The Investigator Must Consider Exculpatory Evidence

The obligation of an employer to investigate allegations of serious misconduct fairly is well established.

So too is the proposition that a seriously inadequate investigation may contribute to an award of aggravated damages where the employer’s conduct amounts to bad faith in the manner of dismissal.

Equally established is the converse proposition. An inadequate investigation does not necessarily prevent the employer from proving at trial that just cause actually existed.

The recent Ontario Superior Court decision in Wilsher v. Olympic Wholesale, 2026 ONSC 3620, does not materially change any of these principles.

Its significance lies elsewhere.

Wilsher provides an important illustration of what a fair investigation requires when the employee offers an explanation which, if true, may defeat the allegation.

The investigator must explore both sides.

It is not sufficient to gather evidence tending to establish misconduct while ignoring reasonably available evidence capable of disproving it.

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The Allegation

Wilsher had worked for Olympic Wholesale for approximately 17 years and was employed as its Night Shift Supervisor.

The employer accused him of “fraudulent activity” and “time theft”.

The allegations arose from a practice referred to as “topping up”. Wilsher had made adjustments to employees’ time records so that employees who had completed their work and left before the scheduled end of a shift were credited with additional time.

The electronic records established that Wilsher had made the adjustments.

That answered one question.

It did not answer the much more important question:

Why had he done so?

Wilsher’s explanation was that topping up was a longstanding workplace practice followed by Night Shift Supervisors.

He maintained that he had learned the practice when he became a supervisor. He did not conceal the adjustments. They were made under his own login credentials. He obtained no personal financial benefit from them.

If his explanation was true, it plainly affected whether his conduct could fairly be characterized as fraudulent or dishonest.

That explanation therefore required investigation.

Investigating the Allegation But Not the Explanation

Olympic examined Wilsher’s time-sheet edits.

What it did not do was equally important.

It did not interview other supervisors to determine whether they also engaged in topping up.

It did not audit the time-sheet edits made by those supervisors.

It did not attempt to determine the nature and extent of the practice.

It did not properly investigate whether the conduct characterized as fraudulent was actually a longstanding workplace practice.

This was not a collateral issue.

It was Wilsher’s answer to the allegation.

The Court later found that the practice had existed for many years, had been followed by multiple supervisors and continued even after Wilsher’s dismissal. Evidence from long-serving employees corroborated his explanation.

The evidence which the employer failed to pursue was therefore evidence capable of fundamentally changing the conclusion reached in the investigation.

That is what makes Wilsher important.

“Not Required to Prove the Plaintiff’s Case”

The employer’s explanation for its failure to investigate the conduct of other supervisors is particularly instructive.

The Court noted that Olympic did not interview the other supervisors or audit their edits because, according to the employer’s witness, Olympic was “not required to prove the plaintiff’s case”.

That proposition misses the purpose of an investigation.

Certainly, an employer investigating misconduct is not required to prove the employee’s case.

But neither is the investigator’s function to prove the employer’s case.

The investigator’s role is to determine what happened.

That necessarily requires examination of relevant evidence pointing in both directions.

Evidence tending to establish the allegation must be considered.

So must evidence reasonably capable of disproving it.

An investigator who follows only the first path is not really testing the allegation. The investigator is looking for confirmation of it.

Exculpatory Evidence

This is the important principle illustrated by Wilsher.

Where the employee provides an explanation for the alleged misconduct and identifies evidence which may substantiate that explanation, the investigation cannot fairly disregard that evidence merely because it may assist the employee.

Such evidence is exculpatory in the ordinary sense of the term. It may show that:

• the alleged conduct did not occur;
• the employee did not commit it;
• the conduct was authorized;
• the employee reasonably believed it was authorized;
• others engaged in the same practice;
• management knew of or tolerated the practice;
• the conduct was consistent with established workplace custom;
• the employee had been instructed or trained to act in that manner; or
• circumstances exist which materially alter the apparent seriousness of the conduct.

An investigator is not obliged to accept the employee’s explanation.

The obligation is to test it.

There is a considerable difference.

The Investigator Must Explore Both Sides

A workplace investigation is fundamentally a fact-finding exercise.

The investigator should therefore be asking two questions throughout the process:

What evidence supports the allegation?

What evidence may show that the allegation is incorrect?

The second question is every bit as important as the first.

Consider an employee accused of breaching a procedure who responds:

“My supervisor told me to do it this way.”

The obvious next step is to interview the supervisor.

If the employee says:

“Everyone in the department does this.”

It may be necessary to examine the conduct of comparable employees.

If the response is:

“This has been the accepted practice here for years.”

The investigator should determine whether that is true.

The investigator need not prove any of these explanations.

The investigator must investigate them.

That distinction lies at the heart of Wilsher.

Comparator Evidence Was Exculpatory Evidence

The failure to examine other supervisors was particularly significant in Wilsher.

The employer viewed Wilsher’s alterations to the time records in isolation and characterized them as evidence of fraud.

But Wilsher said that other supervisors did exactly the same thing.

That made their conduct directly relevant.

If Wilsher alone had secretly manipulated employee time records, the employer might reasonably draw one inference.

If supervisors had openly followed the same practice for many years, an entirely different inference might follow.

The physical act remained the same.

Its significance depended upon the surrounding circumstances.

The conduct of the other supervisors was therefore not merely “the plaintiff’s case”.

It was relevant evidence necessary to determine whether the employer’s own allegation was correct.

Confirmation Bias

There is also a broader investigative problem illustrated by the decision.

An investigator who pursues only evidence supporting the original allegation risks confirmation bias.

Once the theory becomes “Wilsher committed time theft”, evidence may unconsciously be evaluated according to whether it supports that theory.

The investigation then asks:

How can we establish that Wilsher committed fraud?

The proper question is different:

What happened, and what does all of the available evidence tell us about it?

That requires the investigator to be willing to discover that the original allegation is wrong.

Indeed, that possibility is the reason for conducting an investigation in the first place.

If the conclusion has effectively been reached before exculpatory evidence is examined, the process has ceased to be an investigation in any meaningful sense.

Context Must Be Investigated

The need to explore exculpatory evidence is especially important where the alleged misconduct depends upon context.

The Court in Wilsher repeatedly emphasized the importance of context.

The fact that Wilsher altered time records was not seriously disputed.

The issue was what those alterations meant.

Were they covert acts of dishonesty?

Or were they part of an established workplace practice which Wilsher had been taught and reasonably believed he was permitted to follow?

The answer could not be found simply by examining Wilsher’s electronic edits.

It required investigation of the surrounding workplace.

Who else engaged in the practice?

How long had it existed?

How had Wilsher learned it?

Was management aware of it?

Was it prohibited by a policy?

Had anyone previously been told to stop?

These were not questions designed to “prove the plaintiff’s case”.

They were questions necessary to determine whether the allegation of dishonesty was sound.

The Employee’s Right to Respond Must Have Substance

The decision also adds practical content to the familiar requirement that an employee accused of serious wrongdoing be given an opportunity to respond.

It is not sufficient simply to ask for the employee’s version.

The response must be genuinely considered.

If an employee identifies a material avenue of inquiry and the investigator ignores it, the opportunity to respond risks becoming meaningless.

The process should not be:

“We have concluded that you committed misconduct. What do you have to say?”

It should be:

“This is the allegation and this is the evidence we have gathered. What is your explanation, and what further evidence should we examine before reaching a conclusion?”

That is a very different investigative exercise.

Not Every Suggested Inquiry Must Be Pursued

This does not mean that an investigator must pursue every suggestion made by an employee.

Some proposed witnesses may have no relevant information.

Some documents may be peripheral.

Some lines of inquiry may plainly lead nowhere.

The investigation must remain proportionate and reasonable.

The important issue is materiality.

If the employee identifies evidence which, if accepted, could materially affect the finding, the investigator should have a proper basis before deciding not to examine it.

The more central the evidence is to the employee’s explanation, the more difficult it will be to justify ignoring it.

In Wilsher, the comparator evidence could hardly have been more central.

The employee said, in substance, that the very conduct said to constitute fraud was an established practice followed by other supervisors.

The obvious investigative response was to find out whether he was right.

Olympic did not do so.

At trial, he was shown to be right.

The Practical Principle From Wilsher

The existing law concerning the employer’s obligation to investigate serious misconduct does not need to be reinvented.

Nor does Wilsher alter the established principle that an employer may ultimately prove just cause despite flaws in its pre-termination investigation.

The useful contribution made by Wilsher is much narrower.

It illustrates an important component of investigative fairness:

The investigator must examine material evidence on both sides of the allegation.

That means searching for inculpatory evidence.

It also means searching for exculpatory evidence.

An investigation should be capable of producing either conclusion.

If its design permits only confirmation of the allegation, it is not a balanced investigation.

The employer in Wilsher said that it was not required to prove the plaintiff’s case.

That was true.

But it was required to investigate fairly.

And a fair investigation requires the investigator to pursue material evidence which may show that the employer’s case is wrong.

That is the lesson from Wilsher.

The investigator’s task is not to prove the allegation.

It is to find the truth.

1. Wilsher v. Olympic Wholesale, 2026 ONSC 3620, particularly paras. 79-80, 95-107 and 129.