Can an employer use "litigation privilege" to prevent the disclosure of an internal report written by a human resources agent that recommends the dismissal of an employee? A recent arbitration award (the Award) by arbitrator François Hamelin in Ville de Montréal et Syndicat des professionnelles et professionnels municipaux de Montréal1 illustrates the limits of litigation privilege in arbitration.
The union filed two grievances about the suspension and the subsequent dismissal for cause of an employee. During the hearing, the union requested production of an internal report mentioned by the employer's human resources agent during cross-examination. In order to justify her recommendation to dismiss the employee, the HR Agent had prepared the report following an internal investigation. The employer's decision to dismiss the employee was ultimately based on the HR Agent's recommendation and the results of the investigation which were both mentioned in the report. The employer objected to disclosure of the report on the basis of litigation privilege.
The employer argued that the content of the report should be protected from disclosure on the basis of litigation privilege because the main purpose of the report was the preparation of reasonably anticipated litigation resulting from the employee's eventual dismissal. Since the union had already filed grievances contesting the employee's suspension and the employer's recommendation to dismiss, the employer indicated that it reasonably anticipated litigation regarding the eventual dismissal of the employee when it prepared the report. The employer added that the report contained its litigation strategy in view of the anticipated arbitration and that its purpose was to serve as a sort of "checklist" of the evidence to gather for the upcoming hearings.
The union, on the other hand, argued that the report was simply an administrative document prepared by the HR Agent for the main purpose of assisting the employer in deciding whether to dismiss the employee. Accordingly, the union took the position that the Report was not created for the main purpose of preparing for litigation, such that litigation privilege should not prevent the disclosure of its contents.
In order to determine whether the report was created for the main purpose of preparing for litigation, arbitrator Hamelin applied the "dominant purpose" test. That test says that litigation privilege applies to a document if it was created for the dominant purposes of litigation.
Having reviewed the content of the report, the arbitrator sided with the union and ordered its disclosure, finding that the report was an administrative document prepared by the HR Agent in the normal course of her duties and for the purpose of (i) informing the employer of the results of the investigation and (ii) assisting the employer in deciding whether the employee should be dismissed. For arbitrator Hamelin, the fact that the report might eventually be relied on in arbitration was irrelevant to determining its dominant purpose. The arbitrator held that the report was no different from any other internal document relied on by the employer in deciding whether to dismiss the employee. Therefore, he found that the dominant purpose of the report was not the preparation for litigation. It should however be noted that the employer filed for judicial review of this decision before the Superior Court of Québec.
Litigation privilege should be viewed as a limited exception to the principle of full disclosure. The underlying rationale of litigation privilege is the protection of the adversarial process by allowing the parties "to prepare their contending positions in private, without adversarial interference and without fear of premature disclosure"2 by maintaining a "protected area to facilitate investigation and preparation of a case for trial by the adversarial advocate"3, such that immunity from disclosure will only be granted in respect of documents and communications created for the main purpose of preparing for litigation.
Since arbitrator Hamelin found that the report was not prepared for such a dominant purpose, the general rule in favour of disclosure of relevant evidence prevailed.
What about Professional Secrecy?
We note that the Award does not discuss whether the report could be exempt from disclosure on the basis of professional secrecy to which registered professionals are generally bound in the course of their duties. It may be that the HR Agent was not a registered or certified professional subject to a code of ethics imposing a duty of confidentiality4 such that professional secrecy could not be raised; however, it is impossible to know with certainty as the Award is silent in this regard.
The Award thus begs the following question: had the HR Agent been a registered or certified human resources professional, would the arbitrator's conclusion be different? While it is not possible to know with certainty, we believe that, had the report been prepared by a professional bound to confidentiality, strong arguments under the notion of professional secrecy could have been raised to protect the confidentiality of the report and thus prevent disclosure.5
Therefore, the Award serves as a friendly reminder to employers of the benefits of engaging certified professionals where possible in such circumstances.
1 2019 QCTA 235; an application for judicial review is currently pending before the Québec Superior Court (500-17-108021-190).
2 Blank v. Canada (Minister of Justice),  2 SCR 319, at para. 27
3 Id., at para. 30; Lisotte v. Aviva, Compagnie d'assurance du Canada,  2 SCR 521, at para. 24
4 In Québec, "Certified Human Resource Professionals" are bound to professional secrecy pursuant to section 60.4 of the Québec Professional Code, CQLR c. C-26.
5 Foster Wheeler Power Co. v. Soci&ecute;té intermunicipale de gestion et d'élimination des déchets (SIGED) inc.,  1 SCR 456, at para. 42.
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