The Fair Work Commission (FWC) has shed further light on the contentious issue of when an employee’s conduct at a work function will be a valid basis for dismissal. It found that an employer unfairly dismissed a team leader who spent the night of his work Christmas party intimidating and sexually harassing colleagues and telling superiors to “f**k off”.

Implication for employers

This decision calls into question the standards employers can reasonably expect of their employees at staff functions, particularly in instances where the company has provided an “unlimited service of free alcohol”. When determining if an employee’s conduct is a valid reason for dismissal, employers should also carefully consider whether the conduct is sufficiently connected to their employment or will be considered to have occurred “out of hours”.

Background

In this case, Mr Keenan was dismissed by Leighton Boral Amey Joint Venture (LBAJV) following drunken misconduct at the company’s Christmas function.

During the event, which had been organised and paid for by the employer, Mr Keenan told a company director to "f**k off" when he attempted to join a conversation, issued the same directive to a senior project manager, asked a female colleague for her phone number and said to another: "Who the f**k are you? What do you even do here?"

After the official Christmas function ended, Mr Keenan then accompanied colleagues upstairs to the venue’s public bar where he described one female colleague as a "bitch" and kissed another on the mouth, telling her he was going to go home and dream about her. The FWC heard that Mr Keenan consumed 13 drinks on the night, including two beers before he arrived and a vodka and coke after the party at a public bar attached to the same venue.

Mr Keenan was subsequently dismissed, after a meeting at which the allegations of misconduct were put to him. He brought an unfair dismissal claim and sought reinstatement.

Decision

The FWC found that Mr Keenan had been unfairly dismissed as the conduct which occurred after the official function had ended (at the upstairs bar) was “out of hours” conduct and therefore a higher level of misconduct was required for it to constitute a valid reason for dismissal. The Commission considered that Mr Keenan’s conduct in kissing another employee unexpectedly on the mouth would constitute sexual harassment under the Sex Discrimination Act 1984 (Cth) (SD Act). However, it found that the incident was not sufficiently connected to Mr Keenan’s employment, as the social interaction at the upstairs bar was not “in any sense organised, authorised, proposed or induced” by the employer and was “essentially a private social setting”. LBAJV’s submission that they would have been liable for Mr Keenan’s conduct under the SD Act was therefore unfounded, and could not constitute a valid reason for dismissal.

In relation to Mr Keenan’s conduct at the official Christmas function itself, the FWC considered that, whilst unpleasant, it was not sufficiently serious to justify dismissal. It considered that while one piece of misconduct may have constituted a valid reason for dismissal (aggressively asking "Who the f**k are you? What do you even do here?" to a younger female co-worker), the substance of this allegation was not sufficiently communicated to Mr Keenan and he therefore did not have a proper opportunity to respond to the allegation.

In finding that Mr Keenan was unfairly dismissed, the FWC took into account that the behaviour was as a result of his intoxication and stated that “it is contradictory and self-defeating for an employer to require compliance with its usual standards of behaviour at a function but at the same time to allow the unlimited service of free alcohol. If alcohol is supplied in such a manner it becomes entirely predictable that some individuals will consume an excessive amount and behave inappropriately.” It also took into consideration Mr Keenan’s good work record and that there were substantial disciplinary alternatives available to the employer short of dismissal.

Vice President Hatcher invited the parties to provide further submission on whether reinstatement was appropriate. In his view, demotion from Mr Keenan’s position as team leader and a written apology would have been a more appropriate remedy, but as the FWC is only empowered to reinstate someone to the same position they held prior to their dismissal, Vice President Hatcher asked to hear further on the appropriateness of reinstatement.

The emphasis by the FWC that employers cannot hold their employees to the same standard of conduct at work functions where unlimited alcohol is provided at the employer’s expense, has widespread implications for the contentious issue of when an employee’s intoxicated conduct at a work function will justify dismissal. The employer in this case was criticised by the FWC for not placing anyone with managerial authority in charge of the conduct of the function to monitor that alcohol was being served responsibly by the venue (from an early stage it appears employees were able to freely help themselves to beer). Employers should therefore carefully consider how alcohol is served at work functions, as well as clearly delineating official work functions (which they organise and support) and other functions which they considers will occur in a private social setting.

Keenan v Leighton Boral Amey Joint Venture [2015] FWC 3156 (26 June 2015).