Workplace investigations in New Zealand: what "fair and reasonable" looks like (with key cases)

In employment disputes, the investigation is often the whole case. If an employer gets the process wrong, the Employment Relations Authority (ERA) and Employment Court can find the employer's later decision was not what a fair and reasonable employer could have done at the time.

This article is a practical, New Zealand-focused guide for employers, employees, and representatives. It aims to be concise, but anchored in the law and the way the ERA and Court actually assess investigations. It also includes a case map so you can quickly see which authorities matter for which part of the process.

1) What is a workplace investigation?

A workplace investigation is a structured fact-finding process to establish what happened, and in some cases to make findings and recommendations. Investigations sit on a spectrum:

• Fact-finding: gather information so the employer can decide the next step.
• Fact-finding plus findings: determine what likely occurred, and why.
• Investigation inside discipline: part of a disciplinary pathway (often not outsourced).

Whether the employer uses an internal investigator or an external investigator, the core requirement is the same: a process that is fair, even-handed, and fit for the circumstances.

Note that in some situations an investigation is effectively mandatory. For example, the Employment Relations Act 2000 contains a specific obligation to inquire into the facts in cases of sexual or racial harassment.

2) The legal backbone: good faith and "justification"

Good faith (Employment Relations Act 2000, s 4)

Good faith is not just "do not lie". It is a wider, relational obligation. In investigation terms, the practical takeaway is that employers must run a process that is transparent enough to be fair, and that gives affected employees a real chance to respond.

• Disclosure: give access to relevant information that will be relied on, so a response is possible.
• Real opportunity to comment: not a rushed, token response window.
• Genuine consideration: decision-makers must actually grapple with explanations and evidence.

Personal grievances and the objective test (ss 103 and 103A)

Most investigation disputes show up as personal grievances for unjustified dismissal, or unjustified disadvantage. The test is objective: were the employer's actions, and how the employer acted, what a fair and reasonable employer could have done in all the circumstances at the time?

Section 103A(3) identifies procedural fairness considerations the ERA and Court must consider, including: whether the employer sufficiently investigated, raised concerns, gave a reasonable opportunity to respond, and genuinely considered the employee's explanation. Those are not the only factors, but they are the core.

3) Start with the contract and the employer's own rules

Before anyone writes terms of reference or sets an interview, check:

• The employment agreement (and schedules/appendices): are there process commitments?
• Policies and codes: discipline, conduct, bullying/harassment, drug and alcohol, privacy, IT use, H&S, etc.
• Custom and practice: how has the employer handled similar issues before (consistency matters)?

A common trap is an employer publishing "process" policies and then not following them. Even where a policy is not strictly contractual, the ERA/Court may still ask whether a fair and reasonable employer should have followed its own fair and reasonable policy.

This is also the point where parallel processes need to be identified (police investigations, professional regulator inquiries, internal culture reviews, or multiple complaints arising out of the same events). Where parallel processes exist, the question becomes: can the employer proceed fairly, or is there a real risk of injustice?

4) Bullying, harassment, and the health and safety overlay

Bullying is not its own stand-alone personal grievance category (unlike sexual or racial harassment), but it often sits inside unjustified disadvantage, constructive dismissal, and good faith failures. It also engages health and safety duties under the Health and Safety at Work Act 2015 (HSWA): psychosocial harm and behaviour can be hazards.

Practically, that means investigation decisions are not just "HR". Delay, minimisation, or mishandling can become part of the merits. In serious bullying or harassment allegations, an appropriately skilled investigator (sometimes external) and a well-scoped process can matter as much as the ultimate finding.

5) Should you appoint an external investigator?

There is a popular idea that external investigators are "best practice" in all cases. That is not right as a rule. The real question is: what is necessary to achieve a fair process in the circumstances?

External investigators are more likely to be appropriate where:

• Independence is essential (conflict of interest, seniority issues, prior involvement).
• There is a toxic workplace or complex relationship dynamics.
• Allegations are sensitive (sexual harassment, serious bullying, serious violence threats).
• Credibility is central and perceptions of bias will matter.
• The issues are technical (fraud, IT forensics, drugs/alcohol regimes, systemic culture reviews).

But employers are not required to outsource investigations. Larger employers may run a fair process using a capable internal investigator from a separate business unit with no prior involvement. Small employers may have fewer options, but "small" does not excuse unfairness.

6) Licensing: "workplace investigator" can be regulated work

If you are appointing an external investigator, you must think about the Private Security Personnel and Private Investigators Act 2010. The Private Security Personnel Licensing Authority has taken the position that many workplace investigators are "private investigators" for the purposes of the licensing regime.

Lawyers are generally exempt because they are regulated under a different regime. Non-lawyer investigators should treat licensing and compliance as a threshold issue. A later argument may be that a fair and reasonable employer would not have retained an unlicensed investigator for regulated work.

7) Independence is not a vibe: it is a legal vulnerability

Independence is about both actual bias and the perception of bias. Two recurring problems:

• Dual role conflicts: an investigator who is also acting as counsel/adviser for the employer can create a perception of unfairness.
• Not telling the truth about "independence": calling someone "independent" without disclosing a relationship that may affect neutrality (for example, governance ties) can itself breach good faith.

When in doubt, disclose relationships early, and scope roles so the investigator is not simultaneously "judge and advocate".

8) Terms of reference: scope, fairness, and the anti-fishing rule

Terms of reference are the spine of an external investigation. They should:

• Define the allegations/concerns with enough precision to be fair and intelligible.
• Avoid being so broad that the process becomes a fishing expedition.
• Identify relevant documents (agreement, policies, key emails, incident reports, etc.).
• Set expectations: confidentiality, timeframe, interview approach, and natural justice.
• Make clear what the investigator will deliver (facts only, findings, recommendations).

Good practice is to share the terms of reference with the key affected parties (at least the respondent employee, and often the complainant) so interviews are informed and the process is transparent.

Investigators should be careful not to drift beyond scope. "Scope creep" is a common way investigations become unfair: people get asked about new issues without notice, or findings get made about things not properly investigated.

9) Interviewing and evidence: the "full and fair" basics

Put allegations and adverse material to the affected person

A person cannot respond fairly if they do not know the case against them. "Secret evidence" is a high-risk feature in investigations. If the investigator is influenced by material that is not put to the affected person for comment, the investigation can be attacked as procedurally unfair.

Use open questions and avoid leading questions

Leading, prosecutorial, or overly directive questioning is how investigations end up looking predetermined. Investigators can form tentative views as the evidence develops, but should test those views, not harden them through biased questioning.

Record properly

The ERA and Court can scrutinise note-taking. Rough, incomplete, unsigned notes create avoidable arguments. For serious matters, audio recording (with clear consent and upfront disclosure) and transcription is often the cleanest option. If you rely on typed or handwritten notes, consider confirming them with the interviewee for accuracy.

Support people and welfare

Interviews should include clear advice that the employee can bring a representative or support person. In sensitive matters, access to EAP or similar support should be offered. The process should not become punitive by stealth.

10) "Standard of proof" vs what an employer must do

Court cases sometimes get derailed by arguments about "proof beyond reasonable doubt" or even "balance of probabilities". The better framing is this: an employer does not have to prove misconduct to a court standard inside the investigation. The employer must run a full and fair inquiry and then reach a conclusion that a fair and reasonable employer could reach.

Later, in a personal grievance, the Authority/Court applies the statutory justification test and assesses whether the employer's belief and decision were reasonably open on the information gathered through a fair process.

11) Confidentiality, disclosure, and "privilege" traps

Confidentiality is real, but it is not a shield against fairness

Confidentiality can be important to protect people, avoid collusion, and prevent reputational harm while no conclusions have been made. But confidentiality cannot be used as a substitute for putting allegations and adverse material to a person who must respond.

Be careful with confidential witnesses and "secret evidence"

Sometimes a complainant or witness wants anonymity. That can be a real welfare issue. But the more the process relies on material that cannot be meaningfully challenged, the more procedurally fragile the investigation becomes.

Privilege: calling the investigation "for legal advice" does not automatically make it privileged

Employers sometimes try to wrap investigation material in legal privilege to control disclosure. That is dangerous. If the report is not genuinely for the primary purpose of legal advice, privilege can fail. Even where privilege exists, the ERA/Court may still ask whether withholding key material was consistent with good faith disclosure obligations and the s 103A standard of a fair and reasonable employer.

12) The report: write it like it will be challenged (because it might be)

A good investigation report usually includes:

• Terms of reference and what the investigator was asked to do.
• Steps taken (interviews, documents reviewed, site visits, timelines).
• Evidence summary, organised by issue.
• Findings (if within scope), tied to evidence and relevant standards/policies.
• Any recommendations (if within scope), clearly separated from factual findings.

Where the process allows, providing a draft report for comment can strengthen procedural integrity, but only if the investigator genuinely engages with feedback (not lip service). If important new information emerges in response to a draft, the investigator may need to reopen parts of the inquiry.

13) The employer still has to think for itself

Even with an external report, the employer cannot just rubber-stamp. The ERA/Court may examine whether the decision-maker considered the report critically, gave the employee an opportunity to comment on relevant adverse material, and then made an independent decision.

14) Case law map: which cases you reach for, and when

If you want a quick index of the authorities commonly used when arguing about investigations, here is a practical map. (This is not a complete list of all New Zealand investigation decisions, but it covers many of the recurring "workhorse" authorities.)

• FMV v TZB [2021] NZSC 102: Good faith is wider than simply not misleading or deceiving. In investigations, this underpins disclosure and genuine opportunity to comment.
• Coutts Cars Ltd v Baguley [2002] 2 NZLR 533 (CA): High standard of good faith; investigations must be run to a high standard of fairness and transparency.
• NZ (with exceptions) Food Processing Etc IUOW v Unilever New Zealand Ltd (1990) ERNZ Sel Cas 582: Natural justice minimums; links to the s 103A(3) procedural factors.
• W & H Newspapers Ltd v Oram [2001] 3 NZLR 29 (CA): The touchstone is a full and fair investigation in the particular circumstances.
• Maritime Union of New Zealand Inc v TLNZ Ltd (2007) 5 NZELR 87 (EmpC): Employment agreement/policy architecture matters; what an employer agreed to can shape what fairness requires.
• NZ Amalgamated Engineering Printing and Manufacturing Union Inc v Air New Zealand Ltd [2004] ERNZ 614 (EmpC): Policies (eg, health and safety) can be scrutinised for reasonableness; investigation steps often follow policy regimes.
• Makeham v New Plymouth District Council [2005] ERNZ 49: Another example of policy reasonableness and process expectations.
• Hayllar v The Goodtime Food Company Ltd [2012] NZEmpC 153: Employer may be expected to follow its own promulgated fair and reasonable policies, even if not strictly contractual.
• Li v Vice Chancellor of Auckland University of Technology (2006) 3 NZELR 66 (EmpC): Similar principle: internal policies/procedures can set a fairness baseline.
• Russell v Wanganui City College [1998] 3 ERNZ 1076 (EmpC): The Court can restrain investigations in rare cases (eg, parallel processes) where injustice risk is real.
• Wackrow v Fonterra Co-operative Group Ltd [2004] 1 ERNZ 350 (EmpC): Parallel criminal/police inquiries and self-incrimination risk; restraint is exceptional but possible.
• BEO v Vice Chancellor of the University of Auckland [2019] NZERA 616: Restraint can arise where an investigation interacts with severe health issues and fairness.
• FGH v RST [2018] NZEmpC 60: Bullying/harassment and health and safety overlay; how HSWA duties and s 103A justification intersect.
• Goel v Director-General for Primary Industries [2015] NZEmpC 214: External investigators are not always required; an internal investigator from another area with no prior involvement may satisfy fairness.
• Re: D, E & C Ltd [2020] NZPSLA 007: Licensing: many workplace investigators are treated as private investigators under the licensing regime; using an unlicensed investigator can become a fairness issue.
• Campbell v Commissioner of Salford School [2015] NZEmpC 122: Independence is not cosmetic. Conflicts/dual roles and use of confidential witnesses can create procedural vulnerability.
• Fox v Hereford School Trust Board [2015] NZEmpC 206: Disclose the true nature/relationship of the investigator; calling someone 'independent' without disclosure can breach good faith.
• Smithson v Wellington College Board of Trustees [2021] NZEmpC 114: Keep an open mind: do not start with a view then ask leading questions. Employer must also avoid rubber-stamping.
• Ritchies Transport Holdings Ltd v Merennage [2015] NZEmpC 198: Investigators can form tentative views, but must keep testing them fairly; avoid predetermination.
• O'Boyle v McCue [2020] NZEmpC 175: Do not confuse 'serious misconduct' assessment with proving a dismissal in court; focus on full and fair inquiry and reasonable conclusion.
• Cowan v Idea Services Ltd [2020] NZCA 239: Clarifies employer inquiry vs court inquiry and how 'standard of proof' arguments should not derail the statutory justification test.
• Harris v The Warehouse Ltd [2014] NZEmpC 188: Poor note-taking (rough, incomplete, unsigned notes) can undermine the integrity of the process.
• Yu v Zespri International Ltd [2017] NZEmpC 146: Legal privilege claims over investigation material are contestable; cannot be used to avoid good faith disclosure in substance.
• Re King [2018] FWC 6006: Privilege may fail where investigation report is not primarily for legal advice; used as persuasive authority.
• Bartolo v Doutta Galla Aged Services Ltd [2014] FCCA 1517: Persuasive Australian authority on privilege and investigation reports; signals risk in 'privilege over everything' approach.

15) A practical checklist (fast, but useful)

If you are an employer

• Define the issue: misconduct, performance, bullying/harassment, safety, conflict, or systemic review?
• Check agreement/policies and follow them (or have a justified reason not to).
• Pick the right investigator: independence, competence, cultural capability, and licensing if external.
• Scope terms of reference tightly; set timelines and confidentiality expectations.
• Put all adverse allegations and key material to the affected employee; allow real time to respond.
• Keep clean records: interview notes, disclosures, and a clear evidential trail for findings.
• Decision-maker stays independent; do not rubber-stamp the investigator.
• Be cautious about "privilege strategies" that look like a way to avoid disclosure.

If you are an employee (or supporting a colleague)

• Ask for the allegations in writing and the terms of reference (if there is one).
• Ask for the documents the employer is relying on, and what is said you did wrong.
• Bring a representative or support person; take notes.
• Respond in writing where possible; correct inaccuracies promptly.
• If welfare is a problem (stress, illness), say so early and ask for reasonable accommodations.
• Keep an eye on independence: ask who the investigator is, and whether there are any relationships you should know about.

Links to decisions referred to

These are links to free online copies where I could locate them. Where a free public copy is not available (for example, some ERNZ reported cases), I have kept the citation without a hyperlink.

• FMV v TZB [2021] NZSC 102
• Coutts Cars Ltd v Baguley [2002] 2 NZLR 533 (CA)
• W & H Newspapers Ltd v Oram [2001] 3 NZLR 29 (CA)
• Maritime Union of New Zealand Inc v TLNZ Ltd (2007) 5 NZELR 87 (EmpC)
• NZ Amalgamated Engineering Printing and Manufacturing Union Inc v Air New Zealand Ltd [2004] ERNZ 614 (EmpC)
• Makeham v New Plymouth District Council [2005] ERNZ 49
• Hayllar v The Goodtime Food Company Ltd [2012] NZEmpC 153
• Li v Vice Chancellor of Auckland University of Technology (2006) 3 NZELR 66 (EmpC)
• Russell v Wanganui City College [1998] 3 ERNZ 1076 (EmpC)
• Wackrow v Fonterra Co-operative Group Ltd [2004] 1 ERNZ 350 (EmpC)
• BEO v Vice Chancellor of the University of Auckland [2019] NZERA 616
• FGH v RST [2018] NZEmpC 60
• Goel v Director-General for Primary Industries [2015] NZEmpC 214
• Campbell v Commissioner of Salford School [2015] NZEmpC 122
• Fox v Hereford School Trust Board [2015] NZEmpC 206
• Smithson v Wellington College Board of Trustees [2021] NZEmpC 114
• Ritchies Transport Holdings Ltd v Merennage [2015] NZEmpC 198
• O'Boyle v McCue [2020] NZEmpC 175
• Harris v The Warehouse Ltd [2014] NZEmpC 188
• Yu v Zespri International Ltd [2017] NZEmpC 146
• Cowan v Idea Services Ltd [2020] NZCA 239 (opens a list - use the [2020] NZCA 239 PDF link on that page)
• Re: D, E & C Ltd [2020] NZPSLA 007
• Re King [2018] FWC 6006
• Bartolo v Doutta Galla Aged Services Ltd [2014] FCCA 1517
• Food Processing Etc IUOW v Unilever New Zealand Ltd (1990) ERNZ Sel Cas 582 (no free public copy located)

Need help?

If you are mid-investigation (as employer or employee), the best time to get advice is early, before the process locks in. If you want help stress-testing terms of reference, managing disclosure, drafting an interview response, or challenging an investigation's fairness, get in touch.