Workplace investigations: what not to do
A sound outcome does not cure a defective process. An employer may have a legitimate basis for disciplinary action or dismissal, but if the investigation was mishandled, legal liability can still follow. The investigation process is often scrutinised as closely as the ultimate decision. This is what happened in Elisha v Vision Australia Ltd [2024] HCA 50 (Elisha).1 In that case, the High Court awarded approximately $1.44 million in damages to an employee whose employer failed to follow its own disciplinary procedure. The primary judge described the investigation process as a "sham and disgrace", finding that allegations concerning a pattern of aggression by the employee were relied upon as a reason for dismissal. However, the allegations were never put to the employee, who was therefore not provided an opportunity to respond.
The Court confirmed that where a disciplinary policy is incorporated into an employment contract, non-compliance can have consequences far beyond an unfair dismissal claim. A breach may expose an employer to a damages claim, including for psychiatric injury. The lesson for employers is clear: how an investigation is conducted can matter just as much as the findings ultimately reached.
Below we outline some of the most common pitfalls in workplace investigations and how employers can best avoid them.
Appointing an investigator who is not independent
Impartiality is not optional. An investigator with a prior relationship with one of the parties, a personal interest in the outcome, or a pre-existing view of the complaint will struggle to produce findings that withstand scrutiny. Bias, whether actual or perceived, can impact the fairness of an investigation.
In Smout v BHP Coal Pty Ltd [2024] FWC 2062,2 the Fair Work Commission (Commission) found that the investigator was not independent for a number of reasons including the amount of contact that the investigator had with senior employees of the employer throughout the process and that the investigator provided the employer with a draft copy of the investigation report for review, comment and amendment prior to releasing the final report. The Commission accepted that allegations of sexual harassment made by two female contractors provided a valid reason for dismissal. However, the investigation's deficiencies, including the lack of genuine independence and procedural shortcomings throughout the process, rendered the dismissal unfair.
Key takeaway: Do not assume a valid reason for dismissal will cure a flawed investigation. Independence must be genuine, not merely presented as such. If there is any doubt, appoint an experienced, external investigator whose impartiality cannot reasonably be questioned.
Leaving the respondent in the dark
An employee who does not understand, with sufficient detail, the allegations against them cannot meaningfully respond. That sounds obvious. Yet it remains one of the most common procedural failures in workplace investigations.
In Elisha, the employee was denied a meaningful opportunity to respond to allegations that ultimately formed part of the basis for his dismissal. The employer had a disciplinary procedure, which it did not follow. The result was a damages award of $1,442,404.50, not for the dismissal itself, but for the psychiatric injury caused by how the disciplinary process was conducted.
Providing vague or incomplete particulars of the allegations will not meet the standards of procedural fairness required in workplace investigations. An employee cannot properly respond to allegations they do not fully understand.
Key takeaway: Ensure allegations are clearly articulated, sufficiently particularised and put to the employee with adequate time for them to consider and respond before a decision is made.
Rushing the process to meet an unrelated deadline
Conducting a workplace investigation in a timely manner, while ensuring the process remains fair, is a critical consideration in workplace investigations. Speed and thoroughness are not the same thing. The Fair Work Commission has repeatedly emphasised that investigation timelines should be driven by procedural fairness, not business convenience.
In Smout,3 the Commission found that the employer cut corners to finalise the investigation before a public holiday. The employer's own investigator acknowledged that investigations of this kind would ordinarily take around 20 days. This investigation was commenced and concluded in less than a week. Even in circumstances where the Commission accepted that the conduct amounted to a valid reason to dismiss, the rushed investigation rendered the dismissal unfair.
Key takeaway: A valid reason for dismissal will not overcome a rushed investigation. Allow sufficient time to properly investigate allegations, gather evidence and provide employees with a genuine opportunity to respond.
Dragging out the investigation without good reason
The opposite problem carries its own risks. Investigations that extend for months, or even years, without justification can be just as problematic. Witness memories fade. Evidence becomes more difficult to test. The parties are left in prolonged uncertainty. A complaint that could have been resolved efficiently becomes a damaging process in its own right.
In Kildey and Ors v TAFE NSW [2024] FWC 383,4 a complaint was lodged in February 2021. The three employees who were the subject of the investigation were not informed of it until 7 months after the complaint was lodged. The respondents were ultimately dismissed in June 2023, more than two years after the complaint was first made.
The investigation was affected by delays, a shifting scope and a failure to follow the employer’s own policies, including a requirement to conduct a risk assessment before suspending employees. The Commission found the dismissals harsh, unjust and unreasonable, and ordered reinstatement of the dismissed employees.
Key takeaway: Delays can be just as damaging as a rushed investigation. Ensure investigations are progressed efficiently, employees are kept informed, and the process remains focused, proportionate and compliant with internal policies.
Ignoring internal policies
An employer should ensure it follows its own a disciplinary policy and/or investigation procedure, if it has one. After the Elisha case, it is clear that following internal policies is not just good practice but it may also be a legal obligation, particularly where the policy is incorporated into the employment contracts.
Employers who depart from their own policies are likely to face scrutiny over any inconsistencies as well as possible legal liability for failure to follow a prescribed policy or procedure. If an employer’s policies no longer reflect how investigations are actually conducted within the workplace, the policies should be reviewed and updated before an issue arises.
Key takeaway: Policies and procedure are only useful if they are implemented and followed. Ensure disciplinary and investigation policies are applied consistently and reviewed regularly to ensure they remain fit for purpose and aligned with workplace practices.
The bottom line
A flawed investigation process can defeat an otherwise valid decision to terminate or discipline and can expose an employer to liability, regardless of whether the underlying conduct is ultimately established.
As Elisha demonstrates, the investigation process is not a formality. It is part of the legal risk.
With Fair Work Commission lodgements exceeding 44,000 in 2024-25, employers can no longer afford to treat workplace investigations as a cursory exercise. A flawed process may be enough to undermine an otherwise defensible decision.
If you require advice regarding workplace investigations or disciplinary processes, please contact our employment law team or Libbi McLean on libbi@pragma.law.
1 Elisha v Vision Australia Ltd [2024] HCA 50 (‘Elisha’).
2 Smout v BHP Coal Pty Ltd [2024] FWC 2062 (‘Smout’).
3 Ibid.
4 Kildey and Ors v TAFE NSW [2024] FWC 383
