Waving goodbye to legal privilege over a workplace investigation report

Legal professional privilege protects a confidential communication between a lawyer and a client if that document has been prepared for the sole or dominant purpose of the client obtaining advice.  Privilege allows the client not to disclose the document's content, so long as they keep that content confidential.  To obtain, or maintain, this protection, the document must be both:

• confidential; and
• prepared for the sole or dominant purpose of the client obtaining advice.

Any doubt about the dominant purpose for which a document was created may mean that privilege does not apply.  Equally, any act or statement that reveals (or that is otherwise inconsistent with the maintenance of confidentiality over) the content of a document will very likely waive privilege, and once waived, it cannot be restored.  In the absence of privilege, or it has been waived, the document in question must be produced, as the employer found out in this decision.

When is a workplace investigation privileged?

At its core, a workplace investigation is a fact-finding process in which an investigator decides, in response to allegations:

• what is substantiated (based on a positive finding, on the evidence, that an alleged event did happen);
• what is unsubstantiated (based on a positive finding, on the evidence, that an alleged event did not happen); and
• what is not able to be substantiated (because the investigator cannot make a call either way).

An employer might instruct its lawyers to commission an investigation under legal privilege, to help the lawyers understand the facts before offering their advice.  Typically, once the investigation is complete, the investigator makes findings of fact, then hands the report containing those findings to the lawyers.  The lawyers then advise the decision maker within the employer who, based on the factual findings (and potentially, the legal advice), decides what disciplinary or other response is appropriate in all the circumstances.  Ideally, the investigative phase closes before the employer moves into a disciplinary phase, no matter how formal or informal the investigation.

Before an investigation report is privileged, it must be a confidential document that was prepared for the sole or dominant purpose of obtaining legal advice.

If legal privilege applies, the investigation report will not need to be disclosed in legal proceedings, but only so long as the employer maintains the confidentiality of the content of the report, so that privilege is maintained.  If legal privilege is waived by the actions of the client acting inconsistently with the maintenance of privilege, the report may need to be disclosed.

What happened in this case

When a client reported feeling 'uncomfortable and unwelcome' from an interaction with one of the employer's employees, the employer conducted an investigation.  After taking some initial investigatory steps, including interviewing witnesses, the employer invited the employee to an investigation interview.  The employee refused to meet, saying the process was inconsistent with the relevant enterprise agreement.

The employer then asked its lawyers to effectively re-start the investigation process.  The lawyers engaged an external investigator to investigate so they could give the employer legal advice, showing at least the lawyers' intention to engage the investigator for the sole or dominant purpose of providing the employer with legal advice.

Although the employee sought to challenge various aspects of the external investigation in the FWC under the dispute resolution provisions of the enterprise agreement, those processes did not prevent the investigator completing his report and giving it to the lawyers.

When the employer wrote to the employee (via his union representative) about the investigation findings, it simultaneously:

• summarised the investigation outcomes, by setting out in writing:
  • each allegation;
  • whether it was substantiated, partially substantiated or unsubstantiated;
  • and the evidence relied upon to substantiate each finding; and

• gave the employee a written warning and placed the employee on a Performance Improvement Plan (PIP) (both of which are disciplinary actions), in light of the substantiated allegations.

Six months later, the employer dismissed the employee, citing a failure to show sufficient improvement and refusal or failure to engage with the PIP.  The employee claimed unfair dismissal and sought access to the investigation report.

Was the report privileged?

The FWC found that the investigation report was created for multiple purposes, and that it could be privileged only if it was created for the dominant purpose of obtaining legal advice (rather than, for example, to find out what happened, whether the employee had breached a policy, or what disciplinary response was appropriate).  It also found that the Commission must look at all of the circumstances, and that a statement by lawyers about what they had in mind when engaging an investigator (although relevant) cannot decide the matter.

After considering all of the evidence before it, the FWC was not convinced that the report had been created for the dominant purpose of the employer obtaining legal advice, pointing (amongst other things) to:

• the employer's email to the union saying it had engaged an external investigator 'to finalise the investigation on [its] behalf'; and
• a dearth of evidence from employer witnesses, attesting directly that the employer had commissioned the report for the sole or dominant purpose of obtaining legal advice.

The FWC determined that the dominant purpose of the investigation was to determine whether the employee breached its Code of Conduct and to discipline him if he had, in line with its policies; not to obtain legal advice.  The claim of privilege failed.  The Commission went on to consider (in case it was wrong about privilege) whether the employer had waived privilege; that is, whether its actions were inconsistent with keeping the contents of the report confidential.

Was privilege waived?

Two aspects of the facts here led to the FWC finding that (even if it existed here) privilege had been waived.

First, instead of keeping these matters confidential, as required to preserve a claim of privilege, the employer had expressly identified the investigator's factual findings and the evidence on which the investigator made relevant findings (i.e. the recollection of the complainant, any witness/es or the employee).

Second, the FWC found that the employer did not share that information to give the employee an opportunity to respond to findings, a proposed disciplinary sanction or proposed corrective outcome, before it decided next steps (an established exemption to waiver).  Instead, it informed the employee of the disciplinary outcome it had already chosen without giving the employee an opportunity for input.

Noting the employer's submission that the purpose of sharing the findings was to contextualise the disciplinary action, the FWC found that by also sharing information about the reasoning for the findings, in the absence of a 'show cause' process, the employer had waived privilege.  The FWC held:

The disclosure of the particular evidentiary source of [the investigator's] findings in respect of the substantiated and partially substantiated allegations expose [the investigator's] reasoning beyond that which was necessary for [the employer] to explain to [the employee] the basis upon which he was placed on a PIP directed at “supporting [the employee] in engaging in respectful communications and interactions with clients”.

The FWC ordered the employer to hand over the investigation report.

Takeaways

Any employer seeking to cover a workplace investigation report with legal privilege would be well-advised to ensure that its key purpose for commissioning the report is clear, and clearly recorded.

It would also, to help maintain any claim of privilege over an investigation report:

• at all times, treat the investigation report and findings with the utmost confidentiality;
• consider carefully whether, why, and to what extent, it needs to share any information with employees about report outcomes, and if so, how much information needs to be shared;
• consider putting its concerns to an employee arising from investigation findings, together with its proposed disciplinary outcome, through a show cause process, before deciding what sanction to impose in response to a finding of misconduct; and
• limit what and how much information about processes and bases for findings it shares with the employee during that process.

Sharing too much information about bases for findings might also waive privilege, requiring the employer to share the entire report.

Contact us

If you have any queries about the process you should follow in investigating or managing any particular concern about workplace conduct or behaviour, please contact a member of our Employment, Workplace Relations and Safety Team.

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