Workplace Investigations: the Who, What, Where, When, Why and How?
Kathryn Dent, Director
As the end of year looms and staff become relaxed in anticipation of the holiday season, some inappropriate workplace behaviours may either emerge or be displayed at various events.
Such behaviour will require an employer to “investigate”. The level of investigation, and the resources devoted to it, will depend on how the behaviour comes to the employer’s attention and the nature of the (mis) behaviour. Regardless of these factors, that is whether the investigation is formal or informal, and the complaint similarly, it is crucial that employers get this investigation right as it will form the basis for any disciplinary decisions made and will come under scrutiny if the employee later challenges your decision.
This article is designed to be a practical guide to investigations having regard to practices recently considered by Fair Work Australia.
Best Practices in Investigations
Any investigation process is likely to incur a certain level of cost, time and risk. If an employer is conducting a workplace investigation, then five key actions are to:
1. ensure all of the allegations are set out to the employee the subject of the complaint;
2. conduct all processes in a manner that complies with any applicable organisational policies and ensures all parties involved are respected (which includes agreements as to confidentiality and not victimising others) and have an opportunity to state their version of events;
3. provide a comprehensive report of the steps you have taken, the findings you have made, and the recommended course of action;
4. clearly identify whether the allegation is made out or not and provide evidence in support of a conclusion; and
5. provide suggestions, if any, for improving investigatory procedures.
Internal vs External investigations
Whether reference to an external investigator (such as a lawyer) is warranted will generally depend on the nature of the behaviour being investigated. External investigations where you seek to attract legal professional privilege over the investigation by engaging lawyers are more suitable for sensitive matters or if the matters are serious and may result in litigation or generally if an independent view is required where there is more likely to be freedom from bias or conflict of interest.
If an internal investigation is undertaken then it is preferable to separate the role of decision- maker from investigator and it is imperative that the investigator has the appropriate skill-set, knows and appropriately applies, your organisation’s policies and procedures. The investigator should avoid simply following a checklist which will limit the information and evidence being considered. The investigator should always provide procedural fairness to those involved and seek advice where required to ensure the organisation’s actions are appropriate.
Repercussions of inadequate investigations
There are four mains repercussions resulting from inadequate investigations that make adequate investigations a necessity, they are:
1. the risk that the dismissal will be challenged as unfair due to the employee being investigated not being afforded procedural fairness (and if found to be unfair, remedies in result of that – reinstatement, re-employment or compensation);
2. the time and costs of litigation to the business, including adverse publicity;
3. any lack of uniformity in disciplinary proceedings resulting in employees being treated differently in relation to similar allegations; and
4. low morale in the workplace and the lack of confidence in management.
The recent cases below demonstrate the importance of employers carrying out thorough and independent investigations.
In Narwal v Aldi Food Stores Pty Limited1 Mr Narwal’s employment was summarily terminated after he took goods from the store he managed without paying. Aldi Food Stores Pty Limited (“Aldi”) claimed that Mr Narwal had acted dishonestly and viewed his actions as misconduct.
When Mr Narwal returned to work two days later he was alerted by Aldi management that he had not paid for the goods. Mr Narwal paid for the goods immediately. Nonetheless, the Area Manager summarily terminated Mr Narwal’s employment.
Fair Work Australia (“FWA”) found that there was no basis for summarily dismissing Mr Narwal. FWA was critical of the Area Manager’s actions and stated that he had “completely failed to properly investigate and consider the important implications of the suspended docket”. Further, FWA formed the view that Aldi had failed to “satisfy even a basic level of proof upon which to find that the [store manager] acted dishonestly or committed theft”.
In this case the investigation was inadequate. The seriousness of the conduct was mitigated by the employer allowing him to work after having knowledge of his activities. An employer will be deemed to condone the conduct if they do not act swiftly in response. The investigation failed to address all relevant evidence.
In Jones v Commission for Public Employment2 Jones was a parole officer who failed to disclose during her recruitment that her husband was a parolee. Jones lodged an unfair dismissal claim after being terminated on the grounds of serious misconduct. The termination letter stated that “an investigation into your alleged conduct was not warranted”.
It was held that although there was a valid reason for dismissal, Jones was unfairly dismissed. The dismissal was unfair as the employer did not afford the necessary procedural fairness. The investigation was held to be inadequate as:
- the opportunity to respond by letter was not sufficient;
- Jones was given a time limit to respond in writing;
- the employer failed to investigate the alleged conduct; and
- the allegation was based on information obtained from elsewhere, not the investigation.
By contrast, an adequate investigation was confirmed to have taken place in Jalea v Sunstate Airlines3. In this case Jalea lodged an unfair dismissal claim after being terminated for misconduct. Jalea’s manager lodged a complaint after Jalea responded in an inappropriate manner to suggestions that she undergo mediation due to conflict with a colleague. The complaints were investigated through several witness interviews and written correspondence whereby allegations were put to Jalea allowing her an opportunity to respond. At the conclusion of the investigation Jalea was forced to either transfer to a Sydney base with a first and final warning or have her employment terminated. Jalea’s employment was terminated for failing to respond to the offer of transfer or attend meetings, for use of inappropriate language, failing to follow a reasonable direction and using force to enter her manager’s office.
The dismissal was upheld as valid based on the serious nature of Jalea’s conduct which on several occasions clearly breached the organisation’s policy. The investigation was deemed sufficient as it provided procedural fairness and complied with company policies. The investigation was adequate as:
- notice was provided ahead of the meeting;
- the HR manager was not experienced in investigations;
- the investigation engaged an extensive process of appeals consistent with the policy;
- it was not relevant that witness statements were not signed, nor that all witnesses were not spoken to; and
- it was not flawed merely because it could have been performed better and that Jalea was unhappy with the outcome.
In Tokoda v Westpac4 the employee submitted a medical certificate which did not contain the doctor’s provider number. When Westpac telephoned the doctor, the doctor stated that he had not provided the certificate and that Ms Tokoda has not visited his surgery.
An investigation was carried out which resulted in Ms Tokoda being terminated. During the investigation Ms Tokoda alleged that she had been bullied. Westpac investigated the bullying complaint and it was deemed to be unsubstantiated.
It was held that the dismissal was not unfair as there was a valid reason for termination. Fair Work Australia formed the view that Ms Tokoda’s evidence was unconvincing and not credible. The investigation findings by the Area Manager of the Retail Branch Network were upheld. Ms Tokoda appealed to the Full Bench. The Full Bench upheld the decision reafirming that her behaviour constituted serious misconduct.
The investigation was adequate as:
- all relevant parties were interviewed;
- Tokoda was informed about the outcome of the investigation and the reasons;
- the investigator admitted that one of the complaints related to another employee’s error;
- the termination was made after the investigation; and
- there was a valid reason for the termination not related to the complaints made.
Also see our related article on Sharma v Bibby Financial Services Australia Pty Ltd5 in this publication.
These cases are a stark reminder that proper processes must be followed in the investigation of complaints in order to defend legal proceedings which may arise from the decisions implemented as a result of an investigation’s findings.
-  FWA 2056
-  FWA 7069
-  FWA 1360
-  FWA 5379
-  NSWSC 1157
Other relevant resources
31 August 2016