Open all hours for business - employee misconduct and unfair dismissal

One can forgive an employer for lamenting that their liability for employee misconduct is "open all hours" but the ability to dismiss an employee for their misbehaviour is more limited.

Recent decisions highlight that an employer is liable for an employee's conduct outside of working hours where there is some connection with the employer's business. But to dismiss an employee for conduct outside of working hours requires a closer connection.

Employees should not sleep together

Recently the Full Federal Court upheld a finding that an employer was vicariously liable for the sexual harassment of one of its female employees by a fellow male employee (South Pacific Resorts Hotels Pty Ltd v Trainor [2005] FCAFC 130, 15 July 2005).

South Pacific Resorts provided accommodation for its staff within the resort area. An employee was asleep in her room when a male employee entered her room and made sexual advances and requests. Six days later he was found lying on her bed.

Even though all incidents occurred while the employees were off duty the Court found South Pacific Resorts vicariously liable for the sexual harassment. Liability existed because of the connection between the acts of the male employee, the employer provided accommodation and the common employment of the two employees.

But you cannot dismiss an employee for grabbing

In stark contrast to the South Pacific Resorts decision is the matter of Tichy and Department of Justice - Corrections Victoria (AIRC, 4 July 2005, PR959660).

In this case, a group of employees travelled to the country for a field trip. Whilst off duty they attended a motel for drinks, moved to a restaurant for a meal and then a gaming venue for further drinks. Mr Tichy attempted to "pat down" a female employee and later put his hand on her bottom and down her jeans. Mr Tichy was dismissed.

Surprisingly, the Commission held Mr Tichy's behaviour was not related to work and not a reason to terminate his employment. It did not matter that the employees were in the country for work nor that the employer's sexual harassment policy applied to field trips.

The conduct of Mr Tichy occurred in circumstances of a private nature. At the time of the incident all employees were off duty, were out of uniform and not at the employer funded accommodation.

But urinating in public is a reason to dismiss

A more sensible decision concerns the publicly urinating employee (Brown v Aristocrat Technologies Australia Pty Ltd, PR960646, 27 July 2005).

Mr Brown consumed a number of drinks at a Christmas function. After the function concluded, but whilst still at the premises, Mr Brown urinated over the balcony onto people dining at a restaurant below. Mr Brown was subsequently dismissed.

Mr Brown argued his conduct was not work-related. The Commission rejected that submission. The conduct took place at a work social function, funded by the employer. The employer had explained to all staff its expectations on behaviour. Even though the function had concluded the Commission said there was a sufficient connection between the behaviour and the employment relationship. Such a result is both logical and sensible.

Pay for your employee's private relocation expenses

A member of the Police Force was threatened by a criminal as a result of his work. The criminal obtained details of where the employee lived. The employee's dog went missing. The Police Force installed a temporary surveillance system at the employee's home. The employee requested an alarm system but this was refused. The employee received some further threats. The employee then sold his family home and moved to a new property after his employer would not provide additional security.

The employee in this case sought and obtained his reasonable relocation costs under the terms of his Award (Police Association v Victorian Police Force, PR959259, 21 July 2005).

Tips for Employers

Dealing with behaviour and liabilities arising from employee behaviour during non-working hours is difficult. Cases are often decided by impression and the nature of the claim. Nevertheless, there are some simple steps employers can follow to be in the best possible position:

• Develop bullying, discrimination and sexual harassment policies that apply to employee conduct towards fellow employees not just in the office but also at work related functions;

• Educate staff about the behaviour expected of them at work functions on a regular basis;

• Enforce the policy.

Despite the inconsistency between recent decisions, employers should base the reason to dismiss on the standard of behaviour it expects of its staff towards other employees and consistent with its obligations to provide a safe workplace. Taking that approach will send a clear message to other staff about the expected behaviour.

Author: Mark Paul