Workplace investigations can be an important and useful tool. When used in the right situations and conducted appropriately a workplace investigation can resolve a range of issues including bullying and harassment complaints. A recent case, however, has highlighted the ramifications that may occur when an investigation is not conducted properly.
In Romero v Farstad Shipping (Indian Pacific) Pty Ltd a shipping officer sent an email to her superiors alleging bullying by her ship’s captain during a 12 day sea voyage. In addition to Romero’s bullying allegations, the captain separately raised issues of competency in relation to Romero.
The employer, Farstad, proceeded to investigate the issues although failed to follow their own internal policy and the processes outlined within in. Specifically, Romero’s bullying complaint was investigated as a formal complaint although it had not been formally lodged as a complaint and this had not been the intention of Romero’s email. Added to this, the captain was interviewed before Romero (the complainant) about the alleged bullying and the issues of competency were rolled into, and ultimately became the focus of, the investigation. Complicating matters further, inadequate records were kept of the investigation.
On appeal, the Full Court held that the employer’s policies were contractually binding and that the employer had breached its own Workplace Harassment and Discrimination Policy. Put simply, the employer did not respond to the employee’s complaint as it was bound to do by the terms of its own policy. The questions that will now be considered in a separate hearing, following the result of this appeal, are whether the employer has in effect repudiated (or rejected) the contract and if so, what damages should be awarded.
Lessons for Employers
a) Role of Policies
Employers should consider carefully whether they want their workplace policies to be contractually binding. If a policy is incorporated as part of an employee’s employment contract it creates obligations on both the employee and the employer to observe that policy and the procedures set out within it. Connected to this is the consideration of how prescriptive a good policy should be in order to provide sufficient guidance but also enough flexibility around how matters are to be handled.
b) Investigation Processes
Workplace investigations are an increasingly common method of handling workplace grievances or complaints particularly where there are multiple parties involved or the complaints are relatively serious in nature. However, to be effective an investigation needs to observe the correct processes and be used in the right situation. For example, the issues in this case that arose around the employee’s performance should not have formed any part of the investigation of the bullying complaint.
 FCAFC 177 (22 December 2014).