Sometimes traditional compliance investigation cannot satisfy all parties in a workplace complaint. Often, the need for communication to understand everyone’s wishes usurps assigning blame

When faced with employee compliance complaints or whistleblowing reports, most companies rely on traditional investigation procedures to establish facts and resolve issues. But achieving a desired outcomes is not so simple.

Alex Xing, Labour Consulting
Zhao Rong
Labour Consulting (LABOURS)
Tel: +86 10 8225 5618

On one hand, the company is not a professional investigation agency and may lack sufficient ability and transparency to fully present the facts with adequate resources and professionalism. On the other hand, the investigation methods, processes and outcomes may not be recognised by all parties.

Based on the author’s experience participating in many complex complaint cases for multinational Fortune 500 companies, at least half involve challenges in labour relations management, and companies simply conducting compliance investigations often formulate, but cannot truly resolve, issues.

This article shares the challenges of labour relations management and response strategies through three cases, each depicting a different scenario with its own management objective.

Verbal abuse

An executive at a well-known financial company was reported by an employee for verbal abuse, citing unsatisfactory work progress. After a compliance investigation, the company decided the executive should apologise orally to the employee. Although the executive made concessions and agreed, the employee claimed to experience symptoms of depression and rejected the resolution in writing, refusing to attend the apology meeting.

The employee made two written requests. First, terminate the executive’s labour contract according to the employee handbook and, second, the company bears joint liability and should compensate for economic loss and mental distress.

Paying attention to the validity of the abuse claim, the company’s overseas headquarters considered it more important to resolve the issue quickly and properly than to determine liability.

Tasked with resolving the conflict, the author’s firm communicated by adopting the objective and neutral stance of a third party, analysing the pros and cons while clarifying the employee’s demands and the company’s position.

Ultimately, the employee was transferred to a different team, with the antagonistic mindset defused by the adjustment in position and helped by a change in the work environment. Not only was the conflict resolved, it also opened new opportunities for the employee’s future career.

PIP management

After taking over as team leader, a 10-year veteran employee at a foreign consulting company saw multiple projects stagnate and the resignation of 80% of team members, who in exit interviews expressed dissatisfaction with the team leader.

In response, the company initiated a performance improvement plan (PIP) for the team leader, who rejected the decision and raised a series of management shortcomings in the company.

With the situation escalating, the team leader filed a complaint of workplace bullying by the leadership through the internal compliance reporting channel, causing the Asia-Pacific management team to lose faith in the company’s performance management.

Faced with external and internal pressure, and difficulty in substantiating low performance and other pressures, the company’s management hoped to quickly negotiate with the employee to terminate their labour relationship, ensuring a legal, fair and reasonable process that both parties could accept.

The author’s firm’s focus was on re-establishing the legal basis, building trust with the employee and achieving the company’s objectives within the stipulated time.

Communication was directed to avoid requiring the employee to admit poor performance, clarify the author’s firm’s stance of helping to properly resolve the issue, and ultimately shepherd both sides to successful negotiation of termination.

Harassment and long sick leave

A female employee at an internet company reported to the compliance department that her superior had sexually harassed her multiple times. An investigation was unable to uncover conclusive evidence and the complaint was ultimately ruled to be unsubstantiated.

After receiving the investigation results, the employee again appealed. But after re-examination, the compliance department maintained its original ruling. With changes in the market environment and leadership succession, management styles subsequently became stricter, and the employee informed the company that her mental state was poor and her work performance had declined sharply.

After a performance discussion with the new leadership, the employee began taking continual sick leave on the grounds of depression and refused to submit sick leave forms, believing she had been harassed and persecuted by successive managements, and claiming the superior had promised that sick leave forms were not required.

To maintain management consistency and severity – and in light of the employee’s complaint of poor mental condition – continuing the compliance investigation, or other harsher measures, only risked worsening the situation.

With this in mind, the author’s firm’s approach focused on re-establishing communication channels. Through patient communication after the employee refused to meet in four instances, an opportunity for conversation was finally secured. Ultimately, the company and employee reached a settlement and achieved a negotiated termination.

Winning hearts

Judging from the above-mentioned cases, it would seem that workplace compliance issues often arise hand-in-hand with labour relations adjustments. Some instances that appear to be compliance complaints are in fact caused by labour relations adjustments, while other complaints may lead to labour relations adjustments.

When conflicts are not effectively resolved, they can easily escalate into disputes over the adjustment, cancellation or termination of labour contracts. In addition, workplace compliance complaints are also used by employees as a means of self-protection against negative adjustments that the company may impose.

However, whether due to sexual harassment, abuse or dissatisfaction with performance management results, in handling compliance incidents the cause of initiating compliance investigation is not always the primary challenge to be addressed.

Effectively establishing communication channels, calming the emotions of involved parties, and building trust, allowing them to open up, is often more effective than all the effort and cost of finding sufficient evidence.

Therefore, after companies receive compliance complaints, in addition to fulfilling established investigation procedures, the insight of investigators and response team into human nature – and their ability to communicate with employees – becomes particularly important. If a conflict has already come to pass, improper compliance interviews and communications may only make matters worse.

Zhao Rong is a partner at Labour Consulting (LABOURS). He can be contacted at +86 10 8225 5618 and by email at

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Tel: +86 10 8225 5618
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