Carrying out a workplace investigation

Maintaining legal professional privilege and investigation reports

Workplace investigations are required in most workplaces especially in circumstances where an allegation of misconduct has been made against an employee. Conducting a workplace investigation can be a complex process and may result in the termination of an employee if the allegation of misconduct is substantiated.

The fallout of a termination may involve defending an unfair dismissal claim in the Fair Work Commission (the Commission).  It is important that a workplace investigation is carried out correctly as the investigation process will be closely scrutinised by the terminated employee and the Commission.

Carrying out a robust workplace investigation

It is common practice for an employer to engage a law firm to coordinate the workplace investigation. The law firm will then engage and instruct a third-party workplace investigator to conduct the investigation on the ground.

The final product of a workplace investigation is the production of an investigation report which will report on the allegations, evidence collated during the investigation and findings of fact. It is not uncommon for a terminated employee to request a copy of the investigation report or seek to rely on the investigation report in unfair dismissal proceedings. However, the report can be excluded from evidence if it is subject to Legal Professional Privilege.

Recently, the Commission in Tinish and Willner v Co-operative Bulk Handling Ltd [2021] FWC 3381 examined whether a workplace investigation report falls within a claim for Legal Professional Privilege. The Commission ultimately found that the investigation report was subject to privilege and could not be relied on as evidence in the unfair dismissal proceedings. The basis of the finding was that the dominant purpose of the workplace investigation was for the employer to seek legal advice from its lawyer.

Relevant factors

The Commission found that the investigation report was subject to Legal Professional Privilege because of clear terms of reference. In particular, the investigation was subject to an ‘Investigation Protocol’. The Investigation Protocol identified three purposes guiding the workplace investigation including:

1. Obtaining further detail on the allegations against the employee;
2. Allowing the employee to respond to the allegations of misconduct; and
3. If the allegations are proven, allowing the employer’s lawyer to provide legal advice on the findings and any disciplinary action to follow.

The Investigation Protocol and subsequent conduct of the parties allowed the Commission to find that the dominant purpose of the report was to enable the provision of legal advice. Accordingly, the report was subject to privilege and could not be tendered as evidence in the unfair dismissal proceedings.

The Commission also found that the conduct of the employer, investigator and lawyer during the investigation process was consistent with the dominant purpose. At no point in the process did the conduct of the parties give rise to a waiver of privilege. Accordingly, even though the Investigation Protocol was key to establish the purpose of the investigation, the parties also conducted themselves during the entire process so that privilege was maintained.

Key tips

In addition to clearly establishing the terms of reference the following measures should be implemented in a workplace investigation:

1. An employer should engage a lawyer to instruct a third-party investigator to conduct the investigation. The terms of reference provided by the lawyer to the third-party investigator must clearly identify the purpose of the workplace investigation.
2. The investigator should only communicate with the lawyer during the workplace investigation. The investigator should not communicate with the employer other than in respect of logistical or administrative issues.
3. The information communicated to the employee during the investigation should be limited to any findings of fact or ancillary information to allow the employee to meaningfully respond the allegations of misconduct.
4. The employer should directly communicate with the employee in the context of conveying findings of fact or disciplinary action.
5. The investigation report should be treated as privileged and only distributed to key personnel involved in the investigation process.
6. The dominant purpose of the investigation is for the employer to obtain legal advice. Accordingly, the employer should not communicate to the employee that the investigation is being carried out in accordance with company policy as this may give rise to an argument that the dominant purpose of the investigation is to comply with company policy and not to seek legal advice.

Next steps

Workplace investigations are complex but a necessary part of running a business. As experienced employment law specialists, we can ensure best practices are followed. Call us on (02) 9199 8597 or email us for a no-obligation and confidential chat.

The information contained in this post is current at the date of editing – 14 August 2024.