Reminder: HR Advice to Management is NOT Privileged

In a decision released February 9, 2018, an Ontario Master rejected the claim by an employer that communications between management and its human resources advisors were privileged. Two forms of privilege were claimed: litigation privilege and common law privilege, sometimes referred to as "Wigmore" privilege.

The Facts

After more than 30 years of employment, the plaintiff ("Guthrie") was placed on a performance improvement plan in which he was required to meet sales targets, and later failed to do. After his salary was cut back, he left his employment and sued for constructive dismissal.

In the course of examinations for discovery of the defendant employer ("St. Joseph Print"), Guthrie became aware of the existence of five undisclosed email chains between senior management and the human resources department ("HR"). St. Joseph Print claimed privilege over those emails and refused to produce them. Guthrie brought a motion seeking their production.

St. Joseph Print conceded that the emails were relevant but argued that they should not be disclosed because they either met the test for litigation privilege or theWigmoretest for a privileged document at common law.

St. Joseph Print led evidence that senior management relies on its HR department as trusted advisors for full and frank "without prejudice" discussions. The HR department provided opinions and advice on how to cautiously proceed while minimizing legal risks. St. Joseph Print contended that the emails between senior management and HR and were confidential and 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 Guthrie’s poor performance. Otherwise, the HR department’s usefulness would be diminished and its role would be limited to an administrative function rather than an advisory one.

St. Joseph Print also contended that the communications’ dominant purpose was the discussion of anticipated litigation and legal strategy. It argued that the solicitation of advice from its senior HR professionals on legal considerations was evidence that litigation was foreseen as a real possibility and it wanted to minimize that risk.

Decision

The Master ordered that the email chains be produced.

The Master rejected the argument that litigation privilege applied: in order for litigation privilege to apply to a communication or document, it must have arisen when litigation was reasonably anticipated and its dominant purpose must be litigation. Because this was a constructive dismissal matter, it was difficult to definitively ascertain when litigation might reasonably have been anticipated, but the timing of the emails almost a year prior to Guthrie’s departure was not sufficiently proximate to conclude that litigation was reasonably anticipated. She also found that the predominant purpose of the emails was the performance management of the plaintiff, and not litigation.

Further, and despite some arbitral jurisprudence originating primarily in Western Canada to the effect thatWigmoreprivilege exists between management and human resources in a unionized environment, the Master rejected St. Joseph Print’s claim that aWigmoreprivilege covered the emails in this case. The common law privilege under theWigmoretest arises when a communication meets all 4 of the following criteria (seeSlavutych v. Baker,1975 CanLII 5 (SCC), [1976] 1 S.C.R. 254, at para. 260):

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 Master acknowledged that the authors of the emails might have thought that their communication was confidential, but found that was not enough to make them privileged. She found that the other branches of theWigmoretest were not met.

With respect to the second and third branches of the test, the Master commented that, in the course of regular performance management and absent any threat of litigation, the relationship between HR and management is not one in which confidentiality is essential or that the community would say "ought to be sedulously fostered."

With respect to the fourth branch of the test, she concluded that the harm caused by disclosure of the emails would not outweigh the benefit gained for the correct disposal of the litigation, as disclosure is a cornerstone of civil litigation and a fundamental right absent a clear claim of privilege.

Takeaway

As held by Master Champagne: "If management seeks confidentiality in dealing with an employee, it should consult with counsel and not its HR department."