It’s complicated

One Minute Summary

• Employers do not have a general ‘right’ to respond to employee’s out of hours conduct outside the workplace. However, there are certain circumstances where an employer does have such a right.
• A review of a number of case decisions indicates there are two key guiding principles.
• The first key guiding principle is whether there is a sufficient connection between the employee’s conduct and the workplace.
• The second guiding principle is whether the employer has put in place policies and procedures around after hours conduct. Where there are no such policies, action against the employee is usually limited.
• While the above highlights two key principles it is clear from the decisions that the Commission or Court will thoroughly explore the detailed circumstances of any afterhours conduct that has resulted in a termination. This may result in ‘differing’ applications of the above guiding principles.
• Given the uncertainty in this area of workplace law it is recommended that employers seek professional advice before acting on out of hours and away from work incidents.

Employers do not have a general ‘right’ to respond to employee’s out of hours conduct outside the workplace. However, there are certain circumstances where an employer does have such a right. Examining the case law two points emerge:  

• a number of useful guiding principles
• a clear indication that despite those principles the Commission or a Court will determine each case on its particular circumstances.

In addition to these points it is important to note that this area of law is progressively developing based on culturally acceptable norms. By way of example sexual harassment has become a more ‘visible’ workplace problem over the last few years. This could well influence how the Commission views such an ‘after hours’ matter occurring now in comparison to 10 years ago as you will see in one of the decisions discussed below.

The following review takes us through a number of Fair Work Commission and the Court decisions. (I won’t be examining the recent ABC and Lattouf matter as it has a very distinct set of facts which most employers will not encounter. One element in the Lattouf case that would apply to other employers is the need for clarity in directions and policies.)  

The key 1998 decision (Rose v Telstra) provided a number of important guiding principles when examining an employee’s out of hours conduct. They include:

• The conduct of the employee, looked at objectively, was likely to cause significant damage to the employment relationship between the employee and their employer. OR
• The employee’s conduct damages the employer’s interests. OR
• The employee’s conduct is not compatible with the duty as an employee.

These have been quoted in various decisions since and often extrapolated to suit the particular circumstances of the case.

In examining an employee’s after hours conduct the employer should consider the following guiding principles:

Is there a sufficient connection between the employee’s conduct and the workplace or the employment relationship?

Where a sufficient connection to the workplace can be established an employee’s misconduct can constitute a valid reason for dismissal. (Obviously we also need to consider additional factors such as procedural fairness etc.)

An employee lodged an application for unfair dismissal after he was terminated for sexually harassing hotel staff where he was staying.  The Commission found there was a sufficient connection to his employment relationship because the employer was paying for his accommodation, and because he was only in the bar because he was staying there while working for his employer in this location. The Commission also acknowledged the employee’s misconduct could potentially damage the employer’s reputation. The Commission found the termination was valid.

In Bobrenitsky v Sydney Trains the employee was terminated after receiving a Court Attendance Notice for driving under the influence outside of working hours. The Commission found that his dismissal was unfair because the offence took place outside of work hours, he was not on call, his next shift wasn’t until the next day, he did not need his driver’s licence to drive a train, and Sydney Trains was not at risk of reputational damage. The Commission ordered he be reinstated in his former position with backpay.

In Pawelczyk v Commonwealth Bank the Commission found in favour of the employer after it had terminated an employee for sending 50 abusive txt messages to his supervisor after hours. The Commission did not accept the employee’s argument that because the messages had been sent after hours, they did not relate this employment and he should not have been terminated.

Misconduct at an after party

Misconduct at an employer organised function held externally would normally be considered to have a sufficient connection to the workplace. However, what if the misconduct occurred at the ‘after party’ away from the official employer function?

In a decision (Keenan v Boral Amey) addressing this scenario, a Commission Vice-President stated there was not a sufficient connection between the drunk employee’s actions (sexually harassing fellow employees) at the after party and the employment relationship - particularly given the employer’s Code of Conduct did not address such a scenario.  The employee’s dismissal was therefore determined to be unfair.

In a contradictory decision (Kenron v Westpac) the Commission found that a termination that occurred due to incidents at an after party was sufficiently connected to the workplace because the employees were only at the after party due to the fact they attended the official work event immediately prior.

Do the employer’s policies and procedures address this after hours conduct?

The absence of any policies and procedures addressing this issue will usually limit an employer’s actions against an employee’s after hours conduct.

The exception to this principle is if the conduct is of such a magnitude that it stands on its own regardless of policies or procedures.

A good example of this is a recent decision (Zheng v Citic Pacific Mining) where the employee swore at a person unknown to him and pushed them in the back on entering a lift in the employee’s building. The Commission stated there was sufficient connection to the workplace as it occurred in the same building. In response to the employee’s argument his actions were not in the Code of Conduct, the Commission stated that the employee did not require a Code of Conduct to tell him his behaviour totally unacceptable and a terminable offence.

It is insufficient simply to have a Code of Conduct. The employer is also responsible to ensure employees are fully aware of the contents of policies and procedures and the impact of a breach.

In Macnish v Virgin Australia the airline used its policies to defend its termination of a flight attendant who consumed a glass of wine 7.5 hours before commencing duties and thereby breached its 8 hours pre-commencement ‘no alcohol’ rule.  The Commission made several comments about the airline enforcing its policies and procedures in this matter:

• While accepting there were strong and valid reasons for having an eight hour no drinking rule it added “However, just because an employee is in breach of a policy, it does not automatically mean that there is a valid reason for the dismissal”
• That the employee (and other employees) viewed the 8-hour rule more as a guideline rather than a hard and fast rule.
• The 8 hour no drinking rule, and the implications of any breach, was not easy to find among multiple different employee manuals.

Despite a number of Appeals by Virgin Australia the employee has been reinstated.

Commentary

While the above highlights two key principles it is clear from the decisions that the Commission or Court will thoroughly explore the detailed circumstances of any afterhours conduct that has resulted in a termination.

Once it has clearly established the facts it will examine other factors, such as procedural fairness, related to the termination.

The potential reputational damage to the employer of any out of hours conduct by an employee is often a lower-level consideration in the decisions.

While it is impossible to address every potential scenario employers should address after hours conduct in the employment contract and in the organisation’s Code of Conduct.

The Commission makes it very clear that the employer carries the responsibility to ensure employees understand the contents of any workplace policies. Education should take place at the commencement of employment and on a regular basis thereafter.

The higher the potential negative impact on an employee of breaching a policy the greater the need to ensure (and prove) that employees understood its contents and the implications of any breach.  It is recommended that all such education be tracked and that employees be given competency-based quizzes/tests to show their level of understanding on key policies.

An employee breaching a workplace policy or code of conduct does not allow for an automatic termination even if this is stated in the policy document.

Given the uncertainty in this area of workplace law it is recommended that employers seek professional advice before acting on out of hours and away from work incidents.

Kind Regards
Michael Schmidt
M 0438 129 728
[email protected]
www.hunteremployeerelations.com.au

Guiding senior managers through complex employee relations issues

 Sign up here to receive Hunter Employee Relations Update directly to your email inbox

Want to know more about our client services?