PSPLA clarifies Private investigator confusion

A recent PSPLA decision clarifies what the ‘private’ in ‘private investigator’ means, writes Nicholas Dynon, concluding that employment investigators are required to be PSPLA licensed but that lawyers are not.

A decision from the Private Security Personnel Licensing Authority (PSPLA) in June 2020 concluded that a company investigating a case of workplace misconduct had breached the Private Security Personnel and Private Investigators Act 2010 because its investigators were not appropriately licensed during their investigation.

Despite this finding, the company avoided prosecution due to the PSPLA concluding that “any breach was inadvertent and a result of the widespread belief within the employment investigation industry that they were not private investigators.”

The decision ([2020] NZPSLA 007) also noted that the company’s employees had subsequently obtained practicing certificates as lawyers, which exempted them under the Act from having to be licensed as private investigators.

Complaint and CIPU finding A complaint was lodged in July 2019 against the company relating to the way it had carried out a workplace investigation for the complainant’s previous employer. The complaint alleged that two individuals were providing private investigation services through the company without the necessary certificate or licence.

The complaint led to an investigation by the Complaints, Investigation and Prosecution Unit (CIPU), which found that the company’s investigators should have held licenses/certificates and that as holders of practicing certificates as lawyers they were not exempt.

Disagreeing with the finding, the company sought a review, arguing that it is not the intention of the Act for employment consultants and investigators to fit within the definition of a private investigator, and that “even if they were required to hold a licence at the time they carried out the investigation, they should now be exempted by s 22(d) as they hold practicing certificates as lawyers.”

In the subsequent PSPLA review, clarifications were provided in relation to misconceptions relating to the role of private investigators vis a vis employment investigators, and in relation to whether or not practicing lawyers are required to hold private security licenses/certificates of Approval.

Private Investigators and Employment Investigators According to the PSPLA, the company had submitted that when the Act was passed in 2010, “Parliament’s main concern was to ensure private security personnel and investigators did not get out of hand and to deter cowboy operators,” and that “the Act was directed at private investigators in the sense in which that role is commonly understood, namely covert investigations and surveillance of targets.”

The PSPLA accepted that parliament may not specifically have had employment investigators in mind when considering the work of private investigators when the Act was passed, but that it had “clearly intended the definition of private investigator to cover all people in the business of carrying out investigations into a person’s character, actions or behaviour.”

In its decision, the PSPLA noted that the company specialises in independent investigations into workplace complaints, and provided a brief description about what’s involved.

“They are contracted to carry out investigations on behalf of an employer where there are allegations of misconduct, either by one employee against another or by an employee against a manager. Most allegations relate to bullying, sexual harassment or other inappropriate behaviour in the workplace but can also relate to allegations of fraud or theft.

“When such allegations are made an employer is legally required to

establish the facts of the complaint. To ensure fairness to all parties and that any investigation is conducted in accordance with the principles of natural justice and procedural fairness, it is now considered best practice for employers in New Zealand to engage a specialist third party to undertake an independent employment investigation.”

Given this, the PSPLA found that the company is “carrying on a business of seeking or obtaining for their clients, or supplying to their clients, information as defined in s 5(1)(a) of the Act,” and is therefore a private investigator. At the time they carried out the investigation involving the complainant, the company was required to hold a licence as a private investigator and was therefore in breach of the Act.

Nevertheless, the PSPLA accepted “that the breach was unintentional and that there is a widespread misconception in the industry that people in the business of employment investigations are not private investigators.”

In this case, misconceptions appeared to focus around the meaning of ‘private’ as used in ‘private investigator’ and in particular that private refers to investigations activities being of a ‘covert’ or ‘secret’ nature, or involving an invasion of ‘privacy’.

The company had submitted that employment investigations differ from private investigations in that “if individuals decline to participate in an employment investigation covert surveillance or invasion of privacy does not follow.” In response, the PSPLA noted that covert surveillance and invasion of privacy is not part of the Act’s definition of the work of a private investigator, and that private investigation work “covers a wide range and frequently does not include surveillance or invasion of privacy.”

The PSPLA also clarified the misconception that “most employment investigators would not meet the criteria for a security licence as they have no training or experience in surveillance and security.” It noted that “surveillance experience is not an essential part of the training or experience for all private investigators.”

Ultimately, it stated that the ‘private’ in ‘private investigator’ is a designation that distinguishes investigators working in private practice from those working in ‘public’ sector positions, such as police detectives and others in government investigator roles.

Private Investigators and Lawyers The PSPLA noted that subsequent to the period covered by the complaint, the company had become an incorporated law firm and its officers had gained practicing certificates as lawyers. As a result, it found that the company’s officers “are therefore exempt from needing to hold a licence under s 22(d) of the Act and are no longer in breach of the Act.”

Section 22(d) of the Act provides an exemption for people who are licenced or permitted to carry out security work under some other regime. This is particularly the case, noted the PSPLA, “if the other regime under which they are licensed ensures they are qualified to carry out the work and has a robust complaint process if they act contrary to the public interest.”

In particular, it considered the training and ethical requirements for lawyers to be more extensive than those under the Act for private investigators, and that the complaints process for and against lawyers is more comprehensive than that for private investigators.

It concluded that any further action against the company or its officers for the breach of the Act to be unnecessary, and that any breach was inadvertent and a result of the widespread belief within the employment investigation industry that they were not private investigators.