Shalagin v Mercer Celgar Limited Partnership, 2022 BCSC 112 (CanLII), <https://canlii.ca/t/jlzsw>, retrieved on 2022-02-01 (Justice Branch)
On the plaintiff side, the issue of surreptitious recordings comes up often. In support of their grievances or concerns, employees sometimes turn to surreptitious recording conversations, meetings and other events in the workplace. The modern cell phone is a useful and readily accessible tool. Aside from the difficulties, often garbled and unintelligible information – who’s who? saying what – the costs of proper transcription, reliability, authenticity and verification etc., there are certainly ethical issues in such conduct. In this case, the Court concluded that such conduct justified the termination of the employee. The employee was a professional (CPA), in a senior position, who, as well, was bound by professional standards of his profession. Whether it applies more broadly remains to be seen.
In Shalagin v Mercer Celgar Limited Partnership, the plaintiff, a CPA, commenced employment with the employer as a financial analyst in January 2010. He was later promoted to senior analyst. There was no written contract governing his employment relationship. However, the plaintiff agrees that he was bound by Mercer’s policies including: a Code of Business Conduct and Ethics; and a confidentiality policy. He also agreed that he was bound by CPA’s Code of Conduct. In March 2020, he was terminated without cause after a disagreement about discrimination and the 2019 bonus.
The plaintiff filed complaints under the Employment Standards Act, the Human Rights Code and a wrongful dismissal suit.
The Court noted that, as part of his human right proceeding, the plaintiff produced certain documents, including information about surreptitious recordings while employed. At his examination for discovery for this action, he disclosed further information about these secret recordings. He revealed that he had made such recordings during the following meetings:
- a) several one-on-one training sessions from 2010 to 2014;
- b) over 100 “Toolbox Talk” and safety meetings, at which he often presented personally; and
- c) at least 30 one-on-one meetings with supervisors and human resources personnel about compensation and recruitment. [para. 54]
The plaintiff used the recordings exclusively for his proceedings.
Based on the plaintiff’s disclosure, the defendant changed its position to termination for cause based on after-acquired cause, including the surreptitious recordings, but also his failure to return company property and misuse of confidential bonus information. The Court rejected the latter two grounds.
With respect to surreptitious recordings, the Court noted:
[50] There is no dispute that the surreptitious recordings were made. The only question is whether the fact of the recordings go to the root of the plaintiff’s contract, and fundamentally struck at the plaintiff’s employment relationship.
[51] The plaintiff begins by noting that it is lawful to record conversations so long as one party to the conversation consents: Goldman v. R., [1980] 1 S.C.R. 976; Criminal Code, R.S.C. 1985, c. C-46, s. 184.
[52] However, legality is not the sole barometer. The question is whether the employee’s actions fundamentally ruptured the relationship, such that the mutual trust between the parties is broken.
[53] The plaintiff did accept that he was now embarrassed by his recording of
Ms. Ketchuk’s personal family information. He also acknowledged that the reasons he did not ask for permission to record was that he understood it would make people uncomfortable. He also acknowledged that at least some of his surreptitious recordings were unethical, even if not illegal.
Among others, the Court cited Fredrickson v. Newtech Dental Laboratory Inc., 2015 BCCA 357, where the Employer recorded on two occasions private conversations between them, and subsequently made use of those conversations with respect to mitigation. The Court noted: “court’s reasoning is nonetheless strong support for the view that surreptitious recording can cause material damage to the relationship of trust between employee and employer.” [para. 56]. In Schaer v. Yukon (Government of), 2018 YKSC 46, upheld 2019 YKCA 11, the court rejected a judicial review application arising out of the fact that a probational employee was dismissed based in part on the fact that they made surreptitious recordings of colleagues and clients. The Appeal Court noted [para. 38]: “provided the Government of Yukon with a legitimate performance‐related reason to reject him on probation. His actions resulted in the complete breakdown in trust in the employment relationship.”
[71] I find that Mercer has established just cause:
a) As noted, I do not find any support for just cause in the allegations relating to the Database or the Bonus Spreadsheet. The allegation of just cause must stand or fall based on the surreptitious recordings.
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. At least some of the recordings are properly viewed as being solely “for the advantage of the [plaintiff]”, to use the words of the plaintiff’s Code of Conduct. While the plaintiff’s position did not rise to the level of a fiduciary, I accept that professionals in positions of high accountability such as the plaintiff can be expected to respect the standards established by their profession: Hyland v. Royal Alexandra Hospital, 2000 ABQB 458 at paras. 12 and 28.
c) There were clearly ways to improve his English without putting his colleagues in such a position. There was no need for the plaintiff to conduct himself in this manner, but these recordings set him down a problematic path.
d) With his sensitivities lowered, he carried on to record ever more sensitive conversations, including conversations that involved personal information on other employees. The conversations included personal details about his co-workers that had nothing to do with the workplace.
e) Although the plaintiff suggests that some of his conversations were justified because of concerns about discrimination, the plaintiff simply offered no evidence that supported such allegations. Indeed, the evidence suggests to the contrary—the plaintiff received substantial promotions. While I will not comment on the merits of the plaintiff’s human rights complaint, which is based on a different record and statutory scheme, I must assess the plaintiff’s explanation based on the record before me. I cannot find that there was a legitimate basis to make recordings based on a fear of discrimination.
f) The plaintiff suggests that certain recordings were justified because of a concern about financial improprieties. However, the plaintiff had access to the manager in order to raise those concerns. Further, those concerns should have been mitigated given that Mercer’s books were regularly audited. Finally, the plaintiff offered no concrete evidence of such financial mismanagement requiring surreptitious recording in order to protect Mercer’s best interests.
g) The plaintiff suggests that certain recordings were justified so that he could ensure that his own compensation was properly calculated. However, the fear of under-compensation on the plaintiff’s part appears to have been based entirely on the plaintiff’s own misapprehension that his bonus should have been calculated based on a strict formula, whereas it is clear that the bonus was discretionary. The plaintiff cannot invoke an irrational concern to support the reasonableness of surreptitious recordings that would otherwise be treated as destroying the trust between the plaintiff, his colleagues, and his employer.
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.
j) I accept the evidence provided by Mr. East and Ms. Ketchuk that they felt violated by the recordings. I also accept that this reaction was reasonable in the circumstances. Ms. Ketchuk clearly treated the plaintiff as a protegée and felt that the trust she invested in him had been violated—a trust that included telling him about personal family matters, which were recorded.
k) Looking at the effect on employment relationships more broadly, accepting the plaintiff’s argument may encourage other employees who feel mistreated at work to routinely start secretly recording co-workers. This would not be a positive development from a policy perspective, particularly given the growing recognition that the courts have given to the importance of privacy concerns. The Supreme Court of Canada has recognized the “quasi-constitutional status” of privacy issues and its role as a “fundamental value” of our society: Sherman Estate v. Donovan, 2021 SCC 25 at paras. 50–51.
l) Although allegations of after-acquired grounds for dismissal must be carefully examined, this is not the type of case where the fact of the grounds being discovered after dismissal carries particular weight. The clandestine nature of the recordings necessarily meant Mercer had no real ability to discover their existence until after Termination.
[72] As such, I find that the plaintiff’s conduct in surreptitiously recording his colleagues constitutes just cause given the effect of the relationship of trust. As such, the claim must be dismissed on this basis alone.