Managing fraud & inappropriate workplace behaviour: What People & Culture teams need to get right

Workplace misconduct and internal fraud are becoming more complex, more frequent, and harder to resolve quietly. For People & Culture teams, the pressure sits in two places at once protecting your people and your culture, while making sure any investigation is fair, impartial, and able to stand up to scrutiny.

A rising challenge for employers

Workplace misconduct matters are increasing in both volume and complexity, and the growing number of cases before the Fair Work Commission shows how much is at stake when an internal investigation is poorly run. Employers who fail to apply procedural fairness and natural justice, or appoint investigators without the right skills and experience, can face adverse findings, unfair dismissal claims, and reputational damage.

The matters most often landing on People & Culture’s desk include:

• bullying, harassment, and discrimination
• serious employee misconduct
• conflicts of interest and nepotism
• misuse of corporate IT systems and social media
• substance abuse in the workplace
• whistleblower and protected disclosure complaints.

Where fraud & human resources overlap

Fraud rarely starts with a large theft; it usually starts with a small control weakness nobody noticed. Some of the most common exposures sit within human resources and payroll, where insiders understand the controls and know where the gaps are. Some examples are:

• ghost employees and payroll manipulation
• unauthorised changes to employee bank account details
• fictitious overtime or allowances
• misuse of company funds and expense claims.

Payroll redirection is also a growing fraud tactic, where People & Culture or payroll receives a legitimate-looking request to change an employee’s bank details, sending salary to criminal-controlled accounts. Strong prevention starts with segregation of duties, regular payroll and employee audits, independent review of bank account changes, and a culture that encourages people to speak up.

The role of external auditors

External auditors are often the first to surface an anomaly or an unexpected variance, a control that isn’t operating as intended, or a transaction that doesn’t reconcile. However, a statutory audit is not designed to investigate fraud or misconduct, and an audit finding is only the starting point.

When something is flagged, People & Culture and management require specialist forensic support to determine what happened, preserve evidence properly, and respond in a way that stands up if the matter escalates. SW works alongside your external audit process, picking up where the audit ends to test the underlying issue, quantify any loss, and turn a red flag into a defensible outcome.

Working with risk, compliance & internal audit to strengthen controls

The most effective organisations focus less on catching fraud and more on eliminating the opportunities that allow it to occur. That means treating each incident as a chance to fix the underlying process, not just close a file.

SW works with risk, compliance, and internal audit teams to conduct fraud risk assessments, risk and control assessments, and fraud program and procedure audits, identifying where residual risk is high or emerging, and where controls need to be tightened. After an investigation, we prepare root cause analysis and recommend corrective measures, so the same weakness isn’t exploited again, and we can build periodic reviews into your internal audit program to keep controls working as intended over time.

Why independence matters

A common mistake an organisation makes when running their own investigations is failing to pay proper attention to procedural fairness. Internal teams are rarely set up to run these matters at arm’s length, and the stakes are too high to learn on the job.

There is real value in appointing someone who does this every day, a specialist who knows how to collect, preserve, interpret and present evidence, how to plan and conduct interviews, and how to keep a matter confidential and defensible from the first allegation. That experience protects both the employee and the employer, and while it may cost more initially, expert investigators have the potential to save employers money and stress in the longer term.

Working with general counsel

Sensitive matters almost always have a legal dimension, and the best outcomes come from investigators and lawyers working in step.

Anthony and the SW forensic team work collaboratively with in-house legal, general counsel, and external legal advisors aligning on scope, evidence integrity, and privilege from the outset, so findings are legally sound and ready to support any disciplinary, regulatory, or court processes.

Having worked as a trusted advisor on highly complex investigations across government, corporates, and the banking sector, Anthony understands how to structure an investigation, so it supports, rather than complicates, the legal position.

How SW can help

SW’s forensic specialists provide independent, experienced and objective workplace investigations that stand up to scrutiny. We work collaboratively with People & Culture, in-house legal, and external advisors to deliver timely, robust, and fair outcomes, no matter how sensitive the matter. Our support includes:

• independent workplace investigations and serious employee misconduct reviews
• bullying, harassment, and discrimination investigations
• conflict of interest and nepotism reviews
• misuse of corporate IT systems and social media reviews
• whistleblower and protected disclosure investigations
• code of conduct and ethics breach reviews
• fraud risk assessments, control reviews, and investigation training for in-house teams.

Talk to us

Anthony Hodgkinson, Partner – Fraud & Forensics, has more than 30 years’ experience in fraud and corruption risk management and forensic investigations. To discuss how SW can support your team, reach out to your SW advisor or contact Anthony directly.