Out of hours conduct; Know your rights and responsibilities

While most employers understand their responsibilities for employees' conduct in the workplace, things are less clear when that conduct happens out of hours. Employers may also be unsure about when they can dismiss an employee for conduct that occurred out of hours.

What are an employer's responsibilities?

Perhaps surprisingly, employers do have responsibilities that extends out of the hours of employment.

A striking example was where an employer was held to be vicariously liable for the rape of an employee by another employee that happened out of hours and away from the worksite[1]. This was in part because the rape followed on from sexual harassment which had taken place in the workplace. The Magistrate commented that the employer approached the complaint and its investigation with indifference and even a disinclination to take the matter seriously. The employer was found to have victimised the employee because of its own conduct following her complaint.

There's a lot for employers to learn from this case; namely:

Encourage a workplace which is free from sexual harassment;
Monitor the workplace to ensure everyone understands and complies with the sexual harassment policy; and
Ensure that complaints are followed up confidentially and sensitively.

If you are aware that one employee is acting inappropriately towards a co-worker out of hours, you are able to direct the employee to stop the harassment even if none of the conduct happened in work hours[2]. Taking reasonable steps to address and stop the harassment may help you avoid vicarious liability if the behaviour continues or escalates.

What are an employer's rights?

If an employee acts in a way that is contrary to your workplace policies but the behaviour occurs out of work hours and off-site, can you dismiss the employee? It seems that the answer to this question is, "it depends". Employers don't have an unfettered right to judge their employees but they can dismiss an employee whose behaviour amounts to a rejection of the employment contract.

In a recent case, a large corporation dismissed an employee for sexual harassment of another employee following an after work dinner to which the corporation had contributed some funds[3]. During the investigation of the events, the employee lied about her conduct. The employee challenged the dismissal on the grounds that the behaviour was not connected to work and did not constitute sexual harassment. The Australian Industrial Relations Commission found that, while there was a connection to her employment, the behaviour did not warrant dismissal. He ordered that the employee be reinstated. The corporation appealed against this order arguing that the employee's lies during the investigation meant it could no longer have any trust or confidence in the employee. The majority of the Full Bench agreed with the corporation and quashed the order to reinstate the employee[4]. So in this case, the behaviour was sufficiently connected to the workplace to give the employer a right to dismiss the employee and, even though the behaviour wasn't sexual harassment, her lies about what actually occurred gave the employer grounds to dismiss her because it could not longer trust her.

This contrasts with another case where a school principal had an adulterous affair with the mother of a pupil at his school and then misled the chair of the school's board about the relationship. The behaviour was held not to be a serious breach of the responsibilities in the course or performance of his duties under his contract. The school was order to pay him damages to compensate for the wages lost[5].

The need for a connection between the workplace and the out of hours conduct before an employee can be dismissed has been established for some time. Essentially you will only be able to dismiss an employee for out of hours conduct if:

An objective view of the conduct shows it is likely to cause serious damage to the relationship between the employer and employee;
The conduct damages the employer's interests; or
The conduct is incompatible with the employee's duty as an employee.

Before taking action to dismiss an employee for out of hours conduct, it may be worth seeking legal advice. This won't necessarily stop an employee from taking action for the dismissal but it does mean you'll be more confident in your position if your decision is challenged.

If you have a clear policy which tells employees they face dismissal for out of hours conduct, a tribunal reviewing your decision is less likely to find an employee's dismissal was harsh, unjust or unreasonable. A recent case highlights how this works[6]. Nick was employed by a brewing company which had a clear responsible drinking policy. One weekend, Nick was caught driving with a blood alcohol level well over the legal limit. He informed his employer when he returned to work on Monday. He was stood down on full pay and subsequently had his employment terminated. The court found that, in the circumstances, this was reasonable.

The lessons employers should take from this case are:

the policy must be both lawful and reasonable;
the importance of the policy to the business must be stressed to employees;
it must be made clear to employees that any breach is likely to result in termination of employment.

If an employee then knowingly breaches that policy, the employee will have difficulty making out an argument that there is no valid reason for the termination.

You might also be able to show a connection to your workplace if the conduct occurs off-site but while employee is wearing a work uniform. When two employees were fighting in private and not wearing their corporate uniform, there was an insufficient connection to the workplace to justify dismissal[7]. But when an off-duty employee attacked another employee in public and while wearing a jacket with the company's logo clearly visible, the dismissal was held to be justified[8].

Essentially, you do have some responsibilities for your employees' conduct out of hours but you also have some rights to terminate their employment for that conduct. The most important thing to do is ensure that your workplace policies about employee conduct indicate your expectations for our of hours conduct when employees are socialising together and when there's a sufficient connection to the workplace.

While you don't want to feel like Big Brother dictating to your employees about their private lives, you do have a legitimate interest in protecting your business by ensuring good working relations between your employees and guarding your business's reputation. If your workplace policies emphasise these purposes, they will make sense to your employees as they'll realise that your policies are ultimately about protecting them, too.

[1] Lee v Smith [2007] FMCA 59

[2] McManus v Scott Charlton (1996) 140 ALR 625

[3] Carlie Streeter v Telstra Corporation Ltd [2007] AIRC 679

[4] Telstra v Streeter [2008] AIRCFB 15

[5] Moreton Bay College v Teys [2008] QCA 422

[6] Kolodjashnij v Lion Nathan t/a J Boag & Son Pty Ltd [2009] AIRC 893 (16 October 2009)

[7] Rose v Telstra Corporation Ltd [1998] Print Q9292

[8] Gustav Klepacz v Reflections Group Pty Ltd [2007] AIRC 189