In the boardrooms of Canada's public companies, a dangerous pattern is emerging. What begins as a routine management note about a "sensitive employee issue" can, through months of inaction, explode into a complex legal and reputational crisis. According to prominent employment lawyer Howard Levitt, writing in January 2016, the greatest risk employers now face is not making reckless decisions, but making none at all.
The Boardroom Drift: From Routine Agenda Item to Full-Blown Crisis
Levitt paints a familiar scene: a board meeting proceeds normally until management mentions, almost in passing, an unresolved personnel problem. The issue was flagged the previous quarter. Legal counsel is "monitoring," and the human resources department has advised caution. No decision is requested, and no timeline for resolution is offered. The directors, feeling uneasy but relieved to avoid a difficult conversation, simply nod and move on.
Six months later, that same issue returns with a vengeance—not as a simple management report, but as a formal human rights complaint, an allegation of reprisal, and a disclosure dilemma that no one is prepared to answer. This scenario, Levitt argues, is becoming increasingly common and exposes an uncomfortable truth for corporate leadership.
Why Delay Has Become the Highest-Risk Strategy
The core of the problem is not a dramatic shift in employment law itself. Employers in Canada still retain the right to manage performance, discipline misconduct, and terminate employment where justified. The critical change has occurred in the procedural ecosystem surrounding these decisions.
When an employer allows a problematic situation—be it poor performance, alleged misconduct, or an employee undermining team cohesion—to linger, courts and tribunals are increasingly interpreting that silence as tolerance. Delay is often reframed as bad faith, and inaction can be recast as a form of reprisal. Levitt notes that once a situation is permitted to fester, adjudicators will inevitably question why conduct deemed acceptable for months suddenly becomes grounds for dismissal. Explanations rooted in fear, excessive internal process, or caution are rarely persuasive in a legal setting.
Files that should have been resolved swiftly and decisively early on are allowed to metastasize into multi-faceted disputes precisely because decisive action was postponed, often under the guise of waiting for a "clearer risk profile." That clarity, Levitt warns, never comes.
A Governance Issue, Not Just an HR Problem
For boards of directors, particularly at public companies, this is no longer a minor human resources matter but a significant governance and financial risk. Prolonged indecision directly inflates contingent liabilities, complicates disclosure judgments, and creates a reputational threat that is difficult to quantify and impossible to contain once it becomes public.
The cost extends far beyond potential settlement figures or legal bills. It manifests in severe executive distraction, the erosion of internal morale, and prolonged operational uncertainty that auditors and regulators are now scrutinizing more closely. Levitt specifically highlights the role of audit committees, urging them to pay close attention. Employment disputes born of inaction have a tendency to surface late, escalate quickly, and land awkwardly in the grey area between legal accruals and public disclosure obligations.
What management might initially dismiss as an "immaterial HR matter" can evolve into a material contingent liability solely because it was allowed to drift without resolution. The irony, as Levitt frames it, is that boards have come to fear decisiveness more than drift, even though lawful, prompt, and well-documented action is far more defensible in the long run. The lesson for corporate Canada is clear: in the realm of employment disputes, the price of inaction is soaring.
