Key considerations for before, during and after workplace misconduct investigations

Before doing anything, it is important that the organisation’s policies and industrial instruments (enterprise agreements and modern awards) and employment contracts are reviewed to ensure that they are followed. For example, check whether there are specific procedures to be followed in relation to workplace investigations, grievance management, performance management, discrimination and harassment, and any policies specific to the allegations.¹

This ensures that the employees, management and the investigator are all on the same page and know how to conduct and what to expect in an investigation. It can also help to ensure “fairness” for employees protected from unfair dismissal and is one of the issues taken into account in any orders made in dispute or “stop-bullying” proceedings in the Fair Work Commission (FWC) or the Queensland Industrial Relations Commission (QIRC).

As an example, in one case² the FWC examined the employer’s policies in relation to whether vehicle monitoring data could be accessed in an investigation, since their policy indicated data collected within one kilometre of a driver’s residential address would be exempt from collection for privacy reasons. In other case examples, an employer had particular wording in its enterprise agreement which determined when an allegation should be investigated.³

The issue can take on even greater significance where, for whatever reason, a policy forms part of an employee’s contract and is not followed, which can result in the employer becoming liable in a common law claim for damages for breach of contract.⁴ Generally, incorporation of policies into employment contracts is not recommended and, where that occurs, it is usually an inadvertent drafting error.

Things to consider:

• if you do not have policies applicable to misconduct and misconduct investigations, now is a good time to consider developing them (particularly if you are a medium to large sized business) – although not having a policy is not fatal to a misconduct investigation, and can allow flexibility to manage an investigation according to the circumstances;
• if you do have applicable policies but haven’t looked at them for a long time, review them to see if they are still appropriate and allow flexibility to tailor an investigation to the circumstances;

• If you’re in doubt, get advice on how to draft and implement policies in such a way that does not result in your organisation taking on additional and unnecessary contractual (or other) obligations.

It is important to review policies, industrial instruments, and for the public service, the relevant legislation, before making any decisions on a suspension to ensure that appropriate procedures are followed. If there are reasonable grounds to suspend, the employer should do so as soon as is reasonably practicable.

Reasonable grounds would include:

• Where the employer has significant concerns about an employee’s alleged behaviour, such that it could possibly lead to a dismissal;
• Where the employer is concerned that the employee would represent a danger to themselves or others (including complainants and witnesses) if left in the workplace noting the employer’s duty of care.⁵ For example, in the recent decision of Smith v State of Queensland (Queensland Health)⁶, the Commissioner upheld an unfair dismissal claim, partly because the lack of a suspension indicated the employer did not hold significant safety concerns in relation to the employee’s conduct;
• Where there are no alternative duties the employee could perform (if alternate duties are required having regard to the nature of the allegations), for example, because of the employee’s specialised skills or because of trust issues as a result of the allegations;⁷ and
• Where there is a concern that the employee will tamper with or remove evidence relevant to the investigation if left in the workplace.

Employers need to be consistent in their messages – a suspension indicates that an employer has concerns that an employee’s alleged conduct, if proven, is so serious that it may result in a loss of trust and confidence such that a dismissal is necessary.⁸ Again, employers need to be sure that they are following their policies and industrial instruments in making any decision to suspend. Public servants also need to be aware of legislative requirements in deciding whether to suspend.

In Camilleri v IBM Australia Limited⁹ (IBM case), Mr Camilleri was found to have made inaccurate expense claims over three years. IBM suspended Mr Camilleri approximately 9 months after the investigation began – and over a month after the investigation report had been received and considered by management. Despite the fact that Mr Camilleri was found to have engaged in serious misconduct, Senior Deputy President O’Callaghan stated, “…it is difficult to reconcile the IBM position that it had lost trust and confidence in Mr Camilleri as an employee and proposed to dismiss him, with its requirement for him to work until 21 January 2014.” Due to a number of procedural concerns with the dismissal, Mr Camilleri was reinstated.

Conversely, in Barlow v The Commonwealth of Australia¹⁰ it was found that even though the employee was not suspended during an investigation, this was not necessarily inconsistent with a loss of trust and confidence. This was because the alleged serious misconduct related to a serious breach of professional standards and not, for example, a matter of fraud or violence, and because the employee could be closely supervised during the investigation.

Nonetheless, in our view, the better course of action is to suspend an employee who is likely to be dismissed if the particular allegations are proven.

If there are two employees involved in an alleged incident it may be necessary to suspend both employees during the investigation to ensure there is no question of bias.¹¹

This depends on the complexity of the situation. In Bluescope Steel (AIS) Pty Ltd v Agas¹² (Bluescope Steel case), the incident in question involved a straightforward safety breach. In those circumstances, an informal investigation by management – where they mainly relied upon an incident report – was sufficient.

However, if a number of employees are involved, there is more than one incident, or a number of conflicting stories or cross complaints, a formal investigation is essential to ensure reliable findings.

Another consideration is the seriousness of the allegations. If the potential consequences are significant for the employee, for example, dismissal, a higher degree of satisfaction is required to substantiate the allegations. The strength of the evidence to establish a fact on the balance of probabilities will vary according to the nature of the allegations.¹³

Human Resources? A senior manager? An external investigator? Any of these people might be the right person for the job, depending on the situation. There are three key questions to ask in deciding who to choose.

1. Who has the right level of experience?

The person appointed to undertake the investigation must have the appropriate skills and experience to do so.

In the Francis v Patrick Stevedores Holdings Pty Ltd¹⁴ (Patrick Stevedores case), the HR Manager was given the task of investigating the incidents. Unfortunately, she did not have the appropriate experience or expertise to investigate, particularly considering difficulties navigating the “code of silence” amongst staff. It was found that the HR Manager’s, “inexperience and lack of forensic skills as to the assessment of witness evidence, was a major contributory factor to the weaknesses exposed in the respondent’s evidentiary case.” Had the investigation been conducted properly in that case, it is likely that the employee would not have been dismissed.

2. Should we use an internal or external investigator?

There are benefits to both, and it will depend on the allegations and the circumstances as to which is the better choice.

If there are allegations against senior managers, or an internal investigation may reasonably be seen as biased, an external investigator is essential. An external investigator may also be the best choice if there is no one appropriately skilled to do the job (see above), there is a lack of internal resources, or in an effort to show employees that complaints of serious misconduct are taken seriously.

Alternatively, if there is a need to understand the workings of the business or of a particular occupation (for example, investigating a medical incident within a hospital), an appropriately skilled staff member may be better placed to investigate (or co-investigate with an external investigator).

While they may cost more initially, external investigators have potential to save employers money, time and stress in the long term as they reduce the risk of allegations that the employer lacked independence and/or lacked the necessary skills.¹⁵

Ideally, employer’s should not use an investigator who will also be involved in advising on, or deciding what, consequences will flow from the investigation (for example, generally an employer’s legal advisor should not undertake both roles). Where possible, the investigating officer and the disciplining officer (or those advising the disciplining officer) should be independent, such that the decision maker can critically review any investigation (and not blindly accept findings).¹⁶

If an external investigator is appointed, it is important that “independent” investigations are not influenced by the employer, otherwise they will not be considered independent and impartial. For example, framing interview questions, requiring a manager to sit in on the interview with the accused employee, or generally “supervising” an investigation is likely to indicate a lack of independence.¹⁷

However, reviewing a draft investigation report and requesting clarifications or additional information (or even checking grammar/wording) can result in a better quality investigation report – so employers need to walk the line between this and directing the investigation and influencing findings.

3. Are any special skills or characteristics required?

It is also important to consider whether it would be better for the investigator to have certain characteristics to conduct an effective investigation. For example, would the complainant or witnesses feel more comfortable speaking to someone from their own cultural background? Or a male or a female? Or is there a need for someone with expertise in a particular subject area? 

Is there a need for the investigation report to be legally privileged (to the extent possible)? If so, a lawyer will need to be instructed to either conduct the investigation or to engage the investigator.

It is generally recommended that the respondent know the allegations (at least at a high level) against them before being interviewed. Occasionally it may be preferable not to provide details of the allegations prior to interview where there may be a need to put the allegations to the employee without having any evidence disturbed, or to ascertain their initial reaction. In the IBM case, the employee was not provided with the allegations by the investigators before the investigation, and in the circumstances, the FWC said that this was understandable.

However, in most cases, it will be expedient and preferable to allow the employee time to prepare and gather supporting evidence before an interview, and they should be provided with the allegations prior to their interview.

In the interests of ensuring a thorough investigation where the employee is provided with natural justice, if the employee is not provided with the allegations before the initial interview it may be necessary to conduct a second interview or allow the employee to present further evidence to support their case during the show cause process.

There may be times where protection of the complainant’s identity is important to their safety, or because the complainant is a whistleblower, or has not consented to the use of their identity.

However, this must be balanced against providing the respondent with an opportunity to respond, which is a procedural fairness requirement particularly relevant in unfair dismissal proceedings.¹⁸ Generally, if the identity of the complainant is key to respondent understanding the allegations (for example, in harassment or personal conduct matters), their name must be revealed at some point during the process.

For example, in Kildey and ors v Technical and Further Education Commission (TAFE Case),¹⁹ it was found to be unfair that an applicant was not given the complainant’s name, because it appeared that the complainant may have had ulterior motives for complaining.

This can be particularly difficult in whistleblowers complaints, in which case we recommend you proceed with caution and seek advice before disclosing a whistleblower’s identity or anything which may lead to their identity becoming apparent. See our article here for further information.

Anyone who has information that is relevant or material to the matter being investigated should be interviewed.

In almost all cases, the employee respondent should be interviewed where facts are in dispute.²⁰ However, whether to conduct an interview with the employee is a matter for the investigator – for example, in the Bluescope Steel case, the allegations were relatively uncomplicated, and it was found that there was no strict requirement to interview the employee. The employee was well aware of the basis of the allegations against him (having completed an incident report), and had ample opportunity to present his case. This can be contrasted with the TAFE Case, where the employer was strongly criticized for not interviewing the employees or giving them an opportunity to verbally respond.

In terms of witnesses, if the employee respondent mentions someone as a witness to a particular incident, or asks for a particular person to be interviewed, serious consideration should be given to interviewing them, particularly if they may have information relevant to an allegation. ²¹ However, interviewing that person may not be necessary if it is apparent that the individual is not relevant to the allegations.

Individuals external to the organisation may also need to be interviewed (ex-employees, customers etc), particularly where they are witnesses to particular incidents. However this should be approached with caution because such individuals do not have any contractual obligations to confidentiality (compared to an employee) so may need to sign a deed of confidentiality in some circumstances. Also, an employer may have difficulty compelling such individuals to be involved in an investigation.

One of the considerations for the FWC in deciding whether a dismissal was “harsh, unjust or unreasonable” is whether there was an unreasonable refusal by the employer to allow the employee to have a support person present to assist at any discussions relating to dismissal (section 387(d) of the Fair Work Act 2009 (Cth)).²² While this does not impose a positive obligation on the employer to offer a support person to a respondent employee,²³ it is generally seen as best practice to do so both for complainants and respondents.

There is a risk that if an employee is not offered a support person, and they are instructed to maintain strict confidentiality, an employer may be criticised on procedural fairness grounds. In the IBM case, IBM was criticised for instructing the employee not to discuss the matter with anyone prior to the investigation interview, as this meant that the employee was not aware of his right to a support person (although the employee brought a support person regardless).

Overall, it is best practice to offer an employee a support person wherever practicable, and particularly where the situation may cause stress to an employee (which may also assist in avoiding workers’ compensation claims). Employers should, however, consider stipulating (unless extenuating circumstances exist) that the support person be from outside of the workplace, and should always ensure that the support person is aware of their confidentiality obligations.²⁴

For further information see our article on Support persons, disciplinary/performance meetings and reasonable management action – employers top questions answered here.

The investigation in the Patrick Stevedores case was severely hampered by uncooperative employees – the “wharfies” who witnessed the incidents had a “code of silence” which was unofficially endorsed by the union.

In response to that evidence, the FWC stated that employees have a duty to be “open, frank and honest” with their employer about serious issues in the workplace. Therefore, uncooperative employees may be opening themselves up to disciplinary action – and there have been cases in the past where a dismissal has been upheld where employees were uncooperative and dishonest in investigations.²⁵

In the first instance, an uncooperative employee should be warned that such behaviour can result in disciplinary action (up to and including dismissal), and they should be reminded of their obligations. If the behaviour continues, there may be justification for commencing a separate disciplinary procedure against the uncooperative employee.

If they are related to the initial allegations, they must be included in the investigation – particularly if they are raised by the respondent . In the Patrick Stevedores case, during the investigation interview, the respondent alleged that she had been punched and harassed by the complainant. Neither the investigator or the employer pursued these allegations. This was found to be grossly unfair, and showed that the investigation was biased and incomplete.

It is entirely open to the decision-maker to disagree, on a reasonable basis, with the investigator’s findings. In fact, employers should subject an investigator’s report to a thorough review to ensure that they are prepared to adopt the investigator’s finding.

For example, in Cannan and Fuller v Nyrstar Hobart Pty Ltd,²⁶ the investigator found that an allegation was unsubstantiated on the (incorrect) assumption that bullying required intent. The decision-maker in that case disregarded that finding, and, relying upon the witness statements, found the allegation substantiated.²⁷

A second independent opinion or legal advice is invaluable in such situations. In the Patrick Stevedores case mentioned above, the FWC was critical of the employer for not seeking advice where the investigator/HR Manager was inexperienced, and suggested that if the employer had sought advice, the matter would not have ended up in unfair dismissal proceedings.

The decision-maker has a responsibility to independently assess the investigator’s findings and recommendations before making a decision. In the Patrick Stevedores case, of serious concern to the FWC was the fact that the decision-maker only relied upon a brief email from the HR Manager/investigator in deciding to dismiss the employee. This resulted in the decision-maker being unaware of serious flaws, bias, and conflicting evidence in the investigation.

However, it is worth noting that in Dent v Halliburton Australia Pty Ltd²⁸, the Commissioner accepted the employer’s submission that, “an investigation does not need to be without flaw. It does not need to be forensic in detail.” An investigation does not need to be perfect for an employer to be able to rely on it to dismiss an errant employee – provided appropriate processes are followed.

In unfair dismissal proceedings, the criteria for considering whether a dismissal was harsh, unjust or unreasonable includes whether the employee was given an opportunity to respond to any allegations against him/her.²⁹ To ensure employees can adequately respond, employees need to be given whatever information the employer is relying upon in making the decision.

At the disciplinary stage (post-investigation if an investigation is required), it will be necessary to provide the respondent employee with enough documentation/evidence so that they fully understand the substantiated findings. Two case examples where an employer has been criticised for not providing employees with sufficient information to be able to respond to the findings levied against them are:

• where the employee was only provided with the investigation report at the disciplinary meeting, not allowing time to consider the report;³⁰ and
• where the employee was not provided the witness statements, even though the employer specifically relied upon them instead of the investigation report.³¹

It is therefore important that the employee is provided with all the information that is being relied upon by the employer. However, to ensure the safety of witnesses, it may be necessary to also warn the employee that any attempt to contact witnesses without management approval may result in further disciplinary action. Furthermore, parts of the investigation report or witness statements which contain irrelevant information not relied upon may be able to be removed or redacted.

Note that in the case of the Queensland Public Service, there is a legislative requirement for employees subject to disciplinary action to be provided with natural justice (also detailed in various public service directives and guidelines).³² This legislative natural justice requirement provides for a greater level of disclosure of relevant evidence than in the private sector, as the employee needs to be given all the information the decision maker intends to rely upon when determining whether an allegation could be substantiated.³³