Implications of relying on flawed workplace investigations

Workplace investigations are typically – and should be – reserved for serious matters, such as those involving:

• misconduct allegations of significant potential wrongdoing;
• potential health and safety issues such as bullying, sexual harassment or dangerous working methods; or
• behaviours or actions that may have serious disciplinary consequences such as dismissal or summary dismissal.

As a result, it is imperative that the process and findings of workplace investigations are sound, reliable and able to withstand scrutiny from a court or the FWC. A defective investigation may have adverse reputational and financial consequences for an employer.

In applications involving unfair dismissal, the FWC will make its own decision about any misconduct that founded the decision to dismiss. An employer who relies on a flawed investigation to dismiss an employee will be significantly exposed to an adverse finding in the FWC.

The cases

This is highlighted in the recent decision of Kumar v Opal Packaging Australia Pty Ltd.

Opal operates a cardboard packaging business. Kumar was a machine operator with almost 30 years’ service with the company. Opal alleged that Kumar failed to follow the proper ‘lock out tag out’ (LOTO) procedure when operating conveyor belt machinery, the failure of which could have seriously injured, or killed, Kumar or other workers.

The investigation was conducted internally by Opal’s workplace relations specialist, whose role was specifically to investigate allegations of workplace misconduct and manage serious workplace complaints. After a week-long investigation, Opal concluded that Kumar did not follow the LOTO procedure and dismissed him for serious misconduct. He subsequently made an unfair dismissal application in the FWC.

The FWC found that Opal did not have a valid reason for Kumar’s dismissal and held that the dismissal was unfair. It made orders for his immediate reinstatement with back pay and continuity of service.

The FWC listed several factors that it said demonstrated an absence of a valid reason:

• unreliable records – the investigator relied on witness interviews that were incorrectly recorded and the final evidence of several witnesses in the proceedings differed vastly to their records of interview at the investigation stage
• leading questions – the investigator posed questions which presupposed Kumar had engaged in wrongdoing and that a breach had taken place. Questions to that effect were leading and improper
• deemed admissions – the investigator relied on apologies made by Kumar as explicit admissions of a breach of the LOTO procedure without regard to the context in which his apologies were made. The FWC found that the statements, in context, could not amount to admissions of a breach
• failure to provide relevant material – Opal was subject to an investigation regime in an enterprise bargaining agreement (EBA), which required it to provide Kumar with all relevant information on which it relied in making its decision on the results of the investigation. The investigator did not do so until after he had concluded Kumar breached the LOTO procedure
• reliance on Kumar's failure to cooperate – Kumar responded to the investigator’s allegations once he received all the applicable material, then denied breaching the LOTO procedure. The investigator subsequently concluded that Kumar’s denial and his version of events was a fabrication given his delayed response and his supposed former admissions
• reliance on previous misconduct – the investigator relied on various previous LOTO breaches by Kumar to demonstrate a pattern of behaviour that increased the likelihood of Kumar engaging in the current LOTO breach. Kumar wasn’t given any opportunity to discuss the previous LOTO breaches nor was he made aware that they were being considered, and the majority them were found unlikely to have occurred in the first instance. Reliance on tendency evidence in investigations is risky
• inferences – there was no direct evidence of Kumar’s breach, and the investigator relied on several inferences to conclude a breach had occurred
• critical mistakes – the investigator made errors in relation to the date of the alleged LOTO breach on numerous occasions, including in a letter to Kumar.The FWC found this “showed a concerning lack of attention to detail” given the seriousness of the allegations.

These deficiencies wholly undermined the credibility and reliability of the investigator’s report which Opal relied on to dismiss Kumar.

Since that decision, the FWC has also ordered reinstatement of an employee following his employer’s investigation into sexual harassment allegations against him that was “deeply flawed and lacked rigour”.  Those failures included insufficient capability to weigh evidence, neglecting to consider all available evidence, and allowing witnesses to give evidence in the same room.

Lessons for employers

Employers can conduct workplace investigations using in-house resources or commission an investigation by an external firm. Both have their pros and cons. Regardless of whether the investigation is conducted internally or externally, employers need to have confidence that the process and findings will be able to be relied upon if challenged by the employee or their union.

At a minimum, this means the investigator must have the skill, experience and capability to:

• make well-founded and accurate decisions about evidence, including consideration of credibility (not gut feel), tendency evidence, hearsay and inconsistencies;
• understand the appropriate standard to which an accused is held – the balance of probabilities – and that more serious allegations or consequences require stronger and more cogent evidence (although that does not increase the standard of proof required);
• clearly and succinctly synthesise all of the allegations against an accused person, which is typically more difficult in bullying and sexual harassment investigations because of the volume of information a complainant gives that is contextual but should not form part of an investigable allegation;
• interview witnesses and ask appropriate questions that have sufficient probative value;
• comply with any mandated procedure for the investigation, including in an EBA, contract or policy; and
• draft an investigation report that enables decision-makers to make proper evaluations and conclusions.

Co-written by Stefania Silvestro of Pinsent Masons.