Employment investigations – when do you need an independent investigator?

The last few years have seen a marked increase in the number of organisations engaging independent investigators to carry out external employment investigations.

But is an independent investigation always the best option, and how will you know when it is?

There are certainly a number of benefits to having a complaint externally investigated. An independent investigator is free of potential bias, is normally experienced in investigating complex issues, and can review the information gathered without internal influence or pre-determination as to the outcome.

Engaging an external investigator can also be highly symbolic of the seriousness and willingness of an employer to investigate and address a complaint and be subject to independent findings.

However, investigations can be expensive, take several months, and be highly disruptive to the workplace and to the culture. In some cases, external investigations can aggravate division in the workplace and make employment relationships almost impossible to repair.

Sometimes, an internal investigation with support from the organisation’s lawyer is the better option. 

When should you consider an independent investigator? 
Typically, independent investigations are appropriate where there are serious or complex complaints made. Often, these complaints involve allegations of: 

• bullying
• sexual or racial harassment
• dishonesty/fraud, or allegations involving a high level of public interest or scrutiny.

Where serious allegations are made against senior managers in the organisation, it may also be beneficial to engage an independent investigator.

Workplace investigations must strike a balance between the employer’s interests and legislation protecting employees, says an expert.

Choosing the right investigator

There has been a rise in those providing investigation services, which can make it more difficult to identify a suitable investigator. Selecting the right investigator is important however, as the investigation process and report need to be thorough and fair. An experienced and skilled investigator can minimise the disruption to the workplace by running a fair and thorough process, and can ensure that the investigation report is a clear and well-reasoned document that the parties can later rely on to help make decisions about the workplace.

External investigators should be: 

• experienced in carrying out complex investigations
• suitably qualified
• independent of the parties involved, and
• available to commence the investigation promptly.

Those hired to act as independent employment investigators are acting as private investigators under section 5 of the Private Security Personnel and Private Investigators Act 2010. Accordingly, external workplace investigators must either be licensed, or be a lawyer holding a practising certificate from the New Zealand Law Society.

Engaging an investigator who is not suitably qualified can undermine the credibility and reliability of the investigator’s final report.

Employees under investigation should be told of the allegations and given reasonable time to respond, says an employment law specialist.

Investigation terms of reference

The terms of reference (ToR) for an investigation is a key document that sets out the complaint processes to follow and expected outcomes from the outset.

The ToR identifies the scope of the investigation — the allegations that are to be investigated (and in some cases the allegations that are not to be investigated). It also sets out the process the investigator will follow, including who will have access to the information gathered and who will make decisions about the contents of the investigation report.

We recommend organisations seek legal advice on the terms of reference. An experienced independent investigator may also be able to make some suggestions. 

It is also helpful to engage with the party making the complaint, as well as those facing allegations on the investigation terms of reference, and to provide an opportunity for comment and input before the terms of reference are finalised.

Clear ToRs are critical to allowing the investigator and the parties involved to understand the allegations, the scope of the investigation, and how the employer wishes the findings to be presented. Having defined allegations is key so that the scope of the investigation is clearly set out. 

Top employer investigation errors include not planning ahead and not protecting the privacy and confidentiality of those involved, according to an employment lawyer.

Reporting on investigation findings and next steps
At the end of the investigation process, an external investigator will produce a report setting out their findings. The findings should be clearly linked to the evidence that has been gathered. Sometimes, investigators will also outline recommendations based on their investigation if this is required by the ToR. Such recommendations can be extremely useful for the purposes of organisational development and can set a clear path forward for the improvement of the organisation.

The decision about what action, if any, to take following receipt of an investigation report remains with the employer. The employer retains the onus of showing that what it did, and how it acted, and what a fair and reasonable employer could have done in all the circumstances.

No two investigations are the same and there is no “one size fits all” way to approaching investigations. Each investigation has its own complexities and challenges and having a suitable investigator for your particular situation is key to a successful employment investigation. 

Sarah Townsend is an employment and health and safety lawyer with Duncan Cotterill, an employment law firm experienced in carrying out external investigations across a wide range of industries and sectors, in its Christchurch office.