What not to do! Workplace investigations
February 16, 2017
Workplace investigations are a necessary but often fraught area. The question of whether to conduct an investigation internally or to obtain external investigatory services is equally difficult for businesses.
There can be issues with the quality of investigations in both instances. Before relying on the findings of an investigation when terminating an employee, employers must consider whether the investigation itself and its findings can be supported on the facts.
Two recent decisions highlight the difficulties with conducting investigations both internally and through an external provider.
INTERNAL INVESTIGATION FOUND WANTING DUE TO FALSE ASSUMPTIONS
Jennifer Walker v Salvation Army (NSW)  FWC 32
Ms Walker, manager of the Salvation Army’s Lidcombe (Sydney) store, made an unfair dismissal application under the Federal Fair Work Act 2009 (Cth). Ms Walker was a long standing employee of the Salvation Army of some 11 years and had an unblemished employee record.
On 23 July 2016, Ms Walker was serving a customer who wished to purchase a range of furniture. Ms Walker did not enter any sale and she provided the customer a handwritten document indicating she had set aside certain items.
The customer arrived later in the week to pick up the furniture. The customer claimed he had paid $200 in full for the furniture, however, there was no record of sale. The Salvation Army subsequently investigated the issue. The investigation consisted of a review of the CCTV footage and discussions with Ms Walker and the customer.
The Salvation Army believed the customer’s account and also that the CCTV showed Ms Walker had received $200 cash from a customer as payment for furniture he was purchasing. The CCTV footage indicated that while dealing with the customer, Ms Walker had at least $50 in her hand. Ms Walker denied receiving any money from the customer. The Salvation Army terminated her employment for serious misconduct – that is, theft.
In considering the case, Senior Deputy President Hamberger noted that the more serious the alleged conduct was, the higher the standard of reasonable satisfaction applied when determining whether the conduct occurred.
SDP Hamberger found that the evidence demonstrated that Ms Walker was holding a $50 note in her hand, but it did not establish that she had received that money from the customer. SDP Hamberger concluded the customer had not paid Ms Walker for the furniture. As a result, SDP Hamberger also held that Ms Walker had not engaged in serious misconduct.
The termination of Ms Walker’s employment was thus unfair under the Fair Work Act 2009 (Cth). SDP Hamberger was surprised at the lack of rigour in the internal investigation and that the Salvation Army so readily accepted the customer’s claims that he had paid ahead of the account of Ms Walker. SDP Hamberger awarded Ms Walker the maximum compensation, being six months’ pay.
This decision demonstrates the disadvantages of undertaking an internal investigation which was not thorough and made assumptions (that is, the customer’s account was truthful), rather than taking a more open minded approach to all asserted facts.
EXTERNAL INVESTIGATION FOUND LACKING DUE TO POOR SCOPE
Hedges v Wakefield Regional Council  SAIRComm 11
A recent South Australian decision reveals, however, that an external investigation with limited scope which only considers a narrow line of enquiry will not be reasonable either.
Mr Kieran Hedges made an application against his former employer (Wakefield City Council) under section 106 of the South Australian Fair Work Act 1994 alleging his dismissal was unfair. Mr Hedges had been terminated by the Council for serious misconduct, namely an altercation with a colleague during which the Council’s investigator had determined that Mr Hedges spat at the colleague.
The conduct had been the subject of complaint from the colleague concerned, Mr Allan. Following the complaint that Mr Hedges had spat on Mr Allan, an external investigator was appointed by Council. The investigator concluded the spitting had occurred and that it constituted serious misconduct supporting termination of employment. As a result, the Council terminated Mr Hedges’ employment.
In deciding the unfair dismissal application, Commissioner McMahon was not impressed by the investigation undertaken or the decision to terminate.
The Commissioner considered that the investigation had not taken into account Mr Hedges’ submission that he had spat towards Mr Allan after Mr Allan had flicked a lit cigarette at him. Further, the investigator was not independent, as the firm she worked for was acting as a legal representative for the Council.
The Commissioner concluded the investigation had ignored the issue of the flicked cigarette and that the investigation was not sufficiently extensive, having regard to what was reasonable in the circumstances.
The deficiencies in the investigation meant that the dismissal was unfair, particularly in the case of Mr Hedges’ unblemished employment history. Commissioner McMahon order Mr Hedges be reinstated with back pay.
WHAT AN EMPLOYER SHOULD DO
- Set the scope of an investigation so that there is sufficient flexibility for expansive findings – depending on the results of the investigation;
- Take into account an employee’s unblemished employment record in the investigatory process;
- Be careful, do not make false assumptions early on in an investigatory process;
- Thoroughly examine any evidence, particularly audio visual recordings, to ensure you make findings based on that evidence and not an unsupported perception; and
- If the alleged conduct is serious then it is vital the process is rigorous, as such it may be worth engaging a recommended external investigator and seeking legal advice.
- If in doubt or uncertain how to act, as always, seek legal advice.
Authored by Laura Sowden, Senior Associate, Sydney.
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