What is a work place investigation or domestic inquiry ?
A workplace investigation or domestic inquiry (Work Place Investigation), as it is commonly referred to in Sri Lanka, refers to the internal process an employer undertakes to examine allegations of employee misconduct or improper workplace behaviour. Although Sri Lankan law does not mandate a specific procedure for workplace investigations, employers are expected to follow a fair, transparent, and reasonable process to support any subsequent disciplinary action. Conducting a structured investigation helps demonstrate bona fides, ensures compliance with principles of natural justice, and reduces legal risk under Sri Lankan employment law.
- What legislation, guidance and/or policies govern a workplace investigation?
There is no legislation or laws in Sri Lanka that govern or are applicable to workplace investigations. Conducting a workplace investigation is not mandatory under Sri Lankan law. This position was affirmed by the Supreme Court in 2015, when it stated that, ‘there is no statutory requirement to conduct a domestic inquiry prior to the termination of a workmen. Where there is no collective agreement or clause in the contract of employment that a domestic inquiry should be held in the event of termination, it is not mandatory to hold a domestic inquiry’.
However, some form of investigative or inquiry process is recommended at least for the demonstration of bona fides on the part of the employer, establishment of transparency of process and the affording of a free and fair opportunity to an employee to address the misconduct alleged. To this end, it is common for large scale local companies and MNCs to implement internal policies that provide for a procedure to be adopted or followed to tackle matters involving employee misconduct.
The recommended process in the absence of internal policies –
Where an employer does not have any policies providing for workplace investigations, we recommend that the procedure to be adopted is based on the facts and circumstances of the misconduct to be investigated. In such situations, the advisable approach would be to conduct a preliminary investigation into the alleged misconduct. Thereafter, a Show Cause letter could be issued to the employee with the alleged charges. The employee should be given an opportunity to respond to the issued Show Cause letter. If the employer is not satisfied with the responses provided by the employee, an inquiry into the alleged misconduct could be initiated (in Sri Lanka, such an inquiry process is commonly referred to as a “Domestic Inquiry”). This process ensures the principles of natural justice are followed (ie, the employee is informed of the charges against them and is given an opportunity to present their case) and the establishment of an employer’s bona fide and impartiality. - How is a workplace investigation usually commenced?
As Sri Lanka does not have specific laws which govern such investigations, the procedure to be followed is at the discretion of the employer. If an internal policy on workplace investigations form part of an employee’s terms of engagement, it is recommended that the procedure provided in such policies be followed. - Can an employee be suspended during a workplace investigation? Are there any conditions on suspension (eg, pay, duration)?
Yes. An employee can be suspended with or without pay for the duration of the investigation. However, if an employee is to be suspended without pay it should be stated in the contract of employment. - Who should conduct a workplace investigation, are there minimum qualifications or criteria that need to be met?
No. In the event the employer proceeds with a domestic inquiry, having an independent inquiring officer is recommended to demonstrate impartiality, fairness and transparency. - Can the employee under investigation bring legal action to stop the investigation?
No. It is the employer’s prerogative to conduct such investigations and the employee, being subject to the control and direction of the employer, is obliged to comply (unless such directions are unlawful or grossly unreasonable). - Can co-workers be compelled to act as witnesses? What legal protections do employees have when acting as witnesses in an investigation?
Co-workers (ie, employees not under investigation) cannot be compelled to act as witnesses nor does the law provide for protection for co-workers acting as witnesses. - What data protection or other regulations apply when gathering physical evidence?
If the evidence gathered relates to personal data, then the provisions of the Personal Data Processing Act No.09 of 2022 will be applicable. - Can the employer search employees’ possessions or files as part of an investigation?
An employer can only search possessions in the ownership of the employer or otherwise provided by the employer to the employee for the discharge of the employee’s duties. Searching of other possessions or files will require the consent of the employee. Alternatively, a Court Order will have to be obtained for such purpose (which is an extreme step unless part of a criminal investigation). However, withholding of such consent would be matters of evidence that can be led in any ensuing legal process. - What additional considerations apply when the investigation involves whistleblowing?
Sri Lankan law does not provide for a mechanism or guidelines on how whistleblowing should be implemented or conducted within an organisation. However, where formally or informally adopted, employers should ideally ensure anonymity of the informant to avoid retaliation. - What confidentiality obligations apply during an investigation?
Not prescribed or regulated. Ideally, utmost confidentiality should be maintained with disclosures only on a “need to know” basis to ensure an effective investigation process. - What information must the employee under investigation be given about the allegations against them?
Ideally, the employee should be provided with clear and concise information of the allegations levelled against the employee affording them a fair opportunity to address such allegations and formulate a defense against such charges. - Can the identity of the complainant, witnesses or sources of information for the investigation be kept confidential?
Not prescribed or regulated. This is possible, however, where any resultant disciplinary measure (more particularly, termination) is challenged before a Labour or legal forum, the fact that the employee has been deprived of the opportunity to cross examine such sources may undermine the veracity of the findings based on which the disciplinary measure is implemented. - Can non-disclosure agreements (NDAs) be used to keep the fact and substance of an investigation confidential?
Yes. Please note the response to Question 12. - When does privilege attach to investigation materials?
Such a concept is not applicable under Sri Lankan law. - Does the employee under investigation have a right to be accompanied or have legal representation during the investigation?
There is no right of representation. However, at the inquiry stage it is common for the employee to be accompanied by an “observer” who is also somebody generally within the employer organisation. - If there is a works council or trade union, does it have any right to be informed or involved in the investigation?
Where the employer has in place a Collective Bargaining Agreement (“CBA”) with a Trade Union, the CBA would dictate the form of representation. - What other support can employees involved in the investigation be given?
An employer should ensure that the investigation process is conducted in a manner that is fair, impartial and free of any arbitrariness. If an employee requests for any assistance in obtaining information or documents to counter such allegations, these should be made available. - What if unrelated matters are revealed as a result of the investigation?
Fresh or additional charges against the employee in respect of such new revelations. It is not uncommon for Additional Charges to be framed against an employee during the course of a pending investigation. - What if the employee under investigation raises a grievance during the investigation?
This would largely depend on the nature and reasonableness of the grievance raised. The employer is obliged to act reasonably in such circumstances. - What if the employee under investigation goes off sick during the investigation?
If there are genuine grounds of ill-health which precludes the employee from participating in the investigative or inquiry process, then reasonability would dictate that the employer grant further or additional time for the employee to be fit enough to partake in the process. - How do you handle a parallel criminal and/or regulatory investigation?
This would largely depend on the facts and circumstances particular to each case. However, the general approach is to stay internal investigations once criminal investigations by the police are ongoing to avoid duplication of process or interference with evidence. - What must the employee under investigation be told about the outcome of an investigation?
Not prescribed or regulated. However, procedural propriety dictates that once allegations or charges are framed, the employee should be informed of the specific allegations or charges with the evidence provided in support. - What next steps are available to the employer?
Please see response to Question 1. Should the employee be deemed to be guilty of the allegation(s) or charge(s) levelled after the inquiry process, the management would then have to decide of the suitable punishment in proportion to such misconduct. - Who can (or must) the investigation findings be disclosed to? Does that include regulators/police? Can the interview records be kept private, or are they at risk of disclosure?
Generally, such documents or information are required to be kept confidential unless disclosure is required by law or for legal process. - How long should the outcome of the investigation remain on the employee’s record?
Not prescribed or regulated. It is generally retained in the employee’s personal file and would form a consideration in the event of a repeat of indiscretion. - What legal exposure could the employer face for errors during the investigation?
This would undermine the veracity if not admissibility of the evidence gathered in such investigation which would have a direct knock-on implication on the finding of guilt founded on such evidence.
