“Exemplary” investigation course of nonetheless ends in profitable employees compensation declare

An employer failed to rely on reasonable management action to defend itself against a claim for compensation because the investigation was deemed unfair, despite being called “exemplary” by the member who chaired the hearing.

The decision is certainly worrying for employers, as instructing an employee to be investigated to keep the contents of an investigation confidential and not to speak to other employees was viewed as an unfair and therefore inappropriate management measure. The member noted that this had prevented the worker from receiving factual information that might have helped him to mitigate allegations of racist language against him. In fact, the employee was denied the opportunity to conduct his own investigation or to summon other witnesses in support of his defense.


Below we’ve put together a brief background of the facts:

  • On May 24, 2017, the employee had a discussion with several work colleagues about the bombing in the Manchester Arena.
  • It was alleged that the agent made a number of derogatory remarks regarding Islam during the interview, including:
    • “You can’t have fleas without a dog”;
    • “If you get rid of Islam, you get rid of terrorists”; and
    • In response to a statement by another employee that Muslims are good people, the employee said that “it is not genocide if it is Muslim”.
  • After the employer was informed of the allegations, he opened a formal investigation. The employee was instructed to keep the investigation confidential and not to speak to other employees (Direction of confidentiality).
  • At the hearing, the member described the employer’s investigation procedure as “exemplary”. Nonetheless, the member concluded that the investigation was not fair and did not constitute an appropriate management measure as the Confidentiality Directorate denied the employee the opportunity to raise their case “at the highest level”.

The central theses

This decision is important because it is common practice for employers to instruct workers involved in an investigation to keep the contents of the investigation confidential. This is usually done to avoid contamination of evidence and intimidation of witnesses.

The main lessons learned from this decision are:

  • a unified approach to investigations can create unintended risks for employers; and
  • There only needs to be a flaw in the investigation process for an employee to successfully argue that the investigation process was not an “appropriate management action” and is therefore eligible for compensation.

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