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The Court of Appeal recently considered what is required of an employer who investigates an employee’s alleged misconduct.  The good news is the decision indicates that the standard expected of employers conducting an investigation does not equate to a judicial enquiry.

Case summary
In this case, Ms C, a 19 year-old flight attendant alleged that Mr H, a 51 year-old pilot, had sexually harassed her, after entering her bedroom when they were away overnight on duty together, and touching her inappropriately.  After conducting an investigation to Ms C’s complaint, the employer preferred her account of events and decided to terminate Mr H’s employment for contravening the company’s sexual harassment policy.  Mr H challenged this decision and claimed that the dismissal was unjustified.

The Employment Court found a number of procedural defects in the enquiry the employer had conducted, and criticised it heavily for failing to interview witnesses in the same way.  On that basis, the court held that the decision to dismiss was unjustified and reinstated Mr H.

This decision was then challenged in the Court of Appeal.

The Court of Appeal confirmed that employers are required to act in a substantially fair and reasonable manner, which necessitates an even-handed approach but does not require an employer to question every witness in the same way.

The Court of Appeal noted that a range of fair and reasonable options are available to an employer in any given situation.  An employer’s actions or the way they acted will be justified if their conduct was “what a fair and reasonable employer could have done in all the circumstances” under s 103A of the Employment Relations Act 2000.

The Court held that the employer’s actions should not be subject to “minute and pedantic scrutiny” in order to identify failings.  In this case, the procedural defects relied upon by the Employment Court did not affect the accuracy of the information collected and were deemed to be insignificant.

The Court of Appeal concluded that the Employment Court failed to apply the correct statutory test to the process followed by the employer.  It held that the employer was entitled to structure its approach based on the “inherent implausibility” of Mr H’s explanation as to why he entered Ms C’s bedroom and his claim that the touching was accidental in the circumstances.

Case learnings
Despite these findings, employers should be very careful when investigating allegations made against its employees.  Employers are required to carry out a fair process and genuinely consider an employee’s explanation.  There may also be circumstances where an employer is required to scrutinise and challenge an allegation vigorously.

Best practice is to plan the investigation carefully, including considering using an independent investigator where facts must be established from a number of witnesses, and make sure the investigation is well documented.  The findings should be put to the alleged perpetrator for response, in a full and fair disciplinary investigation before a decision as to what action to take is made.

If you would like advice regarding disciplinary investigations, please contact us.

Disclaimer: We remind you that while this article provides commentary on employment law and health and safety topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek legal advice from your lawyer for any questions specific to your workplace.