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Workplace investigations: Getting to the truth of the matter

A workplace investigation is a process initiated by or on behalf of an employer to discover the truth about a workplace matter.

This is separate from investigations conducted by regulators in the employment area, such as WorkSafe, Fair Work Ombudsman or the new Wages Inspectorate in Victoria.

Employers conduct workplace investigations because they need to provide a proper factual basis if they exercise a power to discipline or dismiss an employee.

This is primarily because of the operation of legislation that protects employees. Without those laws, the common law permits an employer to act unreasonably or capriciously. In contrast, the Fair Work Act 2009 (Cth) (FW Act) provides that dismissal without a valid reason will usually be unfair, entitling an eligible employee to seek reinstatement and/or compensation. A reason for dismissal must be sound, defensible or well founded, and justifiable on an objective analysis of the relevant facts. This is best served by a proper investigation into relevant facts and circumstances.

General protections

The FW Act general protections laws prohibit an employer from taking adverse action against an employee, whether that be dismissal or some other detrimental conduct, for prohibited reasons. This means the particular reason the employer is taking the action is a central issue. Where it is alleged that the reason was unlawful, the fact the employer acted on the findings of a proper workplace investigation will assist in in rebutting the presumption that the adverse action was taken for the alleged unlawful reason.

For instance, if an employee asserts that her retrenchment is motivated by the fact that she had previously made complaints her employment, the employer’s position to refute that link might be improved if it is able to show that it properly investigated those complaints.

The employer has a lot of latitude in making up the rules around workplace investigations. Obviously if the investigation findings are to be relied upon to dismiss an employee who is covered by unfair dismissal, a flawed workplace investigation will expose the employer to an unfair dismissal finding.

Natural justice

A key objective for workplace investigations where the subject is an employee who is covered by unfair dismissal laws is giving natural justice. That is, the right of the employee to understand what is alleged against them, to understand the evidence that supports the allegations, and to be granted a fair and reasonable opportunity to be heard about those allegations before any adverse finding is made about the allegations.

In Bridge v Global Bottleshops Pty Ltd (2021), the Fair Work Commission (FWC) ruled the dismissal of a bottleshop manager after an investigation into sexual harassment allegations was unfair. It was alleged the manager had said to a female customer ‘would you like a root hehehe receipt’, laughed and leered at her. It was claimed that on each occasion the customer visited the store, the manager had spoken rudely to her and made her feel uncomfortable.

The FWC ruled the dismissal was ‘nothing less than procedurally disastrous’. There was little to no procedural fairness afforded to the manager. He was not interviewed during a flawed investigation process. He was not given information about the complainant, CCTV footage, what the customer purchased and the full extent of the details of the complaint. No show-cause process followed the investigation, and prior to his dismissal, the manager was not provided with the findings of the investigation.

Common law

If an employee is not able to access FW Act unfair dismissal laws, the common law does not recognise a general obligation on the employer to give an employee natural justice prior to dismissal for misconduct. There is no duty to act reasonably, or to give reasons or afford the employee an opportunity to be heard. The fact dismissal is unreasonable or capricious doesn’t invalidate the dismissal.

Various attempts by courts to explore a general obligation under common law that might limit employers in conducting these processes have not gone far. The High Court in CBA v Barker (2015) ruled that no term or duty of trust and confidence required an employer to take steps in the interests of an employee. Suggestions of an implied obligation of good faith requiring an employer to exercise ‘prudence, caution and diligence’ before dismissal to avoid or minimise adverse consequences to an employee have not progressed.

If an employer publishes a policy about the way it will conduct disciplinary or performance management processes, and there is a basis for this discretion to be enshrined in an employment contract through provisions incorporating its terms, then this might trigger an implied obligation of cooperation. Under this obligation, the employer cannot exercise its rights or discretions under the policy in a way that would deprive the employee of the benefit to it. For instance, in Cummins South Pacific Pty Ltd v Keenan (2020), Anastassiou J took this path to find that an employee was entitled to a right to fairly respond to the matters raised by the employer under its performance improvement policy. Given the employer may only exercise a contractual right, bona fide for the purpose for which it was conferred, the employee was entitled to expect that such a right would not be exercised capriciously or in a manner that would deprive him of the benefit of his contract with the employer.

However, many employment contracts make it expressly clear that disciplinary policies do not form part of the employment contract.

Enterprise agreements

The situation is easier for employees if the disciplinary procedure is enshrined in an enterprise agreement. Disputes about the way the investigation is being conducted maybe referred to the FWC under this dispute resolution procedure.

Clause 25 of the Victorian Public Service Agreement 2020 provides for a comprehensive process for alleged misconduct to be investigated. However, it is carefully drafted such that the dispute resolution procedure cannot be invoked until the investigation is concluded. An exception is where the investigation has not been completed within 6 months and delay is being unreasonably caused by the other party.

Where alleged misconduct that is the subject of an investigation is also the subject of a criminal investigation or criminal proceedings, the VPS employer is not required to delay or cease the management of misconduct process but may exercise its discretion to do so.

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