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Norman Waterhouse

Workplace investigations deemed privileged when conducted by legal representatives

The recent decision of Peter Tainsh and Markus Wellner v Co-Operative Bulk Handling Ltd [2021] FWC 3381 demonstrates the benefits of using external investigators to conduct investigations where it is anticipated legal advice may be required or that legal proceedings may be on foot. The Fair Work Commission (the Commission) held that, where certain criteria are met, the use of legal representatives to conduct workplace investigations allow employers the ability to claim legal professional privilege over documents produced in the course of the investigation.

Facts

Mr Tainsh and Mr Wellner (the Applicants) were terminated from their employment with Co-Operative Bulk Handling Ltd (the Respondent) after receiving an allegation of workplace bullying concerning their conduct towards an apprentice within the company. The Applicants commenced proceedings in the Commission against the Respondent, asserting that they were unfairly dismissed from their employment.

Prior to the termination of their employment, the Respondent on receipt of the complaint of the workplace bullying, engaged a law firm to undertake an investigation into the grievance and provide further legal advice on the appropriate next steps.

On 12 May 2021, upon application by the Applicants, the Commission made an order to the Respondent to produce all communications between the Respondent and the external investigators (the law firm) in relation to the workplace investigation. The Respondent claimed that documents related to the investigation of the grievance allegations against the Applicants and the resulting investigation report were subject to legal professional privilege.

The Respondent sought to rely on the decision of AWB Limited v Honourable Terence Rhoderic Hudson Cole, which established that legal privilege is determined by looking at the dominant purpose for which a document is brought into existence. The Respondent submitted that they sought legal advice in relation to the bullying complaints including advice as to investigating the complaints and taking disciplinary action and, as such, the documents produced through this process fell within the scope of legal advice.

The Applicant’s primary position was that the investigation documents were not subject to privilege as the investigation process itself fed into disciplinary proceedings raised by the Respondent’s Employee Management of Discipline Procedure. The Procedure indicated that the purpose of an investigation was to determine if the conduct had occurred and guide the Respondent through whether or not disciplinary action should be taken, not to seek legal advice. The Applicants submitted that obtaining legal advice was ancillary to the workplace investigation itself.

Decision

The starting point for the Commission’s consideration of legal privilege was section 590(2)(c) of the Fair Work Act 2009 (Cth) which empowers the Commission to require a person to provide information, but it cannot exercise this power over documents for which legal professional privilege is claimed. The primary question for the Commission to consider was whether or not the dominant purpose of the investigation documents was to provide the Respondent with legal services. The Commission relied upon a number of case law authorities to reach its decision in determining the validity of the Respondent’s claim of legal privilege.

The Commission did not agree with the Applicant’s contentions and found that the investigation documents were subject to legal privilege. The Commission held that the investigation report prepared by the law firm came into existence for the purpose of enabling advice to be provided to the Respondent about the workplace bullying complaint that it had received.

Further, the Commissioner stated that:

“it is relevant to observe that the ‘dominant’ purpose is the ruling, prevailing, paramount or most influential purpose. This does not mean that other purposes cannot exist. The dominant purpose brings within the scope of the privilege of a document brought into existence for the purpose of a client being provided with professional legal services notwithstanding that some ancillary or subsidiary use of the documented was contemplated at the time.”

Accordingly, the Commission found that, subject to some exclusions, the investigation documents and report attracted legal professional privilege.

Take Home Messages

Effective workplace investigations are a critical tool to successfully resolving a variety of employment matters, including disciplinary issues. This decision serves as a reminder of the advantages that arise when legal practitioners are engaged to conduct investigations as opposed to internal investigators. The benefit is two-fold. First, to have an external party investigate the complaint independently, without any prior knowledge, bias, perceived bias, or relationship with the relevant parties. Secondly, documents produced through the course of the investigation may then be subject to legal professional privilege should the matter become litigious at a later stage.

Importantly, legal professional privilege can be claimed when:

  • it is brought into existence for the dominant purpose of giving or obtaining legal advice; and/or
  • in anticipation of legal proceedings.

Employers should always seek advice when unsure about initiating workplace investigation. For more specific information on any of the material contained in this article or please contact Virginia Liu on +61 8 8210 1279 or vliu@normans.com.au on or Alice Tonkin on +61 8 8217 1361 or atonkin@normans.com.au.

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