A manager attends their work's Christmas function and observes an employee doing the following:

  1. drinking heavily, including serving himself a succession of beers from a portable cooler in the corner;
  2. telling a director of your company to "f##k off" and then later remarking to others around him that "All those board members and managers are f##ked, they can all get f##ked.  One of those managers in particular, he's a c##t" and "I hate working here.  It’s a s##t place to work.  In fact I just told a director to f##k off";
  3. saying to a junior female employee "No seriously.  Who the f##k are you? What do you even do here?"; and
  4. asking another female employee personal questions about her relationship status and family and saying "I want to ask for your number, but I don’t want to be rejected".

The manager then witnesses this employee leaving the function at its scheduled finishing time while continuing to socialise with other employees.  His drunken behaviour continues, including:

  1. leaning closely to a female colleague and trying to touch her face with his hands;
  2. saying to another female colleague that "I used to think you were a stuck up b#tch, but my friend says you are alright.  If my friend likes you then you must be ok";
  3. kissing another female colleague on the lips without her consent and saying "I’m going to go home and dream about you tonight"; and
  4. telling yet another female colleague that "My mission tonight is to find out what colour your knickers are".

Many managers would assume that they would be entitled to dismiss an employee behaving in this manner for misconduct.

However, a recent decision of Australia's national employment tribunal, the Fair Work Commission, has suggested otherwise.1  Instead, the Commission, to some extent, held the employer liable for providing free and unsupervised alcohol to its employees.  The Commission also did not view the employee's misconduct outside of the event's official hours and premises as being valid grounds for dismissal.

This decision raises the important question of 'what is the workplace?' for the purposes of employers taking disciplinary actions against employees for workplace misbehavior.  This article will consider this question and the inconsistent approach which has been taken in relation to the definition of 'the workplace' in different areas of law and jurisdictions, including the United States of America, Canada and the United Kingdom.  The article will also discuss the steps a prudent employer can take to minimise its potential liabilities in the future.

Investigation and dismissal

Stephen Keenan attended the official Christmas function of his employer, Leighton Boral Amey NSW Pty Ltd (Leighton), on 12 December 2014 and, in the following days, numerous complaints were made against him by other employees to the effect of the bullet points listed above.

Leighton conducted an investigation into Mr Keenan's behaviour at the Christmas function, which identified eight alleged incidents of misconduct by Mr Keenan during and following the Christmas function, including bullying and sexual harassment of several employees.  The allegations were put to Mr Keenan, who initially denied them but then later made limited admissions.

Leighton subsequently dismissed Mr Keenan.  In the termination letter, only two of the allegations were presented as being the reasons for his dismissal:

  1. the sexual harassment of a colleague at the function when he asked for her phone number; and
  2. the sexual harassment of another colleague after the function when he kissed her on the lips and said he would be dreaming of her later.

Mr Keenan brought a claim against Leighton claiming that he had been unfairly dismissed.  Vice President Hatcher of the Fair Work Commission considered the various witness accounts from the night of the function and found that he could not rely on Mr Keenan's recollection of events given his substantial intoxication.

The Fair Work Commission's decision

Despite this, Vice President Hatcher held that Mr Keenan had, in fact, been unfairly dismissed for various reasons, including:

  1. Leighton did not appear to have taken any steps to ensure the responsible service of alcohol during the Christmas function, other than entering into a venue hire agreement with the hotel in which the hotel agreed to take this responsibility upon itself;
  2. no-one cautioned Mr Keenan over the amount of alcohol he was consuming and did not prevent him from serving himself a substantial number of beers;
  3. Mr Keenan's behaviour following the Christmas function was not relevant to his employer as it was not within the 'place of work' and did not sufficiently impact upon Leighton and its employees; and
  4. Mr Keenan's advances towards his female colleague at the function where he asked for her phone number, while unwelcome, did not constitute sexual harassment and were not a valid reason for dismissal.

How has the 'workplace' been defined in Australia?

It is of some concern for employers that Vice President Hatcher did not consider that Mr Keenan's behaviour following the Christmas function was within the 'workplace' or the 'place of work'.  In fact, the decision in this matter appears to run contrary to other recent decisions of the Fair Work Commission.

In one decision, an employee's dismissal was not unfair after it was found that he had groped a waitress' bottom while eating and drinking at a hotel where his employer had provided him with accommodation between shifts.2 It was found that the hotel formed part of the workplace, as the employer had an ongoing relationship with the hotel and regularly booked rooms for its employees there.  In another decision, a pilot's behaviour was found to be misconduct warranting dismissal after he fondled a female colleague's breast while in the taxi returning to his employer-provided accommodation.3 It was not contested in this case that the taxi cab formed part of the employee's workplace.

Employers may also be bewildered by the inconsistency of the definition of the 'place of work' or the 'workplace' for the purposes of different areas of law.  In the Commission's anti-bullying jurisdiction, the term 'place of work' has been construed broadly to include an employee's home, should they be there and read a colleague's disparaging comments posted on social media.4 In a Federal Court of Australia decision, a hotel across the street from an employer's premises was found to form part of the 'workplace' for the purposes of the Sex Discrimination Act 1984 (Cth).5

However, it is worthwhile noting that in these cases, the broad definition of 'place of work' or the 'workplace' did not actually benefit the employer.  In the case of Mr Keenan, a narrow definition of the 'place of work' was adopted which, in these circumstances, was to Leighton's detriment.

All employers understand that there is a limit as to how far their reach can be and that there are areas of employees’ private behaviour that are beyond scrutiny.  However, where the behaviour has a significant and negative impact on the workplace, an employer is entitled to be legitimately concerned.  What is surprising in the case of Mr Keenan is that his behaviour had an impact on so many of his work colleagues and most observers would consider this to mean it should be dealt with as a workplace issue.

How has the 'workplace' been defined in other jurisdictions?

Deciding whether or not an employee's misconduct has occurred in 'the workplace' has been a vexed issue in many international jurisdictions.

Canada

Canadian courts have taken the view that an employee's misconduct need not have taken place within the physical confines of the employer's premises.  It will be sufficient that the employee's misconduct occurs in the context of the work environment.  As a result, the 'workplace' in Canadian employment law can extend to gatherings outside the physical place or work, and has even been held to extend to encompass business conducted at an employee's cottage.6 The Simpson case concerned an executive director of the employer who sexually harassed several female employees.  While the incidents occurred after the official business of meetings, the Court decided that the meetings, including the social aspects, were perceived by the staff as job related.  The Court decided that although these incidents 'did not take place within the physical confines of the office, they occurred in the context of the work environment.'  In this respect, Simpson is reminiscent of earlier Australian cases in which the 'place of work' was broadly construed.7 The Court in Simpson emphasised that it would be 'artificial and contrary to the purposes of controlling sexual harassment in the workplace to say that after-work interaction between a supervisor and other employees cannot constitute the workplace.'  This relatively broad view of the workplace is consistent with Australian decisions preceding Keenan

United Kingdom

In Keenan, some weight was accorded to the fact that Leighton did not appear to have taken steps to ensure the responsible service of alcohol during the function.  The employer had entered into a venue hire agreement with the hotel in which responsibility was assumed by the hotel.  In this respect, the reasoning of Vice President Hatcher bears similarities to common law from the United Kingdom. 

In Williams and Others v Whitbread Beer Co,8 the employer organised a training seminiar which was aimed to, ironically, improve the behavioural skills of its employees.  The seminar was held at a hotel owned by Whitbread and at the end of the day, the employees were provided with unattended access to complimentary and unlimited alcoholic drinks.  Three employees consumed a significant amount of alcohol, and subsequently made threats and abusive comments to their managers.  One employee threw a beer over another which resulted in retaliatory punches being thrown.  The employer dismissed the three employees for gross misconduct. 

The Employment Appeal Tribunal decided that although the behavior was deplorable, the dismissal of the three employees was outside the band of reasonable responses open to the employer.  Of particular relevance was the fact that the conduct occurred outside work hours in a drinking session funded by the employer.  The Court of Appeal upheld the decision.  While Vice President Hatcher's reasoning in Keenan is at odds with previous Australian case law, the emphasis placed on the employer's duty to ensure responsible service of alcohol at work-related functions is consistent with the reasoning in Whitbread

The Employment Appeal Tribunal took a similarly broad view of the workplace in Eggleton v Kerry Foods Ltd.9 A fight between employees which took place in a carpark across the road from the place of employment led to the dismissal of an employee.  Although the behavior was technically beyond the physical confines of the workplace, the Tribunal decided that the dismissal was fair.  This flexible view of the workplace is consistent with the aforementioned Australian decision of Vegara v Ewin in which a hotel across the street from the employer's premises formed part of the workplace under the Sex Discrimination Act 1984 (Cth).10

United States of America

Case law from the United States indicates a broad approach to determining the ambit of 'the workplace'.  In the decision of Lucky Stores,11 two truck drivers employed by a retail grocery chain were dismissed for misconduct engaged in while they were on a layover.  The pair's intoxication and the injuries inflicted on two other drivers disrupted the company's delivery schedule.  This was held to be adequate grounds for dismissal.  Despite the fact that the misconduct occurred outside work hours and outside the physical confines of the 'workplace', the employer's decision was justified.

Lessons for employers

While Vice President Hatcher's decision in Keenan was informed partly by the fact that the employer provided alcohol and failed to monitor consumption, the decision highlights a decidedly narrow view of the workplace.  Such a view receives minimal support in an international context.

Employers need to proceed carefully when considering allegations against their employees, particularly where there are questions about whether the allegations occurred within the workplace.  Although employers expect that there is clarity and consistency around this issue, the reality is that each factual circumstance can be so different that there will never be any fixed rules, particularly around the definition of workplace and the changing nature of workplaces generally.

In the meantime, employers should ensure that they do the following with a view to protecting themselves and, insofar as possible, preventing incidents such as Mr Keenan's occurring at their own functions:

  1. if an employer is expecting an employee to live up to a high standard of behaviour, then the employer will need to inform its employees of that standard, and reflect it in its own management of work functions and events;
  2. review company policies to ensure that employees' expected behaviour in and outside of the workplace is clearly set out and that there is an appropriate and thorough disciplinary procedure in place;
  3. identify in the company policies that behaviour which may damage the employer's reputation, expressing the position that even if this behaviour occurs outside the workplace, it may still be subject to disciplinary action;
  4. train employees in the relevant policies (including the disciplinary policy and procedures) and also train responsible people who manage out of hours functions and events; and

do not simply leave the responsible service of alcohol at work functions to the venue's hosts.  Employers should ensure that there is some form of monitoring of employee alcohol consumption and behaviour.