Earlier this year, the Supreme Court of British Columbia decided an employee who secretly recorded his co-workers could be dismissed for cause because his actions fundamentally ruptured the employment relationship such that the mutual trust between the parties had been broken.1
Significantly, under Canada’s Criminal Code, an individual may record a conversation without the knowledge of the other party, so long as one party to the conversation consents to the recording. The decision reminds us that just because conduct is legal does not mean it will necessarily be acceptable in the workplace.
What happened?
After immigrating to Canada, Roman Shalagin became a Certified Professional Accountant (CPA) and worked as a senior financial analyst for Mercer Celgar Limited Partnership for 12 years. Shalagin did not sign an employment agreement. However, he acknowledged being bound by a code of business conduct and ethics which required him to be honest and ethical in dealing with other employees, customers, suppliers, vendors, and third parties. He was also bound by the CPA’s code of conduct which stated, in part, that he would not disclose confidential information regarding his employer or use confidential information from any client, former client, employer, or former employer, to the disadvantage of such others, without consent.
In 2019, Shalagin was placed on a manager’s incentive program and was eligible to receive his first bonus in the spring of 2020. He took issue with the fact the bonus amount was discretionary and argued the bonus should be based on a formula. He reiterated his views in an e-mail addressed to management in which he stated he was “open to resolve this disagreement in a timely manner and internally, without litigation”. Uncomfortable with the prospect of litigation, Mercer terminated Shalagin’s employment on a “without cause” basis and paid Shalagin his minimum entitlements under employment standards legislation. Not surprisingly, Shalagin commenced a lawsuit alleging wrongful dismissal.
Secret recordings
During the litigation Mercer discovered that, while employed, Shalagin secretly recorded numerous work-related discussions, including one-on-one training sessions, more than 100 “Toolbox Talk” safety meetings, and at least 30 one-on-one meetings between himself and management about compensation and recruitment. Some of the recordings captured sensitive information regarding co-workers’ personal circumstances unrelated to the workplace.
Initially, Shalagin explained he recorded the workplace discussions to help himself learn English. Subsequently, he took the position he didn’t need permission from anyone because the recordings were legal and also because “people would feel uncomfortable if they knew” they were being recorded. In fact, co-workers who were recorded testified they felt violated by the recordings.
Upon learning of the secret recordings, Mercer changed its legal position to assert just cause for termination. Specifically, Mercer argued that had it known of the secret recordings at the time of termination it would have terminated Shalagin’s employment for cause.
Just cause for termination upheld
The court agreed with Mercer’s position, dismissed Shalagin’s claim, and made three important findings:
- Shalagin’s actions fundamentally ruptured the employment relationship such that he had broken the mutual trust between the parties.
- While Shalagin did not act with malice when recording his colleagues and did not publish the recordings or use them for personal benefit, the volume of recordings and length of time over which they were made off-set any mitigating factors.
- Permitting such conduct could encourage other employees who feel mistreated at work to secretly record co-workers. This would not be a positive development particularly given the growing recognition of privacy considerations in Canada.
Lessons for employers
It’s no secret; smartphones make it extremely easy to record others without their knowledge. While doing so may not be illegal, secretly recording in the workplace can amount to a fundamental breach of the employment relationship justifying termination with or without cause.
To clarify expectations regarding the recording of workplace discussions, employers are encouraged to consult with employment counsel and properly implement a clearly worded policy.
To learn more and for assistance, contact the team at Sherrard Kuzz LLP.
1Shalagin v. Mercer Celgar Limited Partnership, 2022 BCSC 112
