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Friday Workplace Briefing

Investigations Are Not Easy – If Lawyers Can Get Them Wrong, Anyone Can!

In this week’s Friday Workplace Briefing, Andrew Douglas and Kim McLagan are taking us through workplace investigations and the challenges that employers may face when conducting them. They aren’t easy – if lawyers can get them wrong, anyone can.

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About the Hosts

Managing Principal - Victoria

Principal Lawyer - Head of Workplace Relations

Episode Transcript

Andrew Douglas: Main Topic, Workplace Investigations. I reckon we’ve got more than 10, to be honest with you. Workplace investigations, we’ve got two cases for you today.

Kim McLagan: Yep.

Andrew Douglas: Kim, first case, I’ll have to get the name of the first case ’cause I forgot, what’s the name?

Kim McLagan: Kidley, this is a TAFE case, so just very briefly, TAFE teacher engaged his partner’s nephew when the nephew possibly didn’t have the right qualifications to teach, and then the teacher’s partner was on the management and she engaged her partner’s daughter and the nephew’s former partner. Anyway, three of them were stood down and a law firm, I won’t name names, was engaged to do an investigation to look at dishonesty, corruption, and fraud. So it’s very serious allegations.

Andrew Douglas: So let’s just stop there. So Briginshaw is the case around findings.

Kim McLagan: Yeah.

Andrew Douglas: So when you’re looking at very serious allegations of a criminal nature, it’s still a balance of probabilities, more than 50%. More likely than not would be the expression that we’d use.

Kim McLagan: Yeah.

Andrew Douglas: But the nature of the evidence that makes those findings absolutely critical. And three things happened with this investigation. One, they didn’t ask the respondents. Duh.

Kim McLagan: Didn’t put any allegations.

Andrew Douglas: Allegations to the respondents. Now that’s, you just got to rub your head and wonder. It took 18 months. That’s unbelievable.

Kim McLagan: Yeah.

Andrew Douglas: But the finishing touch was in the findings to fail to identify the relevant evidence that led to the finding. There’s even a worse part where the person who was the decision maker probably didn’t read the report. But that’s a different issue again. And of course, they were all reinstated.

But can I just say out of this, your findings of fact need to be supported by the relevant evidence in more serious cases around the Briginshaw test, okay? It doesn’t matter if they’re pages and pages, but you got to say what it is. This is a terrible case of misadventure by the investigator. And Kim and I’ll talk about what the rules are around investigations.

But the quick one is allegations letters must be right. They must be facts. You must speak and put those allegations along with the relevant, all the relevant evidence under a case called Bern and Fry, which is a 40 year old high court case for those who make up investigations. So we didn’t do that.

And then when you make findings, you must make findings of fact and relevantly where there is a contest of evidence. And they couldn’t because they didn’t even speak to the respondents in this case, but where there is a contest of evidence, you must say what the evidence is in the making of those findings, because it is critical to the nature of Briginshaw that you do. And it must be quick ’cause you’re doing damage to people all the way through and you’re damaging the recollections of people. So there’s no excuse for it. So then we come into Pedler’s case.

Kim McLagan: So this is an interesting one. So we’ve got a serial complainer really. He’s got, well, maybe not.

Andrew Douglas: Maybe not, but he’s made a lot of complaints.

Kim McLagan: He’s lodged 89 different complaints over the course of a few years. And then there was one altercation with a colleague where the colleague was inadvertently pushed to the ground. The investigation-

Andrew Douglas: Pushing you to the ground inadvertently. I’d like to be able to prove that.

Kim McLagan: But where they went wrong was the person who investigated that altercation was the manager who’d been on the receiving end of the complaints.

Andrew Douglas: And was frustrated by them.

Kim McLagan: Was very frustrated by the complaints. Very frustrated by the employee by being clearly hating him, let’s be frank.

Andrew Douglas: It’s more than what you said to me. Anyway, but yeah, it was a clear conflict. And I guess one of the things I want you to do when you look at investigating, don’t ever have the investigator as a person who is seized with the subject matter well in advance. Because at that stage, particularly if they are an advisor, like the person in HR who’s regularly advised the manager, or the manager, they are not bringing an independent mind. They’re sensitised to the issues there. And on a reasonable basis, they can be criticised for doing it. If it’s a conflict of interest, don’t do it. Get someone else in HR to do it. All right, so we don’t have a lot of time, but the rules in investigations to me are really clear.

Kim McLagan: Yeah.

Andrew Douglas: Do I need to investigate?

One, no, there’s a lot of time I don’t need and there are things I can resolve because I saw it happen. I don’t need to investigate. Or it’s not a breach of a law, it’s a misconduct issue for which conciliation and getting people in a room and fixing it and being healing would work and be better and less disruptive.

Once I decide to investigate, I create a tick list with my own policies and procedures and the law of what I do. And the first thing I need to do is develop an allegations letter. Do I need a complainant? It’s best to have a complainant, but you don’t start a complaint process by writing out a complaint. The moment someone tells you of an issue, which agitates an issue of breach, you are then seized with an obligation to resolve it.

If the complainant is so scared and that happens every now and again, you can rely on your primary duty obligations that come through sexual harassment, discrimination side and safety law to be effectively the complainant on behalf of the business. So be very careful, your policies don’t limit to a complainant. But the allegations must be factual on this date, at this time, at this location, this occurred, nothing else.

Kim McLagan: Yeah.

Andrew Douglas: No rolling up, having 10 things in the one place.

Kim McLagan: And you don’t want to be making assumptions within the allegation that you engaged in bullying behaviour by doing that.

Andrew Douglas:Andrew Douglas: Please keep away from legal words, that’s for us, because they do actually have a meaning and you enter into this fray about, well, no, one action is not bullying, requires, repeated, is unreasonable, all that sort of stuff, okay? That’s a determination for a decision maker.

The moment you start an investigation and an allegations letter, advise the decision maker that an investigation is going on, then quarantine them and don’t let them know anything else that’s happening. Because you will find things around protected attributes and other behaviours, which if the decision maker becomes aware of, there’ll be an argument of general protections or discrimination at the end, so quarantine them.

You make a decision as to, from in creating that allegations letter, whether you go out to witnesses first, my view is you stay with the complainant for the initial allegations letter, you then may go and speak directly to the respondent or go out to witnesses and you may hone that allegations letter if you go to witnesses first. It’s actually a decision on the facts of a case as to whether you go directly to the respondent or whether you go to witnesses first, then the respondent.

Speak to Kim because it’s actually a judgement issue, it’s not a legal issue. Whatever you do, when you go to the respondent with the allegations letter, please give them notice beforehand and provide support at the time you give them notice, it’s for workers’ compensation, nothing to do with law.

Offer them a support person, nothing to do with workplace law, is with workers’ compensation. It’s… understand workers’ compensation is Gumby land. At the time you’re doing it, please be generous, make sure your letters are generous, they show that everything’s kept in confidence, everyone’s told everything’s confidential all the way through, la la la la la la.

We trickle down to the stage where we make the findings, please make the findings simple, be aware of the difference between substantiated and unable to substantiate is clear. In other words, I don’t substantiate that, I don’t have the evidence that says that’s true. Unsubstantiated, I’m unable to make a decision based on my test, substantiated I do. Where you find someone has intentionally lied to you, who’s made an allegation, just please talk to us.

That is a very different mechanism that has to be triggered at that stage, okay?

Then you provide those findings in advance to the person in disciplinary action. You set out what’s like and you attach the relevant policies before you speak to them and provide them with the relevant support around it. We’ll talk about discipline another time. It’s not hard to get an investigation right, but it’s easy to blow.

Kim McLagan: It’s always easy to get it wrong.

Andrew Douglas: Yeah. And remember, speed is everything.

Kim McLagan: Yeah.

Andrew Douglas: ‘Cause you’re hurting people. Remember, you stand down people for one of two reasons. One, it creates an imminent risk of safety to the people who are involved in the investigation. Secondly, you objectively have concern that the person’s presence at work may impact the collection of evidence or influence evidence-giving, okay? They’re the only two reasons. How’d that go?

Kim McLagan: Good. We’re doing well.

Andrew Douglas: I’m talking a lot today. That’s my third coffee. That’s why I can do that. I’ve turned into Turkey Andrew. Let’s go on to… case study.

Kim McLagan: All right. Giles… I’ll give you a break. Let you breathe for a moment.

Giles worked as a consultant. He was 61 and retired from equity holding at 58. Giles now worked three days a week in his old business as a management consultant. He reported to Agatha, the CEO. Agatha had an MBA from Harvard and aspired to equity in 24, 25 year. Giles held many of the traditional large clients of the firm.

Agatha had changed the rules around documenting and reporting leads and actions. Giles often slipped up with these and found them bureaucratic and unhelpful. He didn’t need them as he controlled 35% of the client’s revenue and they had been his clients forever.

The current owners were Mitch and Kwong. The third shareholder was a venture capital firm, Black Boulder, who had James-

Andrew Douglas: I thought I said Black Bladder and I thought I said that wrong, sorry. Sorry.

Kim McLagan: Black Boulder had James sit on the board. Mitch and Kwong were both mid-40 Melbourne University Business School grads who had worked under Giles’ tutelage for about 10 years before buying out Giles’ old partner’s equity and eventually him. They liked him, respected him, but found his difficulties with technology, stiff personality and reluctance to adopt new reporting frustrating.

They both thought that Agatha was a gun. Agatha didn’t like or respect Giles and treated him like an antique. Agatha went to Black Boulder and said that Giles was holding back key intellectual property about his clients and preventing the firm from developing a succession plan for his clients, making them dependent on him. She had not told this to Giles. At the board meeting, Jean raised the issue in front of Agatha, Mitch and Kwong.

Agatha said, “That is not the only thing.” She complained of his sexualised comments to her PA Beatrice and his demeaning and paternalistic attitude to her. She said he refused to follow policy directions and new reporting systems. Jean demanded an investigation and the stand down of Giles.

The following day, Giles was suspended on pay. He received a letter that said, “It is alleged that you are guilty of the sexual harassment of Beatrice, age and gender-based discrimination against the CEO, Agatha and repeated failure to comply with lawful and reasonable directions of Agatha in our policies and reporting systems.” None of this had previously been raised with Giles.

An investigator was appointed. His name was Clive. He sharpened up the allegations to explain examples of the serious misconduct. He gave a direction to attend a meeting to get Giles’ evidence. Giles refused to attend and demanded appropriate particulars. A law firm engaged by the business directed him to attend. And so it was a lawful and reasonable direction. And if he didn’t attend, they would rely on the evidence they had collected.

Giles wrote back and explained the direction was an act of repudiation by the business. He accepted it and would go out and trade on his own with his clients. The firm demanded immediate undertakings. He would comply with his detailed constraints under his employment agreement.

I’ll bet they did.

Andrew Douglas: Okay, so we only had a little time. Were the allegations sufficient?

Kim McLagan: Absolutely not.

Andrew Douglas: Absolutely not. So the fact is you must identify date, time to the best you can. What was said or done can be as near as possible. It doesn’t have to be exact, but they must be able to respond to it. So no, it wasn’t. Was the process in the investigation flawed?

Kim McLagan: Yes.

Andrew Douglas: Absolutely, deeply in every element of what was occurring. Was the business conduct repudiatory? Yes, it was. So when you do something which attacks a person, places, suspends them without any proper basis and raises allegations of such serious nature and refuse to actually provide procedural fairness in it.

And let’s go back to those old high court cases. So you’re not giving any evidence of it, but you’re demanding it. That’s repudiatory. So yes, it is. What is the effect of that? So let’s go on to the next question.

Could Giles accept? Yes, he can accept the repudiation. And the interesting part under Len’s case and Corr Howarth is, if an employer does repudiary conduct that is accepted immediately, that you can’t have delay or its waiver by an employee, the restraints are waived. Very serious consequences.

If Giles took a less hostile approach, could he argue the behaviour firm constitutes psychological hazards and make a successful workers’ comp claim as long as he has an injury?

Kim McLagan: Yeah.

Andrew Douglas: Yes. So there you go. Gee, that was a lot today, wasn’t it?

Kim McLagan: Well done, Andrew.

Andrew Douglas: Yeah, well done, Kim. You almost said nothing. Remember, two things coming up. Kim’s workers’ comp breakfast, absolute must-go-to. We’ll get details out in the next couple of days too.

And then Nina’s and my psychological hazards, really the how-to guide, which we’ll provide you with how to navigate it properly.

We look forward to seeing you. Thumbs up and thank you very much. And I’ll wear a better shirt next week. See you later.

Kim McLagan: Bye.

Kim McLagan: Bye-bye.

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