Suspension Pending Investigation in Victoria: What Employers Need to Know

What Suspension Pending Investigation Actually Means

Suspension pending investigation is a temporary, neutral direction that an employee not attend the workplace, not perform their duties and not access systems, premises or (in most cases) colleagues, while a workplace investigation is conducted. Crucially, suspension is not a finding of misconduct, not a disciplinary outcome and not termination of employment. The employment relationship continues, the employee continues to be paid (in the ordinary case) and the employee remains entitled to procedural fairness through the investigation and the disciplinary decision that follows it.

Because suspension intrudes significantly on the employee's ability to work, earn additional income, maintain professional reputation and continue in workplace relationships, the law requires it to be justified, proportionate, properly authorised and properly conducted. It is not a default response to a complaint and it is not a tool of discipline.

Is There a Right to Suspend at All?

There is no general implied right at common law for an Australian employer to suspend an employee, with or without pay. The power to suspend must come from one of:

• an express term of the employment contract;
• a clause in an applicable modern award;
• a clause in an applicable enterprise agreement; or
• a lawful and reasonable direction justified by the specific circumstances (for example, an immediate safety risk) — and even here, suspension on full pay is materially safer than suspension without pay.

Many older employment contracts contain no suspension clause at all. Victorian employers should review their template contracts, modern award coverage and any enterprise agreement before adopting suspension as a routine investigative tool. Where the contract is silent, suspension on full pay is the practical default and suspension without pay should not be imposed without specific legal advice.

Suspension With Pay Versus Suspension Without Pay

Suspension on full pay is the default in Australian employment law and the position adopted by most modern awards and enterprise agreements. The reasons are practical and legal: an employee who continues to be paid cannot easily claim that the suspension is a financial penalty, a constructive dismissal or adverse action for exercising a workplace right. The employer retains the ability to investigate without giving the employee a ready-made claim.

Suspension without pay is materially more dangerous. Even where a contract or industrial instrument expressly authorises unpaid suspension, exercising that power during an investigation — before any finding of misconduct — can be characterised as adverse action under Part 3-1 of the Fair Work Act 2009 (Cth), as a repudiation of the contract, as constructive dismissal, or as a breach of the implied duty of mutual trust and confidence. The financial and psychological pressure of unpaid suspension is also a well-recognised source of workers compensation claims for psychological injury.

In the vast majority of cases, Victorian employers should suspend on full pay. Suspension without pay should be reserved for the rare case where the contractual authority is unambiguous, the circumstances clearly justify it and specific legal advice has been obtained.

When Suspension May Be Justified

Suspension may be justified where one or more of the following are present:

• Seriousness of the allegations — theft, fraud, sexual harassment, assault, violence, safety breaches, intoxication at work or other conduct that could justify summary termination;
• Safety risk — credible risk to the complainant, witnesses or other staff if the employee continues to attend the workplace;
• Investigation integrity — credible risk of evidence tampering, witness interference, destruction of records or coordinated communication with other persons of interest;
• Role inconsistency — duties of the role are inconsistent with the nature of the allegations (a finance officer alleged to have committed fraud, an IT administrator alleged to have removed client data, a manager alleged to have bullied direct reports);
• No reasonable alternative — the employer cannot reasonably accommodate alternative duties, working from home, redeployment or a temporary reporting line change.

Suspension should be a documented response to one or more of these factors — not a reflexive response to the existence of a complaint.

Serious Misconduct Allegations

Serious misconduct is defined in regulation 1.07 of the Fair Work Regulations 2009 (Cth) and includes wilful or deliberate behaviour inconsistent with continuation of the employment, conduct causing serious and imminent risk to health and safety or to the reputation or viability of the business, theft, fraud, assault and intoxication at work. A finding of serious misconduct can authorise summary termination — termination without notice. Because the disciplinary stakes are so high, the investigation must be rigorous and any suspension imposed during that investigation should be careful, properly justified and on full pay. For an overview of the substantive law, see our companion article on serious misconduct and termination.

Workplace Investigations and Suspension

Suspension is most commonly imposed at the start of a workplace investigation. The investigation itself must be properly conducted: independent investigator, documented terms of reference, particularised allegations put to the respondent, evidence gathered and weighed, a reasoned investigation report and a separate disciplinary decision. A poorly conducted investigation — even one supported by an otherwise defensible suspension — frequently produces unfair dismissal, general protections and discrimination exposure. For a full treatment of the investigation process and the most frequent errors, see our article on workplace investigations and the common mistakes employers make.

Bullying and Harassment Complaints

Where the conduct under investigation is alleged bullying under section 789FD of the Fair Work Act 2009 (Cth) or sexual harassment under the Sex Discrimination Act 1984 (Cth) and the Equal Opportunity Act 2010 (Vic), the suspension decision must balance the safety of the complainant, the procedural fairness owed to the respondent and the broader cultural message sent to the workforce. Since the Respect@Work reforms employers owe a positive duty to take reasonable and proportionate measures to eliminate sexual harassment. A documented, considered suspension of the respondent on full pay may be part of meeting that duty — but blanket suspension of every respondent in every harassment matter would itself be disproportionate. The decision must engage with the actual evidence, risk assessment and operational realities.

Procedural Fairness Obligations

Procedural fairness (natural justice) applies to the suspension decision as well as to the investigation itself. Where practicable, the employee should be told the substance of the allegations being investigated, told why suspension is being considered, given a meaningful opportunity to respond before the suspension is finalised and have the decision taken by an impartial decision-maker. In urgent safety cases the opportunity to respond may have to be condensed or given immediately after suspension is imposed — but the reasons should still be documented and the suspension reviewed quickly. For a deeper treatment of these principles see our article on procedural fairness in workplace investigations.

Risks of Premature Suspension

Premature, reflexive or excessive suspension creates substantial legal and human risk:

• general protections and adverse action claims under Part 3-1 of the Fair Work Act, particularly where the suspension follows the exercise of a workplace right (a complaint, a flexible working request, a leave request, a safety concern);
• constructive dismissal claims under section 386(1)(b) of the Fair Work Act if the employee resigns in response to the suspension;
• breach of contract claims;
• psychological injury claims, workers compensation claims and common-law negligence claims;
• defamation exposure if the suspension is communicated indiscreetly to colleagues, clients or referees; and
• reputational damage to the business, particularly in small professional, medical or trade communities.

Duration of Suspension and Regular Review

There is no fixed statutory limit on the duration of a suspension pending investigation, but Australian courts and the Fair Work Commission expect suspensions to be no longer than reasonably necessary. Most workplace investigations should be capable of being completed within four to eight weeks; suspensions extending well beyond that timeframe without clear documented reasons become increasingly difficult to defend.

Employers should:

• set a clear expected end date or review date in the suspension letter;
• actually conduct reviews at the stated intervals (typically every one to two weeks) and document the review and its outcome;
• communicate progress to the employee at each review, even if there is nothing substantive to report;
• consider, at each review, whether the suspension can be lifted, whether alternative duties or working from home is feasible, and whether conditions could permit a return to work pending completion; and
• document the cause of any delay (witness availability, illness, document recovery, parallel regulator or criminal process) so that the duration is defensible.

Communicating Suspension to the Employee

Suspension should be communicated in a private, respectful meeting wherever possible and confirmed immediately in writing. The meeting should be conducted by an appropriate decision-maker (not the alleged victim, the complainant or a person closely involved in the events), with a support person available, in a neutral location, and at a time of day that preserves the employee's dignity.

The written confirmation should:

• identify the suspension expressly as a neutral precautionary step pending investigation, not as discipline;
• set out the broad nature of the allegations being investigated, in language sufficient to permit a response but without prejudging the outcome;
• confirm that the suspension is on full pay and that entitlements continue;
• identify the expected duration and the review intervals;
• set out directions about contact with colleagues, confidentiality, attendance at the premises and access to systems;
• identify a named point of contact for the employee during the suspension;
• identify available support, including any employee assistance program; and
• invite the employee to seek their own legal advice or representation.

Confidentiality Obligations

Confidentiality is critical on both sides. The employer should disclose the suspension and its reasons only on a strict need-to-know basis. Internal messaging about the employee's absence should be carefully drafted — typically something neutral such as "on leave" — rather than disclosing suspension or its reasons. The employee should be directed in writing to keep the investigation confidential, with the legitimate exceptions clearly identified (legal advice, regulator notification, support person, medical practitioner, immediate family).

Confidentiality breaches by either side carry legal and reputational consequences, including potential defamation claims, regulator complaints and contractual breach. Where the employee is a regulated professional (a lawyer, medical practitioner, accountant, financial adviser, real estate agent or building practitioner) there may also be mandatory reporting obligations to consider, which a confidentiality direction does not override.

Return-to-Work Outcomes

When the investigation concludes, the employer must take a separate decision about outcome and communicate it with procedural fairness. Possible outcomes include:

• reinstatement with no further action;
• return to work with conditions (training, mediation, workplace adjustments, supervision plan, a final written warning);
• redeployment to a different role;
• demotion;
• termination with notice; or
• summary termination for serious misconduct where the evidence and procedural process support it.

Where the outcome is reinstatement or return with conditions, a structured return-to-work plan is essential. Simply unlocking the employee's access and asking them to resume duties — without any communication, support or adjustment — is a frequent source of secondary psychological injury claims and renewed complaints.

Resignation During Suspension

An employee can resign at any time, including during suspension. A freely given resignation takes effect on its terms. However, where the employee resigns in response to the employer's conduct — for example, an unjustified or indefinite suspension, public humiliation or other breach of the implied duty of mutual trust and confidence — the resignation may amount to a constructive dismissal under section 386(1)(b) of the Fair Work Act 2009 (Cth). The employee may then bring an unfair dismissal application as if they had been terminated. Employers should not treat a resignation during suspension as the end of legal risk. If the resignation appears to be a stress response, it is often appropriate to write back acknowledging receipt and offering a cooling-off period before treating the resignation as final.

Fair Work Commission Considerations

A suspension that is unjustified, indefinite, used as de facto discipline or imposed in response to the exercise of a workplace right can support an unfair dismissal application (where it leads to constructive dismissal), a general protections application under Part 3-1 (with uncapped compensation and civil penalties), a stop-bullying application under section 789FF (where the suspension itself becomes part of an alleged pattern of unreasonable conduct) or an adverse-action claim. The Fair Work Commission regularly criticises poorly documented and poorly reviewed suspensions, and the existence and conduct of suspension materially shapes its broader assessment of procedural fairness.

Suspensions also interact with workers compensation (mental injury claims arising from a poorly handled suspension are routine), with the Australian Human Rights Commission and the Victorian Equal Opportunity and Human Rights Commission (where sexual harassment or discrimination is alleged), and with WorkSafe Victoria (where safety issues are part of the underlying complaint).

Common Employer Mistakes

The most frequent suspension mistakes that turn an internal HR matter into expensive external litigation include:

• Reflexive suspension — suspending automatically on receipt of any complaint, without risk assessment or documented justification;
• Unpaid suspension without contractual authority — exercising a suspension power that the contract does not confer;
• No written confirmation — sending the employee home on a verbal direction with no letter, no terms, no review date and no defined process;
• Framing suspension as discipline — telling the employee they are 'on suspension as a consequence' before any finding has been made;
• Indefinite suspension without review— a suspension that drifts on for months without communication, review or progress updates;
• Inadequate communication — going silent on the suspended employee, refusing to confirm expected timing or simply ignoring their emails;
• Cutting off support — disabling employee assistance program access, refusing continuing professional development reimbursement, cancelling team events without explanation;
• Indiscreet disclosure — telling other staff, clients, referees or industry contacts about the suspension or its reasons;
• Treating resignation as the end — assuming a resignation during suspension extinguishes legal risk, when constructive dismissal often remains live;
• Reinstatement without structure — unlocking access on a Monday morning without a return-to-work plan, communication strategy or supervisory adjustment.

Practical Guidance for Victorian Employers

A defensible suspension pending investigation generally follows this shape:

1. Pause and assess — do not suspend reflexively. Conduct a brief, documented risk assessment: seriousness, safety risk, investigation integrity, role inconsistency, alternatives.
2. Confirm authority — check the employment contract, any modern award and any enterprise agreement for a suspension clause and the terms on which it operates.
3. Decide proportionately — if the factors do not clearly support suspension, consider alternative duties, working from home, redeployment or a temporary reporting line change.
4. Communicate properly — private meeting, respectful tone, support person available, followed immediately by a written letter that records all of the matters set out above.
5. Run the investigation rigorously — independent investigator, particularised allegations, real opportunity to respond, reasoned report.
6. Review the suspension regularly and document each review.
7. Decide on outcome separately from the investigation findings, with its own procedural fairness process.
8. Plan the return to work with communication, support and any structural adjustments.

Suspension decisions interact with adjacent employment-law obligations including worker classification, modern award compliance and contractual entitlements. For broader employment context see our articles on employee or contractor classification and annualised salaries and modern awards.

How Parke Lawyers Can Help

Parke Lawyers advises Victorian employers, directors and HR decision-makers on whether and how to suspend an employee pending investigation, drafts and reviews suspension correspondence, advises on parallel safety, confidentiality and regulator obligations, reviews employment contracts, modern awards and enterprise agreements for suspension authority, conducts or briefs independent investigations, advises on the disciplinary outcome and any termination, and defends unfair dismissal, general protections, discrimination, bullying and adverse-action claims before the Fair Work Commission, the Federal Court, the Victorian Civil and Administrative Tribunal and the Australian Human Rights Commission. Our employment law and commercial and business law teams work together so that classification, contract, investigation, suspension, discipline and litigation issues are handled coherently within a single matter.

Frequently Asked Questions