy, and the Respectful Workplace Policy.
- The Employee was also subject to professional obligations as a CPA.
- The Employee alleged he initially took recordings to improve his English, but continued taking clandestine recordings in the workplace for nearly ten years. The Employee’s reasons for the recordings included support for a bonus entitlement and alleged discrimination based on the Employee’s ethnicity and place of origin.
- The Employee did not have a good relationship with his supervisor and alleged the supervisor had made discriminatory comments prompting the employee to secretly record these conversations.
- The Employee did not plead discrimination in the civil claim and amended the claim to remove the allegations the supervisor threatened him rudely and abruptly.
Analysis / Conclusion
The Court of Appeal reviewed the Trial judge’s comments regarding the recordings taken by the Employee and the reasons for taking the recordings. The Court of Appeal also confirmed the Trial Judge applied the correct test for establishing just cause due to employee misconduct, notably, McKinley v BC Tel, 2001 SCC 38 (“McKinley”). At paragraph 32, the court stated,
The judge also described the question before him as whether the employee’s alleged misconduct “was something a reasonable employer could not be expected to overlook, having regard to the nature and circumstances of his employment” (at para. 47 citing Van den Boogaard v. Vancouver Pile Driving Ltd. 2014 BCCA 168 at para. 36); “whether the fact of the recordings goes to the root of the plaintiff’s contract and fundamentally struck at the plaintiff’s employment relationship” (at para. 50); and whether Mr. Shalagin’s actions “ruptured the relationship, such that the mutual trust between the parties is broken.” (At para. 52.) All of these formulations are in my view correct, and counsel for the appellant did not suggest otherwise.
The court noted, allegations of after-acquired cause should be approached with caution, including whether an employer knew of the misconduct and had condoned the conduct.
The Court of Appeal also confirmed the Trial Judge correctly considered case law on surreptitious recordings in the workplace. Further, the Court of Appeal confirmed these additional findings of fact:
- the Employee knew that making secret recordings was wrong and unethical,
- the recordings included personal details with nothing to do with the workplace,
- there was insufficient evidence the recordings were for the purpose of establishing discrimination,
- coworkers felt violated by the recordings.
The Court of Appeal endorsed the “contextual approach” of McKinley stating, “the question of whether an employer is justified in dismissing an employee on the grounds of dishonesty is a question that requires an assessment of the context of the alleged misconduct.” Dishonesty in the workplace is not always cause for dismissal. The Court stated that most employers would view clandestine recordings as undermining the trust relationship including a violation of privacy interests. In addition, the Court reviewed various submissions by the Employee including an apparent lack of acknowledgment of the allegations of discrimination and a submission that policy considerations, ie., encouraging secret recordings, ought not to be influence the assessment. Overall, the Court of Appeal held the Trial Judge correctly considered and balanced the evidence and the case law for and against a finding of just cause for dismissal. There was no overriding or palpable error of law and the Employee “had come to adopt an unrealistic view of his own abilities and an inflexible insistence that his own points of view should prevail.”
My Take
Shalagin is a British Columbia decision. As such it is persuasive but not determinative of the law in Alberta. Shalagin demonstrates the importance of measured and balanced analysis when assessing cause for dismissal. Dishonesty in the workplace must be viewed contextually and the action taken by an employer ought to be proportional in relation to the surrounding circumstances. Not all cases of dishonesty amount to just cause. Shalagin is a good example of the court’s approach to applying the McKinley reasoning and contextual approach to a complicated factual situation, and ultimately finding just cause.
Surreptitious is defined as “done, made, or acquired by stealth” (Merriam-Webster). What is interesting in this case is the interplay between the right to privacy versus protecting a person’s self-interest. The law on surreptitious recordings in Canada, based on the Criminal Code, does not prohibit the making of the recording if one of the participants in the recording consents to the recording. In other words, if I am part of the discussion, I can make a secret recording, and it is not illegal, criminally. But that is not the end of the analysis as demonstrated in Shalagin. The relationship of the parties involved in the recording is relevant to privacy, trust and confidentiality. In the employment relationship, trust is critical for maintaining the relationship. As well, there is a reasonable expectation of privacy in certain circumstances and relationships (see R. v. Edwards, [1996] 1 S.C.R. 128).
From an evidential point of view, the courts have permitted secretive recordings to be entered as evidence based on the probative value the recordings have in assessing legal issues (see R. v. Cole, [2012] 3 SCR 34; also see Teljeur v Aurora Hotel Group, 2023 ONSC 1324). For example, in Shalagin, the surreptitious recordings may have probative value in establishing that discriminatory statements were made. But the evidential value of a secret recording does not extinguish the breach of trust and privacy that results. There may also be a breach of confidentiality. In short, simply because making a surreptitious recording is not prohibited criminally does not mean you should be secretly recording meetings as a regular practice. There are potential legal risks and liability in making surreptitious recordings. The employer may have a basis for cause for termination. On the other hand, a secret recording may be the piece of evidence weighing in an employee’s favour when credibility is in doubt. Unfortunately, it is not possible to endorse or speculate when a secret recording is justifiable – proceed with caution.
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