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In any Australian workplace, there may come a time when you need to handle serious concerns about an employee – whether it’s an allegation of misconduct, a potential breach of policy, or simply a situation that requires further investigation before you make any decisions. For many business owners and managers, one of the biggest questions is: can you suspend an employee pending investigation, and if so, how do you do it in a way that’s legally sound and fair to everyone involved?
It’s not always a straightforward process. Suspension, especially with pay, is a significant step and can impact both your business and the employee’s wellbeing and rights. If it’s handled incorrectly, you risk legal claims, reputational damage, and undermining trust in your team. But when managed properly, suspension is a crucial tool for protecting your workplace while you get to the bottom of the issue.
In this guide, we’ll walk you through when and how to suspend an employee pending investigation in Australia, what “suspension with pay pending investigation” actually means, key legal considerations, and best practices to minimise your risks. If you’re feeling uncertain about the process, you’re not alone – and with the right knowledge and support, you can manage these situations with confidence.
What Does It Mean to Suspend an Employee Pending Investigation?
Suspending an employee pending investigation means temporarily removing them from their duties while you investigate concerns such as alleged misconduct, breaches of workplace policies, or other serious issues. This is not a disciplinary sanction in itself; rather, it’s a precautionary measure to:
- Protect the integrity of the investigation (e.g., avoiding interference with evidence or witnesses)
- Maintain workplace safety
- Safeguard the wellbeing of the employee, other staff, or clients
- Prevent potential harm to the business or its reputation
Usually, suspension is with pay (“suspension with pay pending investigation”), but in some rare instances it may be without pay – though this carries significant legal risk and is only justified in very specific circumstances. In most cases, the employee remains employed, continues to accrue entitlements such as leave, and needs to be treated fairly in line with employment law and your own policies.
When Can You Suspend an Employee Pending Investigation in Australia?
Suspension is a serious step, so you need a legitimate basis for it – simply being annoyed by an employee isn’t enough. In Australia, you should generally only consider suspension when:
- The conduct under investigation is serious (e.g., fraud, bullying, harassment, violence, or serious breaches of policy)
- There is a genuine risk that the employee’s presence might compromise the investigation, workplace safety, or business interests
- Your employment contract or workplace policies specifically allow for suspension (which should be reviewed up front; if you’re unsure, get a contract review by a lawyer)
- You’ve considered alternatives and found suspension to be the most reasonable response
If your policies or contracts don’t mention suspension, you may have less flexibility – but that doesn’t mean you can never suspend an employee. You must always act reasonably, and ideally seek legal advice before proceeding if you’re not sure.
What Are the Legal Requirements for Suspending an Employee in Australia?
When it comes to suspending an employee pending investigation in Australia, several areas of law are at play. Let’s break down the main legal considerations so you know where you stand:
Employment Contract and Policies
Most employment contracts or enterprise agreements set out what you’re allowed to do in relation to suspension. This may include when suspension can occur, whether it is with pay, and any processes you must follow. Consistently following your own contract and policies is essential – if you don’t, you could face claims of breach of contract or unfair treatment.
Fair Work Act 2009 (Cth) and National Employment Standards (NES)
There’s no automatic right under the Fair Work Act to suspend employees. Therefore, fairness, reasonableness, and compliance with your procedures are key. The National Employment Standards (NES) continue to apply throughout any suspension (for example, the employee continues to accrue entitlements while suspended with pay).
Disciplinary Procedures and Natural Justice
Even while suspended, an employee is entitled to “natural justice” – that is, a fair process. You must inform them of the allegations, give them a chance to respond, and regularly update them during the investigation. A suspension should be for the shortest time needed.
Anti-Discrimination and Workplace Health and Safety Laws
You cannot use suspension for discriminatory reasons or in ways that might worsen the employee’s health or create new risks. Any action you take must comply with anti-discrimination laws and your workplace health and safety obligations.
What Is “Suspension With Pay Pending Investigation” and What Are My Rights?
Being “suspended from work with pay” means that while the investigation is underway, the employee stays on the payroll – they receive their normal pay and accrue entitlements, but do not perform their usual duties. This is also called “administrative leave.”
For employees, suspension with pay is not considered a punishment or a finding of guilt. Instead, it’s a neutral act designed to maintain workplace harmony and allow for a fair investigation. Employees retain their legal rights during this period, including:
- Receiving their usual remuneration
- Continuing to accrue leave entitlements
- Being treated with dignity and fairness
- Receiving updates about the investigation’s progress
- Being given a fair chance to respond to allegations
It’s important for employees to understand that being suspended pending investigation is not the same as being dismissed or demoted. Importantly, unjust or unreasonably prolonged suspension – or suspension without valid reason – may give rise to an unfair dismissal or general protections claim.
How Should Employers Manage Suspension Pending Investigation?
Getting the process right helps protect your business from legal risk and ensures a fair outcome for everyone. Here’s a practical guide to managing suspension pending investigation in Australia:
1. Review the Employment Contract and Policies
Before taking any action, check your contract and employment policies for clauses about suspension. If unclear or absent, seek advice – doing so without a contractual right can be risky.
If you don’t have clear disciplinary or suspension provisions in your contracts, now is a great time to review and update your employment documents. A well-drafted Employment Agreement can help avoid disputes and confusion later on.
2. Assess the Situation and Justify the Suspension
Consider the seriousness of the allegation and whether there are alternatives (such as temporary reassignment or increased supervision). Ask yourself:
- Is this necessary to protect people, the business, or the integrity of the investigation?
- Could another, less disruptive, option suffice?
3. Make the Suspension Decision and Notify the Employee
Provide the employee with a clear written notice explaining:
- The reason for the suspension
- The suspension is not a disciplinary action or a presumption of guilt
- How long you expect the suspension to last (or how the employee will be updated)
- Whether the suspension is with pay (in almost all cases, it should be)
- Their obligations (e.g., confidentiality, not coming to the workplace, remaining available for investigation interviews)
4. Conduct the Investigation
Carry out a fair and prompt investigation, giving the employee the opportunity to respond to any allegations. Keep thorough records of the process and regularly update the employee about progress and next steps.
5. End the Suspension and Notify the Outcome
Once the investigation concludes, promptly notify the employee of the outcome and your decision (for example, reinstatement, disciplinary action, or termination if justified). If you’re unsure about handling termination or next steps, get legal advice before acting.
Key Legal Traps to Avoid When Suspending an Employee
It’s easy to make mistakes which could expose your business to claims of unfair dismissal, adverse action, or breach of contract. Here are some of the most common pitfalls:
- Suspending without contractual authority: Unless contracts or policies expressly provide for suspension, you risk legal action if you rely on “custom and practice” alone.
- Suspending without pay (except in rare, clear situations): This is usually unlawful unless the contract allows it and the employee actually refuses to work, not merely because of investigation.
- Failing to give proper notice or reason: Employees should be told why they are suspended and the process that will follow; ambiguity creates mistrust and risk.
- Unreasonably long suspensions: Keep the period as short as possible – open-ended or “forgotten” suspensions can lead to constructive dismissal claims.
- Not offering a fair hearing: Always let the employee explain or respond to the allegations as part of procedural fairness (“natural justice”).
- Ignoring support needs: Check in with the suspended employee; prolonged isolation can harm their mental health and workplace culture.
What Legal Documents and Policies Should You Have in Place?
To protect your business and manage workplace investigations smoothly, there are a few essential legal documents you should have up to date:
- Employment Agreement: Sets out the authority to suspend, key procedures, and protects you from “implied contract” claims.
- Workplace Policies and Staff Handbook: Explains codes of conduct, disciplinary processes, and how investigations will work.
- Anti-Discrimination and Harassment Policy: Vital for managing conflict, bullying, or harassment complaints in line with the law.
- Termination of Employment Procedure: Ensures you follow lawful steps and avoid unfair dismissal risk once an investigation is complete.
Having these documents, and ensuring your staff know where to find them, strengthens your approach and demonstrates you are managing each case fairly and transparently.
Are There Any Alternatives to Suspension Pending Investigation?
Suspension is not always the only option, or even the best. You should first consider alternatives, such as:
- Temporarily moving the employee to another area or role
- Allowing them to work from home (if the investigation allows)
- Increased supervision or a support person arrangement during the investigation period
- Implementing temporary restrictions on duties (for example, withholding access to sensitive systems)
Always document your reasons if you choose suspension – showing that you considered less disruptive options helps prove you acted reasonably if challenged later.
What Happens After the Suspension?
Once your investigation is complete, you need to communicate the outcome clearly and promptly. This could involve reinstating the employee, taking disciplinary action, or – in serious cases – moving towards termination. Whatever the result, ensure you document your process, have given the employee a real chance to respond, and comply with all legal obligations. If the case is complex, seek legal advice to review your decision-making.
If the employee returns to work, a smooth reintegration process and ongoing support can help repair any reputational or cultural impact. If termination is necessary, ensure you comply strictly with the Fair Work Act’s requirements and contractual obligations.
Key Takeaways
- Suspending an employee pending investigation is an important but serious step that must be used reasonably and fairly under Australian law.
- Suspension with pay is the norm – employees retain their rights and benefits while investigations take place.
- You need a valid contractual basis (in contracts or workplace policies) to suspend, and a clear process to ensure fairness and natural justice.
- Always consider alternatives to suspension first, and document your reasons if you proceed with it.
- Get the right legal documents in place – especially robust employment agreements and workplace policies outlining your investigation procedures.
- If you’re unsure at any point, engaging an employment law expert helps you avoid costly mistakes and protect your business.
If you’d like a consultation on managing employee suspensions or developing the right employment documents, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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