When investigations go wrong. Recent case law
With so many moving parts and complexities, it’s not surprising that investigations can be easily flawed by any number of reasons.
Corlia Roos, one of Australia’s leading Workplace Investigators from Q Workplace Solutions, recently gave insight in to the implications and risks which can be realised by employers if workplace investigations are not conducted correctly.
She has offered case reviews and recent FWC decisions, highlighting the importance of properly planning for, and conducting investigations.
- Legal Professional Privilege waived on investigation report into bullying complaint
- Improper investigation by HR into unsatisfactory performance allegations lead to unfair and unreasonable dismissal
- Employer’s failure to maintain confidentiality during employee investigation leads to psychiatric injury compensation payout
LEGAL PROFESSIONAL PRIVILEGE WAIVED ON INVESTIGATION REPORT INTO BULLYING COMPLAINT:
The Fair Work Commission has established the possibility of waiving legal professional privilege by communicating partial contents of complaint reports to parties. In the recent case Gaynor King  FWC 6006 (26 September 2018), the Commission rejected Darwin City Council’s attempt to suppress a substantive bullying report from production orders using professional privilege. The report in question was completed by Minter Ellison during an investigation into bullying complaints, confirming and substantiating the allegations through witness interviews. Commissioner Nick Wilson held that “more than a summary communication of its content” to the complainant and her accused co-workers amounted to the council waiving its privilege on the report. Such conduct by Darwin City Council included communicating letters setting out the findings and subsequent explanations of the investigation’s report to the complainant, as well as letters advising named persons that the report had established inappropriate behaviour and conduct on their behalf. The Commission consequently ordered a full, unredacted copy of the report be filed by the Council for distribution to the parties in the proceedings and their representatives.
IMPROPER INVESTIGATION BY HR INTO UNSATISFACTORY PERFORMANCE ALLEGATIONS LEAD TO UNFAIR AND UNREASONABLE DISMISSAL:
The Fair Work Commission has held the dismissal of an employee as unfair and unreasonable in the absence of proper investigation and substantiation by HR. The decision in Mr Alan Cheek v ELB Pty Ltd T/A ELB Australia  FWC 2198 (29 May 2018) saw Commissioner Bernie Riordan criticise an ELB Australia HR professional’s failure to substantiate allegations of a project manager’s performance shortfalls before his dismissal. The refusal to “properly investigate” responding protests by the manager, with respect to the accuracy of HR’s information used in the dismissal, amounted to unfair termination. The Commissioner further concluded the dismissal was also unreasonable with respect to the denial of opportunity for the manager to respond when terminated on 20 December, one day before the company’s annual shutdown. Overall, the HR manager made no attempt to clarify or investigate any responses from the manager with respect to the initial underperformance allegations, failing to independently investigate the claims made solely by the company’s director. Additionally, the Commissioner found that a refusal by ELB’s director to speak with, or verbally acknowledge, the project manager prior to his dismissal amounted to workplace bullying and “cannot be condoned”. The Commission ordered ELB payout a fortnight’s salary plus superannuation to the dismissed manager.
EMPLOYER’S FAILURE TO MAINTAIN CONFIDENTIALITY DURING EMPLOYEE INVESTIGATION LEADS TO PSYCHIATRIC INJURY COMPENSATION PAYOUT:
The Fair Work Commission has found Woolworths liable for an employee’s psychiatric injury following a failure to preserve confidentiality within the company after unsubstantiated theft allegations. In Campbell v Woolworths Ltd  NSWWCC 213, employee Mr Campbell claimed ostracism by colleagues, reputational damage, and degrading investigatory actions such as a police car search in front of other staff led to distress and psychiatric injury. The claims come after Woolworths conducted an investigation into allegations of Mr Campbell stealing due to a failure to follow store protocol, which were eventually unsubstantiated and dropped.
Although finding some aspects of the action taken by the employer was reasonable, including the putting of allegations to the employee and the performance management plan, the FWC found Woolworths was unable to rely on the defence of reasonable action under relevant workers’ compensation legislation in its entirety. The Commission has upheld Mr Campbell’s claims, finding the employer’s failure to preserve confidentiality during the investigation resulted in other staff becoming aware of the allegations, leading to the severe reputational damage and not reasonably constituting part of the disciplinary action Woolworths was entitled to take under the legislation. Importantly, the Commission noted that “the predominant cause [of the injury] was not the investigation itself but rather the fact that other staff members knew details of the allegations”. The decision highlights the requirements of employers to uphold confidentiality within their workplace with respect to allegations and parties involved during employee investigations.