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Sherlock Holmes or Joe Bloggs? Who is entitled to conduct a workplace investigation into an employee?

Workplace investigations previously have been carried out by different persons, in various different capacities. However, a recent case has brought into question the legitimacy and legality of such investigations and who is legally entitled to conduct a workplace investigation. In this article, Jess Mathieson sets out the recent legal developments in this area and the potential implications that flow from these.

In the realm of employment law, the overarching principles are to always act fairly and reasonably, comply with the rules of natural justice and to act in good faith.  This includes when conducting a workplace investigation.

Natural Justice

The rules of natural justice (broadly) are such that a fair investigation must involve:

  1. The employee under investigation being provided with all the details of the allegations.
  2. The employee under investigation being given a reasonable opportunity to respond to the allegations.
  3. The outcome being free from pre-determination and any explanations put forward by the employee being genuinely considered before the outcome is reached.
  4. The investigation being free from bias.

External investigators

Over the last few years, we have seen a trend developing in which employer organisations have come to the view that it is best practice to outsource their investigations into its employees, to an external party.  This is a sensible trend for those entities that have the resources to do so.

Quite often, the complaints raised are extremely serious and relate to sensitive issues (for example, bullying and sexual harassment).  The legitimacy of the investigation outcome, and steps taken thereafter, are more likely to be challenged if the investigation was conducted internally due to bias issues or questions of credibility.

This is particularly the case if the complaint relates to an organisation-wide issue or if the person complained about is in a high-ranking management role, where it could be perceived that they influenced the findings.  This is exacerbated with smaller employer organisations as they usually do not have access to a Human Resources department.

As this trend has developed, the niche for conducting such investigations has been filled by various different persons and entities, for example, Employment Lawyers, Human Resource Consultants, Employment Advocates and various other entities purporting to be employment investigators. This may change with a recent case of Re. D, E & C Limited.

Re D, E & C Limited [2020] NZPSLA 007

This case has provided helpful guidance on just who should be conducting workplace investigations: lawyers with practising certificates and private investigators. It explores whether the governance of such investigations extend further than was previously envisaged.

Facts

The case is in relation to a complaint made by Ms A against C Limited (C).  According to its website, C is a company that specialises in independent investigations into workplaces.  C had been engaged by Ms A’s previous employer and had conducted an investigation into Ms A.  Ms A claimed that:

  1. By C conducting workplace investigations, it was providing private investigation services and, as such, was subject to the Private Security Personnel and Private Investigators Act 2010 (the Act):
  2. The Act provides that individuals or entities providing private investigation services are required to obtain a licence or certificate of approval to do so. C did not have a licence or certificate of approval:
  3. At the time the investigation was carried out, C did not fit within any of the exemptions outlined in ss 5(4) and 22 of the Act that would excuse the absence of being licenced or certified.

As such, Ms A alleged that the Act applied to workplace investigations in this context and that C was in breach of the Act as it was not licenced to conduct such investigations.

Are workplace investigators private investigators for the purposes of the Act?

When a complaint is received, an employer is obligated to investigate the complaint in full to satisfy its obligations under natural justice rules and the Employment Relations Act 2000.  It is necessary for all the information to be discovered in order to provide it to the employee to adequately respond.  This will likely include the requirement for (among other things) conducting interviews, asking questions, reviewing correspondence, reviewing relevant documentation and reviewing surveillance.

In the present case, it was held that C’s investigation involved the seeking or obtaining of information into the actions and behaviour of the people involved.  It was said that Parliament had clearly intended the definition of private investigator to cover all people in the business of carrying out investigations into a person’s character, actions or behaviour –  which is an integral part of a workplace investigation.

As a result, individuals or entities carrying out workplace investigations for clients were held to fit within the definition of acting as private investigators and are subject to the Act.

When is a licence or certificate of approval required?

A licence or certification of approval is required at all times while conducting private investigation services, unless the exemptions set out in the Act apply.  Relevant to the present case, and this context, is the exemption set out in s 22(d) of the Act, whereby:

Nothing in this Act –

Requires any person to hold a licence or certificate of approval in respect of the carrying on by that person of an occupation or business in accordance with a practising certificate, licence, permit, or other authority, granted or issued to him or her under any other enactment.

In other words, s 22(d) of the Act provides an exemption for people who are licenced or permitted to carry out security work under some other regime, particularly, when the other regime requires they are sufficiently qualified to carry out the work and has a robust complaints process if they act contrary to the public interest.

At the time C conducted the investigation into Ms A, it did not have a licence or certificate of approval, nor did it fit within any of the exemptions.  Thus, C was held to be in breach of the Act.  However, since the complaint had been raised, C had become an incorporated law firm and its officers now hold current practicing certificates.

It was held that the training and ethical requirements for lawyers are more extensive than those under the Act.  Further, the complaints process for and against lawyers (by way of the Law Society) was also said to be more extensive than that of private investigators.

Because of this, the purposes of the Act were held to have been achieved by C being a law firm and its officers holding practicing certificates as lawyers.  As such, Ms A’s complaint was dismissed.

Implications of this decision

The implications of this decision are significant.  The decision establishes that workplace investigators are acting as private investigators and, as such, are subject to the Act.

The result of this is that law firms, and lawyers (who hold a current practicing certificate), may continue to conduct workplace investigations.  However, other individuals or entities in different roles must satisfy the criteria to obtain a licence or certificate of approval under the Act to conduct this work.

The specialist employment team at Harkness Henry all hold current practicing certificates and team members have expertise in conducting external fact finding and independent investigations.  They are ready to pick up their monocles and spy glasses to assist in any workplace investigation needs.

 

This article is current as at the date of publication and is only intended to provide general comments about the law. Harkness Henry accepts no responsibility for reliance by any person or organisation on the content of the article. Please contact the author of the article if you require specific advice about how the law applies to you.

For further information

JTM-2

Jessica Mathieson

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