Investigations Into Employee Misconduct – Does Legal Professional Privilege Apply?

The Fair Work Commission (FWC) recently considered whether documents produced by an external workplace investigator were protected by legal privilege and, if so, whether privilege had been waived by the employer over the investigator’s report.

In the case of James Crafti v Cohealth Limited FWC 3285 the employer received a complaint against Mr Crafti, who was employed as a community health worker made by a client.

Before taking disciplinary action, Cohealth engaged a barrister as a workplace investigator. The barrister was formally instructed by the employer’s lawyers and Cohealth later claimed the investigator’s report was protected by legal professional privilege.

Legal Privilege

Legal professional privilege protects confidential communications made for the dominant purpose of obtaining legal advice or litigation advice. The party claiming privilege has the onus of proving privilege exists.

Legal privilege can be waived if confidentiality in the communication is lost. A party claiming that privilege has been waived must establish a waiver.

Legal Privilege – Dominant Purpose Test

The FWC found that there were multiple purposes for undertaking the investigation.

1. A disciplinary purpose, namely to determine whether the employee had breached the Code of Conduct and discipline him if he had done so. The organisation’s procedures allowed for an external investigation and the decision to use one was influenced by the seriousness of the allegations and the employee’s concerns about an internal investigation.  The FWC found that the ongoing disciplinary process was one purpose for appointing an external investigator.
2. A legal advice purpose - the external investigator was instructed by the employer’s lawyers for the purpose of providing legal advice.

Having identified multiple purposes for the appointment of the external investigator (disciplinary and legal advice) the FWC considered the dominant purpose of the appointment. To attract legal professional privilege, obtaining legal advice must be the dominant purpose for the report.

The FWC held that the dominant purpose of the report was disciplinary, not legal advice. As a result, the investigation report was not protected by legal professional privilege and Cohealth was ordered to produce the report and related materials to Mr Crafti.

Further Cohealth’s conduct, including disclosing substantial details of the report to Mr Crafti to inform him of the outcome of the investigation, eroded any privilege claim and demonstrated an implied waiver of privilege.

The FWC found that even if privilege had attached to the report it had been waived by the employer due to the extent of the disclosure to the employee, which was inconsistent with the maintenance of confidentiality.

The case is a clear reminder that legal professional privilege cannot be assumed even if lawyers instruct the workplace investigator.

For privilege to apply, legal advice must be the dominant purpose and confidentiality must be preserved over the documents produced.

Key Tips for Employers

1. Be clear on the purpose of the investigation as this will affect whether the resulting report is protected by legal professional privilege. If the dominant purpose of the investigation is disciplinary (and not legal advice), privilege will not apply.
2. Be careful with communications. Disclosing detailed evidence or investigative reasoning may waive privilege. Letters should only disclose what is necessary, without extensive details of evidence or reasoning.
3. As with all employment matters, procedural fairness is vital. Ensure that procedural fairness applies to all workplace investigations.

Employers should regularly review misconduct, grievance and investigation procedures to ensure they reflect procedural fairness.

If your business needs tailored guidance on managing investigations or issues of legal privilege, please contact Heather Richardson.