Internal Employment Investigations: How Companies Should Prepare a Disciplinary Decision

Disciplinary decisions within a company require more than the existence of a suspicion or a perception of misconduct. Before adopting a measure as serious as disciplinary dismissal or an employment sanction, the company must ensure that it has an objective basis capable of proving the facts and defending the decision before the courts.

In this context, internal employment investigations have become an essential tool within corporate management. Their purpose is not to anticipate a sanction, but to reconstruct the facts, analyse the available information and ensure that any subsequent decision is based on a solid foundation.

For companies, a properly conducted internal investigation helps reduce legal risks, protect the rights of the parties involved and improve the quality of the disciplinary decision. The difference between a defensible business decision and a complex judicial dispute often lies in the quality of the process followed to determine what happened.

What Is an Internal Employment Investigation?

An internal employment investigation is a procedure through which a company analyses certain facts that may constitute a breach of employment obligations, a violation of internal policies or misconduct by an employee.

It is not a judicial procedure or a disciplinary sanction in the strict sense. Its main purpose is to gather sufficient information for the company to assess whether irregular conduct has occurred and what measures may be appropriate.

These investigations may arise in different contexts:

• Potential contractual breaches.
• Internal fraud.
• Misuse of company resources.
• Conflicts between employees.
• Harassment complaints.
• Disclosure of confidential information.
• Breaches of internal ethical codes or compliance policies.

An internal investigation allows companies to distinguish proven facts from mere suspicions and prevents significant business decisions from being based solely on subjective perceptions.

Internal Investigations as a Tool for Employer Protection and the Burden of Proof

Although Spanish employment legislation does not generally establish an obligation to conduct an internal investigation before every disciplinary decision, in practice it can be decisive in legal proceedings.

Under Spanish law, the burden of proof in disciplinary dismissal proceedings falls exclusively on the employer. This is expressly established by Article 105.1 of Law 36/2011 of 10 October, regulating employment jurisdiction:

“1. Once the claim has been ratified, where applicable, during the submissions stage, the taking of evidence and the closing arguments, the defendant shall present its position first. The defendant shall also bear the burden of proving the truthfulness of the facts alleged in the dismissal letter as justification for the dismissal.”

When a decision is taken hastily and without sufficient prior analysis, the risks increase significantly that:

• The facts cannot be proven before the courts.
• The dismissal letter will be considered insufficient due to a lack of precision.
• Irreconcilable contradictions will arise between the versions provided by witnesses.
• The sanction will be considered disproportionate by the courts.

For this reason, an internal investigation should not be understood as an additional bureaucratic procedure, but as a critical stage in the legal preparation of the company’s decision.

The Importance of Preserving and Analysing Evidence Within Constitutional Limits

One of the central elements of any internal investigation is the proper collection of information. The company must identify which elements may help reconstruct the facts and ensure that the information obtained can be used lawfully if judicial proceedings arise.

Depending on the circumstances, relevant evidence may include internal documents, professional communications, activity records, reports, corporate policies, employee statements or digital evidence.

However, evidence must be obtained in strict compliance with the applicable legal limits, particularly regarding privacy, data protection and fundamental rights, such as the confidentiality of communications and the right to privacy protected by Article 18 of the Spanish Constitution.

The existence of relevant information does not automatically mean that it can be used without restrictions. Evidence obtained in breach of fundamental rights will be declared invalid in court, potentially affecting the validity of the termination decision itself.

Internal Interviews and the Need for a Balanced Investigation

Interviews with the individuals involved are often one of the most important elements of an internal investigation. The company must allow the different versions of the facts to be considered and avoid turning the investigation into a mere confirmation of a conclusion that has already been reached.

A proper investigation should objectively analyse:

• What exactly happened.
• Who was involved in the events.
• What the surrounding circumstances were.
• What actual consequences or harm the organisation suffered.
• Whether there were previous incidents, warnings or sanctions relating to similar conduct.

Impartiality during this stage is particularly important where the facts under investigation may affect fundamental rights or result in serious disciplinary consequences.

Internal Investigations in Harassment and Discrimination Cases

Cases involving workplace harassment, sexual harassment or discrimination present particular legal complexity and sensitivity. In these situations, the internal investigation has an additional and mandatory purpose: demonstrating that the company acted with the appropriate preventive diligence in response to a possible breach of fundamental rights.

Failure to act, or failure to act promptly, following an internal harassment complaint may result in significant employer liability, both administrative and in the form of damages, even where the harassing conduct was carried out by another employee within the organisation who does not hold a management position.

Companies should therefore have clear protocols and procedures for managing these situations, while ensuring confidentiality, prompt action and protection of the individuals involved at all times.

Investigations in these areas should not focus solely on determining whether sanctionable conduct occurred, but also on assessing which preventive, corrective and support measures may be necessary to restore a safe working environment.

The Relationship Between Internal Investigations and Disciplinary Dismissal

An internal investigation does not automatically mean that the company must terminate the employment relationship. Its true purpose is to provide objective and sufficient information to assess the different management alternatives available.

In some cases, the established facts will justify disciplinary dismissal because they constitute serious and culpable misconduct. In others, a less severe sanction may be appropriate, such as suspension of employment and salary, an organisational measure such as a change of department or even the definitive closure of the investigation where there is insufficient evidence.

This assessment of proportionality is essential. Disciplinary dismissal is the most severe sanction within the employment relationship. Courts rigorously assess not only whether inappropriate conduct occurred, but also whether the employer’s response was proportionate to the seriousness of the facts and the employee’s circumstances.

The Dismissal Letter and the Internal Investigation: The Principle of Consistency

When an internal investigation leads to disciplinary dismissal, the information obtained must be transferred with absolute precision to the dismissal letter.

The letter should not merely reproduce general conclusions, subjective assessments or generic legal classifications. It must describe specific facts, dates, times, locations, circumstances and objective elements capable of justifying the decision.

The importance of this formal precision is absolute in employment proceedings. Article 105.2 of Law 36/2011 of 10 October, regulating employment jurisdiction, provides:

“2. In order to justify the dismissal, the defendant may not rely at trial on any grounds for opposing the claim other than those contained in the written dismissal communication.”

An exhaustive investigation loses much of its value if the final communication does not properly reflect the established facts, because the company will be “bound” by the terms of its dismissal letter and will not be able to introduce new facts justifying the decision at trial.

For this reason, the investigation stage and the drafting of the dismissal letter should form part of the same unified legal strategy.

Common Mistakes in Corporate Internal Investigations

• Confirmation bias: Starting the investigation with a predetermined conclusion and looking only for evidence incriminating the employee while ignoring evidence that may exonerate them. The company must analyse the facts objectively.
• Insufficient documentation of the process: Failing to leave a documentary or digital record of the actions carried out, such as interview records or records of the handover of devices. An investigation without traceability may lose its evidentiary value before a court.
• Breach of privacy: Failing to respect the limits relating to employees’ privacy and data protection. Searches for information on corporate devices must be previously regulated by internal policies known to the workforce, justified by a well-founded suspicion and strictly proportionate to the objective pursued.

The Role of Human Resources in Internal Investigations

Human Resources departments play a central role in managing internal investigations. Their role is not limited to collecting information, but also includes ensuring that the entire procedure is conducted consistently with applicable employment legislation, the relevant collective bargaining agreement and the organisation’s internal policies.

HR should coordinate closely with senior management and external legal advisers where the facts under investigation may have significant disciplinary or financial consequences.

Proper procedural management allows the company to protect itself against future judicial contingencies while ensuring that the individuals involved receive fair, respectful and equitable treatment throughout the process.

Internal Investigations as a Tool to Prevent Employment Litigation

Employment litigation does not begin when a company receives a claim before the courts.

In most cases, the outcome of proceedings before the employment courts depends on decisions taken weeks or months earlier, at the precise moment when the company investigated the facts and prepared its response.

A properly designed and conducted internal investigation allows a mere suspicion to be transformed into a solid conclusion based on evidence. It also demonstrates before the courts that the company acted with due diligence, applied objective criteria and adopted reasoned and proportionate decisions.

At Suárez de Vivero, we advise national and international companies on the design and implementation of internal investigations, disciplinary proceedings, disputes involving fundamental rights and judicial defence before the employment courts.

Frequently Asked Questions About Internal Employment Investigations