1 00118601 Emerging themes 2019 A4 AW v31 combined - Page 19

3.Getting the follow-up right
An internal investigation may uncover concerns
about employees’ conduct. In these circumstances,
a disciplinary process should begin swiftly once
sufficient facts have been established, which may be
before the conclusion of the wider investigation. It
may also be justified to commence proceedings in
relation to discrete issues before a wide-ranging
investigation has formally concluded.
Under the Senior Managers and Certification Regime,
firms are required, on receiving a request from a
prospective new employer of one of their former
employees, to provide detailed information in a
templated “regulatory reference” concerning anything
that might affect the fitness and propriety of that
individual to carry out their role. However, the
regulators have conceded that, where an employee
leaves the firm while an internal investigation is
ongoing (and therefore no findings about the relevant
conduct have been made), the fact of the ongoing
investigation would not need to be disclosed.
Securing employees’ buy-in
and co-operation with internal
investigations is critical to
their successful outcome. How
individuals are dealt with during
and at the conclusion of an
investigation can have important
consequences for individuals’ future
employability in today’s regulatory
environment, and may also give
rise to employment related risks.
It is also worth noting in this context that, although
a written warning given to an employee of a regulated
financial services firm counts as “disciplinary action”
that must be disclosed on a regulatory reference, and
therefore will stay on their employment record for
years, a verbal warning does not. It is therefore worth
giving proper consideration to the appropriate
warning given to an employee following the outcome
of a disciplinary investigation, as this can have serious
and longstanding consequences for their future
Partner, London
Partner, London


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