Investigations: common challenges and how to address them

HR and employment law teams often experience periods of heightened activity, and this is especially true during times when organisations are navigating compensation discussions, organisational change or employee relations challenges. Alongside routine workplace issues, teams may also be required to manage complex conversations around performance, potential exits or disputes between colleagues. These situations can lead to concerns being raised by current, departing or former employees about their treatment at work. And for HR and legal teams, the need to conduct an investigation can then arise. 

Investigations play a central role in helping organisations respond to allegations of misconduct or other concerns relating to employees. A well-executed investigation supports a culture of accountability and integrity and positions businesses to manage legal, regulatory and reputational risks effectively. 

This blog post explores some of the most common challenges that arise during investigations involving employees and how to manage them to enable a thorough and robust investigation. 

At the outset 

1.  Choosing the right investigator

Employers need to identify at the outset who is best placed to conduct the investigation.

Using an internal investigatory team may be appropriate as they will have an existing understanding of the employer’s policies and procedures and may be well versed in running these types of investigations for the organisation. Choosing an investigator with no prior involvement with the matter or the individuals concerned is generally an important step in reducing perceived (or actual) threats to the integrity and neutrality of the investigation. In companies with large HR, legal, or compliance teams (or even standalone investigation teams) this can be a straightforward step.  For those with smaller support functions, the challenge can be greater. Consideration should be given to the impact that running an investigation would have on the individual’s or team’s regular responsibilities, given the typically time-sensitive and time-consuming nature of employee investigations. 

Using an external investigator comes with the benefit that external investigators will often have greater resources to progress the investigation at pace, and experience across multiple clients and sectors that they can call upon as needed. If a lawyer is acting as a combination of adviser and investigator, their client may have a clearer basis for asserting legal privilege over the investigation output (although whether this is the desired outcome from a practical perspective will need to be considered – for example, where a formal grievance has been raised to which a response must be delivered, or where non-privileged material is required to support any subsequent disciplinary process). 

2. Preserving confidentiality 

Maintaining confidentiality is a fundamental consideration throughout an investigation, protecting both the integrity of the process and the interests of individuals involved. When communicating the existence and scope of the investigation, any information should be disclosed on a ‘need to know’ basis with the importance of confidentiality clearly communicated to those involved. Where it is necessary to engage additional individuals, disclosures should be carefully managed and restricted to what is essential for their specific role. This approach reduces the risks of information leaks and speculation, as well as possible tainting of witness evidence (whether inadvertent or otherwise). 

3. Managing legal privilege and documentation

Legal privilege enables clients to consult their lawyers openly without the risk that these communications could be used against them in legal proceedings. Involving lawyers at the outset of the investigation, and ensuring that it is made clear where legal advice is sought or provided, is particularly relevant for investigations that may be the subject of later litigation or regulatory involvement. The application of legal privilege is an area where English law can differ materially from other jurisdictions, so particular care must be taken where the investigation raises cross-border issues.

In the UK, there are two key forms of legal privilege: legal advice privilege and litigation privilege.

Legal advice privilege will apply to communications and documents provided confidentially between the client and their lawyer, where the purpose is requesting or receiving legal advice. It may be possible to assert privilege over some (or even all) of the material generated in an investigation, but this is heavily fact-specific and disputes may arise over the status of interview notes, particularly where they are provided verbatim to the client. 

Litigation privilege protects documents and communications that are provided confidentially where the dominant purpose of carrying out the investigation, and therefore the production of documents, is for reasonably contemplated litigation. This might be the case for some employee investigations, but the question of whether litigation is reasonably contemplated can be a difficult one to answer and at risk of later challenge if an interested party wishes to seek disclosure of documents they say have inappropriately been labelled as privileged. 

4. Handling employee suspension or interim measures

In some instances, it may be appropriate to suspend an employee (on full pay) while the investigation is carried out. This could be where the allegations are in relation to serious misconduct such that their continued presence at work poses a risk of harm to the business, clients or other employees, or if it is considered that the employee may jeopardise the investigation. Before taking this step, the employer should consider whether the employee’s employment contract or its existing policies permit suspension. Given the impact on an employee of suspension, employers should also first consider if alternatives can sufficiently mitigate risk, such as temporarily assigning the employee to a different role with restricted access to sensitive information, or asking them to work from home pending the investigation outcome.

If the employee is suspended and the employer is in a regulated sector then, depending on the employee’s seniority and reason for the suspension, it may also be necessary to contact the relevant regulator to inform them of the employee’s suspension. 

If suspension is necessary, employers should act to minimise speculation in the workforce and keep in touch with the suspended employee and offer them HR support whilst they are suspended. Prolonged or unjustified suspension can create legal risk, for example of constructive dismissal claims; it is therefore advisable that employers keep the suspension under regular, documented review and provide reasonable updates to the individual concerned. 

During the investigation 

5. Securing and retaining relevant evidence

Steps should be taken to preserve and secure documents that may be relevant to the investigation, including suspending standard destruction policies and retaining digital communications, such as Microsoft Teams or Slack messages. In some circumstances, a litigation hold to key individuals may be appropriate, alongside measures to restrict employee access to editing or destroying files.

The decision-making process as to what materials are relevant should be clearly documented in case there is later litigation or regulatory scrutiny where the investigation process could be challenged. Consideration of the relevant data protection and privacy laws in the collection and storage of these documents is essential, with legal advice sought where needed, especially if the investigation is multi-jurisdictional, as the legal position may be different in each jurisdiction. 

6. Interviewing witnesses effectively and consistently

Investigation interviews need to comply with the employer’s policies on managing staff and be in accordance with employment law. Consider whether the interview is best suited to be online or in person, taking into account the topic of the investigation, the employee’s circumstances and the logistics involved. Online interviews may be more time efficient; however, it can be more difficult to build rapport with the interviewee and assess credibility, and some interviewees might find it more challenging to engage with and digest documents shared on screen than with hard copies. A record of the interviews should be kept – most commonly with a note-taker joining the meeting, although on some occasions an interviewer might choose to take a full audio recording of an interview (with the possibility of a transcript being produced afterwards or in real time by AI) to avoid any later disputes about what was said. The decision about whether to take this step is often taken alongside broader considerations around issues such as privilege.

To help defend the robustness of an investigation if it is the subject of a later challenge, there should be a paper trail to record who is interviewed and the key reasons as to why certain individuals were not interviewed. 

7. Dealing with uncooperative participants 

Uncooperative participants (whether they are accused of wrongdoing personally or are witnesses to an alleged act of misconduct) can present significant challenges for the progress of an investigation. Reluctance to engage may manifest as refusal to attend interviews, incomplete responses, or intentional delays in the provision of documents.

It is useful for organisations to have clear protocols in place for employees who refuse to cooperate with an investigation. Setting out expectations in written communications and referring to relevant employment policies, or contractual cooperation clauses, can help reinforce these obligations. Even in the absence of clear obligations in policies or contracts, employers can remind employees of their duties to follow the reasonable instructions of their employer.  Whether an employee’s refusal to cooperate is reasonable or could justify disciplinary action will depend on the reasons for that refusal (for example, an employee who is worried about self-incrimination and wishes to seek legal advice might have a good reason to (temporarily) refuse to cooperate).

Next steps

8. Disciplinary action 

Once an investigation has concluded, employers must carefully consider appropriate further actions, such as disciplinary measures against employees where findings warrant it. It is important to determine which outcomes and supporting information are placed on the record and which documents remain privileged (if lawyers have been involved in the investigative process). Care should be taken not to inadvertently waive privilege when disclosing investigative materials, meaning that the sharing of these materials needs to be carefully thought through.

In many investigations it will be clear that the need for a non-privileged record of the investigation outcome (for example to support disciplinary action and ensure a fair and defensible disciplinary outcome) overrides other considerations. Greater complexity can arise where the investigation raises issues with broader implications for the employer – for example, from a regulatory or competition law perspective, or where the employer is balancing the risk of legal action from a number of sources.  In those circumstances, the balance may weigh in favour of maintaining privilege over investigation materials and risking unfair dismissal claims by employees who argue their disciplinary process is unsupported by clear evidence.  The impending removal of the unfair dismissal cap may now make that a more expensive decision to take.

For more information on how Freshfields’ award-winning employment investigations team can support in your investigations, speak to the authors of this post or your usual Freshfields contact.