Illegal workplace investigations coming to an end


In the October 2018 edition of the Waikato Business News, I wrote a piece on the disturbing rise in a cottage industry of “experts” involved in workplace investigations.

On the ground, I was increasingly encountering these people, regularly promoting the need for a workplace-wide investigation (often where no such action was required) and many of these investigations were coming with a five-figure price tag attached.  The quality of some of these investigations was dubious, and particularly when the investigator was being engaged by a large employer, where there was the potential for future work, the impartiality of the investigator was also questionable.

While there are circumstance where a workplace-wide investigation might be appropriate, they were increasingly being advocated for in cases where there were complaints only involving one or two employees, and the benefits of any investigation needs to be carefully weighed against the disruption and disharmony such investigations can invoke.

In June 2020, a rather interesting determination was published by the Private Security Personnel Licensing Authority (‘PSPLA’): Re D, E & C Limited [2020] NZPSLA007. The issue for determination by the PSPLA, was whether workplace investigations came under the Private Security Personnel and Private Investigations Act 2010 (‘PSPPI Act’), and whether those carrying out these investigations fitted within the s 5 definition of the PSPPI Act of “private investigators”. Spoiler alert – turns out they do.

Section 5 of the PSPPI Act defines a private investigator as “a person who, for valuable consideration, either by himself or herself or in partnership with any other person, carries on a business seeking or obtaining for any person or supplying to any person any information described in subsection (2).” The latter defines information as that relating to the personal character, actions, behaviour, financial, occupation or business, location or identity of any person.

Persons captured by the s 5 definition are required to be licensed as private investigators.

Ms D and Ms E were both directors of company C Limited, which was in the business of carrying out workplace investigations. Following one such investigation, an employee, Ms A, complained to the PSPLA about the quality of the investigation and argued that Mss D and E were private investigators covered by the Act.

C Limited argued that Parliament had never intended for the PSPPI Act to cover employment consultants and workplace investigations. Whilst acknowledging Parliament had not expressly included workplace investigations, the PSPLA stated that this was because it was a relatively new phenomenon, but that the actions involved in these investigations were still captured by s 5.

C Limited also argued that the word “private” in the term private investigator implied covert surveillance or an invasion of privacy, and that workplace investigations do not involve these actions. This was rejected by the PSPLA, who noted that the s 5 definition of private investigator did not include reference to covert or privacy invasion issues, and held that the word private merely distinguished private investigators from public investigators, such as the police or inland revenue.

Finally, the PSPLA investigated whether Mss D, E and C Limited were covered by any of the exemptions set out in ss 5(4) or 22 of the PSPPI Act. Section 22 allows exemptions from holding a licence if an investigator holds a practising certificate required by any other enactment. This would, for example, cover lawyers and chartered accountants when engaged in workplace investigations or financial investigations, respectively. The rationale behind this exemption is that the training for such persons is significantly more than that required by private investigators, and the regulatory regime/disciplinary processes in place are stricter, meaning the public are protected. At the time of the complained-about investigation, neither Mss D or E held a practicing certificate, but following the investigation, they both started their own law firm and did hold practicing certificates. The PSPLA held that Mss D and E had breached the PSPPI Act at the time of Ms A’s investigation, but as they did not hold any licence as required by the PSPPI Act, then no action could be taken against them for this breach. As registered lawyers, they are now able to carry out workplace investigations and will be covered by the New Zealand Law Society regulatory and disciplinary framework.

Since this case came out in June 2020, there appears to have been a flurry of applications to the PSPLA for licences, to enable non-lawyer investigators to continue to carry out workplace investigations. While it is not anticipated that this will either increase the quality of these investigations, or decrease the fees being charged, clients will at least have a regulatory body to complain to where the conduct or competency of the investigator comes into question.


About Author

Erin Burke

Employment Lawyer and Director at Practica Legal Email: erin@practicalegal.co.nz phone: 027 459 3375