Investigating misconduct: the importance of getting it right

Anthony Drake, Senior Associate | Thursday 1 November 2007

Risk of reinstatement

The reinstatement of a worker to his job nearly two years after he was fired sends yet another reminder to employers of the need to get it absolutely right when it comes to investigating allegations of misconduct.

The risks around terminating employment have not escaped most employers by now - but some are not always aware of the possibility of reinstatement. Reinstatement, including on an interim basis, involves a whole set of risks and issues of its own as it is the primary remedy under the Employment Relations Act.

The Employment Court ruled last month against an employer in a case involving Mr Murphy, reinstating him 22 months after he was first dismissed after a physical altercation at work.

Mr Murphy and a work colleague were involved in two incidents which ultimately lead to a physical fight and Mr Fowler suffering cuts to his face and lip. Both men were dismissed after a company investigation.

Mr Murphy challenged his dismissal and claimed a personal grievance of unfair dismissal. The court considered whether or not the dismissal was unfair taking into account whether the company's actions were those of a fair and reasonable employer in the circumstances at the time of the dismissal. The investigation process was also closely examined by the court including the conclusions reached by the decision maker.

The court noted that there was some conflict in witness accounts of the incident and Mr Murphy's version. Despite the numerous meetings held, the court was not satisfied that the company had properly investigated the discrepancies in the accounts. It was also concerned that the company took into account prior behaviours which Mr Murphy was not asked to respond to.

The court concluded that the investigation was inadequate and aspects of it were unfair and in the circumstances the dismissal unjustifiable. The court also considered the issue of Mr Murphy's contribution to the situation which led to his claim for a personal grievance and whether to reduce the remedies that would otherwise have been awarded to him.

The court decided that Mr Murphy's contribution to his dismissal was modest, and assessed it at 20%. Mr Murphy was awarded lost remuneration and compensation of $4000. He also sought reinstatement. Despite the company's resistance, the court ordered reinstatement even though Mr Murphy had been away from the workplace for 22 months. Interestingly, the court commented that work practices and safety may have changed during Mr Murphy's absence and there might be a necessity for a re-orientation or re-training programme to reintegrate him into the workplace.

This case highlights the importance of an employer properly investigating allegations of misconduct or serious misconduct warranting disciplinary action. There are a number of important steps which an employer should follow to ensure that the investigation is done correctly and fairly. We outline these below.

Preparation

Check company procedures for disciplinary action

When beginning an investigation you should re-familiarise yourself with the company disciplinary procedures. You should also check whether there are any specific procedures outlined in the employee's own contract which must be followed.

If the company procedures specify particular steps to be taken, these should be followed, provided that they are consistent with the requirements of the Employment Relations Act 2000.

Check company personnel records

It is also good practice to check the employee's personnel file together with background information on the employee such as years of service, past work history, and previous warnings.

If the employee has had a number of exemplary years of service, it may have some bearing on the benefit of doubt to be given to the employee.

Assess whether the employee should be suspended pending an investigation

It may be necessary to suspend the employee pending an investigation, depending on the nature of the alleged misconduct. In some circumstances, the employee's continued presence in the workplace may mean that the investigation may not be fully effective. Issues of intimidation may arise or other employees may be reluctant to come forward when the employee concerned is present.

However, when considering to suspend an employee pending an investigation, the same rules of fairness apply. You must discuss your intention to suspend with the employee and give him/her the opportunity to put forward his/her views.

Make sure work rules are clear

Ensure that any work rules which relate to the conduct in question and which you wish to rely upon are well-known to your workforce and the particular employee. If the rule or company policy regarding enforcement of the rules has recently changed, check whether the employee was notified of the change. This may include finding out whether the employee attended any meetings held to discuss the change or whether the notice had been brought to the employee's attention.

Conducting the investigation

As with preparation, there are a number of steps which you should follow when conducting the investigation.

Ensure you have all relevant facts

It is important to ensure that all relevant facts are obtained by questioning all the people involved. Check that no one else could be involved or associated with the matter. For example where there is conflict or disagreement in the accounts provided by two employees involved, the employer should investigate the possibility of other "eye witnesses".

Make your own enquiries

Don't rely on what other people say they were told - direct evidence is best so be sure to make your own enquiries. It is important that the person involved in making the final decision to dismiss or discipline the employee is involved in the investigation process. Otherwise they may not have a "reasonable belief" of misconduct warranting the disciplinary action.

Where the police are involved, an employer is still required to carry out its own full investigation of events. In one case, involving the theft of product from the company's factory, the court found that the employer had failed to carry out a full investigation of the events surrounding the theft. It said that the failure to interview the suspect's wife, and the heavy reliance placed upon police information, meant the investigation was inadequate and therefore unfair.

Assess the credibility of witnesses

Assess the credibility of witnesses, particularly in relation to their personal relationships with the employee in question. They may be driven by jealously, a genuine dislike of the employee, or may also be in collusion with that employee. Establish whether they have any motive for acting in the way they have.

Examine all possible explanations

Make sure that you examine all possible explanations, to ensure that you have investigated all relevant matters. This may mean, in some circumstances, that you need to "read between the lines" and consider possible explanations which might not have been expressly stated by the employee.

The court held that where an employer is alerted to discrepancies in the accounts of witnesses, the employer is under an obligation to properly investigate the discrepancies.

Providing evidence to support allegations

Where an employee is accused of serious misconduct which may potentially result in dismissal, he or she is entitled to know not only of the allegations, but the evidence in support of them that the employer will consider. This means that conclusions, including tentative ones, need to be articulated to the employee.

This particular requirement was confirmed in the recent high profile case between a doctor and the Auckland District Health Board and is outlined as part of the obligations of good faith in the Employment Relations Act 2000.

After the investigation

With the investigation complete, there are a number of factors you should take into account before meeting with the employee concerned.

Check for instances of similar offences

Go back and check company records and practices for similar offences. This is to ensure that there will be no disparity in the treatment of employees.

It is important to identify those features which are different and may distinguish the conduct from any previous similar offence.

Check whether the action is a collective one

Determine whether any industrial relations issue or dispute is involved with the employee's action which may affect your decision.

Previous warnings

Check any previous warnings again and confirm whether they were justified. Ensure that sufficient time has elapsed since the last warning, so that the employee has had time to improve. Finally, ensure that any warnings relied upon have not expired.

Every step of the way

The key message that is again being delivered in Mr Murphy's case is the need for meticulous practice by employers every step of the way when dealing with misconduct allegations. Miss a single step, or not deal with the process with rigour, and there's a heightened chance that best intentions will be undone by employment rulings.

For further information, please contact your usual Bell Gully adviser or:

AUCKLAND

Rob Towner
Partner

WELLINGTON

Andrew Scott-Howman
Partner

Maria Berryman
Senior Associate

Matt McGoldrick
Solicitor