How to conduct a fair and legal workplace investigation

By Charles Power on October 7th, 2011
  1. Industrial Relations
  2. Conciliation

Dear Reader,

Just the other day, I received a great question from a subscriber to the Employment Law Practical Handbook about employment contracts and whether or not every employee must sign one.

As this was a question many of you may also have, I thought I should share it – and the answer from our experts – with you today.

So here goes:

Question: Does every employee have to sign a written contract of employment? I acquired a business last year and found that a number of staff did not have a written contract of employment, but they had worked for the business for many years. Without a contract, are there any implied terms under common law? If so, what are some of these implied terms?

Answer: It is not a legal requirement that employees sign a written contract, although it is preferable for them to do so. If there is no written contract, then the contractual terms can be more difficult to ascertain as an employee’s contract would consist of a mixture of oral and written terms and terms implied by law.

It is an implied term of every employment contract that an employee will comply with the reasonable and lawful directions of the employer, provided that they fall within the scope of the employment (that is, the nature of the position or job description). An employee who willfully disobeys such a direction is guilty of breaching the terms of the contract.

Also, employees owe a responsibility to act in good faith towards their employer. Employees will breach this duty if they engage in conduct which conflicts with the business interests of the employer or the proper performance of their responsibilities.

The duty of good faith manifests itself in more specific obligations. For instance, employees must:

  • not compete with the employer’s business or assist a competitor;
  • protect the property and goodwill of the employer;
  • not divert customers or business away from the employer;
  • not accept bribes or secret commissions and tell their employer about all monies received;
  • not use or disclose the business’ confidential information unless they are authorised to do so by their employer;
  • fully and truthfully answer all questions asked by their employer within the scope of their employment; and
  • act honestly.

It is also an implied term that an employee performs their work with a reasonable degree of care, skill or diligence. Please note that contractual terms may also be implied by way of custom and practice.

To find out the answers to more subscriber questions, keep an eye out for the Letters section in your next Employment Law Practical Handbook update. It’s due in your mailbox shortly!

Not yet a subscriber to the handbook? Click here for more information.

Until next time…

Claire Berry

Claire Berry
Workplace Bulletin

And now over to our editor-in-chief Charles Power…

Continues below…


The “cut and paste” secret that could save
your business thousands

Click HERE to find out more!


How to conduct a fair and legal workplace investigation
By Charles Power
Editor-in-Chief, Employment Law Practical Handbook

It is important to remember that during a workplace investigation, the respondent must be given a fair and proper opportunity to respond to the allegations.

If an investigation takes too long, the stress and anxiety it causes the respondent may give rise to a claim that you have breached your duty to the employee.

You need to give the respondent details of the allegations before they are interviewed, together with a copy of all the relevant documents.

An investigator will ordinarily require a certain standard of proof before they determine that certain alleged facts are established. The usual standard is what’s called the balance of probabilities. To determine the balance of probabilities, you need to ask yourself if it is more likely than not that what the complainant says happened did happen.

Another way of looking at this question is to ask ‘Is the investigator reasonably satisfied that what was alleged to have happened did happen?’

In Gera v Commonwealth Bank of Australia Ltd [2010] FMCA 205, a federal magistrate suggested that in conducting an investigation, an employer is obliged to act in a practical manner, and not to embark on a judicial hearing or police style examination of the circumstances.

However, if the allegation is very serious, is unlikely to have occurred, or has the potential to have very serious consequences, then you need to be much more stringent when conducting the investigation.

Take the following example:

An employee says that another employee (who was regarded as a model employee with no prior history of sexual harassment) tried to kiss her against her will in a lift. There are no witnesses.

The standard of proof in any investigation of the incident is still whether the employer is reasonably satisfied that it occurred. However, given the seriousness of the allegation, the serious implications the outcome could have for both parties and the fact that what was alleged would ordinarily be considered to be unlikely, an investigator needs clear or cogent proof before they could conclude that it occurred.

This would require the investigator to:

  • examine the credibility and reliability of witnesses;
  • examine the consistency of the evidence any witness gives;
  • take into account whether the witness delayed reporting the incident;
  • determine whether there is any corroboration of the complaint; and
  • determine whether the complainant had any possible reasons and motivation for concocting the story.

Stay tuned for my article in next Wednesday’s Bulletin – it will be the last in this series about workplace investigations. I’ll cover exactly what needs to be included in an investigation report.


Charles Power

Charles Power
Employment Law Practical Handbook

Related Articles:

Tags: , ,