workplace investigations the_case_for_reform_24092014

Josh Bornstein, PrincipalEmployment and Industrial Law

24 September 2014

Twitter: @JoshBBornstein

WORKPLACE INVESTIGATIONS:

The Case for Reform

Overview

2Workplace Investigations: The Case for Reform

The correlation between workplace investigations and mental health

Problems with workplace investigations and the workplace investigation industry

The relationship between workplace investigations and the new anti-bullying laws

Regulation of Workplace Investigations (WIs) In the private sector, WIs are largely unregulated

The Private Security Act – a case of accidental regulation?

– Deals with private security industry

– Investigator broadly defined and must hold a license

– Lawyers are exempt

Some Enterprise Agreements deal with workplace investigations

Public Service Act 1999 (Cth) – relevant in federal public sector


3 essential types of WIs:

1)In-house: by employer (usually HR or other manager);

2)External: by third party retained by employer. Usually either:

a) Workplace investigators retained by the employer or by lawyers on behalf of the employer; or

b) Lawyers retained by the employer to conduct the WI

3)By OHS authority (e.g. Worksafe, Comcare).

Workplace Investigations: The Case for Reform 4

Workplace Investigations (‘WIs’)

1) WIs by Employers


Investigations by employers present a number of risks:

Lack of expertise to conduct investigations

Prejudgment of the issues because the investigators are too close to the people and issues in question

Inadequate separation between the investigator and the decision-maker, which may inhibit the investigator’s independence

Case Study 1: Investigation by Employer

In Nikolich v Goldman Sachs J B Were Services Pty Ltd [2006] FCA 784, the Federal Court awarded the applicant over $500,000 for a major depressive illness that the Court attributed primarily to the botched handling and investigation of the applicant’s complaint, rather than the original grievance itself In that case, delays and inadequate investigation from HR employees at the firm contributed to the deterioration of Mr Nikolich’s health and a hefty award of damages. Wilcox J described the handling of the applicant’s complaint as ‘extremely inept’. His Honour noted that the case involved ‘serious allegations warranting investigation, yet there was no effective investigation.’


The ‘investigation’ in Nikolich was described by the Federal Court as follows at [145-147]: …neither Ms Jowett or Mr Heath took action to arrange meetings in Canberra. Instead, Ms Jowett allowed nearly a month to elapse before she even showed the letter to Mr Sutherland. At no stage did she interview Mr Keogh or Ms Grunbaum, who were both named in Mr Nikolich ’s letter, nor any of the other Canberra financial advisers. More than two months after receiving Mr Nikolich ’s letter of 28 July, and without having taken any meaningful action to establish the truth or otherwise of his allegations, Ms Jowett invited Mr Nikolich to attend a meeting in Sydney with herself and Mr Heath. However, it is apparent from Ms Jowett’s file note that this meeting did not address the concerns he had raised in his letter; rather it developed into a counselling session about Mr Nikolich ’s stress. Instead of responding to a plea for justice, Ms Jowett and Mr Heath, no doubt with good intentions, treated him as the problem. This response was inappropriate.

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Workplace Investigations: The Case for Reform

After that meeting, a further six weeks was allowed to elapse before Ms Jowett formally responded to Mr Nikolich ’s complaint. Even then, she missed the main point of his complaint. She failed to deal with his allegations of abuse of power, except by the bland statement that Mr Sutherland’s allocation decisions ‘were appropriate having regard to the needs of the firm’s clients’, a matter about which she had made no inquiry. Although Ms Jowett knew Mr Nikolich was relying – rightly or wrongly – on the exit strategies paragraph in the DKN team business plan, she made no reference to the plan at all. If she had thought it was inapplicable to the situation that had arisen on Ms Dal Bon’s departure, it would have been helpful for her to explain why that was so.

Mr Nikolich was understandably dissatisfied with this response. He asked that his complaint be referred to Mr Evans and Ms Jacobs. However, they were even less active in ascertaining the merit of his complaints; they seem to have made no investigation at all.”

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The Court attributed the applicant’s major depressive disorder primarily to the company’s mishandling of the grievance and the botched investigation of it, rather than the grievance itself at [314]: “Assessing the expert evidence as a whole, I do not think it supports the respondent’s theory that Mr Nikolich ’s psychological problems were, and are, the result, only or primarily, of the reallocation decision made by Mr Sutherland. I think the better view is that they stem more from the aftermath of that decision, in the way Mr Nikolich was treated by Mr Sutherland and the failure of Ms Jowett and others to give him proper support in handling his problems with Mr Sutherland. Certainly that seems to be the view of Dr Jamieson and Dr Lowden, the two experts who know him best. I conclude, therefore, that the breaches of the three relevant sub-sections of WWU caused the psychological damage …This included a major depressive disorder.”

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Case study 2: investigation by employer and (OHS authority)


Michelle complained to her employer that Steve had been bullying her for an extended period

Some examples of the bullying included:

Turning the heating up in Michelle’s room so it was insufferably hot

Putting music on so loud that Michelle could not do her job

Contacting Michelle’s customers and encouraging them to complain about her

HR interviewed 5 employees about the dispute, all of whom were exclusively allies of Steve

The first question asked in the investigation by HR was ‘Have you seen Michelle behave inappropriately at work?’ (Michelle was not aware that her conduct was also being investigated)

Steve extensively abused Michelle and gloated about the bullying on an internal digital chat platform, yet this evidence was not provided to the internal investigation for to a second investigation by OHS authority

Steve was exonerated by both investigators

Third party investigators may bring independence to the process

However, the workplace investigation industry has a number of systemic problems:

Largely unregulated so anybody can set up as a ‘workplace investigator’ – skills and experience are variable

Industry is growing – no barriers to entry There is a strong financial incentive for the investigators to

produce reports that are to the employer’s approval Where lawyers are retained to investigate, the investigation may

be hidden under the veil of legal professional privilege and the investigation report may be rewritten to legally protect the employer


2) WIs by Third Parties

Employer and investigator agree on terms of reference with no input from the employee

Frequent communications between the employer and the investigator without the employee’s knowledge

Provision of draft reports to the employer for ‘review’ or ‘editing’ prior to publishing to the employee

Full investigation reports are routinely withheld from the employee – given minimal information on grounds of confidentiality

Where lawyers are involved, legal professional privilege is relied on to withhold information from the employee

Query: whether LPP can be challenged??


Lack of Transparency in Third Party WIs

The Dark Arts of WIs by Lawyers…


“Conducting an investigation under cover of legal professional privilege may protect an investigation report from disclosure requirements. Your legal advisor should be contacted early in the investigation process if legal professional privilege is to be claimed.”

“Full report to the person or people who will make disciplinary decisions or decide other outcomes arising from the investigation … provide the complainant with only a summary of the factual findings and not the detail of the outcomes.”


Case Study 1: WI by Third Party Investigator AMWU v Visy Packaging Pty Ltd (No 3) [2013] FCA 525

Facts:

– The employee applicant was an OHS representative for Visy

– The applicant tagged a number of forklifts to prevent them being used because their warning beepers were not loud enough

– Visy saw the applicant’s behaviour as obstructive and disciplined him on the basis of the findings of an “independent” and “impartial” investigation

– The investigation resulted in the applicant being given a final written warning notifying him that he had engaged in serious misconduct and that further instances of misconduct could result in termination of his employment

– The applicant commenced proceedings in the Federal Court claiming that Visy had taken ‘adverse action’ against him in breach of the Fair Work Act

The Federal Court held that the investigation and disciplinary action constituted adverse action in breach of the Fair Work Act

The Court rejected the Company’s argument that the investigation was independent and impartial because:– Visy framed the questions that would be asked by the

investigator – Visy management attended the investigator’s interview with the

employee– Visy’s solicitor was in communication with the investigator during

the investigation and emailed the investigator with ‘some questions for clarification purposes that I would like to put to you, in case this leads to you updating or reviewing the report’

– Visy intervened in the investigation, revising the investigator’s report in order to ‘strengthen it’


AMWU v Visy Packaging Pty Ltd (No 3) [2013] FCA 525


3) Workplace Investigations by OHS Authorities A case of good in theory, bad in practice…

Despite thousands of complaints being made to OHS regulators each year, very few cases are investigated and prosecuted

In the House of Representatives Standing Committee on Education report ‘Workplace Bullying ‘We Just Want It To Stop’, several participants noted the inefficacy of the OHS system in combating workplace bullying

Some examples:

SafeWork SA submitted that no prosecutions for workplace bullying had been pursued in South Australia and very few had reached the stage of being considered for prosecution

WorkCover New South Wales submitted that it did not know of any bullying prosecutions which related only to psychological injury

The Director of NT WorkSafe from 2002 to 2008 submitted that the regulator did not prosecute anyone in relation to psychological behaviours like workplace bullying


Workplace Investigations by OHS Authorities Cont’d

The Impact of WIs and Anti-Bullying Laws


Certain matters that the FWC must take into account in considering whether or not to make an anti-bullying order, including:

– any interim or final outcomes arising out of an investigation into the matter that is being, or has been, undertaken by another person or body

Two situations arise:

– Worker is not satisfied with a workplace investigation and seeks an anti-bullying order in FWC

– Making of an anti-bullying application to the FWC prompts the employer to quickly initiate an investigation to try and pre-empt any adverse order at FWC

FWC should exercise great caution when placing weight on the outcomes of workplace investigations (see next slide)

Recent Anti-bullying decision: Ms SB (AB2014/1035) Decision of Commissioner Hampton, 12 May 2014

FactsMs SB was a manager of a team of delivery support officers. She alleged numerous examples of bullying behaviour in the workplace by her fellow employees and Employer, including:

– two fellow employees making complaints of bullying against Ms SB and the Employer accepting these complaints for investigation;

– the Employer not taking adequate action to prevent further complaints being made against Ms SB in circumstances where the first complaint was resolved in Ms SB’s favour;

– being harassed and badgered on a daily basis by an employee; and

– the Employer not providing Ms SB adequate support when she was the subject of ongoing rumours.


Ms SB (AB2014/1035)

The decision is important as it is the first case to substantially consider the meaning of ‘reasonable management action carried out in a reasonable manner’ under the Act.

However Commissioner Hampton also considered the engagement of an external investigator and commented on the consequences of the Employer not providing a full investigation report to the Commission.


Ms SB (AB2014/1035) [98] The applicant has raised concerns about how her complaints against

CC were investigated. These are not relied upon as evidence of the alleged bullying conduct supporting the application but rather, as an indication that if bullying behaviour is found by the Commission, there is a likelihood of future unreasonable conduct.

[99] Although the results of the investigation have been provided to the applicant and the Commission, the full report and evidence about how the investigation was conducted were not. The employer relied upon legal professional privilege in that regard. As a result, I place no weight upon the outcomes of the investigation so far as it might otherwise have cast light upon the conduct of CC and the applicant. At least in terms of the conduct of CC as relevant to this present application, I have heard direct evidence from the applicant and CC (and others) about those matters and I rely upon my direct findings in that regard.


Ms SB (AB2014/1035) [100] I do however find that the engagement of an external person to

investigate both competing allegations was not unreasonable. There was also nothing unreasonable about the apparent general approach adopted to the investigation by the legal firm. Nothing the applicant has put to me would lead me to a contrary finding as to the conduct of the investigation. The apparent findings of the investigation are however at odds with certain findings made by me from the evidence in relation to the applicant’s motives and I will return to the implications of the investigation shortly.

[101] Given the applicant’s position in relation to the external investigation and my ultimate findings in this matter, it was not necessary for me to consider whether legal professional privilege applied to that investigation and/or whether the employer had waived any privilege by seeking to rely to some degree upon its outcome.

See also Bartolo v Doutta Galla Aged Services Ltd [ 2014 ] FCCA 1517



In order to be satisfied an investigation has been conducted rigorously, impartially and independently, the FWC will need to examine:

– How the terms of reference of the investigation were determined

– Whether there was clandestine communication between the employer and/or the employer’s lawyers with the investigator

– Whether the investigator had adequate skills and was impartial

– Whether the draft report was provided to the employer/employer’s lawyers and whether the employer had input into the outcome of the investigation

– Whether the investigator examined all available evidence and examined all witnesses

– The quality and reliability of the investigator’s final report

Personal Injury