The Fair Work Commission (FWC) recently ruled that Melbourne-based Cohealth waived legal privilege by disclosing excessive detail from an external investigation report to a dismissed employee, highlighting important considerations for employers managing workplace investigations and dismissals.

Case Summary: James Crafti v Cohealth Limited FWC 3285

In June 2025, Cohealth terminated a community health worker after he failed to make sufficient progress on a Performance Improvement Plan (PIP). The PIP followed an external investigation by a barrister, Daniel Fawcett, which substantiated allegations including repeatedly banging a bathroom door while a client was showering.

The dismissed worker sought access to the full external investigation report. The FWC was tasked with deciding:

• Whether the dominant purpose of engaging the external lawyer was obtaining legal advice, thus rendering the report privileged; and
• Whether Cohealth waived legal privilege by revealing too much information in a letter outlining the investigation’s findings.

Deputy President Kamal Farouque found that Cohealth had multiple purposes for commissioning the investigation: legal advice and employment disciplinary processes. While the initial engagement aimed to obtain legal advice, it was unclear if this remained the dominant purpose at the time of the external investigation.

Significantly, the letter sent to the worker disclosed details of the evidence supporting the allegations and the barrister’s reasoning—an uncommon practice that went beyond simply informing the employee of the allegations and disciplinary sanctions.

Deputy President Farouque concluded this disclosure went further than necessary and thus waived any legal privilege attached to the investigation report.

Key Lessons for Employers

1. Understand the ‘Dominant Purpose’ Test for Legal Privilege
Legal privilege protects communications genuinely made for the dominant purpose of obtaining legal advice. If disciplinary or operational objectives become dominant in commissioning an investigation, privilege may not apply. Employers should clearly document the purpose at all stages.

2. Be Cautious When Disclosing Investigation Outcomes
Sharing full evidentiary details or the reasoning behind findings in communications with employees can waive privilege. Employers should limit disclosure to what is essential—typically the outcome and an overview of substantiated findings without revealing the underlying evidence or legal advice.

3. Maintain Confidentiality of External Legal Reports
External legal investigations prepared primarily for advice should be treated as confidential. If disclosure is necessary (e.g., to give the employee a right to respond), it should be carefully limited to preserve privilege.

4. Engage Legal Advice Early and Clearly Define Scope
To ensure reports are privileged, engage lawyers early with a clear instruction for legal advice purposes. Mixing legal and disciplinary aims without clarity risks losing the protection.

5. Train Managers on Handling Sensitive Information
Managers and HR should be trained on the significance of legal privilege and proper communication protocols to avoid inadvertent waivers during disciplinary processes.

Employers facing disciplinary investigations must navigate legal privilege carefully to avoid exposing sensitive advice and to protect the integrity of their processes. The Cohealth case underscores the importance of precise legal and procedural handling in workplace investigations.

If your organisation requires tailored guidance on managing investigations or legal privilege issues, consulting with employment law experts is advisable.