In the media of late there have been a number of cases concerning ‘out of hours conduct’ related dismissals at the Fair Work Commission (FWC). It may surprise some that in a few of these cases, it has been found that the employee was unfairly dismissed even with the evidence presented it may have seemed obvious that there was a valid reason for dismissal.

When determining whether or not an employee was unfairly dismissed the FWC will take into consideration not only the immediate facts around the dismissal but also whether the dismissal was harsh, unjust or unreasonable. As shown in the recent case of Keenan v Leighton Boral Amey Joint Venture [2015] FWC 3156 (26 June 2015) an employee was found to have sexually harassed female staff and verbally abused his superiors by telling them to f… off during a Christmas Party. The FWC found that most of the activity relating to the reason for dismissal did not constitute the workplace and the presiding Commissioner also found that during the subsequent investigation the ‘substance’ of the allegations were not put to the employee and therefore he was not afforded the proper opportunity to respond.

Issues such as these if not properly addressed, can cost a business dearly. The maximum ‘compensation’ under the Fair Work Act 2009 for unfair dismissal is 6 months’ pay. This is not something to take lightly especially given that the Act itself is not a fair instrument for both parties.

In the case of a staff functions, it is often a good idea to remind employees of their obligations while at the same time encouraging them to have a good time. Remind them that it is still a ‘work function’, and this requires responsible alcohol consumption, no use of illegal drugs, no harassment, no fighting/violence, and no inappropriate language. In addition, the employer should state that any breaches of those rules may result in disciplinary action.

Staff-Organised Functions

While a staff Christmas party would be regarded as a work-related function, parties arranged by staff members outside management direction or knowledge can still create issues for employers. Employees may think that behaviour at such staff functions is none of the employer’s business. Ordinarily, it is only in exceptional circumstances that an employer has a right to extend any supervision over the private activities of an employee.

However, conduct that gives rise to a material risk of damage to an employer’s interests, even if there is no actual damage in the particular case, may nevertheless be conduct that attracts the legitimate concern of the employer and, depending on the circumstances, conduct that justifies the employee’s dismissal.

In considering the employee’s out-of-hours conduct in relation to the employment contract, the Fair Work Commission (FWC) considers certain factors in determining the fairness, or otherwise, of an employee’s dismissal. The factors relating to fairness that are normally considered include:

• Whether there is a company policy that deals with out-of-hours conduct and whether the policy is lawful and reasonable
• Whether the reason for dismissal was valid
• Whether the dismissal was harsh, unjust or unreasonable.

An employee’s actions may, for example, involve inappropriate behaviour or activity while the employee was wearing a company uniform, or behaviour that may potentially damage the company’s image. Ultimately, behaviour that gives rise to a material risk of damage to an employer’s interests, even if there is no actual damage in the particular case, may nevertheless be conduct that attracts the legitimate concern of the employer and may thus, depending on the circumstances, constitute conduct that provides a ‘valid or sound reason’ for termination of employment.

For further information, contact the Workplace Relations Department on 08 9321 7701.

Dalton Ryan
Senior Workplace Relations & IR Adviser [Former]