The difficult decision of whether to undertake an internal or external investigation
Employers regularly deal with allegations of inappropriate or unlawful conduct. Although not all allegations will amount to a breach of the law or be substantiated, it is still important for employers to actively manage any allegations to limit the risk of claims (e.g. applications for a stop bullying order during employment, or claims such as general protections or unfair dismissal claims when employment ends).
Conducting thorough and balanced investigations, providing parties with the opportunity to respond, and maintaining records of the investigation process, outcomes and findings helps to ensure that employers are in a stronger position to defend potential claims.
The first decision that an employer must make when considering a workplace investigation is whether to have the investigation conducted internally or externally.
Often, a workplace investigation can be conducted internally, particularly when an issue is not serious and the employer has the internal resources and appropriate human resource management specialists or expertise to conduct a professional and procedurally fair workplace investigation. However, there are certain circumstances where having the investigation conducted externally is necessary to show that it was fair to everyone. Courts and Tribunals often criticise organisations that fail to deal with workplace complaints fairly. A failure to do so could expose an employer to a successful claim. As a guide, the more serious the alleged conduct, the more senior the alleged offender and the greater the potential for challenge in the courts increases the likelihood that an external investigation is more appropriate in all the circumstances.
We will briefly consider two recent decisions in the context of workplace bullying and when bullying will be a valid reason for dismissal, in the Fair Work Commission (FWC). For behaviour to be considered “bullying“, it has to be unreasonable, repeated and create a risk to health and safety. In both cases, the businesses engaged external investigators, a decision which ultimately assisted the employers in defending the unfair dismissal claim and stop bullying action which ensued respectively.
In Anthony King v The Trustee for Bartlett Family Trust T/A Concept Wire Industries  FWC 3867, having a well-documented external investigation allowed Concept Wire Industries to successfully defend an unfair dismissal claim brought by Anthony King when Concept Wire Industries terminated his employment after an external investigation found that his behaviour constituted bullying. The second case, Krnjic  FWC 3688, found that insensitive behaviour alone was not considered bullying.
Anthony King v The Trustee for Bartlett Family Trust T/A Concept Wire Industries  FWC 3867
Concept Wire Industries decided to appoint an external investigator when Mr King accused Concept Wire Industries of “union bashing” and of already making up their mind that Mr King was “guilty” of bullying a colleague prior to the investigation being concluded. After the external investigation was completed and Mr King was given an opportunity to respond to the investigation findings, his employment was terminated for misconduct. Mr King then made an unfair dismissal claim.
The Fair Work Commission, after considering the investigation process, held that Mr King’s conduct in bullying a colleague into joining the union was a valid reason for dismissal. The Commissioner praised the external investigator’s “meticulous and balanced investigation process”, saying the investigation report “records the process by which she interviewed people, then made findings on the balance of probabilities of matters of evidence, and on the overall import of the evidence,” commenting that “some investigation reports seen by the Commission in this jurisdiction fail to get to the heart of such a situation and rarely undertake a true balancing of the evidence seen by them.”
When considering terminating an employee for reasons that may be seen as controversial, politically biased or otherwise sensitive, having an external investigation can often be the only option. A skilled and expert independent investigator assisted Concept Wire Industries to defend a decision to terminate employment based on an investigation.
Krnjic  FWC 3688
Mr John Krnjic, a team member in the electrical department of a hardware store, believed that his team leader had bullied him by asking him insensitive questions about his facial appearance and questioning him about his whereabouts in the hardware store.
When Mr Krnjic tried to contact the store manager to raise these bullying concerns, he was told that the store manager was too busy and unable to speak with him. Mr Krnjic was later called into a meeting with the duty co-ordinator and told that he would be suspended on full pay while an investigation was being carried out. However, Mr Krnjic was not informed that the reason for his suspension was because his team leader had made a complaint about Mr Krnjic for refusing to perform tasks as directed and for being disrespectful.
Mr Krnjic told the Human Resources Manager he did not trust management to properly investigate what had occurred. Given that the investigation related to two employees who had made allegations about each other, the HR Manager suggested an independent and external investigation should be carried out, and Mr Krnjic agreed this would be acceptable. After being provided with the investigation findings, Mr Krnjic made a stop bullying application in the Fair Work Commission alleging that he had been bullied by his team leader.
While the Commissioner found that the team leader’s behaviour towards Mr Krnjic did not amount to bullying, it was noted that there were “some concerning aspects [about the employer’s processes for dealing with its employees] … For example, it appears that Mr Krnjic was suspended from work after a complaint made by [the team leader] without being given an understanding of why this occurred.”
Although the Fair Work Commission may find in favour of the employer in its decision, it may still make adverse findings or comments about the processes followed by the employer in dealing with such matters.
Lessons for employers
These two cases illustrate examples of when a workplace may benefit and reduce the risks of a successful claim being made by engaging an independent external investigator rather than conducting the investigation internally. For example, in circumstances where:
- There is a lack of skills, experience or resources in HR;
- There are complex or multiple allegations;
- Allegations have been made against Management or several parties within the organisation itself;
- The nature of the alleged behaviour is sensitive or controversial;
- A breakdown of trust in the employment relationship has occurred; and/or
- An internal investigation may reasonably be seen as biased.
Having an external, independent investigator helps show that the investigation into the allegations and conduct is impartial and procedurally fair.
Our Workplace Relations & Safety team are able to assist and provide advice on the processes to be followed and any investigation that may be required.
This article was written by Erica Hartley, Partner and Eunice Ong, Solicitor.