Do workplace Investigations by lawyers attract legal professional privilege?

The Federal Circuit Court (the Court) recently found that an employer waived legal professional privilege attaching to a report produced by the employer's lawyers. The report was produced following a workplace investigation. The employer's decision to terminate the employment of the employee arose from the findings in the report.

Background

The employee brought a general protections application alleging, amongst other matters, his employment was terminated because he had exercised a workplace right.  

The employee made an application, as part of those proceedings, for the disclosure of material including the lawyer's investigation report. Doutta Galla Aged Services Ltd (the Employer), defended the application on the basis that the report was subject to legal professional privilege and as such, was not required to be disclosed.

Prior to terminating the employment of the employee, the Employer, arranged a law firm to conduct an independent investigation into the employee's conduct.  

The Board of the Employer received a confidential interim report as a result of the investigation.

Following receipt of the report, the Board recommended to the CEO that the employee's employment should be terminated.

Why is the investigation report relevant to the general protections claim?

The state of mind of the decision maker is central to the determination of whether adverse action was taken because the employee exercised a workplace right.  

In this regard, the issue here was who was the decision maker - the CEO who terminated the employee's employment was the decision maker, the Board which made the recommendation to the CEO or both.

The Court found the state of mind of the CEO was influenced by the Board and therefore the outcome of the investigation was "clearly relevant to the decision to terminate" the employee's employment. 

Was the report subject to legal professional privilege?

If the dominant purpose of the report, at the time it was commissioned, was to obtain legal advice, it would be covered by legal professional privilege.

The Court found that:

• there was no mention in the material provided to the Court that the purpose of the lawyer's engagement was to obtain legal advice, nor that the Board received legal advice before it recommended the dismissal of the employee; and

• conducting an investigation, was not work that required a lawyer and accordingly, the report was not automatically subject to legal professional privilege.

These factors weighed against that the argument that the dominant purpose of the report was to obtain legal advice. 

However, the Court accepted that the Board engaged the lawyers to conduct an investigation and provide legal advice regarding workplace laws and the Board's governance and compliance responsibilities.  

In the circumstances, the Court found that the dominant purpose of the report was to obtain legal advice.  

Had privilege, nevertheless been waived?

As the Employer's state of mind is a central consideration in a general protections claim, the Court found that legal professional privilege attached to the report was  "lost where there is a likelihood that the legal advice contributed to the state of mind". 

As the Board gave the CEO a number of recommendations following receipt of the report, including the termination of the employee's employment, the report had some bearing on the Board's recommendation.  The Board could only have formed these views following the receipt of the report.  

The Court found the Employer relied on the report as the basis for its decision whether or not to terminate the employment of the employee.  Consequently,  it would be unfair for the Employer to be able to rely upon these bases without disclosing to the employee "the factual basis on which the Board formed the reasons which gave rise to the recommendation" resulting in the dismissal of the employee 

In the circumstances, legal professional privilege had been waived.   

Lessons

• To attract legal professional privilege, always ensure that any investigation conducted by a lawyer into workplace issues and any subsequent report is consequent upon your request for legal advice.  The investigation and subsequent report will then normally form part of the legal advice attract legal professional privilege.   

• Do not describe or request an 'independent' investigation   A independent investigation will not normally attract legal professional privilege.

• Even if the dominant purpose of a report is for the purpose of legal advice:

(a) if your decision to terminate the employee's employment arises, at least, in part from the report and the employee brings legal proceedings; or

(b) aspects of the report are referred to in legal documents in defence to a claim,

it is likely that a court will find that legal professional privilege has been waived and you will be required to release the report to the other side.

If you would like more information about the case, please contact National Workplace Lawyers on +61 2 9233 3989. 

National Workplace Lawyers

Note — this is for information purposes only and does not purport to be comprehensive or to render legal advice.