Investigations: robust not perfect
22 June 2017
When allegations such as sexual harassment, bullying, or theft are made against an employee the employer must investigate the allegations before finding misconduct. There is a common misconception that such an investigation must be flawless for the employer to have acted justifiably. However, a recent Court of Appeal case clarifies the law around what constitutes a sufficient investigation.
In the case of A Ltd v H, Mr H was dismissed for sexual harassment, following an investigation by the employer. Mr H was a 51 year old pilot who entered the bedroom of a 19 year old flight attendant uninvited while she was on her first overseas trip. Once in her bedroom he climbed into her bed and stroked her thigh in a sexual manner. When the crew had dinner together the night before Mr H had also stroked the flight attendant’s leg under the table. However at that point she thought it was an accident.
The next day the flight attendant spoke to the Captain about the incident, then raised a written complaint with her employer. The fleet manager made preliminary inquiries then began an investigation. The fleet manager met with Mr H and decided to stand him down during the investigation. Mr H and his representatives met with the fleet manager on numerous occasions during the investigation. When asked to explain his recollection of events Mr H stated he went into the room to inquire about the flight attendant’s welfare and that the touching was accidental.
The fleet manager found the flight attendant’s allegations to be true and that Mr H’s actions amounted to serious misconduct. Accordingly, Mr H was dismissed.
Mr H brought a claim against his employer arguing that he had been unjustifiably dismissed because the investigation was deficient. He focused on the fact that he was interviewed “vigorously” but other members of the crew were not. Also Mr H’s interview was recorded while the other interviews were noted by hand.
The Employment Court initially found that Mr H’s dismissal was unjustified because of flaws in the investigation. A Ltd was ordered to reinstate Mr H to his former position and pay him $7,500 in compensation.
However, the Court of Appeal overturned the Employment Court’s decision, ruling that the factors raised by Mr H were inconsequential. Nothing turned on the interviewing or recording techniques and there is no requirement that all the witnesses be questioned in the same way. The Court also held that the investigator was entitled to structure his approach around the inherent implausibility of an innocent purpose or accidental touching.
It was affirmed that the assessment for a sufficient investigation is whether there was substantive fairness and reasonableness rather than minute and pedantic scrutiny to identify any failings.
Another interesting principle relevant to this case, although not explicitly mentioned by the court is that of the ‘Honda rule’. In Honda NZ Ltd v NZ Boilermakers etc Union the employee was accused of the attempted theft of five 20 litre cans of paint thinner. The Court of Appeal decision now stands for the principle that “the more serious the allegation of misconduct against the employee, the greater the expectation of its proof will be”.
The judiciary has often stated that there is a “sliding scale of proof depending on the seriousness of the allegations”. However, even in the most severe instances of serious misconduct the proof required for the employment investigation is much lower than the standard of proof required to convict an individual on criminal charges.
In the present case of A Ltd v H, Mr H faced very serious the allegations, as they were of a sexual nature and would inevitably damage his reputation. Accordingly the Honda rule applied and a higher level of proof was required to establish that the alleged behaviour took place. As the flight crew corroborated the flight attendant’s story and Mr H was unable to provide a sound explanation for his behaviour, the outcome of the investigation was not impacted by this heightened requirement for proof.
The Court of Appeal decision in A Ltd v H sets a strong precedent that employers must carry out a sufficient investigation into misconduct, not a perfect investigation. However, during the investigation employers should remember that if the allegations are serious a higher level of proof will be necessary for the allegations to be made out. Only when that high threshold is met can the employer safely find serious misconduct and, if required, dismiss the employee.