Investigations in the Workplace – Pitfalls for the unwary

1. Failing to investigate

The first and most common pitfall is where employers fail to investigate at all. Whether or not embodied in a grievance or disciplinary provision or employee handbook, the common law principle of natural justice require that employers investigate circumstances surrounding an employee related issue before coming to a decision. If an employee makes an allegation and the employer takes a step adverse to that employee without conducting any investigation, the employer potentially puts themselves at risk.

The extent of that risk will be determined by the nature of the issue, but if, for example, an employee is dismissed without an investigation into the circumstances leading to the dismissal, the employer could be liable to a claim for unfair dismissal.

2. Both sides of the story

The second most common pitfall is where employers act without properly considering both sides of the story. The common example is where a trustworthy and reasonable employee reports another employee’s misconduct and the employer takes action before giving the employee against whom the misconduct is alleged an opportunity to respond. The common law principle of natural justice and/or the duty to act fairly in the Employment Act 2000 require that any employee alleged of wrongdoing be allowed an opportunity to respond to any allegations before the employer makes a decision.

The Employment Act sets out that in considering whether any dismissal was unfair, one of the considerations is the procedure followed by the employer and if that procedure is found to have been biased or unfair, an employee could be awarded compensation from the employer.

3. Impartiality

Much like the requirement to consider both sides of the story, steps ought to be taken to ensure the investigation itself is not inherently biased. This issue typically arises where the employee or manager conducting the investigation is a person too closely associated with the allegations. In smaller organizations it may be difficult to avoid this issue but advice should be sought on how to manage the circumstances at an early stage to mitigate any adverse consequences.

There is also a growing trend of employers relying on third party investigators (e.g. HR professionals, auditors, lawyers, labour relations experts etc.) to carry out the task of investigating a grievance or internal issue, and reporting on any findings. While this may mitigate some of the issues outlined above, there is going to be an additional cost and care should be taken to ensure that even if a third party is conducting the investigation, the results of that investigation will be useful in dealing with the relevant issue.

4. Confidential Internal Investigations – Increasing Regulator Oversight

With growing regulatory oversight, reporting responsibilities and the risk of significant penalties if found to have failed to meet any of the required standards, many organizations ought to be cognizant of the issue of whether or not information gathered during an internal investigation could be subject to disclosure during a subsequent regulatory investigation.

Summary

In general, investigations are sensitive internal operations which should be handled with great care. There are nuances involved that non-attorney advisers will be unable/unqualified to properly advise on. The law around internal investigations, confidentiality and employee rights is constantly evolving, and proactively seeking advice at an early stage is always recommended.

This note is intended as a high level overview of this topic. Legal advice should always be sought on a case by case basis.