Taking legal advice on workplace investigations: protecting legal privilege

Naturally, and especially with contentious employee cases on the rise, HR or other managers within organisations often want to take legal advice on internal processes and outcomes. In the main, this is because this should help ensure the procedure is carried out in line with proper process and in line with the employer’s legal obligations. In short, taking legal advice should offer employers some protection when following the process and making decisions.

A recent case involving a university that carried out a grievance investigation shows that it is essential that organisations consider, at the outset of any workplace investigation, how they wish to take legal advice and structure their approach accordingly. They should seek to keep the advice separate from the outcome of process to avoid any disputes over privilege and waiver.

What is “legal privilege”?

For these purposes, there are two types of legal privilege: “legal advice privilege” and “litigation privilege”.

• Legal Advice Privilege
  
  Applies to confidential communications which:
  
  
  • Pass between a client and the client's lawyer, and
  • Have come into existence for the dominant purpose of giving or receiving legal advice in the relevant legal context.
• Litigation Privilege
  
  
  • There is communication between the lawyer and the client, or between either of them and a third party (or it is a document created by or on behalf of the client or the client's lawyer).
  • It is made for the dominant purpose of litigation.
  • It relates to litigation which is pending, reasonably contemplated or existing.
  • It is confidential.

Grievance Investigations

The starting assumption is that documents created as part of a grievance investigation in the workplace will not be privileged, even where an external lawyer may be appointed to conduct the investigation. 

The key question that needs to be asked when considering privilege is what is the dominant purpose of the document / communication. Is it to take legal advice? With grievance investigations, the dominant purpose is likely to be fact-finding: the essential purpose is to consider complaints, establish facts, and come to an initial recommendation or conclusion in a report. Though an adverse outcome of a grievance may well fuel litigation, or feature in it, the purpose of the investigation itself was not for litigation and is thus probably not going to be covered by litigation privilege.

In University of Dundee v Chakraborty [2023] ScotCS CSIH 22,  a recent Scottish decision,   which is binding on Employment Tribunals in England and Wales, the Court of Session (Inner House), considered the question of privilege in the context of a grievance investigation.

Background

In that case the employee’s grievance was investigated by an internal investigator, and a report was produced. Before sending the report to the employee, the employer took legal advice, and amendments were proposed. These were accepted by the investigator who also made some of her own further changes. The final report, which was disclosed to the employee, remained dated as per the earlier report date but a footnote recorded that the report had been "amended and reissued on 23.06.2022 following independent legal advice".

As part of Employment Tribunal (ET) proceedings, the employee sought specific disclosure of the initial unamended February report. The University resisted, asserting legal advice privilege. The University argued that while it was not privileged at the point when it was created, the report retrospectively acquired legal advice privilege when it was amended. The University contended that by comparing the two versions one could determine the legal advice received, and thus they should not have to disclose the earlier report because doing so would allow the employee to determine the privileged advice. The tribunal rejected this argument and ordered disclosure. On appeal the Court of Session dismissed the appeal.

Judgement

The Court held that the original report could not be covered by legal advice privilege since the advice had not been proposed before the original report was drafted.

As to whether “the appellants' own act of issuing the final version containing a footnote revealing that the report had been amended following "independent legal advice" made the original [privileged]”, the Court found that it did not. The status of the original report “ought not to depend upon the use subsequently made of it, or the fortuity whether it is used in the manner intended.”

The Court further held that a comparison between the original and the final reports would only allow the employee to speculate as to the substance of the legal advice received, and even then only because the employer told him that legal advice had been sought.

Finally, the Court turned to the question of waiver and observed that “the privilege was probably abandoned when the advice, which was obtained by the [University], was revealed to the person who was carrying out what was supposed to be an impartial investigation. It was certainly lost once it became known, as the footnote in the report stated, that the original report had been altered as a result of that advice.”

Comments

This case maintains the position that privilege does not generally attach to grievance investigations, and a lawyer’s involvement cannot be used to provide blanket protection. But more importantly, it serves as reminder to be cautious as to who and how legal advice is obtained and shared with, and also how it is referred to in any documentation. The safest course of action is to discuss the process with the organisation’s lawyers before advice is given (or circulated around) and, where it is envisaged that legal advice will be sought on the report or the decision letter (which is common), ensure that the paper trail records show that those drafts are being prepared for the purposes of taking advice on them. This should go some way to helping preserve privilege.

With special thanks to Conor Kennedy, a barrister on secondment, for his assistance with this article.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, November 2023