Workplace investigations: How to manage allegations fairly and effectively
There are several types of investigation that an employer may have to undertake, such as a disciplinary investigation into workplace misconduct, a grievance investigation or perhaps an investigation into something that has gone wrong (for example if there is a suspected health and safety breach).
Jemma Sherwood-Roberts and Nick Hine explain below what issues businesses need to consider when investigating alleged misconduct or breaches of their internal processes.
There are several types of investigation that an employer may have to undertake, such as a disciplinary investigation into workplace misconduct, a grievance investigation or perhaps an investigation into something that has gone wrong (for example if there is a suspected health and safety breach).
Workplace investigations are a necessary part of running a business. They allow businesses to address complaints, root out problems and sometimes show that there was in fact no issue or misconduct at all.
The potential fallout from mismanaging a complaint can be significant and may create problems both internally and potentially externally in the industry marketplace and sometimes in the media. For example, Yorkshire County Cricket Club recently came into the spotlight after completing its investigation clearing Gary Ballance of any wrongdoing after he used a racial slur against his teammate Azeem Rafiq. The club’s handling of the investigation caused public outrage and led to an external investigation by the Equality and Human Rights Commission (EHRC), suspension from hosting major and international matches as well as loss of sponsorships. The EHRC has now confirmed that the club has taken sufficient remedial action to avoid legal action (including the replacement of all of its management) but the financial and reputational damage to the club is done.
The importance of having a good process for a workplace investigation should therefore not be underestimated. The outcome of such an investigation can affect the culture of a company and have a direct impact on how the business is run moving forward. It can also result, if not handled properly, in employment claims, disengagement and loss of staff. Getting the investigation done and dusted effectively and fairly is fundamental, especially in the increasingly regulated landscape facing businesses.
Given the importance of this task, this article sets out those issues which businesses should consider when embarking on a workplace investigation.
What do we need to do when we receive a complaint?
When a complaint is received, it is important to deal with it expeditiously and thoroughly. The first question is whether an investigation is necessary. Can the issue be resolved without undue process, perhaps by having an informal chat with the parties involved?
Where this is not practical or possible, then the business should consider a number of matters before launching an investigation. Do any policies or procedures mandate an investigation (for example, grievances have to be investigated and dealt with through the grievance procedure)? Does the issue warrant an investigation (for example, is there at least prima facie evidence that what is being alleged could be true, such as the person having been in the office when the conduct is alleged to have taken place)?
If an investigation is required, Acas highlights the need for this to be ‘reasonable’ and carried out ‘promptly’. A good question to ask at the outset is what type of investigation is needed and for what purpose. There are several types of investigation that an employer may have to undertake, such as a disciplinary investigation into workplace misconduct, a grievance investigation or perhaps an investigation into something that has gone wrong (for example if there is a suspected health and safety breach).
Another important consideration is how serious the allegations are. While even minor allegations need to be dealt with, clearly the more serious the allegation is, the bigger and more detailed the investigation is likely to be. In addition, it is important to consider who the allegation involves – if it is alleged that there is a systemic issue in the company then this would obviously widen the scale of the investigation.
Other considerations include whether any employees need to be suspended pending investigation and what steps the company needs to take to secure and preserve evidence. The investigation needs to be fair and objective and so the investigator will need to look for evidence that both supports and contradicts the allegation.
Whistleblowing complaints need to be handled very carefully and there are additional legal protections for those making allegations. Businesses must therefore have the relevant procedures and protocols in place to deal with these types of complaints. Legal advice should be taken when dealing with this type of complaint as the consequences of getting this wrong can be costly. Dismissals can be automatically unfair and the unfair dismissal cap does not apply.
Who should carry out the investigation?
There are a number of different people who could carry out a workplace investigation, including a business’s in-house legal team or HR department. Alternatively, there are practitioners who act as dedicated external workplace investigators. However, there are risks hiring these individuals, such as the issue of legal privilege, which is dealt with below. Independent legal teams are a good alternative to doing the investigation in-house, offering expertise in conducting investigations and ensuring independence, and they should give legal privilege protection.
When considering who should conduct the investigation, it is worth considering the following issues:
What is the conduct we are investigating?
At what level in the business has the alleged misconduct occurred?
If this is dealt with in-house, could there be a lack of independence?
What conflicts can arise?
Does the business want the report to be disclosable or would it be better for its contents to be protected by legal privilege?
Independent review
Depending on the type of misconduct alleged or the people involved, it may be better for the investigation to be carried out by someone outside the business. Using someone who is independent from the business or at least independent from the team involved will help ensure the employee receives a fair hearing (and therefore remove or reduce any suggestion that the company has managed the investigation badly). Using an independent investigator can also remove any external perception of impropriety. The importance of this was highlighted recently when the original head of the Downing Street parties investigation, Simon Case, had to step down because he broke the Covid rules himself.
Legal privilege
The issue of privilege is complex and far from clear cut. However, in most cases, if an external lawyer is used then it is more likely that their work will be covered by legal professional privilege than if it is carried out by an in-house legal team or a non-legal external investigator. The benefit of using external lawyers is that anything containing legal advice, including the final report, is likely to be covered by legal professional privilege, meaning that the business does not have to disclose it to third parties.
It is worth noting that if a company does decide to self-report, for example to the Serious Fraud Office (SFO), then the SFO may well ask the company to waive legal professional privilege and to provide these documents. Failure to do so could be seen as a failure to cooperate and would affect any deferred prosecution agreement, for example. However, at least the SFO will afford the business the opportunity for legal advice on the risks and benefits of waiving privilege.
What process should we follow?
The company will usually need to tailor its approach to the type of investigation and the allegations and people involved. However, most investigations are likely to follow the broad process below:
Investigation procedure
1) Set out the scope of the investigation
Terms of reference
2) Fact-finding process
Review of detail of complaints made
Gathering evidence including review of any email or other documentary evidence
Interviewing relevant witnesses
3) Reporting
Report on issues found and steps required including whether to proceed to a disciplinary hearing
4) Decide on the right disciplinary process based on findings
5) Consider the impact on the business’s internal policies, procedures and training – what needs improving?
There are a number of issues to be considered during this process.
Terms of reference
This is important as it sets out the intended scope of the investigation. It allows the business and individual involved to understand the nature of allegations.
Independent legal advisers (ILAs)
An issue to be considered at the start of the process is whether to suggest to the individual under investigation that they instruct a lawyer of their own, an ILA. This is case specific and may be beneficial in cases of serious misconduct so as to avoid any allegation that the employer failed to conduct a fair investigation.
A downside to an ILA is that the individual may be given advice not to cooperate with the investigation. However, this may sometimes still be the best option, even if it does mean proceeding without that person’s version of events.
Businesses may choose to offer to pay for some or all the ILA’s legal fees. There is no obligation to do so (unless this is stipulated in the company’s policies) but it may assist in ensuring that the individual is properly prepared and in demonstrating fairness.
Interviews
Businesses need to consider whether they require individuals to attend interviews or whether they can respond to the allegations in writing. This is case specific but businesses may feel that they can get a better account in person, particularly if they are instructing external legal support, who have expertise in interviewing witnesses and elucidating the answers required.
A further issue to be considered if interviewing individuals is whether to give a so-called ‘Upjohn warning’. This warning tells employees that the legal privilege belongs to the company and that the business may waive the privilege and disclose the substance of the interview to third parties. The reason to give this warning is to dispel any belief held by the employee that the company’s lawyers are representing them and will not reveal anything the employee says, for example to a regulator, investigator or prosecutor. This is not a legal duty in the UK and will not be required in every case but is a further factor to determine as an investigation is being scoped.
Disclosure to the individual involved
The company should consider whether to disclose any of the documentary evidence it has reviewed in the course of the investigation to the individual. This is not a legal requirement (although if taking disciplinary proceedings, the company does need to disclose documents evidencing the allegations). However, it may well be in the company’s interests to do so, in order that the employee can be in a better position to answer questions about their conduct. It may be that a business only allows inspection of the documents (where the individual can see them but not take copies). Alternatively, if the individual has an ILA, then that lawyer can be asked to give an undertaking limiting the use and the disclosure of the documents.
Dealing with regulators and other third parties
Depending on the company’s sector, it may need to consider what steps it needs to take regarding the industry regulator and any other third parties who may also be investigating the conduct alleged. These third parties might be the police in a criminal matter, the Solicitors Regulation Authority for law firms and the Financial Conduct Authority and the Prudential Regulation Authority for financial services firms. In certain instances, a suspicious activity report may be required. It may also be necessary to contact the local authority designated officer if there are any allegations which may affect the safeguarding of children. It is recommended that legal advice be sought when dealing with these issues.
Individuals facing an investigation which may also be dealt with by a regulator or other third party may be reluctant to engage with a workplace investigation at the same time. While most employees will wish to be forthcoming and compliant with their employer’s request, they may be concerned about saying too much or saying something inconsistent. Businesses should consider how to approach this or perhaps consider delaying their interviews until the other investigation has concluded.
Risks of getting it wrong
It is evident that there are a number of important matters to consider before embarking on a workplace investigation. For this reason, businesses need to ensure that they have people who are capable and suitably trained to undertake investigations properly or seek external legal support. Failing to conduct a fair and effective investigation can affect the company’s reputation among its employees, potential recruits, other businesses in its sector and the wider public. It also creates a risk of employment and other claims.
This article first appeared in Employment Law Journal (Feb 2022)
Jemma Sherwood Roberts is a regulatory partner and Nick Hine is an employment partner at Constantine Law.