Out-of-Hours Conduct by Employees and Unfair Dismissal

Usually, an employee’s employment may only be terminated for out-of-hours conduct when:
1.The employee’s conduct is likely to cause serious damage to the relationship between the employer and the employee; or

2.The employee’s behaviour damages the interests of the employer; or

3.The conduct is incompatible with the employee’s duty as an employee and effectively amounts to a breakdown or a repudiation of the employment contract.

There are a couple of case examples which illustrate what is inappropriate out-of-work behaviour by employees, and how it can lead to the termination of a person’s employment.

Applicant v. Employer (2015) FWC 506

In this case, an employee was staying at a hotel overnight after attending training sessions arranged by his employer. He was scheduled to return to work the next day. His employment was terminated for his conduct at the hotel that night. He allegedly groped a waitress at the hotel after work hours.
The evidence the waitress gave was that as she walked past the employee, the employee groped her bottom. She complained about the employee’s conduct to his supervisor who was also staying at the hotel. After an investigation, the employee was dismissed from his employment.

In his application to the Fair Work Commission for unfair dismissal, the employee argued that the incident which concerned the waitress was not a valid reason for terminating his employment as it occurred out of work hours.

The Fair Work Commission found that the incident that occurred with the waitress was a valid reason to terminate his employment. This is because the main reason for the employee being at the hotel at the time of the incident was because of the employment relationship he had with the employer. The Commission accepted the employer’s arguments that because the employer had a long-standing arrangement with the hotel, such that it had hired at least forty rooms in every five-week period for its employees, and received a corporate rate, there was an ongoing and important relationship with the hotel and the employer.

It also highlighted that the employee took part in training at the hotel on the day of the incident and was paid for this training. The employer also paid for the employee’s food and accommodation at the hotel. The employee was also going back to work the next day and was, at the time of the incident, with his work colleagues. The Commission also considered the fact that the employee had been given a warning for his misconduct previously, when he damaged a hotel room. The Fair Work Commission also considered that it was a situation where the employee’s actions had the potential to damage the employer’s reputation. Therefore, the employee’s dismissal was not found to be unfair.

In another case, an employee who was a team leader with the Boral Amey Joint Venture consumed 13 drinks at a work Christmas party and engaged in inappropriate conduct. This conduct included interrogating a female colleague about her love life, asking for her phone number, and using foul language. After the work function ended at 10 pm, the employees moved into an outside courtyard area where Mr Keenan continued to harass female co-workers. At one point, he attempted to kiss a female colleague without her consent. When a group of women employees moved on, Mr Keenan followed them and told one female co-worker that it was his “mission” to find out what colour underwear she was wearing. He also made various crude comments throughout the night.

In its decision, the Fair Work Commission distinguished between the conduct which took place at the Christmas party before 10 pm, and the conduct which occurred after 10 pm outside in the courtyard when the Christmas party was over. They found that the incidents which occurred before 10pm, during the Christmas party, would be a valid reason for dismissal, but because they were not put to the employee, nor investigated, or cited in the letter of termination, they could not be relied upon as the basis for termination.

The Fair Work Commission found that the termination was harsh, unjust and unreasonable. They also took into consideration the fact that the employer could not expect the same behaviour from the employees at work, and at a Christmas party where they were serving unlimited alcohol. Therefore, employers should have in place clear expectations about behaviour at work functions that occur out of work hours.

Lessons for Employers

From the last case, we can see that there is an onus on employers to manage the behaviour of employees at work functions involving the unlimited service of alcohol. It is also a reminder that proper investigation should be carried out into such incidents as this will affect the outcome of any unfair dismissal claim. In essence, employees still need to be given procedural fairness, even if the alleged conduct involved was out-of-hours conduct. This means that the allegations must be put to the employee, the employee must be given an opportunity to respond, and the employer must set out clearly the basis for termination.
In particular, when planning work functions involving alcohol, employers should direct their attention to:
1. Ensuring that there are clear policies in place regulating sexual harassment and the consumption of alcohol at company functions;
2. Being clear about their expectations of employees’ conduct at the event; they can do this by sending an email which reinforces their policies; and
3. Being proactive in ensuring the responsible service of alcohol at functions.

Please contact one of our employment lawyers should you have any queries.

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