Neil Sands
Recent court decisions that clarify an employer’s obligations and responsibilities when dealing with workplace problems mean bosses must step up and conduct their own inquiries, rather than simply “passing the buck” to external investigators, experts have told TLANZ’s Burning Issues conference.
The conference in Auckland earlier this month examined a range of topic relating to employment law, including the rise in external workplace investigations when things go wrong.
As Employment Court Chief Judge Christina Inglis noted in her keynote address, the “legalisation” of employment issues had resulted in an “explosion of independent employment investigators, who now routinely assist employers with their disciplinary and other processes”.
But employment law specialist Margaret Robins said it could be difficult for employers to know when an external investigation was appropriate or when to handle a matter in-house.
Margaret Robins
Robins, who operates Epsom-based Workplace Law, said the test for when to appoint an external investigator was contained in s103 of the Employment Relations Act.
“The authority or court will ask, ‘could a fair, reasonable employer have commenced an investigation and, given the employer’s resources, was the employer’s choice of an in-house or external investigator the choice that a fair and reasonable employer could have made?” she said.
“If the employer decides an investigation is appropriate, who should conduct it? The case law suggests that the employer should look in-house first.”
‘Tightrope assignment’
Robins said there were some circumstances when an in-house investigation was not suitable, such as when the issue concerns a senior member of the organisation or the issues are serious and complex.
But she said even when an external investigation was justified, it was only the first part of a four-step process involving the employer:
Step 1 – whether the employer has sufficiently investigated the allegations
Step 2 – whether the employer raised its concerns with the employee
Step 3 – whether the employer gave the employee a reasonable opportunity to respond
Step 4 – whether the employer genuinely considered the employee’s explanation before taking action
“So, the investigator takes the first step and the employer is responsible for the following three steps,” Robins said.
To demonstrate the requirements employers must meet, she cited JSC v Landcorp Farming (T/A Pāmu), a March 2024 determination of the Employment Relations Authority.
The case concerned JSC, a senior manager, who allegedly made a sexually inappropriate comment to an employee, prompting an external investigation that found he had sexually harassed the employee, eventually leading to his dismissal.
However, the Authority made it clear that the employer could not simply accept the external investigator’s conclusions.
Robins outlined the extensive steps the employer’s decision-maker took after receiving the external report.
The relevant person read the report more than once. He consulted HR, he read the interview transcripts, worked through the issues on a whiteboard, then reviewed JSC’s feedback on the draft report.
Following that, he looked at text messages between the complainant and JSC, then examined how the investigator had tested the complainant’s credibility. After all these steps, he concluded, giving reasons, that he agreed with the investigator’s finding of sexual harassment.
“Employers may be left wondering what lengths they have to go to test the investigator’s analysis and findings,” Robins said.
“What, in practice, is the difference between the employer conducting a truly independent inquiry and re-running the investigator’s investigation? It feels like a tightrope assignment.”
But she said one thing was clear: “The buck now well and truly stops with the employer”
‘Short shrift’
Robins said the courts had also provided decisive guidance on the need for employers who say they follow tikanga principles to honour the commitment, regardless of whether the employee being investigated is Māori.
In a paper presented to the conference, she added: “At present, the legal obligation to apply tikanga is limited to employers who have expressed a commitment to tikanga principles, but the obligation is likely to be interpreted more widely as the case law develops.”
The courts had indicated that employers who express a commitment to tikanga must properly incorporate Māori customary law into workplace investigations.
Robins pointed to the 2023 decision in GF v Comptroller of the New Zealand Customs Service [2023] NZEmpC 101, which concerned a Customs officer who was terminated for refusing the covid-19 vaccine during the pandemic.
The Employment Court found that because Customs operates under the Public Service Act, it had heightened tikanga obligations, even though GF was not Māori.
It found that employees did not need to ask for tikanga to apply and placed the onus for understanding Māori customary law on the employer.
“It’s no excuse for the employer to say, ‘we’re on a journey to understand tikanga’. Both the court and the authority just gave that argument very short shrift,” Robins said.
For more details on what triggers an external workplace investigation and how tikanga applies, read Robins’ full Burning Issues paper here.