The recent decision of the Fair Work Commission in Kirkman v DP World Melbourne Limited[1]  illustrates the benefits to employers of taking care when commissioning investigations into alleged misconduct in the workplace.  If the commissioning of the report is handled correctly, and confidentiality of the report is maintained at all times, it may be possible to withhold production of the report in subsequent proceedings brought by employees, on the basis of a claim for legal professional privilege (LPP).

Background

The case concerned an application by a former employee (Applicant) of DP World Melbourne Limited (DP World) for relief from unfair dismissal.

Some months prior to the Applicant’s dismissal, DP World had received complaints from a number of its employees regarding alleged bullying by the Applicant (among other people), and three employees had commenced anti-bullying proceedings (under Part 6-4B of the Fair Work Act 2009).

DP World’s lawyers subsequently engaged an independent investigator (Investigator) to prepare a factual report into the bullying allegations made against the Applicant.  The Investigator’s report found that a number of the allegations were substantiated.

Some 6 months later, DP World initiated an internal disciplinary process against the Applicant (including an internal investigation process), which resulted in the termination of his employment.  The Applicant brought proceedings for unfair dismissal.

Orders to produce the Investigator’s report

At an interlocutory stage in the proceedings, the Fair Work Commission (FWC) made orders for the production of a number of categories of documents, which included the Investigator’s report.  DP World argued that the Investigator’s report was not relevant, but that if it was, it was protected from disclosure by LPP.

The FWC ultimately found that the Investigator’s report was relevant (because it was “apparently relevant” to the dismissal, whether or not there was a direct causal link between the report and the dismissal).[2]  As such, the issues which remained to be determined were:

  1. whether there was a valid claim of privilege over the Investigator’s report; and
  2. if so, whether that privilege had been waived by references which DP World had made in the Applicant’s disciplinary process on the outcomes of the investigation.

Was there a valid claim for privilege over the Investigator’s report?

DP World argued that the report was privileged on the basis that it was brought into existence for the purpose of DP World’s lawyers providing legal advice in the context of the anti-bullying litigation.

The FWC, after considering the established principles for determining a claim for privilege, concluded that the dominant purpose at the time the report was created was to assist DP World’s lawyers in the provision of legal advice to DP World.[3]  Some of the matters relevant to that conclusion were the facts that:

  • The Investigator was engaged by DP World’s lawyers for the express purpose (as described in the letter of engagement) of conducting an investigation to assist in the preparation of advice to its client, DP World.
  • The Investigator’s report was marked “privileged and confidential”.
  • The Investigator’s communication was almost exclusively directed to DP World’s lawyers, with only one email copied to DP World.
  • The Investigator told the Applicant that he had been engaged by DP World’s lawyers.
  • The Report was provided by the Investigator to DP World’s lawyers almost five months old before DP World’s letter requiring the Applicant to attend a disciplinary meeting.

Had the privilege been waived?

The Applicant argued that DP World had waived any privilege that existed in relation to the Investigator’s report, by virtue of comments made in the letter requiring the Applicant to attend a disciplinary meeting.  In that letter, DP World stated that, at the meeting, the Applicant would be provided with an opportunity to respond to various allegations of inappropriate behaviour “which were substantiated in the investigation conducted by [the Investigator]”.  The letter went on to describe the allegations against the Applicant which had been substantiated by the Investigator.

The FWC concluded that the privilege had not been waived, because the purpose of DP World’s partial disclosure was to provide the Applicant with an opportunity to respond to the allegations which had been substantiated by the Investigator.  The FWC held that “the purpose of the disclosure was to focus the disciplinary discussion on those allegations that were found by [the Investigator] to have been sustained.  The alternative would have been for DP World to simply put all of the allegations made by [the complainants] regarding [the Applicant] to him in the disciplinary meeting …”.

Conclusion: Maintaining LPP over an investigation report

The DP World case illustrates a number of matters that employers should keep in mind when engaging an independent investigator to investigate workplace misconduct under LPP:

  • The investigator should be engaged by the employer’s lawyers, and the express purpose of the investigation should be made clear in the letter of engagement and instructions.
  • The investigator should report only to the employer’s lawyers, not to the employer.
  • During the investigator’s enquiries, the employer and the investigator should be careful not to say that the investigator has been engaged by the employer – instead, it should be made clear that the investigator has been engaged by the employer’s lawyers.
  • Communications regarding the investigator’s report should be marked “privileged and confidential”.
  • The investigation report should be kept confidential, and its content should not be disclosed to employees.  If the employer subsequently initiates disciplinary action against any employees, the employer should avoid making any reference to the investigation report in that disciplinary process.
  • The employer should not rely on the investigation report in deciding to take action against an employee, but should instead undertake an appropriate internal investigation of the conduct which the employer considers may justify taking action against an employee.  The investigation report cannot form part of the employer’s standard disciplinary procedures.

[1] [2016] FWC 605.

[2] Kirkman v DP World Melbourne Limited [2015] FWCFB 3995, reversing the decision of Bissett C in Kirkman v DP World Melbourne Limited [2015] FWC 2563.

[3] Kirkman v DP World Melbourne Limited [2016] FWC 605.

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