Pitfalls to Avoid when Conducting Internal Investigations, Grievances and Disciplinary Procedures Barry Walsh, Partner, Employment and Benefits Unit Julie O’ Neill, Associate, Employment and Benefits Unit

2 April 2014

Possible Stages in a Grievance & Disciplinary Procedure

• Grievance Meeting / Pre-Disciplinary Investigation Meeting

• Disciplinary Hearing

• Appeal

Importance of Fair Procedures in Irish Law

• Compliance with procedures is as important as proving the substantive allegation

• Even if an employee is blatantly guilty of gross misconduct, employer can lose a claim on procedural grounds alone

• “a regrettable tendency in some employment cases is to treat procedural safeguards as the real battlefield, in preference to facing the substance of complaints in accordance with an agreed procedure” – Supreme Court, Traynor v Ryan (2003)

What does the law require?

• Compliance with Natural Justice and Fair Procedures

• Compliance with Employer’s Policies

• Compliance with Code of Practice: Grievance and Disciplinary Procedures S.I. NO. 146 OF 2000

Principles of Natural Justice and Fair Procedures (NJFP)

• Right to receive advance notice of the allegations

• Right to be furnished with a copy of the evidence

• Right to a fair and impartial determination of the issues

• Right to respond fully to any allegations or complaints

• Right to representation

• Right to cross-examine

• Right to appeal

Two Types of Investigations

• NJFP do not apply to a pure investigation which does not involve any findings. Generally these investigations are carried out for the purpose of establishing whether there may be a basis for instituting disciplinary procedures

• On the other hand, where the purpose of the investigation is to make findings, NJFP will apply. The extent to which they will apply will vary from case to case depending on the circumstances

• The investigator should never make any findings of guilt unless:

– the employee is put on notice of this in advance; and – NJFP strictly applied

Legal Remedies

1. Claim for Unfair Dismissal • Compensation of up to 2 years’ remuneration, reinstatement or reengagement

• Legal costs incurred in defending claim cannot be recovered

2. Injunction • Declaration that dismissal is void

• Put the employee back on the payroll pending trial

• Put the employee back into the workplace pending trial

• No announcements regarding dismissal pending trial

• No replacement of employee’s role pending trial

• Discontinue the investigation or disciplinary process

• May result in employer starting the process from the beginning or settling the claim

• Very difficult to get process back on track

• Publicity

• Apology

• Exposure to legal costs for unsuccessful party

Case Study – Investigation Stage

Mary, a sales assistant, makes a complaint to the HR Manager in writing under the grievance procedure that she was verbally abused by the general manager, Tom, in the canteen. The HR Manager and another employee, Paul, witnessed the incident.

The HR manager emails the Managing Director, upon receipt of the complaint stating “I always knew that Tom was unhinged”.

HR Manager is appointed to investigate the complaint. The Managing Director is appointed to conduct any disciplinary process that may arise.

General Process – Step 1

• Review the procedure to establish whether the aim of the investigation is:

– To collate evidence and to determine whether there is a case to

answer to warrant formal disciplinary proceedings (i.e. a pure investigation); or

– To make a determination of guilt and/or to recommend a sanction

• This will determine the manner in which the investigation should proceed • For the purpose of the case study, the Disciplinary Procedure states that

the investigator shall: “collate evidence and determine whether there is a case to answer to warrant formal disciplinary proceedings”

General Process – Step 2

• HR manager should write to Mary and Tom in advance of the

investigation meeting re:

a) Seeking details of allegations b) Purpose of the meeting c) All material which will be relied upon including emails,

written complaints or witness statements d) Enclosing procedure e) Identity of person who will chair the meeting and note

taker f) Noting that it could lead to disciplinary action

General Process – Step 3

• During the investigation:

a) Contemporaneous notes of meetings should be kept b) Any witness statements taken should be given to the

accused in order to allow him to respond c) Notes should be copied to the relevant employees d) Report may be given to Tom in draft form for comment

before it is finalised (although this is not a requirement: Kelleher v An Post [2013] IEHC 238)

e) A subsequent round of meetings may be required to deal with new facts as they emerge

f) Create a paper trail!

Common Problems arising at the Investigation Stage

1. Mary does not want to disclose her identity for fear of retribution from her general manager

2. Tom refuses to attend the meeting without:

a) union representation;

b) confirmation that the HR Manager will not conduct the investigation; and

c) the company complying with a data access request that he has made.

1. Mary does not want to disclose her identity

• Irrespective of whether the investigation is a pure investigation or an investigation where a finding will be made, accused should be given the name of the person who is making the complaint

• It will be extremely difficult to proceed without disclosing identity at the investigation and even more difficult in any subsequent disciplinary process

2(a): Tom refuses to attend the grievance

meeting without union representation

• Code of Practice provides that employees are entitled to be accompanied to grievance and disciplinary meetings by an “employee representative”

• For the purposes of the Code, "employee representative"

includes a colleague of the employee's choice and a registered trade union but not any other person or body unconnected with the enterprise

• What about where there is no union? The Employment Appeals Tribunal has held that the right to have a work colleague present in a disciplinary meeting was adequate and in conformity with the Code

2(b): Tom refuses to attend meeting unless another individual is appointed to conduct the investigation

• This issue occurs very frequently • Person appointed to investigate the allegations

should have had no prior involvement and should not be prejudiced or biased

• At the outset, identify who will conduct the

investigation, disciplinary and appeal to avoid any cross-contamination

2(c): Tom refuses to attend the investigation meeting without being given access to his personal documents

• A very useful employee tool

• Data Protections Acts 1998-2003 provides that the employer has 40 days to process request

• Mary has a right to a speedy investigation

• Tom has a right to be given all relevant documents

• What does the balance of justice require? • Will the comment made by HR (“I always knew Tom was unhinged”)

be exposed?

Case Study – Disciplinary Stage

• Investigation concludes

• HR Manager issues a report at conclusion of the grievance process stating that

“I find that Tom verbally abused Mary and should be dismissed.”

Common Problems at the Disciplinary Stage

Tom refuses to attend a disciplinary meeting unless:

1. A new investigation is conducted

2. He is permitted to be accompanied to the disciplinary meeting by a solicitor

3. He is permitted to cross-examine Mary on her version of events at the disciplinary meeting

1. A new investigation is conducted

1. HR Manager went above and beyond her remit:

— Terms of Ref: “collate evidence and determine whether there is a case to answer to warrant formal disciplinary proceedings”

— Finding: “I find that Tom verbally abused Mary and should be dismissed”

— What report should have said: “Following the conclusion of the investigation,

Paul states that he witnessed Tom shouting at Mary which corroborates Mary’s version of events and there appears to be sufficient grounds to proceed to a disciplinary hearing.”

2. HR Manager predetermined the issues as she was a witness and she stated that “I always knew Tom was unhinged”; 3. The investigation report prejudices the disciplinary process.

Minnock v. Irish Casing Company Ltd. [2007] 18 ELR 229

• Investigation into improper conduct. The plaintiff sought an interlocutory injunction restraining the continuation of the investigation.

• “the court will not intervene necessarily in the course of a disciplinary process unless a clear case has been made out that there is a serious risk that the process is sufficiently flawed and incapable of being cured, that it might cause irreparable harm to the plaintiff if the process is permitted to continue.”

• The High Court granted the injunction on two grounds:

– The process was more than a pure investigation. The defendant had purported to make findings and had therefore not confined itself to collecting evidence and determining whether there was a case to answer to warrant formal disciplinary proceedings;

– It was only after the proceedings had commenced that the defendants had set out in clear terms what the process was and what was intended.

O’Sullivan v Mercy Hospital Cork

(unreported, Clarke J., June 3, 2005)

• Mr Brown appointed to investigate whether certain behaviour constituted bullying (the “Brown Inquiry”)

• Mr Brown issued report which concluded that the plaintiff had been guilty of bullying (the “Browne Report”)

• The Employee was not informed that Mr Brown was considering making findings against her and threatened to challenge the process

• A new investigator, Mr O’ Brien, was appointed by the company to conduct a new investigation on account of the flaw in the Brown Inquiry (the “O’ Brien Inquiry”)

• The terms of reference of the O’ Brien Inquiry incorporated the Brown Report

• The High Court held that the Brown Report could not be relied upon during the O’ Brien Inquiry as it was prejudicial

• Two very costly procedural flaws!

Is a two step process necessary?

• A one stage process which includes:

— an investigation into the facts;

— a finding of whether the employee is guilty; and

— a decision on sanction

may be appropriate in many cases as long as:

a) This is envisaged by the disciplinary policy;

b)The employee has been informed of the process in advance; and

c) NJFP are applied from the outset.

2. Request to be accompanied by a solicitor

• An employee does not have the right to legal representation in an internal disciplinary process as a matter of law.

• However, legal representation may be required in exceptional circumstances in order to ensure fairness (Burns -v- Governor of Castlerea Prison [2009] 20 ELR 109 - Supreme Court)

• In considering whether “exceptional circumstances” exist, the Supreme Court set out the following six factors which should be considered:-

1. The seriousness of the charge and its potential penalty 2. Whether any point of law is likely to arise 3. The capacity of the particular disciplinee to defend his own case 4. Any procedural difficulties 5. The need for reasonable speed in making adjudication, that being an

important consideration 6. The need for fairness as between the parties

3. Tom refuses to attend a disciplinary meeting unless he is permitted to cross-examine Mary

• In the case of In Re Haughey [1971] IR 217, the Supreme Court found that the Plaintiff should be allowed to cross-examine, by counsel, his accuser

• In the case of Shortt v Royal Liver Assurance [2008] IEHC 332, the employee, who was the subject of a disciplinary hearing, was not permitted to cross-examine a witness. The High Court held that this did not “imperil” the fairness of the proceedings and hence was not a reason to grant an injunction to restrain the disciplinary process

Employee v Ulster Bank UD962/09

• Employee requested that ten witnesses, including two customers, attend a disciplinary hearing for the purpose of cross-examination. The employer refused request in so far as the customers were concerned.

• Instead, the employee was allowed to make submissions at the hearing as to the relevance of the two witnesses, and following these submissions, if the decision maker made a finding as to their relevance, he would subsequently request their attendance.

• The employee in question resigned on foot of this decision.

• In its decision, the Tribunal criticised the employer’s decision to refuse to allow the two witnesses to attend without the employee first having to convince the decision maker of their relevance. However, the Tribunal found that the approach taken was not so unreasonable so as to justify the employee’s resignation.

• The Tribunal’s finding may have been different if the employee was not afforded the opportunity to cross-examine any of the witnesses.

Right of Appeal

• An employee has the right to appeal any disciplinary sanction imposed

• The appeal should be heard by someone with no previous involvement

• Problems arise where the employer is a small company

• The dismissal letter should state that the disciplinary sanction will not be stayed pending the appeal

• De novo hearing?

– Rachel Bermingham v Marks and Spencer Ireland UD 601/2011, MN 639/2011

• What happens if the decision is overturned on procedural grounds only?

– An Employee v An Employer UD263/2012

Be Aware

1. Data Access Requests

– Don’t write anything down that you would not want read out in court!

– Only engage in formal communications with witnesses, superiors, business managers, HR

2. Delay

3. Legal privilege – does not always attach to communications between in-house lawyers and the company

4. Don’t ignore the problem!

Barry Walsh bwalsh@mcdowellpurcell.ie

Julie O’Neill joneill@mcdowellpurcell.ie

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Remember that these slides are for information purposes only and does not constitute legal advice. Case law is fact specific and readers should understand that similar outcomes cannot be assumed. Specific advice should always be taken in given situations.