How far does an employment investigation need to go?

When investigating misconduct allegations, it is well-established that an employer is not obliged to undertake a detailed criminal investigation or quasi-judicial process.  But how far does an employer need to go in order to be fair? Many employers are having difficulty satisfying the standard being set by the employment institutions, even after quite involved investigation processes.

In this context, the Court of Appeal recently granted an employer leave to appeal a decision of the Employment Court that ordered the reinstatement of a pilot after an investigation into allegations of sexual harassment: A Limited v H [2015] NZCA 99. The Court of Appeal indicated in its leave decision that the quality of the investigation demanded of the employer, by the Employment Court, was too high.

The crux of the allegation in the case concerned physical contact, in a private setting, which the pilot claimed was accidental. As part of the employer’s investigation it interviewed the employee complainant, as well as all other witnesses (none of whom were present when that particular event occurred). As will often be the case, recollections differed. The Employment Court decided that the efforts made by the employer to clarify the inconsistent accounts were insufficient. In particular, while the pilot’s statements in response to the allegations were tested with him “in a penetrating, and at times, a relentless fashion”, the complainant’s statements were essentially accepted at face value.  Inconsistencies in her accounts of events, and other possibilities, were not put to her.  Also, where the accounts differed, the most incriminating version was used.  The Court found that the company’s investigator did not approach his task in a fair way, because he tested the pilot’s account vigorously but did not approach the complainant employee’s evidence in the same manner.

The requirements to conduct an even-handed investigation, and to put the accounts of witnesses to the respondent employee, are not surprising.  But it need not be to the same level as a criminal investigation, in which the Crown must be satisfied (and prove) beyond reasonable doubt what was actually said and done, and with what motive – which requires that type of penetrating investigation. An employer’s task is to determine, acting as a fair and reasonable employer, that it is more probable than not that the alleged misconduct occurred. While an employer’s investigation must reflect their resources and the seriousness of the allegation, a higher standard than this would not be within the reach or capability of most employers.

In this case, the Court of Appeal considered that it was reasonably arguable that the Employment Court had imposed on the employer a standard of inquiry that was too stringent and which bordered on the equivalent of a judicial investigation. It therefore granted the employer leave to appeal the question of whether the Employment Court’s approach to determining whether the company had “sufficiently investigated” the allegations was correct in law.

This may be an opportunity for the Court of Appeal to provide some guidance on the degree of investigation required of an employer before it can make misconduct findings. I will keep you posted.

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