Outsourcing Investigations

What the FWC said about outsourcing investigations in the workplace

The recent case at the Fair Work Commission of, Xiaoli Cao v Metro Assist Inc; Rita Wilkinson [2016] FWC 5592 has highlight the need for employers to consider engaging independent third parties and consider outsourcing investigations in the workplace to maintain a level of impartiality and transparency.
https://www.fwc.gov.au/documents/decisionssigned/html/2016fwc5592.htm

Workplace investigations especially in the case of bullying, harassment and sexual harassment complaints are complex and in many cases involve both legal and cultural issues and risk.

Behaviour that is characterised as “bullying” or “harassment” can lead to claims under the Sex Discrimination Act (Cth) and the Work Health and Safety Act (Cth), and in addition bullying complaints can lead to the FWC issuing an anti-bullying orders under section 789FF of the Fair Work Act https://www.fwc.gov.au/disputes-at-work/anti-bullying

One of the challenges facing employers when dealing with workplace complaints is should the matter be investigated internally or externally by an independent, objective third party.

The Fair Work Commission in, Xiaoli Cao v Metro Assist Inc; Rita Wilkinson held that appointing an objective third party to investigate complaints might be a prudent step to adopt where an employee “vigorously asserts” that an internal investigation would be compromised by bias or a lack of transparency.

 

The bullying complaint

Ms Cao, an employee of Metro Assist Inc, claimed she had been bullied at work by her manager.

She lodged a formal grievance with Metro’s CEO, alleging that her manager had acted in an aggressive and belittling manner towards her, and had exhibited other unruly behaviour including repeated and persistent undue criticism, demeaning sarcasm and exhibiting “mistrust resulting in [the employee] having a low self-esteem”. This was later followed by further claims of bullying.

 

Two investigations into Ms Cao’s complaints

Metro conducted two separate investigations into Ms Cao’s complaints. Both investigations were handled internally by Metro’s CEO and Human Resources team, and involved a number of interviews. During the course of the investigations, Ms Cao was afforded opportunities to ventilate her complaints and put her position.

The internal investigations concluded that Ms Cao’s allegations were unfounded. Metro subsequently engaged external meditation sessions with Ms Cao, following which (after submitting medical advice) her reporting arrangements were changed and she was offered sessions with an independent psychologist (to be paid for by Metro).

Ms Cao was dissatisfied with the outcome of Metro’s investigations, and subsequently lodged an application with the Fair Work Commission seeking an order to stop bullying under section 789FC of the Fair Work Act.

When to consider outsourcing investigations?

Deputy President Sams concluded that the Manager had taken reasonable management action in her treatment of the Employee, and that no bullying conduct had occurred. Rather, it was concluded that Ms Cao’s:

“dogged, single-minded belief in the righteousness of her cause of action, no matter what the result of any investigation of her complaints, particularly those conducted by the employer, was [the reason why] she was not prepared to accept any outcome, unless it unequivocally vindicated her complaints”.

Deputy President Sams recommended that:

“where an employee vigorously asserts that an internal investigation into bullying allegations will lack transparency or independence, it may be prudent for the employer to engage an independent third party to conduct the investigation”.

Conducting the investigations – internally or bring in external expert?

The decision of whether an investigation is conducted on an internal or external basis must be made against the consideration of an employer’s obligation to ensure that investigations are conducted in an objective, fair, timely and thorough manner.

While there are advantages to conducting an investigation internally, this needs to be balanced against the risk of an employee believing that the investigation process is unfair or biased. In any workplace factors such as personal and professional relationships between staff members, internal political considerations, power imbalances and issues of competence and resourcing may have an effect on an investigation.

Engaging an independent third party to carry out an investigation can assist employers in balancing the interests of all parties to ensure the investigation is not only conducted appropriately, but perceived to be as such. It’s an application of the well-known saying

“not only must justice be done, it must be seen to be done”.

Key points for employers contemplating an investigation

When an investigation is being contemplated, these are some questions to be considered in regard to outsourcing investigations:

If the matter is investigated internally;

  • Can we ensure;
  • Transparency
  • Independence
  • An absence of bias
  • An absence of any conflict of interest
  • Will the parties involved object to having the matter investigated internally

Do we have a person within the organisation who has;

  • Solid experience and expertise conducting investigations?
  • Extensive experience conducting investigative interviews?
  • A full understanding of the rules of evidence?
  • An understanding of procedural fairness?
  • A comprehensive understanding of current legislation as it relates to workplace issues.
  • Experience making finding and recommendations and writing reports that will withstand the scrutiny of an industrial commission, the Fair Work Commission or a court?
  • The time and resources to conduct a thorough investigation

If in doubt I recommend that you call and expert.

The author Phil O’Brien is a highly experienced and skilled workplace investigator and trainer who can take the stress out of conducting workplace investigations and provide you and your employees with up to date a relevant training in the areas of misconduct, investigations, procedural fairness, reasonable management action, performance management, bullying & harassment and other issues facing employers and workplaces.

This is general information only. It does not replace advice from a qualified workplace investigator in your state or territory. It is recommended that should you encounter complaints in the workplace that you seek advice from suitability qualified and experienced workplace investigator.

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