Monaco business community turns to corporate internal investigations
Whistleblower series: Monaco
For an internal investigation in Monaco, the specific type of allegation will – in many cases – determine how an inquiry should be conducted.
For example, if an employee is alleged to be working while under the influence of alcohol, he can be subject to testing only accordingto a procedure outlined in a ministerial ruling under the laws of Monaco, and only if the the règlement intérieur of the Company provides for it.
If an employee is alleged to be working under the influence of drugs or narcotics, it is not mandatory, but highly recommended that the testing be conducted according to Monegasque rulings and to be provided in the règlement intérieur.
For other allegations of wrongdoing or misconduct, however, companies are not required to follow these rules and can conduct procedures according to best practices and the unique demands of each particular case.
How does a Monaco-based company learn of a case of misconduct that might become the target of an internal investigation?
Like in other parts of the EU, misconduct is often communicated to company management through Whistleblower reports or alerts. In these instances, a worker witnessing a wrongdoing that it is either a contravention of company regulations or Monegasque law reports this misconduct to company management or its HR office.
In other instances, company managers either stumble upon an infraction or discover it through an internal audit.
For harassment issues specifically, any company with a headcount of over 10 employees must implement a specific policy to prevent harassment and violent behavior in the workplace, which includes the designation of a "referent". Failing to do so, the employer is exposed to criminal and civil sanctions.
For more general issues, there is no specific obligation towards the Monegasque employer, which must investigate according to its duties.
In this respect, even if Monegasque law does not demand action for a particular type of wrongdoing, a company is advised to investigate when it has knowledge of an alert / a behavior. Indeed, companies should establish policies and procedures for conducting the various inquires they may face in the future: reports of alcohol or drug abuse in the workplace; and all other types of wrongdoing from fraud to corruption.
Indeed, many companies, further to an EU Directive on the matter, have implemented Whistleblowing systems or channels, which provide an email address or hotline where reports of wrongdoing can be made. These companies also have Whistleblowing procedures in place, which should specify exactly when and how a report can be made, and the company's response when they receive such an alert.
Also, before an allegation is ever made, companies could name an official who is responsible for overseeing investigations and establish general policies on the collection of evidence.
If a company has investigation procedures like this in place, they are able to act the moment a Whistleblower alert is reported or wrongdoing is uncovered by other means. How an investigation proceeds now depends on the severity of the misconduct.
If the allegation is serious and the investigators believe there is a danger that witnesses can be influenced or evidence tampered with, it may be advisable to place the accused employee on temporary furlough to extract him from the work place. It should be made clear that when an employee is placed on furlough, the suspension is temporary and merely a function of the investigation. It is neither punishment nor a supposition of guilt.
Monaco-based companies lacking a history of internal investigations may wonder if it is necessary to have ad hoc investigation procedures in place to probe misconduct that is not mandated by law.
In our opinion, company executives should actively pursue investigations as part of its commitment to internal security, employee welfare, and to reduce the risks to the company. Without a commitment to internal investigations, a company risks legal threats regarding its civil and criminal liability in addition to damage to its brand and reputation.
When a company resolves to conduct an investigation, it's vital that this responsibility be placed in the hands of a representative of the employer, who has the legal power to do so. The employer can opt to have an outside entity (e.g. a law firm with experience in corporate investigations) oversee an inquiry, but it is usually not necessary to outsource the investigations.
Once the company has selected a manager or outside party to lead the probe, the investigation can begin. But all investigations should adhere to several basic principles. First of all, a detailed record should be kept of the investigation, including the employees who are interviewed (along with the details of their testimony) and the evidence collected.
When collecting evidence that directly impacts employees (e.g. pertaining to company email and messaging services), the investigation must take care to follow all Monegasque regulations pertaining to privacy and data protection.
Furthermore, an investigation must ensure the confidentiality of both employee data and all information surrounding a probe, including investigation strategy. Employees can be informed about the general aims of an investigation, but a company is under no obligation to share details and must endure that a system is in place to protect the integrity of the investigation and the evidence it collects.
Perhaps the most important stage of the investigation will be employee interviews where the investigation's target (i.e. the employee accused of wrongdoing) and witnesses are questioned. As stated, interviews should be held in secure surroundings where witnesses can speak freely. Minutes should be taken of each interview that accurately record the testimony.
The current pandemic, which has prompted many Monaco-based companies to close offices and assign staff to work remotely from home, creates clear difficulties for the execution of internal investigations. Not only is documentary evidence more difficult to access, employees are unavailable for face-to-face interviews.
How should a company conduct an investigation during the current pandemic while remote working is in place? If the alleged misconduct is not overly serious and there is little risk to the company, the investigation can be postponed until the crisis is over. But in more serious cases, the investigation can continue with interviews conducted over video conferencing. For the sake of confidentiality, the investigation will have to find technical solutions to ensure that the interviews are secure and private. But there is no reason to delay an investigation vital to a company's interests even during the current crisis, although with much of Europe slowly reopening its economies, business may soon be back to normal (within certain limitations).
Once all the interviews are conducted and the evidence collected, the investigators will arrive at a decision as to whether the allegation has been confirmed or should be dismissed due to lack of proof.
If the allegation of misconduct is confirmed, the investigatory team should issue a formal letter to the employee found guilty of wrongdoing outlining the charge and findings of the probe. The letter will also inform the employee of the disciplinary action he is to receive, which can be – in simple cases – a warning. For more serious wrongdoings, temporary suspension or full dismissal may be called for.
The investigators will also have to determine if the wrongdoing breaks any civil or criminal laws. If this is the case, the company should discuss with legal counsel any obligation it may have to report its findings to authorities.
Clearly, by having Whistleblower and internal-investigation policies and procedures in place, a company can provided needed protection to employees and its own interests.
For more information on conducting internal investigations in Monaco, contact your regular CMS advisor or local CMS experts:
Sophie Marquet, Partner, CMS Monaco
Sophia Bernardi, Middle Associate, CMS Monaco
