In Kozar v. The Canadian National Railway Company, the plaintiff sued the employer for wrongful dismissal after over 30 years of service for allegedly failing to adequately respond to complaints of sexual harassment from an incident involving a female employee and a male co-worker.

The Court of King’s Bench of Manitoba stressed that the employer couldn’t prove that the persons responsible for the decision to terminate carefully examined the investigative reports into the incident.

It, therefore, upheld the appeal and ordered the company to pay the employee 24 months' pay in lieu of notice and aggravated damages, based on the fact that CN could not provide clear evidence or recall decisions leading to Kozar's dismissal, nor could it present employment records justifying the termination.

The type of evidence—or the lack thereof—becomes a focal point that ultimately determines the outcome. The Court stated that there was a lack of direct evidence, such as testimonies or records, and that reliance on hearsay, without the support of substantial and direct evidence, was insufficient to meet the burden of proof required to demonstrate cause for termination. 

Based on that, the Court found that CN's actions were disproportionate to the alleged misconduct. This conclusion was facilitated by the fact that CN's management did not recall the decision-making process or provide testimony that they had read the reports informing their decision.

The case underlines the necessity for a well-documented and thorough investigative process before making any definitive employment decisions, particularly dismissals.

It calls for Employers to not only have clear and direct evidence but also ensure that such evidence is carefully preserved to be presented by individuals with direct knowledge of the relevant facts.