Workplace Investigations – Getting them Right

January, 2015

Complaints that arise in workplaces can often lead to litigation. In areas such as unlawful discrimination, and sexual and workplace harassment in particular, investigations may be required. These investigations may be conducted either internally, or with the assistance of a third party, such as a lawyer.

These investigations need to be handled sensitively and appropriately. They should also be carried out consistently with the approach mandated in any relevant workplace policy.

A Full Court of the Federal Court of Australia in the matter of Romero v Farstad Shipping (Indian Pacific), held that a failure by an employer to follow its own policy relating to workplace investigations, led to a breach of its employee’s employment contract.

The employee in question sent an email to her employer complaining about her treatment at the hands of a ship’s captain she had been serving under. Although the email did not constitute either a formal or an informal complaint under the employer’s relevant policy, the employer treated the email as a formal complaint. At the same time, the ship’s captain also raised allegations about the employee’s competency and temperament.

The employer then commenced what purported to be an investigation in accordance with its policy. The nature of the investigation wrongly focused on the employee’s competency, capacity and temperament, rather than the employee’s initial concerns.

The employer also failed to follow the processes mandated by the applicable enterprise agreement in investigating the employee.

The employee initially argued that she had been unlawfully discriminated against on the basis of her sex in that she had been treated less favourably than a male employee would have in similar circumstances. This complaint failed, however the employee was successful in arguing that the relevant workplace policy was breached by the manner of her employer’s investigation. This breach led to her suffering loss and damage.

The employer argued that the policy was merely “directive” and not a contractual term.

In finding that the policy actually constituted a contractual term, the court found:

The language used in this instance, taking the Policy as a whole, makes it clear that there is an expectation by the company that there will be mutual obligations. In return for the employee complying with the terms of the Policy, the employer gives a responsive assurance that complaints for non-compliance by other employees will be treated in a certain way”.

In terms of the way in which the investigation was conducted, the Court noted:

“(The employer) should have dealt with the two issues (i.e. the employee’s complaint, and the complaint by the captain about her) separately on deciding (the employee) had a raised a formal complaint, and should have dealt with it in accordance with the Policy, which it did not”.


In this case, one wonders whether the result would have been different had:

  1.  the employee’s letter of appointment specifically referred to the employer’s policies as being directive in nature, and not mutually enforceable terms; and
  2. the employer engaged a third party such as a lawyer to undertake the investigations.

The decision highlights the need for employers to take care not only in undertaking an investigation process, but also in the way that the policies are applied to and incorporated into the employment relationship.

Contact Mills Oakley

For more information, please contact:

Ross Levin | Partner
T: +61 3 9605 0070

Malcolm Davis | Partner
T: +61 2 8035 7932

Adam Lunn | Partner
T: +61 3 9605 0868

Lisa Anaf | Partner
T: +61 3 9605 0857


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