Employers Have a Statutory Duty to Investigate Claims of Harassment and Authority to Discipline Off-Duty Conduct When It Manifests in the Workplace

The Ontario Court of Appeal’s recent decision in Metrolinx v. Amalgamated Transit Union, Local 1587 provides critical guidance for employers navigating workplace harassment investigations and disciplinary authority over off-duty employee conduct. The Court dismissed the Union’s appeal and confirmed that an arbitration award ordering reinstatement of five terminated employees was unreasonable, establishing important precedents regarding statutory duties to investigate and workplace discipline boundaries.

Background

The dispute centered on five Metrolinx employees who participated in a private WhatsApp group chat on their personal devices. During these conversations, the employees made derogatory and sexist comments about colleagues, including allegations that a female employee performed sexual favours for career advancement. When the targeted employee, referred to as “Ms. A,” received screenshots of these messages in 2019, she reported them to a supervisor but declined to file a formal complaint.

In 2020, Metrolinx became aware of the messages and launched an investigation. Ms. A confirmed she had received the screenshots but refused to disclose their source and indicated she did not want the matter investigated further. During the investigation, one grievor ultimately shared screenshots of the WhatsApp conversations with the investigator. Following this investigation, Metrolinx terminated all five employees for cause on the basis of sexual harassment.

The Union filed grievances challenging these terminations. An arbitrator allowed the grievances and ordered reinstatement with full back pay and no loss of seniority for all five employees, prompting Metrolinx to seek judicial review of his award.

The Divisional Court’s Ruling

On judicial review, the Divisional Court found that the arbitration award was unreasonable and quashed it, ordering the matter to be remitted to the Grievance Settlement Board for reconsideration by a different arbitrator.

The Divisional Court determined that the original arbitrator had made fundamental legal errors in his analysis that rendered his decision to reinstate the five terminated employees unreasonable. Specifically, the Divisional Court found that the arbitrator had failed to properly consider Metrolinx’s statutory obligations under section 32.0.7 of the Occupational Health and Safety Act (the Act) to investigate workplace harassment incidents, had inappropriately relied on the absence of a formal complaint from the harassment victim, and had incorrectly concluded that the off-duty conduct did not have workplace impact.

The Divisional Court also rejected the arbitrator’s findings regarding procedural deficiencies in Metrolinx’s investigation, determining that the employer had acted within its authority and statutory obligations. The Union subsequently appealed the Divisional Court decision to the Court of Appeal for Ontario.

The Court of Appeal’s Analysis

The Court of Appeal applied the reasonableness standard established in Vavilov and identified multiple fundamental errors that rendered the arbitrator’s award unreasonable. The Court confirmed that, when reviewing appeals from Divisional Court decisions on administrative law matters, the appellate court must conduct its own analysis of the tribunal’s decision rather than deferring to the lower court’s findings.

In its analysis, the Court of Appeal found multiple fundamental errors that permeated the arbitrator’s analysis and rendered his award unreasonable:

Failure to Address Statutory Obligations

The arbitrator failed to meaningfully consider Metrolinx’s statutory obligations under section 32.0.7 of the Act, which requires employers to investigate both incidents and complaints of workplace harassment. The Court noted that the conduct appeared to meet the statutory definition of workplace sexual harassment, and that Metrolinx was obligated to investigate even without a formal complaint from Ms. A. This duty extends beyond protecting the immediate victim to ensuring all employees can work in an environment free from demeaning and offensive comments.

Reliance on Outdated Stereotypes

The Court found that the arbitrator’s focus on the absence of an official complaint by Ms. A was based on rejected myths and stereotypes about how harassment victims typically respond. The Court emphasized that there are many legitimate reasons why a victim might choose not to pursue a formal complaint, and that such reluctance does not negate the harassing behaviour or relieve the employer of its investigative obligations. The Supreme Court’s warnings about relying on presumptions and stereotypes regarding victims of sexual assault apply equally to arbitrators adjudicating sexual harassment grievances.

Misunderstanding of Workplace Impact

The arbitrator erred in concluding that the impact of the communications was not manifested within the workplace. The Court pointed to evidence that Ms. A became emotional at work when she first reviewed the messages. Regardless of where the conduct originated, it made its way into the workplace and became a workplace issue. The nature of social media and the potential for employees to forward messages to others created significant potential for workplace impact.

Procedural Investigation Findings

The Court found that the arbitrator incorrectly determined that the investigator’s request for information from an employee’s personal cellphone violated the collective agreement. The investigator’s actions were part of a legitimate workplace investigation, particularly given that the employee himself had referenced the WhatsApp chat during his interview and that the offensive comments could not be properly assessed in isolation.

The Court of Appeal’s Decision

The Court of Appeal dismissed the Union’s appeal and confirmed the Divisional Court’s order remitting the matter to the Grievance Settlement Board for determination by a different arbitrator.

The Court directed that the new arbitrator should determine the matter in accordance with the legal principles established in the Court of Appeal’s reasons. The Court also confirmed the costs order requiring the Union to pay Metrolinx $20,000 in costs.

Key Takeaways for Employers

This decision reinforces several critical principles for employers managing workplace harassment situations. Employers have statutory obligations to investigate workplace harassment incidents regardless of whether formal complaints are filed. As noted by the Court of Appeal, “an employer’s duty to investigate is not just a duty owed to the victim, but to all employees, who have a right to work in an environment free from demeaning and offensive comments.”

The Court has acknowledged that social media platforms can create situations where private conduct can become workplace issues, particularly when employees are involved and workplace relationships are affected. Accordingly, off-duty conduct can be subject to workplace discipline when it manifests negative impacts within the workplace environment.

Importantly, the Court confirmed that an arbitrator tasked with determining whether an employee engaged in sexual harassment in the workplace cannot rely upon outdated myths and stereotypes surrounding how a victim of such harassment should react to the harassment.

Metrolinx was successfully represented by Hicks Morley’s Bonnie Roberts Jones and Rayaz Khan.

The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Hicks Morley Hamilton Stewart Storie LLP and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Hicks Morley Hamilton Stewart Storie LLP. ©

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