Workplace Investigations in Australia: Getting it Right Across Regulated and High-Risk Sectors

Workplace investigations are a critical tool for managing allegations of misconduct, resolving disputes, and ensuring compliance with legal and organisational standards. For employers operating in Australia, the consequences of mishandling an investigation can extend far beyond internal disruption — leading to unfair dismissal claims, reputational damage, loss of regulator confidence, and in some sectors, serious licence or coverage implications.

This is especially true for entities regulated by the Australian Prudential Regulation Authority (APRA) and insurance sector clients working in high-risk industries such as aviation, shipping, mining, natural resources, and construction. In these contexts, investigations are not just about resolving an HR issue — they can trigger regulatory reporting obligations, influence claims defensibility, and become a focal point in regulator or insurer audits.

Australia’s Legal and Regulatory Expectations

At its core, a compliant workplace investigation in Australia must meet the principles of procedural fairness:

• Clearly defining allegations before seeking a response.
• Allowing the employee a fair opportunity to respond.
• Avoiding bias in decision-making.
• Basing findings on objective evidence.

However, for insurers, brokers, and high-risk sectors, additional layers of obligation apply:

• Claims Implications – Allegations involving fraud, safety breaches, or professional negligence may require insurer notification to preserve coverage rights under relevant policies.
• WHS Integration – In safety-critical sectors, workplace investigations often overlap with statutory Work Health and Safety (WHS) investigations. Processes should be coordinated to meet both obligations without compromising evidence or breaching confidentiality.
• Contractual Consequences – For insureds or policyholders, poor investigation handling can affect contractual obligations with underwriters, reinsurers, or counterparties.
• Board Oversight – In some cases, investigation outcomes should be escalated to the board or a risk committee for review and remediation.
• APRA-Regulated entities may also be subject to –
  • Specific Regulatory Reporting – Misconduct that involves breaches of prudential standards, risk controls, or governance frameworks may need to be reported to APRA under laws such as the Banking Act 1959 (Cth), Insurance Act 1973 (Cth), and Life Insurance Act 1995 (Cth).
  • Governance and Risk Management – APRA Prudential Standards (e.g., CPS 510 Governance, CPS 220 Risk Management, CPS 234 Information Security) expect boards and senior management to ensure cultural, conduct, and control failures are identified, investigated, and addressed.

Practical do's and don'ts for employers

Why regulated entities must pay attention

Multi-national organisations often lead or centralize investigations from overseas in order to increase efficiency; however, this can create compliance gaps in Australia. For regulated and high-risk sectors, local laws and prudential standards require investigation processes that:

• Meet procedural fairness requirements under the Fair Work Act 2009 (Cth).
• Align with APRA prudential standards and reporting rules.
• Satisfy WHS obligations and insurer notification requirements.

Failure to meet these standards can attract regulator scrutiny, weaken claims positions, and in extreme cases, jeopardise an APRA-regulated licence.

Key takeaways

For APRA-regulated entities, insurers, brokers, and high-risk industry employers, a workplace investigation is not merely an HR exercise — it is a multi-dimensional compliance process. A well-planned and well-executed investigation:

• Protects against unfair dismissal and discrimination claims.
• Preserves regulatory and insurance standing.
• Demonstrates to regulators, insurers, and stakeholders that the business takes governance, risk management, and safety seriously.

In a landscape where misconduct and compliance failures can quickly escalate to regulatory and reputational crises, the message is clear: get investigations right the first time.

Clyde & Co’s Corporate Advisory team is working with global clients to align contracts, policies, and operational practices like workplace investigations, to ensure they are safe and compliant.

For further advice, contact the team at Clyde & Co.