Is an investigation necessary?
Straightforward complaints or grievances do not always require a formal investigation. Provided the facts are clear and the allegations do not involve a serious breach, a light-touch, informal investigation may suffice. However, in the age of enhanced corporate responsibility and social media, employers can no longer brush matters under the carpet and expect things to move on. In a growing number of cases, a formal investigation may be the only option.
An investigation may be dictated by a regulatory obligation or the duty to report certain breaches, or the principle of taking a zero-tolerance approach to certain breaches – such as discrimination, harassment or bullying – may be embedded in a code of business conduct.
Ultimately, launching such a fact-finding exercise is often the best approach to protect a company’s brand and reduce the risk of claims, provided it is thorough, fair and balanced. If an employee blows the whistle or raises a grievance but wants to remain anonymous, the employer may find itself in a delicate situation of how to handle the complaint given the practical difficulties of investigating an anonymous allegation.
Can it be handled internally?
Except if an investigation is at a regulator’s initiative, there are generally no requirements under English law mandating that a workplace investigation be handled externally or internally. It is a fact-specific assessment a company should undertake to achieve the most efficient approach.
Investigations can considerably disrupt businesses, particularly multinational ones, which may lack a robust compliance, legal and HR team in their smaller overseas or regional offices.
Importantly, the processes and standards under English law require the investigator to be thoroughly trained, as a botched investigation could considerably increase an employer’s liability and litigation risk.
Typically, the availability of the internal staff apt to lead an investigation, the seniority of the person(s) raising the complaint or being named in it, the complexity of the facts and the seriousness of the allegations will dictate whether the investigation should be handled externally.
This will mean involving an experienced external resource such as an HR consultant, a solicitor or a barrister. The company may lose control of the process, and the upfront costs may appear higher. However, this may be a sound investment: delaying an investigation can be costly because of the reputational and cultural impact on the company, and an independent investigator may generally be perceived as more reliable and objective.
Can it be kept confidential?
Confidentiality or anonymity can seldom be guaranteed to complainants and witnesses because of the nature of an investigation; ie, bringing events to light to take appropriate actions. However, active steps can be taken to protect confidentiality as much as possible. These can include carefully drafting confidentiality undertakings, restricting communication to a focused circle of individuals and reminding employees of their existing contractual duties. All of these may help to contain rumours and reduce the risk of constructive dismissal claims from individuals having their reputation unduly tarnished.
An investigation report should be kept confidential and handled sensitively, taking into account internal procedures and potential outcomes. Nevertheless, if the investigation was triggered by an employee’s grievance, they will generally have a right of access to the report, as would the alleged perpetrator should a disciplinary action follow. Regulators may also have the right to access certain internal investigation material.
Are there any exceptions?
Narrow exceptions to such duty to disclose exist – the main one being professional legal privilege, which gives protection from disclosing legal advice and communications in the course of litigation. In the context of an internal investigation, legal advice privilege may apply to written or oral communications made in confidence between a client and a lawyer for the purpose of obtaining legal advice or assistance. Unfortunately, this legal privilege suffers many loopholes; for example, it may not extend to documents attached to the legal advice or to communications a lawyer has with third parties. In cases where litigation has been threatened, litigation privilege may also apply.
What else should be considered?
An investigation is just the tip of the iceberg. During an investigation, employers should consider other measures for preserving their reputation, protecting employees and limiting their liability. Common questions arising during an investigation include whether an internal employee communication is required, and whether an employer should take PR advice at an early stage. Should the facts be reported to the police or a regulator be notified pending an internal investigation? Should any employees be suspended to preserve evidence or protect the interests of other employees?
Whether the investigation report contains recommendations or solely focuses on the factual findings, an employer should act promptly once the investigation closes. At this stage, employers should consider whether the grievance can resume and whether any disciplinary procedure should be initiated. In addition, processes should be reviewed to avoid similar issues occurring again.
Beth Hale is a partner and general counsel at CM Murray