In employment, statements by an employer or employee can result in seriously damaging a person or company’s reputation. Defamation occurs when untrue statements regarding an identifiable individual are communicated to a third party. Statements can be written or oral, the former is referred to as libel and the latter as slander. As the Supreme Court noted in Grant v Torstar Corp, 2009 SCC 61 (CanLII), a statement will be defamatory if it lowers the reputation of a person in the eyes of a reasonable person.
Employers and employees should be cautious of the statements they make, particularly in this age of social media, as it may constitute defamation. Defamation can occur at any time and during any stage of an employment relationship. Some common instances where problems may arise are employee references, employee evaluations, comments regarding an employee’s performance, disciplinary actions, etc. In addition, with the laws around vicarious liability, comments made by employees during the course of their employment may expose their employers to liability. Vicarious liability puts liability on employers for their employee’s actions if the employee is acting within the scope of their duties.
Wrongful dismissal suits sometimes contain additional claims for defamation of character. Hampton Securities v Dean, 2018 ONSC 10, provided an example of an employee successfully claiming defamation against her employer for filing a false notice containing allegations that she failed to follow policies and procedures and engaged in unauthorized trading with the securities commission after her termination. Not only was she successful on her defamation claim but the underlying facts of that claim also lead the Court to award extraordinary damages, in part due to the defamation. The employer completely failed to establish that what was written in the notice was true.
The purpose of a defamation suit is to protect a person’s reputation. However, courts have determined that not all negative statements constitute defamation. An example of this is an employer giving a bad job reference to another employer. It may be acceptable in some circumstances for an employer to make negative statements regarding an employee’s job performance abilities. For example, in Papp v Stokes Economic Consults Inc, 2018 ONSC 1598 (CanLII) and Kanak v Riggin, 2018 ONCA 345 (CanLII), both employers were found to have defamed a past employee by giving a bad reference, however the employer escaped liability due to their successful defences.
Employers, or others subject to a defamation claim, may argue several defences for defamation, including but not limited to, absolute privilege, qualified privilege and justification:
A statement is absolutely privileged if it was made in the course of, incidental to or during a judicial proceeding.
It is qualified privilege if the maker of the statement has a duty to share information to a receiver who has an interest in receiving the information. This may be a defence even if the statement is untrue, however it may be defeated by malicious intent. Just like the bad job references, employers may make statements to other employers interested in the information as long as the employer was not acting with malice.
The defence of justification is simply truth. Parties who argue justification have the burden of proving the truth to their statement. The risk of arguing justification is that if a party fails to show the truthfulness in the statement, a court may order costs against them.
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