News & Events

You can’t keep secret what you rely upon: Employer loses legal professional privilege in workplace investigation report

Submitted By Firm: Corrs Chambers Westgarth

Contact(s): John Tuck


Tracy Caspersz (Counsel) & James Hulmes (Lawyer)

Date Published: 9/15/2014

Article Type:

Share This:

The decision of the Federal Circuit Court of Australia (FCCA) in Bartolo v Doutta Galla Aged Services Ltd [2014] FCCA 1517 (15 July 2014) highlights the need to carefully consider what documents are to be relied upon in court proceedings, lest legal professional privilege be lost over those communications.

In this case, the defendant employer, in an action alleging unlawful adverse action by it against an employee (in the form of dismissal), was required to disclose a confidential report containing factual findings and advice relating to the allegations (Investigation Report). The Investigation Report had been taken into account by the employer’s Board in recommending that its CEO dismiss the employee.

In this In Brief, we examine the FCCA’s decision and its implications for employers when obtaining legal advice and having investigations conducted in relation to employment issues such as dismissal.

The Investigation Report

The Board of the employer, Doutta Galla Aged Services Ltd (DGAS), instructed solicitors to investigate allegations against the employee, Bartolo, and provide a report. After receiving and considering the Investigation Report, the Board made a recommendation to the CEO that he dismiss Bartolo.

The minutes from the relevant Board meeting stated that:

“Following the provision of legal advice in relation to the outcomes of the investigation, the following recommendations were agreed to be referred to the CEO: ... Termination of the contract of [the Employee].”

The CEO did not receive a copy of or read the Investigation Report. However, he decided to dismiss the employee in reliance on the Board’s recommendation.

Bartolo brought proceedings against DGAS, alleging that it dismissed him (i.e. took adverse action against him) because he had exercised a workplace right, in breach of section 340 of the Fair Work Act 2009 (Cth) (FW Act). The employer in adverse action claims has a reverse onus of proof to demonstrate that its reasons for dismissal do not include a prohibited reason (FW Act, section 361).

DGAS’s Response to Bartolo’s claim asserted that its CEO made the decision to dismiss taking into account a recommendation of the Board to that effect. The Response noted that the Board’s recommendation had taken the Investigation Report into account, which itself was based on an investigation that had been undertaken by the lawyers for the Board.

Application for Discovery of the Investigation Report

Bartolo sought discovery of the Investigation Report on the basis that it was relevant to the CEO’s reasons for the decision to dismiss him. DGAS claimed that the Investigation Report was privileged as it contained legal advice and, therefore, refused to disclose it.

Bartolo contended that the Investigation Report was relevant to the state of mind of both the Board, and the CEO, who had made his decision after receiving the Board’s recommendation. The state of mind of the Board and the CEO had been put into issue by the Response.[1] Once it had been put in issue, Bartolo was entitled to know the state of mind of the CEO and the Board. It would therefore not be fair for DGAS both to rely on the Investigation Report (by referring to it in the Response) and at the same time claim privilege over it.[2]

Bartolo argued that, even if the Investigation Report and any subsequent legal advice were privileged, DGAS had waived that privilege as:

  1. DGAS had raised the CEO’s state of mind in its pleadings;
  2. the Investigation Report was relevant or likely to be relevant to the CEO’s state of mind; and
  3. it would not be fair for DGAS to rely on the CEO’s state of mind, and at the same time claim privilege over the Investigation Report.[3]

DGAS argued that the Investigation Report was privileged because its dominant purpose was the provision of legal advice, notwithstanding that it also had a “fact finding” purpose.[4]

The Respondent also argued that the privilege had not been waived as the CEO had made his decision in reliance on the Board’s recommendation, and not on the Investigation Report. The CEO had not received a copy of the Investigation Report, and the Board had not disclosed to him the substance of the advice contained within it. Therefore, the Investigation Report could not have influenced the CEO’s decision.[5]

Legal Professional Privilege

Lawyer/client communications made for the dominant purpose of the provision of legal advice are privileged – that is, they cannot be disclosed without the consent of the client. The privilege extends to protect supporting documents created for the purpose of preparing those communications.

Legal professional privilege protects the confidentiality of lawyer/client communications. As the privilege is that of the client, a privileged communication cannot be subject to an order for discovery unless the privilege is waived by the client. This can happen if the client expressly waives privilege, or acts in a manner that is inconsistent with maintaining the confidentiality of the communication – for example, by seeking to rely upon it in proceedings.

Waiver of Privilege

The FCCA found that the dominant purpose of the Investigation Report was to provide legal advice to DGAS’s Board.[6] The Investigation Report was, therefore, subject to legal professional privilege.

Despite this, the Court held that DGAS had waived privilege over the Investigation Report. Applying the principle enunciated by the High Court of Australia in Mann v Carnell[7], Judge Whelan noted that a waiver of legal professional privilege arises from inconsistency between a disclosure of advice by a client and the maintenance of confidentiality over that advice. Considerations of fairness may also be relevant to determining whether any inconsistency arises in a particular case.[8]

A mere reference to legal advice will not give rise to inconsistency, nor will a mere reference to a decision having been made following receipt of advice.[9] However, an inconsistent disclosure may occur where:

  1. a client has put in issue its state of mind; and
  2. there is a likelihood that the communication over which privilege is asserted contributed to the development of that state of mind.[10]

In this case, Judge Whelan determined that the Board could not have made its recommendation other than in reliance on the Investigation Report, which recommendation was accepted by the CEO in deciding to terminate Bartolo. DGAS was, in effect, seeking to rely on the Investigation Report in its defence concerning the CEO’s state of mind. Judge Whelan was therefore satisfied that it would be unfair to allow DGAS to do so without disclosing the Investigation Report.[11]

Implications for Employers

  • The decision in Bartolo highlights the risk of one lawyer doing both an investigation and advice on the same matter. One consequence of a lawyer’s advice being discovered is that it might, ultimately, be admitted into evidence. Further, the lawyer could be called as a witness and be cross-examined on the advice.
  • An employer should consider this possibility when requesting a written investigation report and legal advice on it. The chances of the employer waiving legal professional privilege in those documents will depend on the risk of either the investigation report or the legal advice ultimately being relied on by the employer to advance its position in any litigation that ensues.
  • Employers should also take care when disclosing legal advice that they receive to other persons. If the substance of the advice is disclosed, the confidentiality of the communication and, thus, legal professional privilege, may be lost. Board minutes and papers should be drafted with this in mind, as should correspondence (including emails) attaching or referring to legal advice.

[1] Bartolo v Doutta Galla Aged Services Ltd [2014] FCCA 1517 at [25].

[2] [2014] FCCA 1517 at [44]-[45], [48].

[3] [2014] FCCA 1517 at [38]-[39].

[4] [2014] FCCA 1517 at [51].

[5] [2014] FCCA 1517 at [55], [66].

[6] [2014] FCCA 1517 at [85].

[7] (1999) 201 CLR 1.

[8] [2014] FCCA 1517 at [86]-[87].

[9] [2014] FCCA 1517 at [90].

[10] [2014] FCCA 1517 at [90].

[11] [2014] FCCA 1517 at [95].

Find a Member

View or print a complete ELA member list »

Client Successes

Altra Industrial Motion Inc.

Altra Industrial Motion Inc. has multiple locations in the U.S., as well as Central America, Europe, and Asia. The Employment Law Alliance has proved to be a great asset in assisting us in dealing with employment issues and matters in such diverse venues as Mexico, Australia, and Spain. We have obtained excellent results using the ELA network for matters ranging from a multi-state review of employment policies to assisting with individual employment issues in a variety of foreign jurisdictions.

In one instance, we were faced with an employment dispute with a former associate in Mexico that had the potential for substantial economic exposure. The matter had been pending for over a year, and we were not confident in the employment advice we had been receiving. I obtained a referral to the ELA counsel in Mexico, who was able to obtain a favorable resolution of the dispute in only a few days. Based on our experiences with the ELA, we would not hesitate to use its many resources for future employment law needs.

American University in Bulgaria

In my career I have been a practicing attorney, counsel to the Governor of Maine, and CEO of a major public utility. I have worked with many lawyers in many settings. When the American University in Bulgaria needed help with employment litigation in federal court in Syracuse, New York, we turned to Pierce Atwood, the ELA member we knew and trusted in Maine, for a referral. We were extremely pleased with the responsiveness and high quality of service we received from Bond Schoeneck & King, the ELA's firm in upstate New York. I would not hesitate to recommend the ELA to any employer.

David T. Flanagan
Member of Board of Trustees 

Arcata Associates

I really enjoyed the Conducting an Effective Internal Investigation in the United States webinar.  We are in the midst of a rather delicate employee relations issue in California right now and the discussion helped me tremendously.  It also reinforced things that you tend to forget if you don't do these investigations frequently.  So, many, many thanks to the Employment Law Alliance for putting that webinar together.  It was extremely beneficial.

Lynn Clayton
Vice President, Human Resources

Barrett Business Services, Inc.

I recently participated in the ELA-sponsored webinar on the Employee Free Choice Act.  I was most impressed with that presentation.  It was extremely helpful and very worthwhile.  I have also been utilizing the ELA's online Global Employer Handbook.  This compliance tool is absolutely terrific. 

I am familiar with several other products that purport to provide up-to- date employment law information and I believe that this resource is superior to other similar compliance manuals.  I am delighted that the ELA provides this free to its members' clients.

Boyd Coffee Company

Employment Law Alliance (ELA) has provided Boyd Coffee Company with a highly valued connection to resources, important information and learning. With complex operations and employees working in approximately 20 states, we are continually striving to keep abreast of specific state laws, many of which vary from state to state. We have participated in the ELA web seminars and have found the content very useful. We appreciate the ease, cost effectiveness and quality of the content and presenters offered by these web seminars.  The Global Employer Handbook has provided our company with a very helpful overview of legal issues in the various states in which we operate, and the network of attorneys has helped us manage issues that have arisen in states other than where our Roastery and corporate headquarters are located in Portland, Oregon.

Capgemini Outsourcing Services GmbH

As an international operating outsourcing and consulting supplier Capgemini has used firms of the Employment Law Alliance in Central Europe. We were always highly satisfied with the quality of employment law advice and the responsiveness. I can really recommend the ELA lawyers.

Hirschfeld Kraemer

Stephen HirschfeldAs an employment lawyer based in San Francisco, I work closely with high tech clients with operations around the globe. Last year, one of my clients needed to implement a workforce reduction in a dozen countries simultaneously. And they gave me 48 hours to accomplish this. I don't know how I could have pulled this off without the resources of the ELA. I don't know of any single law firm that could have made this happen. My client received all of the help they needed in a timely fashion and on a cost effective basis.

Stephen J. Hirschfeld

Hollywood Entertainment Corporation

As the Vice President for Litigation & Associate General Counsel for my company, I need to ensure that we have a team of top-notch employment lawyers in place in every jurisdiction where we do business. And I want to be confident that those lawyers know our business so they don't have to reinvent the wheel when a new legal matter arises. With more than 3400 stores and 35,000 employees operating in all 50 U.S. states and across Canada, we rely on the ELA to partner with us to help accomplish our objectives. I have been delighted with the consistent high quality of the work performed by ELA lawyers. I encourage other in-house counsel to use their services, as well.

Ingram Micro

Ingram Micro is the world's largest technology distributor, providing sales, marketing, and logistics services for the IT industry around the globe. With over 13,000 employees working throughout the U.S. and in 35 international countries, we need employment lawyers who we can count on to ensure global legal compliance. Our experience with many multi-state and multi-national law firms is that their employment law services are not always a high priority for them, and many do not have experts in many of their offices. The ELA has assembled an excellent team of highly skilled employment lawyers, wherever and whenever I need them, and they have proven to be an invaluable resource to our company.

Konami Gaming

Our company, Konami Gaming, Inc., is growing rapidly in a very diverse and highly regulated industry. We are aggressively entering new markets outside the domestic U.S., including Canada and South America. I have had the recent opportunity to utilize the services provided by the ELA. The legal advice was both responsive and professional. Most of all, the entire process was seamless since our Nevada attorney coordinated the services and legal advice requested. I look forward to working with the ELA in the future, as it serves as a great resource to the legal community.

Jennifer Martinez
Vice President, Human Resources

Nikkiso Cryo, Inc.

Until recently, I was unaware of the ELA's existence. We have subsidiaries and affiliates throughout the United States, as well as in Asia, the Middle East and Europe. When a recent legal issue arose in Texas, our long-time Nevada counsel, who is a member of the ELA, suggested that this matter be handled by his ELA colleague in Dallas. We are very pleased with the quality and timeliness of services provided by that firm, and we are excited to now have the ELA as an important asset to help us address employment law issues worldwide.

Palm, Inc.

The ELA network has been immensely important to our company in helping us address an array of human resources challenges around the world. I strongly encourage H.R. executives who have employees located in many different jurisdictions to utilize the ELA's unparalleled expertise and geographic coverage.

Stacy Murphy
Former Senior Director of Human Resources

Rich Products

As the General Counsel for a company with 6,500 employees operating across the U.S. and in eight countries, it is critical that I have top quality lawyers on the ground where we do business. The ELA is an indispensable resource. It has taken the guesswork out of finding the best employment counsel wherever we have a problem.

Jill K. Bond
Senior Vice President/General Counsel, Shared Services and Benefits

Ricoh Americas Corporation

We have direct sales and service offices all over the U.S., but have not necessarily had the need in the past for assistance with legal work in every state where we have a business presence. From time to time, we suddenly find ourselves facing a legal issue in a state where we have no outside counsel relationship. It has been a real benefit to know that the ELA has assembled such an impressive team of experts throughout the U.S. and overseas.

A few years ago, we faced a very tough discrimination lawsuit in Mississippi. We had never had to retain a lawyer there before. I was absolutely delighted with the Mississippi ELA firm. We received an excellent result. They will no doubt handle all of our employment law matters in Mississippi in the future. I have also obtained the assistance of several other ELA firms around the U.S. and have received the same outstanding service. The ELA is a tremendous resource for our company.

Roberts-Gordon LLC

Our affiliated companies have used the Employment Law Alliance in connection with numerous acquisitions, and have always been extremely pleased with our ability to obtain the highest quality legal advice on due diligence issues from jurisdiction to jurisdiction. We have found the Employment Law Alliance firms to be not only first rate with respect to their legal advice but also responsive and timely in assisting us with federal and state law issues critical to our due diligence efforts. We consider the Employment Law Alliance to be an important part of our team.

Rockwell Collins, Inc.

We have partnered with many ELA firms on the development and execution of case management strategies with very positive results. We have been very pleased with the legal advice and counsel provided by the law firms we have utilized who are affiliated with the Employment Law Alliance. The ELA firms we have worked with are customer focused, responsive, and thorough in their approach to handling labor and employment law matters.

Elizabeth Daly
Assistant General Counsel


Sanmina-SCI has facilities strategically located in key regions throughout the world. Our customers expect that we will provide them with the highest quality and most sophisticated services in the marketplace. We have that same expectation for the lawyers with whom we do business. With operations in 17 countries, we need to be certain that we have a team of lawyers working together to address our employment law needs worldwide. The ELA has delivered exactly what it promised-- seamless and consistent high quality services delivered in each locale around the globe. It has quickly become a key asset for our human resources department.


We own, manage, and franchise hotels throughout the U.S. and in more than 90 countries. With more than 145,000 employees worldwide, ensuring that we comply with the complex web of local labor and employment laws in every one of these jurisdictions is a daunting task. The Employment Law Alliance has served as an important resource for us and we have benefited greatly from its expertise and long reach. When a legal dispute or issue has arisen in some far-flung place, Employment Law Alliance lawyers have always provided responsive, practical, and cost-effective assistance.

Wilmington Trust Corporation

Wilmington Trust has used the ELA to locate firms in California, Washington State, Georgia, and Europe. Our experience with the ELA lawyers with whom we have worked has always been one of complete satisfaction and prompt, practical advice.

Michael A. DiGregorio
General Counsel