There are no employment laws regulating workplace investigations in Brazil. This means that employers are not legally required to conduct workplace investigations except to substantiate the dismissal of a union legal representative. These representatives have protection against at-will termination, and in case of a termination for cause, it is required a previous judicial inquiry.
However, it is strongly recommended that the company create its own rules and policies to investigate misconduct and illegal activities. The best way to protect companies against improper conduct by their representatives, such as fraud, corruption, moral and sexual harassment, or damage to the workplace is to create an effective and strong compliance programme with whistleblowing channels.
The regular purpose of internal investigations
Normally, a workplace investigation, in Brazil, is undertaken as preparation and support for disciplinary action by the employer. Although a workplace investigation is not legally required to validate a disciplinary action, the company will have the burden to prove the wrongdoing in any litigation disputing the disciplinary action, which is not unusual in Brazil. The investigation process also ensures that disciplinary actions are proportional to the wrongdoing and consistent as to all employees who were involved, two issues that courts may review in the event of litigation.
Naturally, the more serious the case, the more advisable it is to undertake a workplace investigation, as in cases of moral and sexual harassment. Not only would the investigation substantiate an informed decision, it may also mitigate the risk of liability for annulment of the disciplinary action (including annulment of termination for cause) and related damages. Considering that litigation to reverse dismissal for just cause is fairly common, the investigation will support the company’s defence and serve as guidance to witnesses testifying in court, as they may change their account of facts over time.
In the worst case, if the court finds that cause is unsubstantiated, it would at least demonstrate due diligence, prudence, and good faith, thus mitigating the risk of an award for moral damages. The investigation may also ensure the company compliance programme’s credibility among employees and may mitigate the victims’ reactive (and potentially litigious) stance by giving the sense that the company recognised the importance of the complaint and the need to investigate it. This is a very subjective factor, though.
As there is no legal procedure to be followed as to how to conduct a workplace investigation, the employer is free to set up its own internal rules and process. The process usually varies according to the complexity of the case. Situations of clear proof of wrongdoing do not require much elaboration, but it is advisable to have two or more people interview employees and to record the interview or produce minutes executed by the interviewee. Interviewing the subject of the investigation is generally advisable, but is not a legal requirement and the employer may choose not to do it if it already has clear proof (e.g. CCTV footage) of the facts/events.
The investigations should be undertaken as soon as possible, because disciplinary actions cannot be delayed after the facts and responsibilities are known; otherwise, a tacit pardon will apply. There are no statutory deadlines, and common sense determines reasonability.
It is important to mention that employers must comply with the Brazilian General Data Protection Law (LGPD) when processing personal data in the context of internal investigations.
With regard to whistleblowing channels, employers are not legally required to put in place a system to allow for anonymous reporting. However, the Federal Public Labour Attorney’s Office and Labour Branch, has a mechanism for anonymous reporting by employees who want to blow the whistle on what they think are unlawful or immoral activities in the workplace.
Additionally, Brazilian anti-bribery and anti-corruption law allows organisations to avoid or limit their liability if they prove the existence of internal integrity and audit mechanisms, the effective application of codes of ethics and conduct, and internal procedures for reporting irregularities (i.e. reporting channels by e-mail or telephone). Channels for the reporting of such misconduct and violations must be reliable and ensure the protection of the whistleblower. This regulation has driven many employers to provide secure reporting channels in which employees can blow the whistle with a guarantee of non-retaliation by the organisation.