The Fair Work Commission’s decision of Keenan v Leighton Boral Amey NSW Pty Ltd [2015] FWC 3156 was handed down in July this year and will serve as a timely reminder as we enter the Christmas ‘silly season’ when many employers organise Christmas functions for their hardworking employees.

This matter involved an employee, Mr Keenan, being dismissed due to conduct that constituted sexual harassment after a work Christmas function.  The function was at a hotel and the employer had hired out a private area for its employees.  At this function the alcohol was free and employees could serve themselves.  There was no one from the employer monitoring alcohol consumption or behaviour.

Mr Keenan took full advantage of the free flowing alcohol and consumed an unknown quantity at the Christmas function.  As a result Mr Keenan became very intoxicated and then engaged in the following conduct during the function:

  1. he told a director of the employer to “f##k off
  2. he said to senior female colleague “who the f##k are you?”
  3. he repeatedly asked for the phone number of a female colleague; and
  4. he told another male colleague to “f##k off”.

Immediately after the function many of the remaining employees went to the public bar at the hotel to continue drinking and Mr Keenan made the decision to continue drinking at the public bar after the function and engaged in the following conduct:

  1. he tried to touch the face of a female colleague;
  2. he told a female colleague “I used to think you were a stuck up b###h but Ryan says you are alright.  If Ryan likes you then you must be ok”;
  3. he suddenly grabbed and kissed a female colleague on the lips and then told her that he would be dreaming about her later that night; and
  4. he told a female colleague that his mission for the evening was to find out what colour underwear she had on.

Unsurprisingly, there were a number of complaints made about Mr Keenan following this function and the employer investigated the complaints and terminated Mr Keenan’s employment on the basis of two grounds of sexual harassment being the complaints about asking for a female colleague’s phone number and kissing another female colleague on the lips.  Mr Keenan lodged an application for unfair dismissal contending that his dismissal was harsh, unfair and unjust and sought reinstatement.

DECISION

Worryingly for employers the Commission found in favour of Mr Keenan. The Commission placed a lot of importance on the distinction between the conduct that occurred during the function and the conduct that occurred after the function had finished.  It said that the behaviour following the Christmas function was not relevant to the employer as it was not within the “place of work” and did not sufficiently impact upon its employees. 

Vice President Hatcher said:

“I do not consider the conduct, which occurred at the upstairs bar can be said to be in connection with Mr Keenan’s employment.  The social interaction, which occurred there, was not in any sense organised, authorised, proposed or induced by LBAJV.  Those who gathered there did so entirely of their own volition.  It was a public space… Mr Keenan’s conduct in the upstairs bar was merely incidental to his employment.”[1]

This may cause some confusion because the issue of “place of work” has been construed broadly in the anti-bullying jurisdiction (to even include an employee’s home). What is interesting in this case is that Mr Keenan’s behaviour had an impact on so many of his work colleagues but the Commission found his conduct to not be a workplace issue.

The Commission found that the employer had a valid reason to dismiss Mr Keenan. However, the Commission found that even though it was “abundantly clear[2] the incident of kissing the female colleague was sexual harassment it lacked the requisite connection with employment (because it occurred after the function had finished) to establish vicarious liability and reputational damage.

The Commission found that in the circumstances, the termination was harsh and unjust.  It considered that the appropriate response would have been to demote Mr Keenan, issue him a final warning, require a written apology and/or ban him from future work functions where alcohol was involved.[3]

In coming to its decision it also gave weight to the fact that Mr Keenan had a good employment record, it was considered out of character, there was minimal detrimental effect on employees and the commission even formed the view that the employer was partly to blame for allowing the function to occur in the manner that it did. 

Vice President Hatcher said:

“in my view 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 allow the unlimited service of free alcohol at the function.[4]

(Emphasis added)

IMPLICATIONS:

If employers are going to have work functions with alcohol they should:

  1. have an employee in a supervisor role to manage the function and monitor behaviour and alcohol consumption; and
  2. ensure they have clear start and finish times for functions.

Employers also need to make sure that they have policies in place about employee behaviour in and outside of the workplace and need to make clear what behaviour the employer says may damage its reputation.

Having EPL Insurance in place would allow the employer to act upon the bad behaviour and not be too greatly affected if the court reinstates the employee.  No doubt everyone in this case learnt from Mr Keenan’s misadventure.