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Best Practice Misconduct Investigations – A Short Guide

Bettina Bender
sexual harassment

Employee misconduct of a more serious nature can include a range of misdemeanours, from harassment of colleagues (including sexual harassment) to regulatory breaches or even potentially criminal activities. Contributor Bettina Bender, Employment Partner – Winckworth Sherwood.

What the various forms of serious misconduct tend to have in common is that they can expose an employer to the risk of legal claims by fellow employees and potentially also further action by a third party, such as a regulator. There can also be the risk of related reputational damage to the employer.

An appropriate investigation into the alleged misconduct can go a long way towards mitigating these risks and establishing the appropriate next steps which need to be taken by the employer. However, an employee misconduct investigation which is not conducted properly can itself have a far-reaching adverse impact beyond the investigation and could result in allegations from the participants including, for example, for unlawful discrimination or whistleblowing, data protection breaches or even defamation.

Best practice investigations are made up of the right investigation team, the precise scope and extent of the investigation is established from the outset, data processing risks are controlled, and witnesses are protected.

Key issues which should therefore be addressed at the outset of any investigation include the following:-

  • Consider the risks, potential outcomes and the overall objective
  • Define the issues to be investigated
  • Consider the appropriate investigator
  • Consider the appropriate process and the relevant witnesses
  • Consider the outcome and necessary remedial action

We look at each of these issues in turn below:

Consider the risk, potential outcomes and the overall objective
At the outset of any investigation process, and before committing to it, it is worth considering the overall objective. If there is no appetite to address the underlying concerns and take remedial action if necessary, then an investigation process may not be the appropriate way forward.  However, more recently, with an increase in regulation, general oversight and a shift in public opinion, failing to investigate and address misconduct concerns can potentially expose an employer to further risk. In cases involving criminal or regulatory proceedings some thought should also be given to the likely timing and scope of any criminal or regulatory investigation and how this might interact with the internal investigation process, specialist advice may be necessary.

Define the issues to be investigated
The issues to be investigated need to be carefully defined so as to determine the scope as precisely as possible.  The risk with widening out the scope of any investigation is that a determination of the core issues may become more difficult and time-consuming and the investigation process may be diverted from the key concerns. The scope of the investigation should, however, be kept under review and on occasion new issues may arise which mean the scope of the review may have to be adapted.

Consider the appropriate investigator
When appointing an investigator, the key decision to be made is whether an external investigator should be appointed or whether it is preferable to keep the investigation process internal.  When appointing an internal investigator, the background knowledge of the organisation and the personalities involved can sometimes prove helpful. The benefit of appointing an external investigator is that they may be seen to be more objective, although there is then often less scope to control the process. In cases where regulatory or criminal aspects may be involved, it will usually be advisable to consider appointing an independent law firm or an external investigator with specialist experience.

Consider the appropriate process and the relevant witnesses
A fair process should be followed, which is in line with the principles set out in the internal policies and procedures and also the ACAS Code of Practice on Disciplinary and Grievance Procedures and the guidance set out in the ACAS Guide on Conducting Workplace Investigations.  The potential witnesses should be considered and the order in which they should be interviewed.

It should be made clear to witnesses that they are under an ongoing duty to keep all information relevant to the investigation and their own statements strictly confidential and not to discuss this internally or externally. Any breaches of this duty of confidentiality could give rise to separate disciplinary action. Witnesses will also need to be assured that they are free to give evidence and that they not will be subject to any detrimental treatment or be penalised in any way for taking part in the investigation process.

It is worth bearing in mind that all documents created in the course of an investigation can be disclosable if litigation follows. Equally, if a subject access request is submitted to the employer these documents will be disclosable unless an exemption applies.  Legal advice privilege or litigation privilege which can cover certain documents and protect from disclosure are both unlikely to apply to the documents produced during an investigation process. Any advice you receive from your lawyers direct will however usually be covered by legal advice privilege. Care should therefore be exercised in how any evidence is collected and information presented.

Investigations will involve the handling of personal data of the employee who is under investigation and of witnesses and other related third parties. Care must be exercised to act in compliance with the GDPR rules on data privacy. By way of reminder, the GDPR outlines six principles that all employers must adhere to in relation to personal data, namely it must be: processed lawfully, fairly and in a transparent manner; collected only for specified, explicit and legitimate purposes adequate, relevant and limited to what is necessary; accurate and, where necessary, kept up to date; kept only as long as necessary and for the purpose that the employer had told the employee about kept securely

Consider the outcome and necessary remedial action
On the conclusion of any investigation process an investigation report will usually be issued. This can be a full report or a summary version, or both. Typically the subject of the investigation process would receive a copy of the investigation report. The final stage of the investigation process will be to determine what happens next. If the investigation has found that the concerns regarding the misconduct have substance, a decision will then have to be taken whether disciplinary action should follow. This disciplinary process will have to be conducted by an independent person not connected with the investigation process and it will be for them to make recommendations regarding any potential sanctions or dismissal.

Whilst an investigation process can be time-consuming and costly, one of the positive outcomes of a good internal investigation can be an opportunity for an employer to manage the associated risks and ascertain system or management failures and procedural risks which may have contributed to the original misconduct. The process provides an opportunity for employers to adapt their management systems and internal policies to try to reduce the risk of similar misconduct in future.

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