Handling Compliance Violations and Ethical Breaches in Alberta
Every organization will face its moment. A compliance issue. An ethical concern. A complaint that cannot be ignored.
What matters most is not whether these issues arise, but how leaders respond. The decisions made in those first hours and days can determine whether the situation is contained and resolved or whether it grows into a crisis that damages culture, reputation, and trust.
Taking Action Early
The natural temptation is to wait. To gather more facts before acting, to hope the concern will fade, or to downplay the issue to protect the business. But hesitation carries real risks.
The Supreme Court of Canada has made clear that honesty and good faith are essential to all business dealings. In Bhasin v. Hrynew (2014), the Court established that misleading or withholding information is a breach of this duty. The principle extends beyond contracts. It reinforces that evasion in the face of misconduct can expose organizations to liability.
We have seen this in practice. In one case, a company chose to “monitor” concerns about financial irregularities rather than intervene. Months later, regulators were involved, and the business was forced to defend not only the misconduct but its inaction. The lesson: act quickly. Acknowledge the concern, preserve evidence, and protect those involved.
The Role of Investigations
Once an issue is raised, a fair and impartial investigation becomes essential. Investigations are not just about uncovering facts; they are about demonstrating accountability. Employees want to know: Will this be taken seriously? Will anything change?
Canadian courts have underscored this duty for decades. In Robichaud v. Canada (1987), the Supreme Court held that employers are responsible for workplace harassment even if carried out by individual employees. In Janzen v. Platy Enterprises Ltd. (1989), the Court confirmed that sexual harassment is a form of sex discrimination.
We also know the difference swift action can make. In one investigation we handled, leadership acted immediately on a bullying complaint, brought in a neutral investigator, and communicated openly with staff. The issue was resolved, but more importantly, employees said it reinforced their trust in leadership. The investigation didn’t weaken the culture—it strengthened it.
Legal and Reputational Consequences
Corporations can be criminally liable for acts of their “directing mind” under the identification doctrine. When the “directing minds” of a corporation fail to act, the consequences can be severe. This was confirmed in Canadian Dredge & Dock Co. v. The Queen (1985), which was involved the misconduct tied to senior management. And in Wallace v. United Grain Growers Ltd. (1997), the Court recognized that employers have a duty of good faith when dealing with employees especially during termination. Mishandling sensitive matters can trigger liability far beyond the original complaint.
We have seen firsthand that the greatest cost is often reputational. In one matter, a business ignored repeated harassment concerns until a tribunal ruling forced public scrutiny. The judgment wasn’t the most damaging part, but the loss of employee trust and talent was.
Building a Culture of Accountability
Compliance and ethics are not about avoiding every problem—they are about how problems are handled when they arise. Each issue is a test of culture. Do leaders act with integrity? Do employees feel safe speaking up? Are policies lived out in practice, not just written on paper?
Handled poorly, breaches weaken the organization. Handled well, they reinforce values, build resilience and culture.
Its important that corporations do things right are being seen doing it. For example, a sound internal investigation leads to decisions but the aftermath shapes culture.
Culture isn’t a poster. Rather it’s a pattern of responses. Here are 5 ways to strengthen corporate culture:
- Codify expectations: Clear, accessible policies (respectful workplace, anti‑harassment, reporting and anti‑retaliation, investigations).
- Make speaking up safe: Anonymous channels; multiple reporting options; protection from retaliation.
- Train the moments that matter: Manager micro‑interventions, bystander skills, documentation basics, early conflict resolution.
- Audit and improve: Track complaints, timelines, outcomes, and repeat patterns; publish anonymized trends internally to encourage learning.
- Lead visibly: Executives model accountability must own their mistakes, fix systems, and close feedback loops.
At Osuji & Smith Lawyers, our Employment Law Division works closely with organizations navigating these critical moments. Led by Christie Eze, Managing Lawyer of the Employment Law Division, our team brings a unique dual perspective:
- Legal expertise: advising on wrongful dismissal claims, human rights complaints, workplace investigations, and compliance disputes.
- HR and governance expertise: informed by professional certifications (SHRM-CP, CPHR Alberta) and experience guiding leaders in building policies and frameworks that prevent crises before they occur.
This combined approach allows us to help organizations not only manage legal risk but also strengthen workplace culture. Compliance isn’t just a legal requirement; it is the foundation of trust and credibility.
At Osuji & Smith Lawyers, we provide the guidance, clarity, and strategy to help businesses act with integrity, protect their people, and preserve their reputation when it matters most.
Author: Christie Eze
