When does an internal investigation become a courtroom?
The balance between fairness and perfection
Earlier this summer, as summarised in our previous article, the High Court appeared to significantly expand on an employee's entitlement to fair procedures during internal employee investigations. In Lyons v Longford Westmeath Education and Training Board (the "Lyons Decision"), the High Court held that where dismissal or an adverse impact on reputation were potential outcomes of that investigation, the employee should be afforded (i) the right to cross-examine his accuser; and (ii) the right to be legally represented.
Following a collective intake of breath by employers across Ireland, the High Court has since taken steps to clarify its position. So exactly when does an investigation need to resemble a courtroom when it comes to employees' rights and fair procedures? The answer, according to the latest High Court decisions, is when an investigation evolves from a fact-finding exercise to a vehicle for final determinations and sanctions.
What's happened since the Lyons decision?
The Lyons Decision was issued in May 2017 and was swiftly followed by two further High Court decisions of relevance in June 2017, namely: EG v The Society of Actuaries Ireland (the "EG case") and NM v Limerick and Claire Education and Training Board (the "NM case").
In the NM case, a Limerick school principal sought to prevent the Training Board from progressing with an independent investigation into two complaints against him by other teachers in the school in relation to sexual harassment and fraudulent use of State money for personal gain. NM argued that he was denied the opportunity to "confront, challenge and question" his accusers. Here, the Court distinguished between the standard of fair procedures applicable to an investigation which was "information-gathering" and one that could result in dismissal. It was held that NM had been given full notice of the allegations made against him and had secured his right to legal representation at interviews such that the process was not flawed or unfair.
In the EG case, EG was accused of misconduct in respect of the handling of the estates of his late mother and brother. The High Court here followed the 2012 Supreme Court decision in O'Sullivan v Law Society, which outlined that "the full panoply of natural justice rights does not inexorably apply at every phase of an investigative process. An appropriate standard of fair procedures must be applied at all stages of a tiered process". The Court drew a distinction between the standard of fair procedures applicable to an investigation which is, in essence, "information-gathering", and that which applies to the making of a finding that could lead to dismissal. The Court found that the full suite of rights, including an opportunity to cross-examine witnesses, was not required at the investigation stage.
Most recently in the August 2017 decision in A General Operative v A Manufacturing Company, the Workplace Relations Commission (the "WRC") weighed in, citing with approval the 2015 High Court case of Boyle v An Post which held that, when it comes to fair procedures, fairness is always "required" but acknowledged that "perfection is unattainable". The Adjudication Officer noted that the investigation was "an internal enquiry. Such enquiries may proceed on a less formal basis than a criminal investigation". Significantly, this case considered the recent Lyons Decision and the failure to afford the employee an opportunity to cross-examine a witness. The WRC held that that, while this failure resulted in a "flawed investigation process", it ultimately did not taint the entire disciplinary process. It was held that, "while the process undertaken was not without fault, on the whole, the process was comprehensive and fair." Arising from these decisions, it appears that employers should be guided by the benchmark of fairness as a whole, rather than judged by the yardstick of perfection.
What about lawyers in the room?
When it comes to the matter of legal representation during an internal investigation, the 2009 Supreme Court decision in Hartigan v Castlerea Prison is of assistance. Here the Supreme Court held that where the "potential penalties" included dismissal, "natural or constitutional justice required" that the individuals in question be entitled to legal representation. However, the Supreme Court cautioned that "legal representation should be the exception rather than the rule" confirming that it is "wholly undesirable to involve legal representation" where there are disciplinary procedures in place. The Supreme Court held that while legal representation at the disciplinary hearing stage would likely be appropriate depending on the severity of potential sanctions, legal representation at a preliminary fact finding investigation would be a step too far.
So what does this mean for internal investigations now?
It now appears that the extent to which an employer must afford these "additional" fair procedures will turn on (1) the specific facts of the situation (i.e. where dismissal or an adverse impact on reputation are potential outcomes of the investigation); and (2) the ambit or nature of the investigation.
Provided the investigation is strictly limited to fact-finding and there is no scope for the investigation to result in the allegations at issue being either upheld or dismissed, the right to cross-examine or be legally represented at investigation stage should not arise. In each of the NM and EG cases the High Court considered the purpose of the investigation and held that where the investigation was an information-gathering exercise only, with no scope for final determinations, the need to effectively mirror courtroom procedures did not arise.
These two recent High Court decisions, alongside last month's WRC decision, are a welcome development from an employer's perspective, clarifying that not all internal investigations automatically give rise to courtroom-esque entitlements and that employers should be striving for fairness, not perfection, in conducting such investigations. The recent decisions have to some extent recalibrated fair procedures during investigations back to what employers were familiar with prior to the Lyons Decision.
However, it will still be necessary for employers to tread carefully. The line between factual findings and final determinations is a fine one that is naturally prone to blurring. While these recent cases make clear that the full weight of the fair procedures armoury does not necessarily apply at investigative stage, care should be taken to ensure that the scope of an investigation is carefully crafted to guarantee that the investigator does not inadvertently trespass into to the role of decision-maker.