Workplace investigation reports not always protected by legal professional privilege

A recent Fair Work Commission decision confirms that employers cannot always withhold workplace investigation reports merely by asserting legal professional privilege.

The ruling clarifies that legal professional privilege only applies if the dominant purpose of an investigation is to obtain legal advice and that privilege may be waived if employers disclose too much evidentiary detail. This serves as a timely reminder for organisations to carefully document investigation purposes and limit disclosures to what is strictly necessary.

 In the recent decision of James Crafti v. Cohealth Limited [2025] FWC 3285, the Fair Work Commission (FWC) considered whether a law firm engaging an investigator to conduct a legally privileged investigation was for the dominant purpose of providing legal advice and whether privilege had been waived over the report. The FWC found that the dominant purpose of the investigation was not to provide legal advice and, in any event, the employer had waived privilege over the report. 

The decision serves as a cautionary reminder that engaging investigators through legal representatives does not guarantee that the investigation will be protected by privilege. 

The dominant purpose of engaging external lawyers to investigate

The FWC found that the employer had multiple purposes when engaging a law firm to brief a barrister to commence the external investigation. While the FWC accepted that one of the purposes was to obtain legal advice, the other purpose was to determine whether the employee had breached the employer’s Code of Conduct and, if so, to discipline the employee in accordance with the procedures in the employer’s grievance and misconduct policy. 

In reaching its decision, Deputy President Farouque noted that, without any evidence from the employer demonstrating the dominant purpose, he could not accept that the investigation was primarily for obtaining legal advice. Deputy President Farouque found:

• The employer had determined that it was obliged to assess whether the employee had breached the employer’s code of conduct and, if so, which disciplinary steps were required to be taken.

• The employer’s workplace misconduct policy encompassed an external investigation as a means of addressing allegations of misconduct.

• The employer’s correspondence disclosed the purpose of the external investigation as being an employment disciplinary purpose, with statements that indicated that a more thorough external investigation was necessary to assess whether a breach of the code of conduct had occurred.

• The employer’s use of words such as “continue the investigation” and “finalise the investigation” indicated that there was a continued operation of the employment operation purpose in authorising the external investigation.

• The letter which notified the employee of the allegations, and which required the employee to respond included statements which provided that, should the allegations be substantiated, disciplinary action may be taken. The employer’s code of conduct and disciplinary policy were attached to this letter. 

Was privilege nonetheless waived?

The FWC found that even if the investigation was subject to legal professional privilege, privilege over the report was waived. 

The outcome letter provided to the employee included (amongst other things) the evidentiary basis of the substantiated or partially substantiated allegations, including reference to specific witness statements.

The FWC observed:

“The disclosure of the particular evidentiary source of [the barrister’s] findings in respect of the substantiated and partially substantiated allegations expose [the barrister’s] reasoning beyond that which was necessary for [the employer] to explain to [the employee] the basis upon which he was placed on a [performance improvement plan]…Consequently, I consider that if the [investigation report] was privileged, there has been a waiver of the privilege by the extent of the disclosure made to [the employee], as the extent of that disclosure to [the employee] is inconsistent with the maintenance of confidentiality.”

Deputy President Farouque distinguished this decision from Peter Tainsh and Markus Wellner v Co-Operative Bulk Handling Ltd [2021] FWC 3381 (Tainsh decision) where privilege had not been waived. Deputy President Farouque considered that in the Tainsh decision the purpose of disclosing investigation finings was to provide the employee an opportunity to respond to substantiated allegations. 

As part of Deputy President Farouque’s reasoning, he referred to observation made in Damien Stephen v Seahill Enterprises Pty Ltd & Denise Fitzgibbons [2021] FWCFB 2623, where the Full Bench stated:

“A procedurally fair workplace investigation initiated by an employer the outcome of which is intended to be made known to relevant employees in the workplace and which is to lead, where necessary, to corrective or disciplinary action is not one which ordinarily has a purpose confidential to the employer.”

Key takeaways

• Legal professional privilege only applies to an investigation if the dominant purpose is to obtain legal advice.

• Employers should clearly record the purpose of an investigation.

• Any communication sent to participants of an investigation should be carefully drafted to avoid the risk of waiving privilege and any information disclosed should be limited to only what is necessary.

• Employers should be aware of the risk that disclosing the evidentiary basis for findings may waive privilege over an external investigation. Should this occur, reports will need to be produced to regulators under compliance notices (including Safety regulators and the Australian Human Rights Commission) and in any proceeding commenced by the complainant or respondent to the investigation.

Fay Calderone is a Partner and Jacinta White is an Associate, both at Hall & Wilcox in Sydney and specialising in employment law.