Jurisdiction - Australia
News
Australia – How To Manage Workplace Investigators.

25 October, 2013

 

Legal News & Analysis – Asia Pacific – Australia – Labour & Employment

 

Phillip Leyshan v Wyndham City Council [2013] FWC 7094 (14 October 2013)

 

WHAT YOU NEED TO KNOW

 

  • With the commencement of the Fair Work Commission’s new anti-bullying jurisdiction on 1 January 2014, some employers may need to outsource investigations to external investigators to increase their capacity to respond to complaints in a timely fashion.
  • The appointment of any investigator, but particularly an external investigator, needs to be carefully managed.
  • While an externally produced report can provide important information, an external investigator’s report is not a substitute for an employer conducting its own internal investigations.
  • Ultimately, an internal decision-maker must make a final decision about the report, the allegations and the outcome for the employee(s) concerned, in light of the employer’s internal processes.
  • The decision-maker needs to be satisfied that he or she is making a decision based on the most reliable and accurate information available, obtained in a procedurally fair process.
 

WHAT YOU NEED TO DO

 

  • Ensure your business has rigorous processes for engaging and managing external investigators. Pay particular attention to our practical suggestions set out in this Alert about:

– engaging the right person
– protecting client legal privilege
-the scope of the terms of reference
– management of the investigator; and
– reliance on the investigator’s report.

  • If you do decide to hire an external investigator to investigate the alleged misconduct of one of your employees, be sure to consider the information they provide with a critical eye and in light of all the other information to which you have access.
  • Do not substitute an externally conducted investigation for internal enquiries and investigations. Continuing to follow internal policies and processes in relation to employee conduct and performance management is paramount.
  • Be clear about who the decision-maker is and about the decision-making process.
 

What would you do if an external investigator decided, independent of you, to act outside your brief and record the actions of other employees who were not within the scope of your investigation? Would you rely on this investigator’s report to terminate the employment of another employee?


These are the circumstances that faced the employer in a recent Fair Work Commission decision, Phillip Leyshan v Wyndham City Council [2013] FWC 7094.

 

Private Investigation


In Leyshan, the employer hired Witness X to conduct surveillance on one of its employees. Witness X undertook the investigation for the LKA Group. Witness X never worked with the target; however, Witness X decided to record the activities of employees who were not the subject of his brief because he considered that some of the behaviour he witnessed was unacceptable and he “believed that someone should know about it”. Witness X advised the employer that he was not working with the target but that he was obtaining other information that might be of interest to it. The employer continued with the covert surveillance.


The LKA Report provided to the employer contained Witness X’s observations. The Report did not deal with the allegations that Witness X was asked to investigate. Everything in the Report was outside the scope of the investigator’s brief. However, the Report did include observations about another employee, Mr Leyshan, and one of Mr Leyshan’s subordinates.


Mr Leyshan had been employed by his employer for 25 years, had a clean employment record and had been in his current role for about two years.


Based on the Report, the employer summarily dismissed Mr Leyshan for deliberate and wilful misconduct for three reasons.


For two of the reasons for dismissal, the employer relied solely on the information in the Report.


Mr Leyshan applied to the Fair Work Commission for an unfair dismissal remedy.


Commissioner Cribb’s Decision


Commissioner Cribb held that Mr Leyshan’s dismissal was harsh, unjust or unreasonable because:

 

  • Mr Leyshan’s dismissal was the result of covert surveillance of another employee and Mr Leyshan was not within the scope of the investigator’s brief;
  • the Report was unreliable (Witness X claimed aspects of the Report were not an accurate account of his investigation);
  • the employer unquestioningly and uncritically accepted and relied on the Report despite its obvious flaws and omissions;
  • the employer failed to afford procedural fairness to Mr Leyshan by failing to conduct its own investigation, which was in breach of its Conduct and Performance Management Policy;
  • Witness X was not impartial and appeared to “have an axe to grind in respect of Mr Leyshan”;
  • no concerns had been raised with Mr Leyshan about his supervisory approach and no warnings had been issued in accordance with the employer’s Conduct and Performance Management policy; and
  • one reason, the failure in supervisory duties, was not a valid reason for Mr Leyshan’s dismissal.
 

There was also evidence that the Chief Executive Officer of the employer had not read Mr Leyshan’s written responses to the allegations at the time that she made the decision to dismiss him.


Commissioner Cribb reinstated Mr Leyshan into a non-supervisory position with the Council.


Managing A Workplace Investigation – What To Look For


With the commencement of the Fair Work Commission’s new anti-bullying regime just around the corner, some employers may need to outsource investigations to external investigators to increase their capacity to respond to complaints in a timely fashion.
The Leyshan decision highlights some key issues in engaging and managing investigators, as well as how to deal with the information which an investigator provides.


While the decision relates to a surveillance context, the principles which can be drawn from it are equally relevant to any investigation into alleged employee misconduct. The decision shows that the appointment of any investigator, and particularly of an external investigator, needs to be carefully managed. Factors to be considered include:

 

  • Engaging the right person: an inappropriate or inexperienced investigator can do more harm than good, and may result in an unreliable process and/or report. Employers should engage reputable, experienced and reference checked investigators. Some employers may want to consider compiling a list of appropriate external investigators now in case there is an urgent need for investigation resources in the new year.
 
  • Protecting client legal privilege: If an investigation is being conducted for the dominant purpose of obtaining legal advice or in anticipation of legal proceedings, the documents and some other communications relating to the investigation may be subject to privilege. If so, the employer will not be required to disclose them in subsequent proceedings. The investigator needs to be carefully engaged, instructed and managed to ensure he or she understands privilege and does not do anything to waive privilege.
 
  • Terms of reference: both the employer and the investigator need to be clear on the scope of the investigator’s brief. For example:

-Are there any internal procedures, policies or agreements specifying the process which must be followed?

– Is it a fact finding investigation only?

– Is the investigator briefed to determine the facts and make findings about whether specific allegations are substantiated?

– Is the investigator also briefed to make recommendations for disciplinary action, based on his or her findings in relation to specific allegations?

– Investigators should be instructed to seek further instructions and an extension of their brief if additional information/allegations arise. There may also be cost implications with changes to instructions so these need to be carefully documented.

 

  • Management of the investigator: subject to the scope of the investigation, some investigators may need to be closely managed. For example, you may want to require your investigator to provide regular updates on progress, next steps, and any difficulties he or she is facing. Additional reporting could have cost implications, and impact on privilege. It also needs to be managed so as not to interfere with the independence and neutrality of the investigator.
 
  • Reliance on the investigator’s report: each employer needs to make an independent judgment as to how heavily it can rely on any report provided by an investigator. As the Leyshan decision shows, where there are issues with the report, an employer should be very cautious in relying on the report without any further independent investigation of its own. Employers should critically review each investigation report, paying close attention to whether:

– it is within the scope of the terms of reference for the investigation

– the principles of procedural fairness (and any internal processes) have been followed

– the findings in respect of allegations (if any) are supported by the evidence; and

– the language and content is relevant, appropriate, neutral and unbiased.

 

An employer may want to consider requesting a draft (or even verbal report if privilege will not apply to the draft written report) before receiving the final report. This may help to manage any misunderstandings, inappropriate content or procedural flaws.


Investigations are just one part of a disciplinary process. Ultimately, an internal decision-maker must make a final decision about the report, the allegations and the outcome for the employee(s) concerned, in light of the employer’s internal processes. The decision-maker needs to be satisfied that he or she is making a decision based on the most reliable and accurate information available, obtained in a procedurally fair process.


MAKING THE CASE: Insights From Geoff Giudice


The Leyshan decision indicates that where termination of employment is a possibility, information obtained from an external source should be carefully checked and evaluated. And if the information is found to be correct and cogent, it is still important to deal with employees fairly.

 

As always, an employer which applies sound human resource management processes, with an eye to the requirements of section 387 of the Fair Work Act, is well placed to defend an application for an unfair dismissal remedy.

 

Ashurst Logo

 

For further information, please contact:

 

Marie-Claire Foley, Partner, Ashurst
 marie-claire.foley@ashurst.com


Julie Mills, Ashurst
julie.mills@ashurst.com


Geoffrey Giudice, Ashurst
geoffrey.giudice@ashurst.com


Ashleigh Garrard, Ashurst
ashleigh.garrard@ashurst.com

 

Ashurst Labour & Employment Practice Profile in Australia

 

Homegrown Labour & Employment Law Firms in Australia

 

Comments are closed.