In Wan v H&R Block Canada Inc., 2024 ABKB 734 (Farrington), the Alberta Court of King’s Bench considered whether secret recordings taken by an employee at work, discovered after termination of employment, were just cause for dismissal.
This was a special application brought by the employer for summary dismissal. Applications Judge Farrington provided some guidance on the law of just cause related to surreptitious recordings and dismissed employer’s application.
This is important because there is a fairly small but developing body of caselaw considering the issue of when a secret recording by an employee would be considered just cause.
Facts
The following were some of the pertinent facts summarized by the Alberta Court of King’s Bench:
- The plaintiff employee Timothy Wan was employed by H & R Block in the position of Vice President of Product Development and Innovation
- Wan’s employment was terminated, purportedly for cause
- Wan sued for wrongful dismissal, seeking reasonable notice (severance pay)
- H & R Block defended based on a number of just cause allegations
- H & R Block discovered after termination of employment that while employed, Mr. Wan had secretly recorded meetings without the consent of those being recorded
- H & R Block brought this application for summary dismissal of the plaintiff’s claim, primarily arguing that the secret recordings were just cause for dismissal
- The employer code of conduct and confidentiality agreements did not expressly prohibit recording
- At one point in his employment, the plaintiff employee had been having difficulties with another employee. It was suggested to him at that time by the President of the Defendant at that time that perhaps he should record conversations he had with that employee
- There was no evidence that the plaintiff had ever disseminated recordings containing confidential information to anyone
Analysis / Conclusion
The Court started its analysis by pointing out that there is a developing body of caselaw in employment law and other areas around the blameworthiness of secret recording.
The Court cited Shalagin as one of the leading Canadian cases considering whether secret recordings are just cause for dismissal. I reproduce below some of the more important reasoning cited from Shalagin in the Wan case:
[7] In Shalagin v Mercer Celgar Limited Partnership, 2022 BCSC 112 (cited and considered by Feasby, J.) the Court undertook a broad review of the law and held at paragraph 71:
[71] I find that Mercer has established just cause:
[…]
b) Although the initial recordings said to be for the plaintiff’s own language training purposes may not, on their own, have supported just cause, they demonstrate how the plaintiff’s sensitivities towards his colleagues’ privacy began to loosen. He knew that his fellow employees would be uncomfortable with even these early recordings, yet he continued to make them. I find that he knew it was wrong, if not legally, at least ethically. The plaintiff’s professional obligations provide additional support for a finding that he did not conduct himself as an employed CPA should have done. […]
[…]
h) I accept that the plaintiff was not acting with malice in making the recordings and that this is a mitigating factor. However, the fact that his stated bases for the recordings were all unnecessary or ill-founded, and several were designed to benefit him alone, weighs on the other side of the ledger. Likewise, the fact that the recordings captured personal information from his subordinates and colleagues and, thus, could not have supported his alleged purposes in any case, also weighs against his position.
i) I accept that the fact that the plaintiff did not publish the recordings and did not seek to make use of them for his own benefit outside of the ongoing legal proceedings is a mitigating factor as well. However, on the other side of the ledger, the sheer volume of recordings, and the length over which they occurred, generally offsets this factor.
[…]
[9] […] The result in Shalagin was cumulative. In other words, there is no general legal principle that secretive recording always equals grounds for dismissal.
The Court cited Rooney v GSL Chevrolet as an Alberta case that distinguished Shalagin. In Rooney, a secret recording was not considered just cause for dismissal because at the time of the first recording the employment relationship was frayed by tension and the employer had made a fundamental change to his employment and suspended him without pay. His secret recording was less blameworthy in that context because he was responding to a power imbalance in the employment relationship.
The Court went on to provide the following observations / guidance around secret recordings:
[10] The case law generally would seem to reflect the following:
1. In the absence of a specific agreement, there is not an automatic consequence that comes with recording.
2. While recording may sometimes be referred to as unethical or distasteful, it is not in itself illegal.
3. The cases seem to distinguish between situations where an employee or recording party is using the recording process “offensively”, in order to found new causes of action, and situations where an employee is using a recording “defensively” to protect themself from a feared action by the employer.
The Court then went on to consider whether the secret recordings by Mr. Wan amounted to just cause on the summary dismissal application, finding that it was too nuanced to determine on the paper record alone:
[17] I find that the issues in this action cannot be determined fairly and justly on the paper record alone here. Much of the result depends on subtleties and nuances as to Mr. Wan’s motivations, the pressures that he may or may not have been under in relation to the workplace, and the workplace environment generally. All of that is in issue, and in my view, it is largely credibility dependent, and it must be determined at a trial.
My Take
I should be clear that these cases are considering secret recordings where the plaintiff employee is one of the participants in the conversation. I have no doubt that secret recordings without the employee as a participant in the recorded conversation (i.e. essentially spying on others) would usually be just cause for dismissal, and there are other very serious potential consequences as well.
The growing body of caselaw around secret recordings by employees is important in employment law. Many employees who have lost trust in their employers start recording conversations with their employers. It’s impossible to know how common this is for certain, but I know from experience with my own clients over the years that it is not uncommon.
Generally it seems clear on the caselaw so far that recording lots of conversations without a good reason is likely to result in just cause for dismissal, whereas, recording few select conversations with few select people where the employer has recently wronged the employee, or where the employee has reason to distrust the employer based on recent events, is not very likely to result in just cause for dismissal.
Any employee considering making secret recordings should consult with an employment lawyer before doing so if possible. This is to avoid a just cause argument and ensure that if their employment is terminated they will receive a severance package.
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