6 considerations before commencing a workplace investigation

ELM:  As a result of a surge in claims around unfair dismissals, discrimination and harassment in the workplace, as well as employee misconduct, workplace investigations have received increasing scrutiny from the Fair Work Commission. What do you see as three main reasons for the increase in claims?

JULIE: The increase in claims seems to be in part a redirection of claims towards the general protections (adverse action) jurisdiction of the Fair Work Commission (FWC).  It is sometimes easier for employees to establish an adverse action claim, as opposed to a discrimination or unfair dismissal claim (if they meet the relevant legal tests) because of the reverse onus of proof in the general protections provisions of the Fair Work Act 2009 (Cth) (FW Act).  The reverse onus of proof means that the FWC must presume that the employer took alleged adverse action for the prohibited reason alleged, unless the employer can prove otherwise.  So, we are seeing a number of discrimination/harassment claims brought as adverse action claims.  The focus on workplace investigations within the adverse action jurisdiction has generally been on the reasoning process of the decision maker(s) and about getting access to investigation reports.  By contrast, due to the different legal tests involved, in unfair dismissal claims the FWC tends to focus on procedural issues in the conduct of workplace investigations, to assess procedural fairness.

A second reason for the increase in claims may be the delayed effect of the introduction of the FWC’s  anti-bullying jurisdiction, which commenced in January 2014.  Some of the considerations which the FWC must take into account under the FW Act when considering whether to make orders to stop bullying include any final or interim outcomes arising out of an investigation into the matter, any procedure available to the worker to resolve grievances or disputes, and any final or interim outcomes arising out of the procedure available to the worker to resolve grievances or disputes.  These considerations bring the conduct of workplace investigations under closer scrutiny.

Finally, a third reason for the apparent increase in claims may be the increase in awards of general damages for unlawful discrimination and harassment, as evidenced in 2014’s Richardson v Oracle Corporation Australia Pty Ltd [2014] FCAFC 82 decision.  In this decision, a Full Court of the Federal Court signalled a marked increase in the likely amount of general damages for pain and suffering and loss of enjoyment of life.  The Court overturned an $18,000 award of general damages and instead awarded $100,000, stating that the accepted range of general damages was no longer in step with prevailing community standards.  Only a handful of decisions handed down since that time have referred to the Oracle decision (because it had not been handed down at the time that they were argued), however, the prospects of recovering a higher amount may be another factor influencing the number of claims now being made.

ELM:  Julie, you recently facilitated a discussion on best practice procedures for conducting fair workplace investigations. Regarding this, what suggestions do you have for our readers on how to recognise situations where investigations are required?

JULIE: When considering whether to commence an investigation, or to take an informal intervention in response to an issue, I suggest that readers:

  • Check their internal policies, procedures, contracts and enterprise agreements to see where investigations are mandatory (and consider reviewing these provisions to give more flexibility if there are too many mandatory areas);
  • Consider the nature, severity and frequency of the alleged misconduct you are dealing with. The more serious, and/or the more frequent the conduct, the greater the likelihood that an investigation, as opposed to an informal intervention, will be required.  For example, allegations of serious misconduct (such as theft and assault) generally need to be investigated.  However, issues regarding personal miscommunication and personality conflicts often benefit from informal interventions, such as mediation.
  • Consider the level of risk to your organisation. What claims could the organisation be exposed to?  Consider also your organisation’s sensitivity to adverse media coverage.  Where claims or media coverage are a possibility an investigation to ensure you have all the appropriate facts to be able to defend the organisation may be the better response.
  • Consider the possible disciplinary action (if any) which may be taken if the allegations of misconduct are substantiated. If it is unlikely that any disciplinary action would be taken, an informal intervention is more likely to be the appropriate response.
  • Are not guided solely by a complainant’s wishes. Manage the situation based on the risk and processes within your organisation but carefully manage the complainant’s expectations as you do so.  Also ensure your policies and procedures are drafted to allow management, and not complainants, to determine the appropriate course of action.
  • Finally, if you decide not to conduct a formal investigation, carefully consider whether you need to do something, such as an informal intervention, as a risk mitigation strategy. Possible actions include re-issuing a policy, holding a team meeting to reinforce a policy, and/or holding training on a particular issue.  Taking one or more of these steps can help to protect the organisation because if the issue is raised at a later time the organisation can show it took risk mitigation steps.

ELM: Can you help us define “procedural fairness” from a legal perspective; since our readers need to ensure their workplace investigations are conducted in such manner?

JULIE: Procedural fairness is a common law concept which is also referred to natural justice.  Procedural fairness is generally regarded as including two elements: the rule against bias and the right to a fair hearing.  In the context of workplace investigations, providing procedural fairness usually involves:

  • clearly distinguishing informal and formal processes, and not using materials obtained during an informal process within a subsequent formal process;
  • appointing a neutral investigator, free from any bias or perception of bias;
  • complying with internal policies, procedures, contracts and enterprise agreements;
  • providing the respondent with allegations (usually in writing) of sufficient detail to enable them to provide a response;
  • conducting a full investigation by considering all the legitimate leads and evidence available;
  • providing the respondent with a genuine opportunity to respond, which involves allowing them sufficient time to obtain advice, and may also include the opportunity to attend an interview with the investigator;
  • properly considering the response provided by the respondent and undertaking any further investigation necessary arising out of the response;
  • being able to justify the findings made in respect of each allegation on the basis of the evidence obtained during the investigation; and
  • being able to justify the disciplinary outcomes imposed as a result of the findings made in the investigation.

ELM:  Can you provide us with some recent court rulings that we can learn from – case examples where employers have been penalised due to unfair workplace investigations? A short brief on each to explain the main take-away would be great.

JULIE: In Smith v KDR Victoria Pty Ltd [2016] FWC 1774 (22 March 2016) the employer dismissed the applicant for serious misconduct, finding that he issued an unauthorised instruction to other tram drivers that they should not attempt to unblock sandpipes.  The employer argued that the FWC could find a valid reason for the dismissal because the employee was dishonest during the investigation.  The FWC dismissed this argument, finding that the investigation process took a significant period of time and that the employee could not recall all the people he spoke to or all the events that occurred in relation to the incident.  While he did not clearly describe what he did and heard on that day, this was in part due to the way the investigation was conducted.  Instead of asking the employee what he recalled happened on that date, he was asked to respond to the allegation that he had instructed drivers to not unblock sandpipes.  The FWC ordered that the employee be reinstated, finding that his termination was unfair because he did not engage in the conduct alleged and harsh given his personal circumstances.

In Australian Rail, Tram and Bus Industry Union v NSW Trains [2016] FWC 1553 (11 March 2016) the FWC found that there were unreasonable delays in investigations of a safeworking incident involving two train drivers.  The incident occurred in June 2014 and the outcome of one of the investigations was determined in May 2015. The FWC found that this period of 11 months was “excessive and unreasonable”.  This was because the circumstances of the case did not justify this amount of time and delay – the drivers had admitted to breaching the employer’s policy from the outset and the FWC found there was little to consider other than responses from the two drivers regarding mitigation.  Another investigation took around six weeks despite there being “nothing complex to determine”.  The employer argued that the reason the investigations took so long was because it was complying with its policies and procedures and because of the Christmas period.  However, the FWC was critical of these processes, noting that “justice delayed is justice denied”.  The FWC did not accept the Christmas period as a reason for delay, noting “Trains does not stop its operations over Christmas and nor should investigations affecting the livelihood and wellbeing of employees”.  The FWC ordered that the employees be given a caution (with one employee also ordered to be given a reprimand).

In Cherunkunnel v Alfred Health [2015] FWC 1127 the employee lodged a grievance under the applicable enterprise agreement concerning his employer’s decision to issue him with a final warning and to demote him.  A nurse had made a complaint against him and he was stood down while the employer investigated.  The FWC considered whether the investigative procedure adopted by the employer complied with the relevant enterprise agreement.  The applicant argued that his employer did not comply with the enterprise agreement because he was not interviewed.  The enterprise agreement contained a number of procedural requirements, including that an employer must take all reasonable steps to give the employee a reasonable opportunity to answer any concerns to the allegations, and to conduct a fair investigation.  The FWC found that providing the employee with a reasonable opportunity to answer any allegations and concerns could “realistically only take place during an interview” which formed part of an investigation.  The FWC found that if the employee is not interviewed as part of the investigation, then it would not have been conducted in a fair manner because the investigator would only be hearing and making recommendations based on one side of the story.  Further, the employee was required to respond to a recommendation that he show cause as to why his employment should not be terminated without having been heard in relation to his version of the events prior to the investigator forming a view or making a recommendation.  The FWC found this approach to be procedurally unfair but concluded that the employer, in not terminating the employee’s employment but deciding to issue him with a final warning, took an appropriate approach in dealing with the issues relating to his nursing practice.

ELM:  What is the one common mistake you’ve seen companies make when it comes to this issue? How would you suggest our readers avoid this going forth?

JULIE: One common mistake I frequently see in workplace investigations is that the investigator has not justified the findings of the investigation.  They do not have sufficient evidence to show why the allegation was substantiated and/or they cannot explain why they have accepted one version of events (or one piece of evidence) over another.  To try and avoid this mistake, I suggest that the readers develop a process for making their findings which makes them articulate their reasoning.  Stepping through the process should highlight where the investigator may not have evidence to support their findings.  For example, I use a landscape table that lists each allegation separately by row.  The columns in the table from left to right list the allegation, the evidence that supports the allegation, issues (if any) with that evidence and/or its reliability, the evidence that refutes the allegation, issues (if any) with that evidence and its reliability, and then the finding.  The table is designed to show the reasoning for each allegation and the evidence that supports or refutes the allegation in order to justify the finding in the final column.  You may not include the full table in the final report, but the investigator can feel confident about following a thorough and systematic process to get to the findings.

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About Julie Mills:

Julie Mills is a senior associate at Ashurst’s employment group in Sydney.  Julie also manages its national workplace learning practice; being an accredited workplace trainer, Julie has extensive experience in the development and delivery of interactive and experiential training on a broad range of employment and discrimination law topics.

Julie advises private sector clients from various industries, including publishing, transportation, IT, pharmaceutical and hospitality, as well as public sector employers, on a broad range of employment issues.  She advises on contracts of employment, termination of employment, performance management and disciplinary action (and related investigations), appropriate use of email and IT, and the interpretation of agreements and contracts.  She also appears before industrial relations commissions and discrimination tribunals in conciliation proceedings.

Julie recently presented at the Sydney Mach 2016 edition of the HR Law Masterclass Series where she was given great reviews for her insights into the topic of workplace investigations. The biannual HR Law Masterclass Series will take place in September this year, again in Sydney, Melbourne and Brisbane, plus also an introduction into Adelaide. The September series already has over 115 attendees attending.