Can You Find an Employee Dishonest Simply Because You Don't Believe Them?
An employee is accused of serious misconduct. He denies the allegation, but his explanations are vague, selective and sometimes evasive.
The investigator doesn't believe him.
Can the employer reasonably conclude that he's been dishonest?
This is one of the more difficult issues in workplace investigations. Assessing credibility is important, particularly when an employee's account is inconsistent or doesn't seem convincing. But how far can an investigator go in relying on those concerns?
A 2024 Fair Work Commission decision, [2024] FWC 2914, provides useful guidance.
The case involved a senior hospitality manager accused of disclosing commercially sensitive information to a former colleague. His employer also alleged that he'd been dishonest during the subsequent workplace investigation.
The Commission found that some of his answers were evasive. Nevertheless, it wasn't satisfied that either allegation of misconduct had been established.
The decision offers an important lesson for workplace investigators: having good reasons to doubt someone's account doesn't necessarily mean there's sufficient evidence to substantiate an allegation.
A lunch that led to dismissal
The employee worked in a senior management position for a company providing hospitality and catering services at Defence facilities in South Australia.
His employer was involved in a competitive tender process to retain a substantial Defence contract.
During this period, the employee met a former colleague for lunch.
The two men had previously worked together and maintained a friendship. The former colleague had since established his own hospitality services business.
The employee knew that his former colleague operated in the same industry and that his own employer was involved in a competitive tender process.
Two days after the lunch, the former colleague sent an email to businesses that could be considered competitors of the employer.
The email contained information about the employer's catering operations, staffing arrangements and other business matters. It also suggested that the information had come from someone occupying a position corresponding to the employee's role.
When the employer became aware of the email, it suspected that the employee had disclosed confidential or commercially sensitive information during the lunch.
An investigation followed.
The employee's explanation
The employee denied providing the confidential information alleged.
He acknowledged that he'd discussed work with his former colleague, but maintained that the conversation was general in nature.
His employer wasn't convinced.
During the investigation, the employee provided explanations that the employer considered evasive and misleading.
Ultimately, the employer concluded that he'd disclosed confidential information and breached his duty to be honest during the investigation.
He was dismissed.
The employee challenged his dismissal in the Fair Work Commission.
What did the Fair Work Commission decide?
The Commission considered two central questions:
Had the employee disclosed confidential or commercially sensitive information without authorisation?
Had he deliberately misled the employer during the investigation?
The Commission wasn't satisfied that either allegation had been established.
The employee's evidence was sometimes evasive
One of the interesting features of the decision is that the Commission didn't simply accept the employee's version of events.
Deputy President Anderson found that aspects of his evidence were vague, selective and evasive.
The Commission also preferred the employer's witnesses over the employee where there were factual disputes between their accounts.
However, these credibility concerns didn't establish that he'd disclosed the confidential information alleged.
The email sent by the former colleague certainly raised legitimate suspicions.
The timing was concerning. The subject matter related closely to the employee's responsibilities, and the email suggested that the information had come from someone in his position.
The Commission accepted that these circumstances created a reasonable suspicion that information had been disclosed.
But suspicion wasn't sufficient.
The employer still had to establish that the alleged misconduct had occurred on the balance of probabilities.
The witness who wasn't interviewed
A particularly significant evidentiary gap was the absence of evidence from the former colleague.
He was the only other person present at the lunch.
He had subsequently sent the email containing the information that prompted the investigation.
He was therefore in a position to provide direct evidence about what had actually been discussed.
However, the employer hadn't interviewed him during its investigation.
Neither party called him to give evidence before the Commission.
Instead, the employer relied heavily on the contents of his email and the employee's responses to questions about it.
The Commission considered that the email was hearsay and couldn't reliably establish what information had actually been communicated during the lunch.
Without direct evidence from the former colleague, significant uncertainty remained.
Could the employer find the employee dishonest?
This was perhaps the most important aspect of the decision for workplace investigators.
The employer argued that the employee had breached his duty to be honest during the investigation.
The Commission accepted that some of his answers were selective and evasive.
However, the employer lacked sufficiently reliable independent information against which to test whether his denials were actually false.
The Commission found that the employer hadn't established deliberate dishonesty.
In other words, the employee's responses gave the employer legitimate reasons for concern, but the available evidence didn't establish the alleged misconduct.
What this decision teaches us about assessing credibility
Workplace investigators regularly encounter conflicting accounts.
A complainant may provide a detailed description of an incident, while the respondent denies that it happened.
Sometimes the respondent's answers are inconsistent. They may struggle to explain their conduct, avoid particular questions or change their account when confronted with additional evidence.
Those matters can be relevant to credibility.
However, investigators need to consider the relationship between credibility and proof.
An employee's explanation may be unreliable without the alternative allegation necessarily being true.
For example, suppose a respondent denies making a particular statement during a meeting.
During the interview, the respondent gives inconsistent explanations about who attended the meeting and what was discussed.
Those inconsistencies may undermine confidence in their account.
However, if the allegation concerns specific words allegedly spoken, the investigator still needs to assess the evidence supporting those particular words.
That might include witness accounts, contemporaneous messages, meeting notes or other relevant records.
An adverse credibility assessment should form part of the overall evidentiary analysis. It shouldn't automatically determine the finding.
Three practical lessons for workplace investigators
1. Identify the evidence required to establish each allegation
Before commencing interviews, investigators should identify the factual questions that need to be resolved.
If an allegation concerns an unauthorised disclosure of information, consider:
What specific information was allegedly disclosed?
When, where and to whom was it allegedly communicated?
What evidence establishes that the disclosure occurred?
Was the information genuinely confidential or commercially sensitive?
What alternative explanations are reasonably available?
This approach assists investigators in identifying evidentiary gaps before they reach findings.
2. Pursue important witnesses and test competing explanations
The former colleague was central to this investigation.
He was present during the relevant conversation and later circulated the information that led to the allegations.
His account had the potential to clarify what had actually been discussed.
Investigators should make reasonable efforts to obtain evidence from individuals with direct knowledge of disputed events.
Where a witness is unavailable or unwilling to cooperate, those limitations should be documented and considered when assessing the evidence.
There is no universal obligation to interview every potentially relevant witness, but failing to pursue a central source of evidence can substantially weaken an investigation.
3. Separate concerns about credibility from findings of dishonesty
Investigators should be cautious about concluding that a respondent has deliberately lied simply because an explanation appears implausible.
A finding of dishonesty may itself amount to a serious allegation.
If deliberate dishonesty is being considered, investigators should identify the particular statement said to be false, the evidence establishing its falsity and the basis for concluding that the employee knew it was false.
The respondent should also have an appropriate opportunity to address the relevant inconsistencies and adverse material.
In the 2024 decision, the employer's inability to establish that the denials were false was critical.
How did the Commission apply the standard of proof?
The Commission applied the civil standard of proof: the balance of probabilities.
It also considered the principles in Briginshaw v Briginshaw [1938] HCA 34.
Those principles require decision-makers to reach an appropriate level of satisfaction, taking account of matters including the seriousness of the allegation and its consequences.
They don't create a separate standard of proof.
In this case, the evidence supported a possibility that confidential information had been disclosed.
However, the Commission wasn't sufficiently satisfied that the specific disclosures alleged had actually occurred.
This is an important distinction for workplace investigators.
An allegation may be plausible. There may be circumstances that justify suspicion. The respondent's explanation may also be unconvincing.
Nevertheless, the investigator must still determine whether the evidence establishes that the alleged conduct more likely than not occurred, having regard to the applicable evidentiary principles.
What was the outcome?
The Commission found that the employer hadn't established a valid reason for dismissal.
After considering the relevant statutory factors, it concluded that the dismissal was unfair.
However, the Commission also recognised that the employee's own conduct had contributed to the circumstances leading to his dismissal.
His judgement in discussing work matters with a former colleague operating in the same industry was questionable, particularly during a competitive tender process.
His selective and evasive responses had also contributed to the deterioration of trust and confidence.
These factors were taken into account when determining compensation.
The Commission reduced compensation by 10% and ordered the employer to pay $25,773.82, without an additional superannuation component.
The outcome illustrates that an employee can contribute to the breakdown of an employment relationship even where the particular allegations relied upon to justify dismissal haven't been established.
Frequently asked questions
Can an investigator find an employee dishonest because their answers are inconsistent?
Inconsistencies may support an adverse credibility assessment and, in appropriate circumstances, a dishonesty finding. However, the investigator needs to examine the nature of the inconsistencies, the available corroborating evidence and any explanations provided.
An inconsistent account doesn't automatically establish deliberate dishonesty.
Does an investigator have to interview every witness?
No general rule requires every potentially relevant person to be interviewed in every workplace investigation.
However, investigators should identify witnesses who may provide material evidence and make reasonable efforts to obtain that evidence.
The significance of an unavailable witness depends on the allegations and the other evidence available.
Can hearsay evidence be used in a workplace investigation?
Hearsay can be considered in workplace investigations, subject to applicable legal requirements.
However, investigators should assess its reliability and weight.
Where direct evidence is reasonably available, obtaining that evidence may substantially strengthen the findings.
What if the respondent's explanation seems implausible?
An investigator can take the plausibility of an explanation into account when assessing evidence.
However, the investigator should identify why the explanation is considered implausible, consider alternative explanations and assess whether the evidence as a whole establishes the alleged conduct.
Does reasonable suspicion satisfy the balance of probabilities?
Reasonable suspicion may justify commencing an investigation, but it doesn't necessarily establish misconduct.
Findings should be based on the evidence gathered and assessed against the applicable standard of proof.
Final thoughts
The 2024 Fair Work Commission decision provides an important reminder about the distinction between assessing credibility and establishing misconduct.
Investigators may encounter employees who are evasive, inconsistent or reluctant to provide information.
Those behaviours can raise legitimate concerns.
However, making a substantiated finding requires an assessment of the available evidence, including evidence supporting and contradicting the allegation.
The practical question for investigators is:
Are we satisfied that the misconduct occurred because the evidence establishes it, or are we relying principally on the fact that we don't believe the respondent?
That question is worth considering before finalising any investigation report.
Insight Investigations provides independent workplace investigations, reportable conduct investigations and professional training in investigation practice.
For information about our investigation services and training, visit www.insightinvestigations.com.au.
Decision: [2024] FWC 2914, Fair Work Commission, Deputy President Anderson, 11 October 2024.