Employers who engage external providers to conduct IR workplace investigations in South Australia must ensure that they are lawfully permitted to conduct those investigations. Significant penalties can apply under the legislation. Investigators must also have the essential industrial relations knowledge and experience for their investigations to be effective in the IR arena.
Employers often rely on external parties to conduct independent workplace investigations into allegations against employees or suspected misconduct. There are valid reasons for that approach - including independence, expertise and resource constraints. However, it is not commonly understood that in South Australia there is specific legislation that controls who is permitted to conduct such investigations on a fee or reward basis. Significant problems can flow if investigators are not chosen carefully.
The legislation in SA
Most employers are unaware that in South Australia, the Security and Investigation Industry Act 1995 (“Act”) regulates work by “investigative agents”. The Act covers businesses acting as independent workplace investigators.
Section 3 of the Act includes in its definitions of investigation agent those performing certain functions for fee or reward. Relevant to industrial relations, the following listed functions would usually be part of a workplace investigation (for example into alleged misconduct or bullying):
obtaining or providing (without the written consent of a person) information as to the personal character or actions of the person or as to the business or occupation of the person.
obtaining evidence for the purpose of legal proceedings (whether the proceedings have been commenced or are prospective).
Section 6 of the Act requires that a person must not carry on a business, or act as an investigation agent except as authorised by a licence.
Sec 12A(1) of the Act also provides that a person must not employ another as an investigation agent under a contract of service to perform such functions unless that other person holds a licence authorising them to personally perform them.
Many employers may believe that professions such as lawyers or accountants are automatically authorised to conduct workplace investigation into employee conduct on behalf of the employer. In South Australia, the Act is clear in that the exemption for licensing will only apply to legal practitioners or accountants where they are acting in the ‘ordinary course of their profession’. Workplace investigations are not generally in the ordinary role for an accountant or legal practitioner. For example, a law firm could provide legal advice about the findings of an investigation report, but not generally undertake the investigation itself (e.g. gathering documents, interviewing witnesses, compiling the investigation report etc) as this is arguably not in the ordinary course of their profession.
Penalties for operating in breach of the Act range up to $50,000 or imprisonment for an individual and up to $250,000 for a body corporate.
Aside from potential penalties for breach of the Act, there may be attempts to have the investigation discredited in legal proceedings if an organisation relying on an investigation report takes action against any employees.
Employers must ensure that investigations are only conducted by persons and organisations permitted to do so under the Act, and that the organisation has the relevant a depth of experience in the area concerned so that the correct issues at play are identified and investigated
More than a private investigator
To effectively conduct investigations into conduct or capacity issues, the investigator must also possess significant industrial relations experience and knowledge. Understanding the rules and body of case law around issues such as a valid reason, balance of probabilities and what is reasonable in a workplace setting will be critical. Licensed private investigators can collect evidence and statements, but can they properly identify and assess the key issues from an IR perspective?
EMA Consulting is uniquely placed in this space. We have significant experience in the field of industrial relations including the conduct of workplace investigations at all levels and have been doing so in private and public organisations across Australia since 1997. We are authorised under the Securities and Investigation Industry Act 1995 (SA) to undertake workplace investigations.
If instructing an external organisation to conduct or assist with a workplace investigation into employee conduct or capacity, you need to check:
is the external organisation permitted to conduct investigation services in South Australia; and
does the external organisation have the necessary industrial relations expertise?
Require further information/assistance?
If you require further information or advice, please contact one of our Principal Consultants.