Checking Your Privilege At the (HR Office’s) Door

Written on behalf of Arbesman Hamilton LLP

Employers may often rely on the advice of their human resources department when making decisions regarding discipline and termination of employees. The Ontario Superior Court of Justice recently had to address whether such advice is privileged.

The “discovery” of five emails

The employee brought an action against the employer in April 2016, alleging he was constructively dismissed in February/March of the same year. During discovery for the case, which is ongoing, the employee became aware of five undisclosed emails between the employer’s senior management and the local and regional human resources (HR) departments. The employer claimed privilege over the emails and refused to produce them, resulting in the motion at hand.

The employee had been working for the employer for 34 years when he was placed on a performance improvement plan in May 2015. The plan required him to meet certain sales targets. He failed to meet them by February 2016 and saw his salary decreased by 10%. He left his job on March 1 of the same year, alleging constructive dismissal.

Roughly 288 documents were provided by the employer during discovery. One of the documents mentioned five emails between senior management and senior HR staff. The employer disclosed the existence of the emails in a supplementary affidavit of documents, but claimed privilege, refusing to disclose them.

Relying on HR as “trusted advisors”

The employer stated it relies on its HR department as “trusted advisors” when managing, disciplining and terminating employees. They claimed such discussions were full and frank and “without prejudice.” According to the employer, the HR department provides opinions on how to cautiously proceed while minimizing legal risks. The employer testified it expects those discussions to remain confidential and that their usefulness would be diminished if they were not held as such. The employer claims that HR’s role would be limited to that of an administrative function without the expectation of confidentiality.

The employee argued that the documents should be produced if they deal predominantly with his performance management. By alleging bad faith on the part of the employer, he suggested any communications between senior management and HR would be relevant. Furthermore, the employee argued the conversations were not between management and the employer’s lawyers, but between management and HR.

It was the defendant’s position that the emails were intended to be confidential and “were assumed to be confidential and were exchanged in a zone of complete privacy where the parties to the emails could share full and frank opinions on the strategy and management of the plaintiff’s poor performance.” The employer also stated they communicated with the anticipation that the situation could lead to litigation and the discussions contained conversations of legal strategy.

After reviewing the emails the court determined they “discuss the establishment of a performance management strategy to address the defendant’s concerns regarding the plaintiff’s poor sales. The emails request advice on a proposed performance management strategy and discuss the legal implications of the strategy.”

The court found the employer had breached its obligation under Rules 30.02 and 30.03 of the Rules of Civil Procedure, which requires parties to disclose every relevant document regardless of whether it is privileged or not and to identify which documents are privileged and will not be produced.

Determining privilege

While the employer may have failed to disclose the documents, they asserted litigation privilege, which arises when documents are authored or prepared for the dominant purpose of litigation as well as a common law privilege under what is known as the Wigmore test.

The court first addressed litigation privilege, which was established in a 2006 Supreme Court of Canada decision. Litigation privilege applies when the document was produced when litigation is anticipated, and when the dominant purpose of the document is litigation. The court dismissed this, stating the predominant purpose of the emails was the performance management of the plaintiff, not litigation.

The common law privilege of the Wigmore test was established by the Supreme Court of Canada in 1975. It states privilege applies when the following four conditions are met.

 

  1. The information or communications must originate in a confidence that they will not be disclosed;
  2. This element of confidentiality must be essential to the full and satisfactory maintenance of the relationship between the parties;
  3. The relation must be one which in the opinion of the community ought to be sedulously fostered;
  4. The injury that would inure to the relationship by the disclosure of the communications must be greater than the benefit thereby gained for the correct disposal of litigation.

The court was cautious of extending the Wigmore privilege to the relationship between HR and management, stating,  “circumstances such as these could have wide-ranging implications for employment law and must be based on persuasive and compelling evidence. Such evidence is simply not before me.  While I accept that the parties to the impugned emails might have thought that their communication was confidential, that is not enough. The third and fourth branch of the Wigmore test must be satisfied.”

The lawyers of Arbesman Hamilton LLP are experienced in helping both employers and employees in matters of employment law. Call us today at 416-481-5604 or reach us online if you are an employer or employee with questions about your rights or responsibilities in the workplace.