Australia: Are you getting your workplace investigations right?

Last Updated: 7 November 2013
Article by Brett Feltham

In light of the new anti-bullying regime under the Fair Work Act 2009 (Cth) (Act), it is more important than ever that employers understand how a workplace investigation should be conducted, and have robust policies and procedures in place to assist with defending against bullying applications under this new regime and any other legal claims.

In our previous article, we explained the impact that the anti-bullying amendments to the Act will have on the workplace practices of employers when those amendments come into effect on 1 January 2014, including the increased exposure that a workplace bullying complaint may create for an employer.

Workplace bullying is, of course, not the only workplace issue that may need to be the subject of an investigation in the workplace. A wide range of issues may require investigation by an employer, for example, complaints of any inappropriate behaviour or conduct in the workplace (including misconduct and bullying, harassing or discriminatory behaviour), work health or safety concerns, workplace accidents, fraud, theft, misuse of the employer's resources (including confidential information and intellectual property), drug use in the workplace, performance issues, and so on.

This article will focus on workplace investigations of inappropriate employee behaviours or conduct that may give rise to an unfair dismissal, general protections (adverse action), discrimination, harassment or workplace bullying claim, some of the issues which can arise during an investigation, and some thoughts on a recommended investigation process.

Do you have a policy, and if so, does it provide flexibility?

Where an employer is faced with a legal claim involving a workplace issue that was the subject of an investigation, the courts will generally turn their attention firstly, to what policies and procedures the employer has in place.

Many employers will have policies that cover some, but not the full range of, workplace issues that may require an investigation to be carried out.

It is important that employers have policies and procedures that are comprehensive, and adequately explain the types of workplace behaviours or conduct that are unacceptable and may be subject to disciplinary action. Those documents should also be regularly reviewed and updated to reflect legislative developments such as the new anti-bullying regime.

Where an employer has policies that contain grievance handling and workplace investigation procedures, those procedures must be followed. For this reason, employers should ensure their policies and procedures do not apply a "one size fits all" approach to workplace investigations and allow flexibility for investigations to be conducted:

  • informally or formally at the employer's discretion and so as to take into account the nature and severity of the complaint made, and
  • internally or externally (with the assistance of an expert) depending on the factual circumstances.

Do your employees know and understand your policies and procedures?

There is no use having well drafted policies and procedures if employees do not have a sound understanding of their rights and obligations under those documents, or worse, if they do not even know such documents exist.

Employers should ensure their policies and procedures are readily accessible by their employees, and that employees are promptly informed of changes made to those documents.

Providing regular training, in an online or classroom forum, is an effective way for employers to ensure their employees understand, and are up to date with, the policies and procedures that apply. Training and educating employees can also be relied upon by an employer as a "reasonable steps" defence to a claim made by an employee.

What if the employee does not want an investigation into their complaint?

In some circumstances, an employee may raise a workplace issue with their employer or make an "informal" complaint but does not wish for any formal action to be taken, as was the case in Swan v Monash Law Book Co-operative (Swan v Monash).

It is the responsibility of the employer to protect its employees against unlawful behaviour and conduct in the workplace. As a result, sometimes irrespective of an employee's views on how their workplace issue should be managed, once an employer becomes aware of an issue, it is imperative that the employer considers the potential risks arising from the complaint, and makes an assessment about the extent to which the issue should be investigated and the process for doing so.

All workplace investigations should be conducted confidentially, promptly and with discretion.

When should you engage an expert?

It is not always appropriate or effective for an investigation to be conducted internally. Circumstances where an employer should consider engaging an external investigator include, but are not limited to:

  • where a complaint is made against a senior employee
  • where the employer does not have adequate resources to properly conduct the investigation internally, particularly if the complaint involves multiple parties, complex issues and/or someone with specialist skills is needed to investigate the complaint
  • where there is a risk that the complaint cannot be objectively handled by an internal investigator due to a real or perceived conflict of interest
  • if the alleged behaviour or conduct is of a serious (or criminal) nature and the risk of litigation is high, or
  • when legal professional privilege may be required over the investigation process.

What to do with employees during the investigation?

  • Before the commencement of any investigation, an employer should consider whether to place the employee who is being investigated (Perpetrator) on suspension and/or to allow the employee making the complaint (Complainant) to take special paid leave during the investigation process. Alternatively, if practical, consideration could also be given to introducing changed working arrangements and/or locations so as to minimise or remove the potential for contact between the Complainant and the Perpetrator during the investigation period. The following factors should be taken into account by the employer:
  • the seriousness of the alleged behaviours and/or conduct of the Perpetrator
  • whether the employer has an express right to suspend the Perpetrator with or without pay during the investigation under the Perpetrator's employment contract or a workplace policy, and
  • the risk of the Perpetrator interfering with the investigation process (for example, contacting witnesses) and/or continuing to victimise the Complainant.

Does your workplace investigation process afford procedural fairness?

Employers must conduct workplace investigations (whether internally or externally) in a manner which affords procedural fairness to both the Perpetrator and the Complainant. To do so, employers should incorporate the following steps into their workplace investigation procedures:

  • offer the Complainant, the Perpetrator, and in some cases, each witness being interviewed, the opportunity to bring a support person to their interview with the investigator
  • be aware of language difficulties and consider whether the services of an interpreter are needed
  • consider whether to audio record the interview or simply make a written contemporaneous record of the interview
  • where audio recording is to be used, prior consent from the interviewee must be sought – the employer's policies should provide guidance on what happens if consent cannot be obtained from the interviewee and the audio recording process
  • interviews with each interviewee should be conducted separately to maintain confidentiality, and to encourage an open discussion between the investigator and each interviewee
  • the Perpetrator should be given the opportunity to provide a meaningful response to the allegations made against them. This may mean that an interview may need to be deferred to allow the Perpetrator to properly respond
  • carefully consider all responses given by the Perpetrator during the investigation, their honesty during the investigation process, their employment record, and the seriousness of the alleged behaviours or conduct
  • if possible, where an investigation is being conducted internally, separate the roles of the person conducting the investigation, and the person who will implement any recommendations or actions arising from the findings of the investigation
  • ensure that the investigator provides a comprehensive written report of the investigation process, findings reached (including reasons/evidence for the findings) and the recommended course of action to be taken by the employer
  • critically assess the findings and recommendations made by the investigator (whether internal or external)
  • the employer should meet separately with the Perpetrator and the Complainant to discuss the outcome of the investigation, and allow each party an opportunity to respond, particularly where disciplinary action is to be taken against the Perpetrator (including, but not limited to, termination of employment), and
  • if, during the course of the investigation, it was found that the complaint was initiated vexatiously or maliciously, then the employer may need to consider whether disciplinary action should be taken against the Complainant.

Consequences of not getting workplace investigations right

There can be serious consequences for an employer where their investigation process is flawed.

In three recent decisions: Trevor Thomas v Newland Food Company Pty Ltd, George Szentpaly v Basin Sands Logistics Pty Ltd and Phillip Leyshan v Wyndham City Council, deficiencies in the employers' investigation process and the lack of procedural fairness afforded to their employees have led the Fair Work Commission to conclude that there was no valid reason for the dismissals and that those dismissals were unfair.

In Sheng He v Peacock Brothers & Wilson Lac v Peacock Brothers, even though the Fair Work Commission was satisfied that the employer had a valid reason for the dismissal, it ultimately decided the dismissal was unfair because of the employer's flawed investigation process.

In each of the above cases, the employee involved was either reinstated or awarded compensation.

The employer in Swan v Monash failed to promptly act on the employee's workplace bullying complaint because when the issue was first raised by the employee, the employee did not wish for any formal action to be taken. This delay (and of course the underlying conduct complained of) ultimately resulted in the employer being ordered to pay almost $600,000 in damages to the employee for the severe psychological injuries that she suffered.

Finally, the recent decision in Richardson v Oracle Corporation Australia Pty Limited best highlights the importance of having robust policies and procedures in place in order for employers to successfully defend against legal claims brought by employees. Deficiencies in the employer's policies and training package (which could have been easily corrected) ultimately led to the decision that the employer had not taken "all reasonable steps" to prevent sexual harassment, and the employer was found to be vicariously liable for the actions of their employee and ordered to pay $18,000 in damages (and incur substantial legal fees in defending the claim).

What should employers do?

Employers should have comprehensive and flexible policies, which deal with different workplace issues that may require an investigation, and set out a procedurally fair process for a workplace investigation to be carried out.

Once those policies and procedures are in place, it is essential that employers ensure that they are properly communicated to, and understood by, employees, and are appropriately followed when the need for a workplace investigation arises.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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