Internal investigations in France: why HR should consider using a lawyer?

According to a French recent survey, when an alert is reported, it leads to an internal investigation in 61.11% of cases, but also to disciplinary measures (28.89%) and a review of the company's processes (23.33%) (source: Ethicorp and the French Association of the in-house Jurists (AFJE))

 Internal investigations have been common practice in the US for a while but are now developing in France, particularly in financial, economic and governance matters, but the employment field is not left behind, thanks to the increasing use of whistleblowing policies. The above-mentioned figures demonstrate that internal investigations in France become usual, meaning that employers and HR should be prepared to conduct them properly. 

The growing number of internal investigations involving employees is largely due to society's increasing expectations in terms of ESG (environmental, social and governance) and CSR (corporate social responsibility), and the fact that internal investigations are increasingly becoming an essential tool for employers (in line with their legal obligation) to provide a safe workplace and protect employees’ mental health.

Internal investigations as part of the employer's health and safety obligations

Indeed, employers’ health and safety obligations are significant and have given rise to numerous court cases. 

As an example, French Labor Courts have already ruled against employers who failed to act following a report of harassment (Cass. Soc. 27 November. 2019, no 18-10.551). 

As a result, it is always advisable, where possible, to carry out internal investigations so that the employer is not subsequently held responsible for failing to do so. 

The aim of these internal investigations is to enable the employer to identify and shed light on facts that have been reported or bad practices in order to remedy them. 

In most cases, internal investigations are useful in the identification and cessation of workplace misconducts (such as discrimination, sexual harassment or bullying).

A rather limited legal framework

Given the significant increase in the number of internal investigations, practice is slowly taking shape, despite extensive and clear legislation. 

In France, the introduction of legislation in this area started with the so-called Sapin 2 Act of 9 December 2016, then updated by the Waserman Act of 21 March 2022 and an implementing decree of 3 October 2022 adopted in order to transpose the European Directive no 2019/1937 dated 23 October 2019, which aims to unify the protection of whistleblowers within the EU. 

Even if it leaves a number of questions open, this recent legal framework explains the rapid growth of internal investigations in France. In this respect, it is interesting to note that most employees, 66% according to the 2022 edition of the Ethical Climate Barometer, claim to be aware of this legislation, even if there are major discrepancies between the various socio-professional categories. 

Given the obligation to implement an internal whistleblowing system (which is now mandatory for companies employing 50 employees and more), most companies are dealing with an increasing number of whistleblower reports, demonstrating a high-level of employees’ expectations in this respect. As a result, employers must define and implement effective internal investigation processes.

Outsourcing investigations to an investigating lawyer?

Given the sensitivity and complex nature of internal investigations, some companies choose to outsource their investigation procedures to lawyers.

This is especially the case when serious issues are raised that could have a major impact on the company, or when the social climate is difficult, leading to a loss of confidence in the company, or when management or senior executives are the subject matter of a report.

There are indeed many advantages to outsource this task to a lawyer.

In particular, the lawyer is subject to ethical principles and is therefore well placed to apply the main principles of the investigation: neutrality, impartiality, confidentiality, fairness process and proper legal classification of the facts. 

Indeed, an internal investigation led by HR may be perceived by employees as biased, especially when senior managers or sensitive cases are involved. Using an independent lawyer brings neutrality and credibility to the process. As a result, employees are more likely to cooperate and trust the findings. Moreover, investigations conducted by in-house personnel may be influenced by internal politics. Using an external lawyer thus avoids conflict of interests. In this respect, in France, professional rules recommend lawyers not to conduct an internal investigation if they are the usual legal counsel of the employer, to ensure objectivity and impartiality. Likewise, the lawyer in charge of an investigation should refuse to assist the employer in further court case involving the subject of the investigation.

In addition, employers reduce the risk of an improperly conducted investigation which could invalidate further disciplinary action and expose their company to litigation, either from the employee being terminated further to findings or by whistleblowers claiming retaliation.

Using a lawyer to conduct internal investigations also prevents leaks that could damage the company’s reputation.

Finally, internal HR teams may not have the required expertise to conduct internal investigations whereas employment lawyer experienced with internal investigations have the necessary skills to ensure interviews, gather evidence, qualify the facts, draft a comprehensive report and provide proper guidance when it comes to deciding on next steps (discipline, amicable resolution, corrective action, …).

While it is not always necessary to use a lawyer for every internal investigation, there are significant advantages in doing so, in particular for sensitive issues or that involving key managers. Therefore, whenever a report is made, it is always recommended to consider if, given the nature of the complaint raised and/or the people involved, it is not better to outsource the internal investigation, which ultimately can protect all parties’ interests.