1 00118601 Emerging themes 2019 A4 AW v31 combined - Page 18



INVESTIGATIONS
1.Avoiding the temptation towards “knee-jerk”
decisions to suspend
When beginning an internal investigation within the
regulated sector, a preliminary issue to consider is
whether the firm is obliged to make, or should
consider making, an initial regulatory notification.
Where a notification is contemplated, a firm will want
to emphasise to its regulator that the matter is being
taken seriously, so the regulator will trust the firm
to conduct the investigation itself. This can lead to
firms taking an automatic decision to suspend one
or more individuals, pending investigation of the
allegations made.
Where there is a reasonable suspicion of employee
wrongdoing, it may indeed be appropriate to
suspend that employee, pending investigation
(particularly where the employee occupies a senior
role in relation to which the firm has an obligation to
ensure the fitness and propriety of its incumbent).
However, in such circumstances, care must be taken
to ensure that:
•any suspension is an appropriate and proportionate
response, and not a “knee-jerk reaction” to the
allegations made;
•the period of suspension is kept to a minimum; and
•there is regular communication with the suspended
employee.
In today’s world of increased personal accountability,
it is increasingly common to see multiple individuals
make conflicting protected disclosures, meaning that
it may take some time before the firm is able to identify
the key issues and whose behaviour (if anybody’s) was
at fault. Wherever an employee has made a protected
disclosure, how that whistleblower is subsequently
treated can give rise to employment claims.
A whistleblower must not be subject to detrimental
treatment as a result of blowing the whistle. Where a
whistleblower is also the focus of investigation, careful
consideration should be given to whether it is
appropriate to carry out the internal investigation
without suspending the relevant individual(s), to avoid
a claim of detrimental treatment. In some cases, it
may be advisable to discuss this decision with the
firm’s supervisors or the FCA/PRA. Note also that a
whistleblower should not have their identity revealed
if they wish to remain anonymous.
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2.Employee reluctance to cooperate
Employees often feel concerned about giving
evidence in internal investigations and request their
own legal representation. While this is understandable,
employees generally have no right to be legally
represented at an interview carried out as part of an
internal investigation. Further, it may be impracticable
for firms to fund legal representation for all employees
who may conceivably be implicated in an alleged
wrongdoing. Unless there is a real risk that an
employee being interviewed may be implicated in
allegations of criminal conduct (in which case the risk
assessment may well be different), there are a number
of steps that can be taken to encourage a reluctant
employee to cooperate with an interview process for
the purposes of an internal investigation:
•Steps should first be taken to understand the reason
for any reluctance, and appropriate assurances given
(for example, for a whistleblower, a reminder could be
given of their legal protection against retaliation).
•If requested, consideration should also be given
to whether it is possible to maintain the witness’s
anonymity. However, the employer should be mindful
of the possibility that public litigation may follow,
in which the witness may be required to take part,
as a result of which their identity may be uncovered.
•If the witness is still reluctant, they can be reminded
of their duty of good faith and fidelity to the
organisation.
•In appropriate circumstances, the employee could
also be issued with a management instruction
to cooperate.

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