What to do when your employee is under criminal investigation?

When an employee is subject to a criminal investigation, HR professionals need to avoid any knee-jerk reactions to avoid potential legal recourse.

The role of HR in these circumstances will hinge greatly on whether the alleged conduct is connected to the employee’s work and could impact on their work, says Lucienne Gleeson, Associate with PCC Lawyers.

“Some common examples of criminal investigations that can arise in the workplace include fraud and embezzlement, stalking/ intimidation of co-workers, illegal drug use, serious driving offences and stealing,” Gleeson told HC Online.

If HR has established that the employee is under criminal investigation for a work related issue, Gleeson says they should take the following immediate steps:

1. Contact the relevant law enforcement agency to find out as much information as possible. The agency may need the employer’s cooperation to find out more details so this can be a mutually beneficial communication.
2. Consider whether it would be appropriate to suspend the employee on full pay. This will depend on the severity of the allegations and whether this could affect them carrying out their role.
3. Consider an internal investigation, and in particular interviewing the employee involved and any relevant co-workers. The employee must still follow lawful and reasonable directions of their employer and so must attend an interview if so required. The criminal investigation and the internal company investigation need to be treated entirely separately. If the employee is found during this investigation to have committed serious misconduct, they can be terminated without needing to await the outcome of a criminal trial. If the employee has otherwise performed poorly or against company policy, they can be disciplined appropriately. 
4. Review any potential relevant evidence including emails, letters, finance records, CCTV, computer history, telephone logs and so on. This is not only an important step in an internal investigation but could provide some relevant information to provide to law enforcement agencies.

However, if the investigation is non-work related and will not impact on the person being able to continue carrying out their role, then none of the above apply, Gleeson says.

“The only real step that should be taken is to have a discreet discussion with the employee about support they may require in the workplace and any potential time off work to attend court and meet with their lawyer,” she says.

Employers need to ensure they follow procedural fairness and comply with the terms of the employment contract when considering if the staff member’s employment should be terminated.

Otherwise, a hefty damages claim from unfair dismissal or a breach of contract could be raised against the company if an employee is dismissed due to being subject to a criminal investigation, without any further consideration.

“A company could end up with an employee being reinstated, or awarded significant compensation, if they rush to sack an employee in this situation,” she says.

In the case of Deeth v Milly Hill Pty LTd [2015] FWC 6422, an apprentice butcher was fired by his employer after he was charged with being an accessory to murder.

A court found he was unfairly dismissed as his employer didn’t carry out a workplace investigation.

While it was found that there was a valid reason for termination, it was ultimately held that it was a harsh and unjust dismissal as the employee was given no opportunity to respond and given no notice of termination.

“What can be gleaned from this case is that an employer should not rush into making a decision,” Gleeson says.

“They need to carefully consider whether the alleged conduct is connected to the work carried out and could impact upon the work.”

For example, it would be unlikely that an allegation of drink driving would impact upon a person carrying out a purely office based role, she says, however such an allegation could severely impact on someone carrying out a role that includes driving such as a courier or bus driver.

Gleeson reminds HR that a full investigation must be carried out, giving the employee an opportunity to put forward their side of events and to scrutinise the facts, before any decision is made.

If HR feels that it’s not appropriate for the employee to remain in the workplace during the course of the investigation into a work related matter that will be internally investigated, they could place the employee on special leave with full pay.

“Alternatively, even if it is not work related, the employee may voluntarily agree to such an arrangement,” Gleeson says.

However, she says companies need to be aware that criminal investigations can continue for many months and that the matter will not be listed for a full hearing for a significant period of time.

“It is therefore not a good idea to plan on having the person on full paid leave until they are either found guilty or not guilty, as this could result in significant lost money as well as having to hold open the person’s position.”

In a workplace where employees require a working with children check HR need to be particularly vigilant about any investigation or allegations into any sort of inappropriate relationships with child.

“Importantly, employers are not required to find that a criminal offence occurred to dismiss an employee,” Gleeson says.

“Rather, they are required to find that there has been serious misconduct committed in the course of work, or that the conduct outside of work will impact so much on work as to justify termination.”