1. The complaint should be in writing

A workplace investigation usually won’t be initiated until Human Resources receives a written complaint.

The written complaint ensures:
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• The Complainant describes what has been occurring in their own words.  
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• Human resources can evaluate and decide next steps like:
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  • Administrative leave for the person being complained about (the Respondent)
  • Determine if an informal process might be appropriate or if a workplace investigation is needed.
  • If a workplace investigation is needed if an internal investigation is going to be suitable or does an external third-party investigator need to be retained.
    
• The investigator (internal or external) has a starting point to prepare for their interview with the Complainant and witnesses, if anyone witnessed the conduct being complained about.
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2. Confidentiality/no retaliation

Workplace policies and collective agreements generally have language about the importance of confidentiality in a workplace investigation. Confidentiality on the part of all the participants ensures a fair process and helps eliminate gossip in the workplace.

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Human resources, citing the workplace policies and/or a collective agreement, will also make sure all of the participants understand that retaliation by the Respondent, or others aligned with them, is not okay and how to report retaliation when it occurs.

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3. Interviews

If an informal process is not appropriate, then the workplace investigator (internal or external) will conduct interviews so they can hear in each participant’s own words what occurred and gather details about what happened. The workplace investigator will also ask for documents, like text messages or photos that are relevant to the conduct being investigated.
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The workplace investigator asks for these details so that they can summarize what they have heard and provide the Respondent with a summary of allegations in advance of their interview.

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4. Follow-up interviews or questions

Sometimes in the Respondent interview, new information comes to light that the Complainant or a witness did not discuss.  This may require a second interview or follow-up questions to help the workplace investigator reconcile the new information with the information gathered earlier. The workplace investigator does this so the investigation process is fair to both the Complainant and the Respondent.

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5. Final Report

Generally speaking, a final report will be prepared and kept on file with Human Resources.  While the final report will not be shared in full with the Complainant or the Respondent, workplace policies and collective agreements typically set out what can be shared, for instance a short summary saying if the complaint was substantiated, in part or in whole.  

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Final reports are not shared because they often include personal information about employees other than the Complainant and the Respondent and privacy laws require employee personal information to be treated very carefully.

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To learn more about KSW Lawyers, how we help clients, and how we can assist you with your workplace investigation, workplace policies or human rights matter, call (604) 591-7321, visit kswlawyers.ca or email fmcfarlane@kswlawyers.ca.

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Employers and employees have both been increasingly turning to publicly available generative AI (artificial intelligence) tools like ChatGPT, Microsoft Copilot, Claude, Grok and other similar platforms. In some high-profile cases, litigants have attempted to use those types of tools in place of legal advice. Some recent US-based cases serve as a strong warning of the risks in relying on AI tools as a substitute for legal representation and advice.

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In United States v. Heppner, No. 25 Cr. 503 (JSR) (S.D.N.Y. Feb. 17, 2026), the defendant fed information that he had received from his lawyers (which are normally protected by solicitor-client privilege), generated additional documents without input from those lawyers (which, if produced by those lawyers, would also be shielded from disclosure) and subsequently shared them with the lawyers. In that case, the court held that the documents generated by the AI (in that case, Claude) were not protected by solicitor-client privilege and therefore weren’t protected by solicitor-client privilege and could be used against Heppner. This decision was due in large part to the fact that the individual was sending information to a third party (Claude) that was not a lawyer or used under the direction of or in consultation with his lawyers.

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In Fortis Advisors, LLC v. Krafton, Inc. C.A. No. 2025-0805-LWW (Del. Ch. March 16, 2026) (Will, V.C.), a Delaware case, the CEO of the defendant game publisher notoriously turned to ChatGPT for a second opinion after being told by the company’s legal counsel that they likely could not fire key employees for just cause in order to try to avoid paying employees of the developer, Unknown Worlds, over $200 million in performance bonuses relating to the projected success of its upcoming game Subnautica 2. In that case, the CEO used ChatGPT to create a strategy (despite previous advice from legal counsel that Krafton would likely be contractually obligated to pay out the bonuses) to try to avoid paying those bonuses; the CEO mostly followed that advice from the AI including by locking down the developer’s ability to publish the game as planned in order to generate leverage for a settlement. When negotiations stalled, Krafton removed key employees from the developer’s board and terminated the developer’s leadership team, citing the “premature” pending release of the game as something that would “inflict long-term damage” to the game and franchise.

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One eye-opening piece of the Krafton case was the fact that the court’s decision included extensive references to the CEO’s conversations with ChatGPT and the resulting strategies attempted by the company. Although the decision itself does not address how those AI chats came into evidence, the fact that they were disclosed and referenced in the decision serves as another warning of the dangers of relying upon AI in place of legal counsel.

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Although – as far as we are aware – no similar cases have emerged in Canada yet, the rules around solicitor-client privilege are similar and it would not be surprising if future Canadian cases reach a similar decision. At minimum, the above cases serve as a strong warning sign that relying upon AI for legal work at least creates a significant risk of having to disclose and justify those conversations in court later.

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It is also worth understanding that despite AI being quite good at some tasks (such as summarizing or organizing information), chatbots have a distinct bias towards providing responses that fit what the user is seeking. For example, if someone asks a chatbot whether an employee has been constructively dismissed, its answer will likely be “yes” if the query is from the employee and “no” if the query is from the employer. In most cases, the answer won’t be this clear-cut and understanding that gray area and the degree of risk involved in your situation is precisely where legal professionals can be most useful.

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In short, AI platforms can be a great tool for surface-level research or high-level explanations of concepts but for the most part should not be used in place of legal advice or (if you are represented by a lawyer) without consulting your lawyer first. Of course, the risk involved will also vary depending on the stakes involved and the legal topic.

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Every spring, WorkSafeBC publishes its annual report reflecting the work it did in the prior calendar year.  Here are some of the highlights from the 2025 annual report:

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Deaths because of work still happen.

• WorkSafeBC reports that 138 workers died at or because of work in 2025.
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  • 59 died due to physically traumatic incidents, including 18 as a result of motor vehicle incidents.
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  • 79 due to occupational disease, including 36 deaths related to asbestos exposure.

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Prevention is key.

• Employers have an easier way to report incidents and near-misses at their workplaces, which helps to improve data accuracy and provide insight into the hazards that led to the incident and what actions the employer can take to improve workplace safety.
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• WorkSafeBC focuses on high-risk areas, ensuring consistent inspections across industries and regions and targeted risk-reduction strategies are the goal, for instance their refreshed crane-safety initiative. Their approach focuses on three areas of worker health and safety:
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  • physical risks,
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  • occupational disease and environmental hazards, and
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  • psychological health and safety.
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    ‍
• The changing mix of industries and more major projects means a shift from lower- to higher-risk industries in BC. As such, WorkSafeBC is developing and implementing targeted strategies to effectively mitigate risk.
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• WorkSafeBC is working on draft regulations on psychological health and safety, and harassment and violence in the workplace.

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Claims are getting more complex.  

• While the number of claims has remained the same claims are more complex involving chronic pain and psychological injuries, which leads to higher costs and longer claim durations.
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• A new clinical advisor role, along with new streamlined processes for psychological assessments, and improved tools have been introduced to enhance supports for psychological injuries.

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Claims management is changing with the times.

• WorkSafeBC is improving and modernizing processes and approaches to manage the increasing number of complex claims.
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• This includes changes to care pathways, which “are structured, step by step plans that outline how patient care is delivered over time, ensuring care is consistent, evidence based, and coordinated. They are used to improve quality, efficiency, and patient outcomes. In the WorkSafeBC context, care pathways guide injured workers through the claim and recovery process.”
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• 2025 saw changes to WorkSafeBC’s digital infrastructure, improved data and analytics capabilities, and the establishment of robust artificial intelligence (AI) and data governance frameworks.

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If your company needs help understanding its obligations under the Workers' Compensation Act and regulations, including supporting injured workers as they return to work and creating policies that address workplace investigations, psychological health and safety, and harassment and violence in the workplace please contact Fiona H McFarlane for more information.

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How To Interpret Employment Contracts In BC

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We often get asked if the employment contract someone signed on day 1 of their employment is still enforceable after the employee has been promoted and received salary increases.  In British Columbia, the Supreme Court confirmed in October 2025 in LaPlume v AAA Internet Publishing Inc., 2025 BCSC 2139,  that changes to employment does not impact the enforceability of the employment contract.

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Mr. Laplume became an employee of AAA Internet Publishing Inc. in December 2013, after some time as an independent contractor.  While initially in a junior position, Mr. Plume received salary increases in 2015, 2016 and 2019 and then was promoted to a manager role in fall 2019 then to operations manager in 2022, which is the role he held until his without cause termination in July 2023.

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The employment contract Mr. Plume signed in 2013 contained a termination clause that set out severance amounts greater than the Employment Standards Act amounts, and, at paragraph 3 said:

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During your employment, the Company may change your position, title, duties, responsibilities or reporting relationship as it deems appropriate from time to time, consistent with your qualifications, skills and experience, and such change will not constitute a breach of this [employment contract] or a constructive dismissal, as long a such changes do not materially increase work duties or hours of work;

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The BC Supreme Court considered Mr. Plume’s raises and the changes to his job description with reference to the common law concept of “changed substratum”, essentially it is possible to “outgrow” an employment contract if an employee's job duties, responsibilities, or compensation expand so drastically over time that they are no longer connected to the foundation of their original role, and whose effect is to void the outgrown employment contract.

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To understand if “changed substratum” occurred the BC Supreme Court reviewed Mr. Plume’s employment contract, in particular the clause permitting the employer to change the employee’s position and duties and asked what is

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   (a) the degree of change required to constitute the erosion of the substratum of the contract;

   (b) the degree of the changes to the terms of employment in this case, and

    (c) in any event, were the changes contemplated or allowed under the employment contract?

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In Mr. Plume’s case the changes to his employment were not considered dramatic since they consisted of mostly pay increases and his first promotion to manager of a small team was after seven years of employment, and the subsequent promotion added relatively minor responsibilities to the work he was already doing. According to the judge, these are reasonable incremental changes to employment so didn’t change the enforceability of the employment contract, and were contemplated and within the expectation of paragraph 3 of the employment contract.  Specifically, the BC Supreme Court found:

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Specifically, pursuant to para. 3, both he and the defendant expected Mr. LaPlume’s role to evolve with his qualifications, skills, and experience. That is exactly what happened: as he gained more experience and skill as a developer, his role evolved to overseeing less experienced developers. Paragraph 3 expressly reflects that both parties expected that the employment contract would remain effective notwithstanding those changes.

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KEY TAKEAWAYS

It is important to start out all employment relationships with a solid and enforceable employment contract, and KSW Lawyers can provide legal advice to ensure your employment contracts anticipate and permits changes in employment.  Further, reviewing your employment contracts with KSW Lawyers periodically, especially when promotions are contemplated, will ensure any changes will not erode the foundation/substratum of the contract beyond what was anticipated and permitted.

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Finally, the following takeaways from LaPlume v AAA Internet Publishing Inc. will help to ensure that the employment contract signed on day 1 continues to be enforceable at the end of the employment relationship. Since not all changes in employment benefits, duties, and responsibilities are sufficient to erode the foundation/substratum of an employment contract, we recommend contacting KSW Lawyers if:

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- Significant changes in employment are being planned since they can make the employment contract unenforceable IF

    (a) The foundation/substratum of the employment when the employment contract was signed no longer exists by the time of termination, or

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   (b) it may be implied that the employed contract could not have been intended to apply to the position ultimately occupied by the time of termination.

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- A change that could be dramatic and fundamental is being considered since they can erode the foundation/substratum of an employment contract. If incremental and predictable changes in the terms of employment are introduced, they are unlikely to be a sufficient basis on which to conclude that an employment contract is unenforceable.

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- Where an employment contract anticipates and permits changes in employment, the change required to erode the foundation/substratum of the contract must be beyond what was anticipated and permitted.

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Please contact Fiona H McFarlane for more information.

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By: Junki Hong

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While the length of service is often associated with notice entitlement of a dismissed employee, with greater emphasis than other relevant factors, Canadian courts have recognized that short-service employees are often entitled to a proportionately longer period of notice. Carroll v. Oracle Canada ULC, 2025 ONSC 4889 (“Carroll”) is a recent example from Ontario.

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Court Decision

The Court in Carroll awarded 12 months’ notice to Mr. Carroll, who served for three years and seven months in the position of Global Strategic Client Executive for the employer, Oracle Canada ULC (“Oracle”). He was 61 years old at the time of termination. Mr. Carroll earned from Oracle $761,069.79 in 2022, $786,186.33 in 2021, and in 2023, between January 1, 2023 and his termination on June 30, 2023, earned $725,674.08.

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In coming to this determination, the Court considered the earnings of the employees of authorities cited by the parties, and how the salary level would affect the availability of a comparable position.

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The Court also noted that failing to provide a positive letter of reference was a factor that increases the length of an employee’s reasonable notice period. The letter that Oracle did provide was seen as a “letter that an employer would write for a mediocre or problematic employee in respect of whom an employer did not want to say anything proactively negative”.  Although Oracle maintained that it was company policy not to write letters of recommendation, the letter it did write does not indicate that company policy was not to write letters of recommendation.

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Mr. Carroll found alternative employment on February 28, 2024, eight months after his termination.  Nevertheless, the Court held that the appropriate notice period was 12 months.

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In ascertaining the monetary value of the 12 months notice, the Court used a three-year average for the commissions portion. The Court also awarded for benefits, a sum equal to 10% of the base salary.

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The Court also awarded $57,740.55, equal to the amount of the improperly withheld commissions, in punitive damages for the employer's bad faith conduct, including delays in paying statutory entitlements without any explanation for that failure, and for relying on a termination provision, when a similarly worded employment agreement involving another Oracle employee had been struck down as unenforceable.

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Takeaways

For your consideration:

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• Reference letter practices can backfire. While reference letters can mitigate legal risks, refusal to provide a reference is seen as impeding an employee's ability to mitigate their losses.
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• In assessing the notice, courts will weigh multiple factors—including the availability of a reference.
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• Statutory requirements, including commissions earned during the notice period, are not optional, and further, not leverage. They must be paid promptly.
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• The Court will note the history of the enforceability of termination clause. Oracle tried a similar contractual language in the past and did not succeed and was punished for trying to do so again knowing that it would fail.
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• When an employee occupies a senior, specialized, or high-earning role where the market for comparable positions is narrow, courts will look carefully at all the relevant factors.

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Note to Readers: This is not legal advice. If you are looking for legal advice in relation to a particular matter please contact one of our group members. We communicate all these updates to our clients and readers on our Employer Resources Portal and through monthly Newsletters.

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By: Chris D. Drinovz

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In the recent decision of Vassilakaki v Vassilaki & Sons Investments, 2026 BCSC 474, an 80-year-old employee’s wrongful dismissal case went horribly wrong for him.

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The Facts

John Vassilakaki was a director, officer, and long-time employee of Vassilaki & Sons Investments Ltd. (VSI), a family company which operated the Last Call Liquor Mart and other businesses in the Okanagan. This wrongful dismissal case followed numerous other lawsuits amongst the feuding family, including a shareholder oppression claim brought by John Vassilakaki (which was dismissed with special costs, then appealed and upheld except the costs award) and an assault claim where John was found liable for $14,000 for battery against his brother Nick.  

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The subject of this case was Mr. Vassilakaki’s employment. Over many years, Mr. Vassilakaki had used company funds for personal expenses, including personal income taxes and legal fees, increased his own compensation, paid himself bonuses, and authorized payments to his wife, son, and daughter-in-law without board approval or informing the company's other director, his brother Nick. Notably, Mr. Vassilakaki did not work for VSI continuously, including periods of time when he was a Councilor and then Mayor of Penticton, and when he was appointed as a director of the Regional District of Okanagan-Similkameen.  

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Although Nick warned him in August 2020 that future pay increases, bonuses, and personal use of company funds required board approval, Mr. Vassilakaki continued the conduct.

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After discovering additional questionable payments in 2023, VSI retained an independent workplace investigator. The investigation report dated July 2023 revealed serious misconduct much of which Mr. Vassilakaki admitted. Also during his interview, Mr. Vassilakaki displayed serious insolence towards his brother Nick and other family members.

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Following the investigation, and after hiring a replacement manager for the liquor store, VSI terminated Mr. Vassilakaki's employment for just cause in October 2023. The hiring process took some time as VSI used several recruiters, and the process occurred during a summer with bad forest fires.  

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Mr. Vassilakaki sued for wrongful dismissal and VSI counterclaimed for breach of fiduciary duty. Interestingly, the case proceeded as a “summary trial” based on affidavits only and not live testimony, which is rare for cases involving just cause and misappropriation; however in this case many of the underlying facts had been agreed between the parties in advance of the hearing.

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The Court's Decision

During the second day of trial, Mr. Vassilakaki admitted that his conduct constituted just cause for dismissal. His principal argument instead was that VSI had condoned his misconduct by delaying his dismissal after discovering the misconduct and by conducting what he characterized as an unnecessary investigation.

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The Court rejected this argument and held that:

• the workplace investigation was reasonable and necessary, particularly because other litigation between the parties was already underway (including shareholder oppression);
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• VSI was entitled to fully investigate the allegations before making a termination decision;
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• the time taken to recruit a replacement manager before dismissing Mr. Vassilakaki was also reasonable; and
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• there was no evidence that VSI had forgiven or accepted the misconduct.

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Having found no condonation, the Court concluded that VSI had just cause to terminate the employment:

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[90]      In the case at bar, the plaintiff acknowledged his misconduct was worthy of dismissal. The misconduct involved causing VSI to pay excessive salaries to the plaintiff and to members of his family, payment of salaries for employees while on vacation where such holiday pay had already been paid regularly with pay cheques on a monthly basis, paying three sets of management salaries which were demonstrably unnecessary given the size of the business of VSI, and causing VSI to give him interest-free loans and pay personal expenses for additions to the plaintiff’s personal stamp collection, household insurance and payments of personal income tax in the amount of $20,000. All of this was coupled with intransigent insolence that no doubt was so egregious that it rendered the continuation of the employment relationship impossible.

…

[93]      It is clear that the plaintiff’s behaviour was seriously incompatible with his duties as the manager of the Liquor Store, and that the employment relationship could not viably persist after the workplace investigation concluded and its results were made known to VSI and its board. Accordingly, the plaintiff’s claim for wrongful dismissal is dismissed.

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Accordingly, the wrongful dismissal claim was dismissed.

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Fiduciary Duty and Counterclaim Damages

The Court then addressed VSI's claim against Mr. Vassilakaki for funds he had improperly obtained during his employment and while serving as a director. The Court found that he had deliberately concealed the diversion of company funds and had breached his fiduciary duties to VSI.

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Relying on an expert economic report that the plaintiff did not contest, the Court awarded VSI an extraordinary $814,681.99 in damages, representing diverted company funds, excessive wages and unauthorized compensation, and unpaid loans owed to the company.

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Punitive Damages

The issues of costs and punitive damages were left to be determined in a second hearing. This hearing with reasons reported at 2026 BCSC 1059 occurred in front of a different judge because the original judge (Justice Ball) had retired.

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The Court acknowledged that punitive damages are an exceptional remedy. They are awarded where conduct is malicious, oppressive and high-handed such that it offends the Court’s sense of decency, and where compensatory damages are insufficient to achieve the objectives of retribution, deterrence and denunciation. The Court found that Mr. Vassilakaki’s conduct was exceptionally serious and met this high threshold including because he had:

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• Deliberately diverted company funds for personal benefit;
• Breached his fiduciary duties as a corporate officer;
• Falsified or allowed falsification of payroll records;
• Attempted to conceal the misconduct; and
• Continued the misconduct despite being warned by the company's board.

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Although Mr. Vassilakaki argued he had already suffered significant consequences - including having to pay significant damages and legal costs from all of his lost cases, losing his job, reputation, and political career - the Court concluded that additional punishment was necessary to denounce and deter this type of misconduct. Accordingly, it awarded an astounding $100,000 in punitive damages.

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Special Costs

The award for punitive damages was not the end of the matter. The Court also criticized the plaintiff's conduct during the litigation, including that fact that Mr. Vassilakaki i) continued pursuing a wrongful dismissal claim even though he knew it lacked merit; ii) had already admitted the misconduct that justified his dismissal; and iii) abandoned key parts of his claim only during the second day of trial.

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Because of this, the Court ordered special costs (100% of legal fees) for the portion of the trial devoted to defending the meritless wrongful dismissal claim, but not for VSI's successful counterclaim. This resulted in a costs award equal to 1/3 of VSI’s trial costs, with the remainder recoverable under the normal “Scale B” costs.

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As the cherry on top, the Court awarded VSI statutory pre-judgment interest of $137,067.43.

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Key Takeaways

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• An employer is not required to terminate an employee immediately upon discovering misconduct. A reasonable investigation and practical considerations, such as arranging business continuity, do not necessarily amount to condonation.
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• Condonation requires evidence that the employer knowingly forgave or accepted the misconduct. Mere delay, without more, is generally insufficient.
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• Employees who are also corporate directors owe fiduciary duties to the corporation. Unauthorized self-dealing, diversion of corporate assets, and concealment of such conduct can result in substantial personal liability in addition to dismissal for cause.
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• Admissions by an employee that their conduct constitutes just cause can significantly narrow the issues at trial, leaving the court to focus on defences such as condonation rather than whether the misconduct itself justified dismissal.
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• Employees who bring frivolous claims where they have already admitted serious misconduct may be subject to serious consequences, including punitive damages and/or special costs.

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Note to Readers: This is not legal advice. If you are looking for legal advice in relation to a particular matter please contact one of our group members. We communicate all these updates to our clients and readers on our Employer Resources Portal and through monthly Newsletters.

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By Chris D. Drinovz

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In Cressey Construction Corporation v. Parolin, 2026 BCCA 199, the British Columbia Court of Appeal confirmed that workplace arrangements established through the conduct of the employer and employee can become binding terms of an employment contract, even where they are not recorded in writing. The decision provides important guidance for employers considering changes to long-standing remote work or flexible work arrangements.

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Background

Tracy Parolin was employed by Cressey Construction Corporation for 18 years, ultimately serving as Director of Marketing. Over the course of her employment, her working arrangements evolved to include flexible hours to accommodate childcare responsibilities and, beginning in 2020, a full-time remote work arrangement. In 2021, after her reporting manager left the company, senior management expressly confirmed that she could continue working from home so long as her work continued to be completed satisfactorily. She remained a full-time remote employee for approximately three years.

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In May 2023, after Ms. Parolin requested a salary increase, Cressey instead directed her to return to the office on a full-time basis. Ms. Parolin treated the unilateral return-to-office directive as constructive dismissal and commenced a wrongful dismissal action.

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The trial judge concluded that both the flexible hours and remote work arrangement had become terms of Ms. Parolin's employment through the parties' longstanding agreement and conduct. The judge further found that the remote work arrangement had become an essential term of the employment contract and that Cressey's unilateral decision to require Ms. Parolin to return to the office without her consent or reasonable notice constituted constructive dismissal.

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The trial judge awarded 19 months of notice.

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Appeal Decision

The Court of Appeal upheld the trial court decision. Applying the principles established by the Supreme Court of Canada in Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10, the Court confirmed that constructive dismissal occurs where an employer unilaterally breaches the employment agreement by substantially altering an essential term of employment.

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The Court found that Ms. Parolin's right to work remotely was an express oral term of her employment contract and, in the circumstances, an essential one:

[67]      Ms. Parolin sought permission to work from home and as detailed above, Cressey agreed. Ms. Parolin then worked from home for three full years…In addition, the oral work from home term was not complicated, was clearly understood by the parties and was therefore sufficiently certain to be enforceable.

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The Court also confirmed that a reasonable person in her position would have viewed the mandatory return-to-office requirement, imposed without notice, as a substantial change to the terms of her employment. In describing why the return-to-work mandate was a substantial change, the Court held as follows:

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[88]      Ms. Parolin had been working from home with Cressey’s approval for approximately three years. Her work from home situation allowed her to fulfil her childcare responsibilities and scale up her hours to full-time work. Cressey was aware of Ms. Parolin’s ongoing childcare needs. A change to her location of work, without notice, would have had a significant impact on her ability to manage her childcare and work responsibilities, and it is reasonable to conclude, objectively, that someone in her circumstances would have seen this as a substantial change to her contract.

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The decision underscores that employment contracts are shaped not only by written agreements, but also by the parties' ongoing conduct.

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Key Takeaways

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• Employers should take care to ensure that any flexible remote work arrangement is captured in writing, with clear language preserving the employer’s right to require attendance at the workplace on reasonable notice. It is better to communicate expectations clearly rather than relying on a mere assumption that the arrangement was always meant to be temporary.
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• Employers contemplating a return-to-office policy, particularly for employees with long-standing remote work arrangements, should provide meaningful advance notice and engage in substantive dialogue with affected employees before implementing any such change.

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Note to Readers: This is not legal advice. If you are looking for legal advice in relation to a particular matter please contact one of our group members. We communicate all these updates to our clients and readers on our Employer Resources Portal and through monthly Newsletters.

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By: Michael J. Weiler & Chris D. Drinovz

Nanaimo (City) v. Mema, 2026 BCCA 203

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This is a follow up article to our earlier article on this saga.

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The British Columbia Court of Appeal has now upheld the decision of the BC Human Rights Tribunal exceeding $600,000 after finding that racial bias was a factor in the City’s decisions to suspend and terminate Mr. Mema, its Chief Financial Officer.

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Background

To refresh your memories, we will set out some of the relevant background again below.

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The City of Nanaimo hired Victor Mema as its Director of Finance in September 2015 and later changed his title to Chief Financial Officer. Mr. Mema (who was born in Zimbabwe and is Black) alleged that the City discriminated against him on the basis of ancestry, place of origin, race and colour when it suspended him in March 2018 and terminated his employment two months later.

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The dispute arose from Mr. Mema’s use of a corporate credit card, known as a P-card. The cards were not intended for personal purchases, but in practice some employees used them for personal expenses, identified those charges as personal, and repaid the City. There was no formal guideline setting out how quickly repayment had to be made.

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From 2016 to 2017, Mr. Mema accumulated a significant number and value of personal charges and was slow to repay the balance. Finance staff followed up over several months and eventually escalated their concerns to management. The City reprimanded Mr. Mema, agreed to a repayment plan, and ultimately cancelled his card. The City also retained auditors to review personal credit card use and recommend changes to policy or practice.

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Although the amount owing had been repaid, the City later suspended Mr. Mema after receiving an internal report from its finance staff alleging serious misconduct. City Council subsequently gave Mr. Mema an opportunity to be heard but ultimately voted to terminate his employment for cause.

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Tribunal Decision

Before the B.C. Human Rights Tribunal, the central issue was whether Mr. Mema’s protected characteristics were a factor in the City’s decisions to suspend and dismiss him. The Tribunal found that they were.

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The Tribunal concluded that, “however subconsciously,” stereotypes of a Black man as less honest or trustworthy factored into the internal misconduct report from Mr. Mema’s coworkers. Because the City relied on that report when suspending and terminating Mr. Mema, the Tribunal found that those decisions were tainted by discrimination.

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The Tribunal emphasized that the question was not whether Mr. Mema had breached a workplace duty or whether he had engaged in misconduct. The relevant question was whether his protected characteristics factored into the City’s conduct. It found “a distinct underlying thread of racial bias” in the way the misconduct allegations were framed, including a narrative that cast Mr. Mema’s credit card use as broader and more sinister than the established facts supported.

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The Tribunal awarded Mr. Mema remedies that included $50,000 for injury to dignity, feelings and self-respect, $583,413.40 for wage loss subject to a 25% reduction in the City’s responsibility, $10,150.04 in expenses, and post-judgment interest. It was noted in our prior article that the 25% reduction was due to the “chilling effect” on his future employment of numerous articles about Mr. Mema’s financial misconduct with his prior employer, the City of Sechelt, including the fact that Sechelt had to pursue him in court to seek repayment for personal purchases used on the corporate card, the exact same misconduct he was fired from Nanaimo for.

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Court of Appeal Decision

The City unsuccessfully sought judicial review in the Supreme Court of British Columbia and then appealed to the BC Court of Appeal. The Court of Appeal dismissed the appeal and upheld the Tribunal’s finding that there was a reasonable basis to conclude that race was a factor in the suspension and termination decisions.

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The Court reiterated several core principles of human rights law: Mr. Mema did not need to prove that the City intended to discriminate, nor did he need to prove that race was the sole or overriding factor in the adverse treatment. It was enough to show that a protected characteristic was a factor.

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The Court rejected the argument that the Tribunal had failed to consider Mr. Mema’s position of trust as the CFO when assessing the City’s decision to terminate him for cause. The Court noted that “it made no difference whether the City had the right to fire Mr. Mema for misconduct” (para. 61) and “it matters not whether Mr. Mema’s conduct may have given the City cause to terminate his employment at common law because a termination with cause may nevertheless contravene s. 13(1)(b) of the Code if it is racially motivated” (para. 63) holding:

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[64]      The City submits that the Tribunal could not decide whether Mr. Mema’s misconduct was a factor in the City’s decision to terminate without meaningfully engaging in an analysis of the misconduct.  But the issue before the Tribunal was not whether Mr. Mema’s misconduct was a factor in the City’s decision.  Undoubtedly, there were many factors.  Misconduct and a racist motivation could co-exist.  Only the presence or absence of the latter was relevant.

Another key argument on appeal was that the misconduct report was effectively an employee complaint and that the City should not be responsible for whatever alleged subconscious biases another employee may have held. The Court rejected that argument as well by stating as follows:

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[79]      I reject the City’s submission.  In my view, the distinction drawn by the City between policies, rules, and decisions, on the one hand, and employee complaints, on the other, is unprincipled and unsound.  While it is true that the City has no control over the subconscious biases that may motivate employee complaints, it is in control over how it handles complaints, and the decisions it makes in reliance on them.  The City Council chose to suspend Mr. Mema, and later to terminate him.  Nothing forced its hand.  In choosing to take action based on an employee complaint without full investigation, it assumed the risk that the complaint rested on an insecure foundation.  

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What was surprising to us is that the City did not appear to challenge the Tribunal’s finding of a general subconscious bias in the first place which the Tribunal clearly stated was not grounded in any direct (or even circumstantial) evidence but seemed to rely entirely on “historical disadvantage experienced by the group”.  

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We question however whether the City could have done anything to change the result. If they had done an external investigation which confirmed the misconduct without any bias, would the process still not have been found to be tainted by the original report? How could the employer “clean” the ultimate decision to terminate? What about the fact that Mr. Mema was offered the chance to speak to Council? Could it be argued that this eliminated any discrimination?

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Practical Takeaways for Employers

This result would be extremely difficult for most if not all employers to accept and in our view undermines the trust necessary to have in our adjudicative process. Where hundreds of thousands of dollars are awarded based on a connection that was assumed (not proven), it creates an incredible uncertainty, not to mention the chilling effect on employees and other whistleblowers who are acting in good faith and reporting financial and other misconduct, particularly in a public organization.

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All of this is occurring in the underlying context of extraordinary adjudicative delay. In a recent presentation, the BC Human Rights Tribunal confirmed that complaints are now being vetted and forwarded to employers 2 years after being filed, and the average time for decisions is now down to 5 years from the date of original filing, and this is an improvement!

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Employer must now be extremely cautious when investigating misconduct against any racialized individual. Mema demonstrates that courts and tribunals will look beyond the serious misconduct and examine how the employer reached its decision. A disciplinary outcome that may appear justified can still be found to violate human rights legislation if the process was tainted or biased in any way, including if subconscious bias is found to have influenced the investigation, the report, or the decision-making process.

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The case also shows the risk of relying too heavily on a single internal narrative produced by co-workers without having an external investigation done. Where there is a possibility that an internal complaint is only assembling partial facts or creates a suspicious or exaggerated story, decision-makers should pause before treating the report as a reliable foundation for discipline without outside verification.

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When investigating workplace misconduct and making disciplinary decisions, employers should keep the following points in mind:

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• ‍Vet from the beginning. Had the City done some basic due diligence on Mr. Mema, they would have found his past misconduct with Sechelt and avoided this case altogether.
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• Cause is not a complete answer. A termination for cause may still breach human rights legislation if a protected characteristic plays any role in the decision.
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• Investigate thoroughly and objectively. Employers should not rely uncritically on one employee’s report or account, especially where the allegations are serious and the consequences are significant.
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• Test the factual foundation. Decision-makers should distinguish between established facts, assumptions, inferences, and speculation before imposing discipline.
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• Consider whether bias may be operating indirectly. Bias does not need to be intentional or overt. Employers should assess whether stereotypes or assumptions may have shaped how concerns were framed, investigated, or escalated.
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• Use independent support where appropriate. In serious or sensitive matters, an independent investigator or outside advisor may help ensure the process is fair, impartial, and evidence-based.
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• Document the decision-making process. Employers should be able to show how they assessed the evidence, considered the employee’s response, and separated legitimate misconduct concerns from potentially biased reasoning.
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Note to Readers: This is not legal advice. If you are looking for legal advice in relation to a particular matter please contact one of our group members. We communicate all these updates to our clients and readers on our Employer Resources Portal and through monthly Newsletters.

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It's 9pm. The kids are finally down, the house is quiet, and I'm standing in the kitchen realizing I survived the t-ball/gymnastics gauntlet on nothing but half a cheese string. I do what any exhausted parent does: summon a sushi platter from DoorDash.

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My dasher arrived looking exactly how I felt. Turns out she is a fellow parent who fits this delivery hustle in after her own kids are asleep just to keep up with the rising cost of music lessons. It's a wild cycle: I'm paying her to bring me California rolls so I don't have to move, and she's delivering them so her kid can master Mozart.

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We've become completely reliant on the "convenience economy" and it's built on the backs of people like her - the gig workers. In professional terms, "gig work" includes someone who is an independent contractor juggling app-based tasks like ride-hailing or delivery. In reality, gig work is the engine that keeps our chaotic lives running, one late-night spicy tuna roll at a time.

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A lot of British Columbians are doing it. Some estimates suggest BC has one of the highest concentrations of gig workers in Canada (around 10% of workers). With the cost of living on the rise, it is no surprise that approximately 35% of gig workers rely on this type of work to supplement their main income source.

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BC is setting the bar for gig worker protections in Canada. The province essentially looked at the gig economy and said: "Maybe people delivering your burrito bowl at 2am in the rain should have at least sooooooome labour protections."

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Since 2024, BC has introduced protections specifically for app-based ride hail workers and delivery workers that are among the first of their kind in Canada. They include

1. Guaranteed minimum wage for "engaged time" at 120% of BC's minimum wage;
2. Per-kilometer expense reimbursement;
3. Protection of tips from deductions;
4. WorkSafe BC coverage for injuries;
5. Pay transparency before accepting jobs; and
6. Occupational health and safety protections.

BC also expressly recognizes that simply calling someone an independent contractor does not magically make it true, regulators and courts still look at the actual relationship.

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Importantly, BC's approach is still evolving. The province is actively reviewing whether the current protections go far enough.

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To me, having some protections in place feels fair when a gig worker's day is controlled by an algorithm, customer ratings, surge pricing, GPS tracking, and the threat of "deactivation".

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