When Workplace Investigations Go Wrong

An organisation or business may need to undertake a workplace investigation when dealing with allegations of misconduct, such as claims of discrimination, harassment, bullying or a conflict of interest. Such investigations can be undertaken internally or outsourced to an external investigator. When undertaken properly, workplace investigations can be an effective method to determine whether misconduct has occurred and ensure that appropriate and proportionate action is taken in response.

However, carrying out workplace investigations can be complicated and, at times, prone to error – even if an external investigator is engaged. The recent decision of Kildey and Ors v Technical and Further Education Commission [2024] FWC 383 is a timely reminder of the consequences which may flow when a workplace investigation goes wrong.

Background to the Case

Mr Kildey, Ms Kerr and Mr Browne (Applicants) were all employed by Technical and Further Education Commission (TAFE) until they were dismissed in June 2023 based on the findings of a workplace investigation into alleged conflicts of interest. The Applicants lodged unfair dismissal proceedings seeking reinstatement.

Relevantly, Ms Kerr and Mr Browne were de facto partners. Mr Kildey is the nephew of Ms Kerr.

TAFE commenced a workplace investigation following a complaint in February 2021, alleging that Mr Browne was involved in improperly recruiting and managing Mr Kildey’s employment (who was the nephew of his de facto partner, Ms Kerr). Following some preliminary enquiries, additional concerns were raised that Ms Kerr was involved in improperly assisting to hire Mr Kildey’s former partner and Mr Browne’s daughter at TAFE. TAFE engaged an external investigator to conduct an investigation into the complaint in April 2021.

It was not until September 2021 that the Applicants were first informed of the investigation and suspended from employment. In breach of TAFE’s policies, no risk assessment was conducted before suspending the three employees.

The Applicants were asked to provide initial responses to the allegations in October 2021, however, when the investigator conducted witness interviews between October 2021 and August 2022, none of the Applicants were formally interviewed.

The final report was provided to TAFE on 6 September 2022. The independent investigation relevantly found that each Applicant failed to complete a conflict of interest form declaring their personal relationships in relation to internal recruiting, management and hiring practices at TAFE. This was found to be inconsistent with the TAFE Code of Conduct and applicable legislation.

All three employees were eventually dismissed in June 2023 – more than two years after the external lawyers were initially engaged to carry out the investigation.

The Fair Work Commission’s Decision

Deputy President Slevin largely rejected the investigation’s findings, and found broader problems with the procedure of the investigation and dismissals which followed.

The Deputy President concluded that whilst Ms Kerr and Mr Browne had breached TAFE’s conflict of interest policy, in all the circumstances the breaches were not sufficient to justify dismissal. Mr Kildey was found not to have breached the conflict of interest policy at all.

In his decision, the Deputy President emphasised the prolonged investigation process, the failure to interview the Applicants and the inadequate information and support provided to them during the investigation. He said that the Applicants were deprived of a real opportunity to accurately respond and defend themselves against the allegations levelled against them and, as such, the integrity of the investigation report was undermined, and procedural fairness not afforded to the Applicants.

Further, the Deputy President found that when provided with the investigation report, TAFE failed to properly scrutinise its findings, and dismissed the Applicants without due consideration. The Deputy President commented that the decision maker should have critically reviewed the report and formed their own opinion as to the appropriate action at the time.

The lack of a valid reason for the dismissals and the denial of procedural fairness throughout the investigation rendered the dismissals ‘harsh, unjust and unreasonable’. Reinstatement with lost pay was ordered as an appropriate remedy for the Applicants.

What do Employers Need to be Aware of as a Result of This Decision?

In all cases, investigations must be carried fairly, specifically it is important to:

• Conduct investigations promptly and in line with organisational policies and procedures;
• Interview all relevant parties and gather all relevant evidence; and
• Provide updates and support to the employees affected by investigations.

Further, upon receipt of an investigation report from an external investigator (if engaged), the employer should critically examine the report’s findings and recommendations to ensure they are justified, before next steps are taken.

What is Next?

It is crucial that workplace investigations are carried out in a procedurally fair manner, and that all relevant circumstances are taken into account when taking action following an investigation. HR Legal has extensive expertise and experience in assisting organisations to conduct workplace investigations.

If you are unsure whether an investigation is necessary or worried about carrying out the process, HR Legal is here to provide you with the comfort that your workplace issue will be managed in a compliant and professional manner.

Case reference: Kildey and Ors v Technical and Further Education Commission [2024]