Employers often assume that if they have evidence of employee misconduct, a termination decision will withstand legal scrutiny. However, the BC Court of Appeal’s decision in Nanaimo (City) v. Mema, 2026 BCCA 203, is an important reminder that this is not always the case.
Even where legitimate concerns about misconduct exist, an employer may still face liability under the Human Rights Code if discrimination plays a role in its decision-making process.
Case background
Victor Mema worked for the City of Nanaimo as its Chief Financial Officer. Following concerns regarding Mr. Mema’s use of a corporate credit card, the City commissioned a forensic audit. While the audit found that Mr. Mema had delayed repayments, it found no evidence of fraud or criminal conduct.
A senior manager subsequently prepared a Misconduct Report addressing the credit card issue and several other concerns. Relying on that report, City Council suspended and ultimately terminated Mr. Mema’s employment.
Mr. Mema filed a human rights complaint alleging that race and colour were factors in the City’s disciplinary decisions.
The Tribunal’s decision
The BC Human Rights Tribunal accepted that Mr. Mema’s conduct raised legitimate concerns. However, it found that the Misconduct Report portrayed Mr. Mema’s conduct as more suspicious than the evidence warranted and that racial stereotypes influenced how concerns about Mr. Mema were communicated, interpreted, and escalated.
As a result, the Tribunal concluded that race was a factor in both the City’s suspension and termination decisions and awarded Mr. Mema more than $600,000 in damages.
Judicial review and appeal
The City sought judicial review of the Tribunal’s decision, arguing that the Tribunal had failed to properly consider Mr. Mema’s position of trust and the seriousness of his conduct.
The Court rejected the City’s arguments.
Importantly, the Court emphasized that the issue was not about whether the City had legitimate grounds to discipline or dismiss Mr. Mema. Rather, the question before the Tribunal was whether race or colour played a role in the City’s decision-making process.
It confirmed that the existence of legitimate misconduct does not preclude a finding of discrimination. An employer may have legitimate concerns about an employee’s conduct, but if a protected characteristic influences how those concerns are investigated, characterized, or acted upon, the resulting decision may still breach the Human Rights Code.
The Court also rejected the City’s argument that it should not be responsible for any bias reflected in the Misconduct Report. Employers are responsible for the decisions they make based on complaints, reports, and investigations, particularly where they rely on those materials without sufficiently testing the underlying assumptions.
The Court explained:
“While it is true that the City has no control over the subconscious biases that may motivate employee complaints, it is in control over how it handles complaints, and the decisions it makes in reliance on them” (at para. 79).
Ultimately, the Court found that the Tribunal had a reasonable basis for concluding that racial stereotypes influenced the Misconduct Report, and in turn, the City’s suspension and termination decisions. The appeal was dismissed, thereby confirming the Tribunal’s decision.
Key takeaways for employers
1. Legitimate misconduct does not eliminate human rights risk.
Having valid concerns about an employee’s misconduct does not automatically protect an employer from a discrimination claim. Human rights obligations continue to apply throughout the investigation and disciplinary process.
2. Do not assume complaints or reports are objective.
Employers can be held responsible for decisions based on complaints, reports, or allegations that are influenced by conscious or unconscious bias. Before relying on such information, employers should ensure that concerns have been properly investigated, assumptions have been tested, and conclusions are supported by the evidence.
3. Tribunals consider the broader context.
When assessing whether discrimination occurred, tribunals will consider the broader workplace context, not just the reasons given for discipline or dismissal. Workplace culture, comments made by decision-makers or others involved in the process, and the way concerns about an employee are framed may all be relevant.
Final thoughts
Nanaimo (City) v. Mema serves as a reminder that a well-founded misconduct allegation may justify discipline or dismissal, but it will not shield an employer from liability if discrimination influenced the process or outcome. Employers must also ensure that complaints are appropriately assessed, investigations are conducted fairly, and disciplinary decisions are based on objective evidence rather than assumptions or stereotypes.
If your organization is dealing with a workplace investigation, allegations of employee misconduct, or a complex disciplinary or termination decision, contact Jasmine Tsang or any of the lawyers at Ascent Employment Law. We can help ensure your workplace investigations and disciplinary decision-making processes are fair, defensible, and compliant with the Human Rights Code.
