The recent decision of the Fair Work Commission in Keenan v Leighton Boral Amey NSW Pty Ltd [2015] FWC 3156 considered employee conduct at a work function, and what was in and out of the scope of employment.

INTRODUCTION

The Commission found that whilst there were valid reasons for an employer’s decision to dismiss an employee after he engaged in inappropriate conduct at a work Christmas function in December 2014, the decision was nevertheless harsh and unjust.

Importantly for employers, the Commission has taken a narrow view of which allegations of misconduct may be relied upon as being valid grounds for dismissal. Conduct that occurred after the official finish of the Christmas party was held to be outside the scope of employment.

The decision also acts to remind employers that they should take measures to regulate employee consumption of alcohol during work functions.

BACKGROUND

Stephen Keenan arrived at his work Christmas function having already consumed two stubbies of beer. The event was held in the function room of a hotel and employees had been told that the event would finish at 10.00pm. The hotel served beer, wine and some mixed drinks, alongside finger food as part of the room hire, with no cost for attendees.

Mr Keenan quickly consumed a large amount of alcohol and became heavily intoxicated. The Commission heard that throughout the evening employees were able to help themselves to bottles of alcohol, and there was no evidence that hotel staff refused service of alcohol to any intoxicated employees.

Mr Keenan’s behaviour throughout the function included telling a director to ‘f*** off mate’, asking a senior team coordinator ‘who the f*** she was’, and then pursuing a female manager for her phone number.

After the formal function came to an ‘official end’ at 10.00pm, a group of employees moved into the public bar area of the same hotel. Mr Keenan then went on to:

  • stroke a senior female team coordinator’s chin
  • call a female employee a ‘bitch’
  • grab another female employee’s head with both hands and kiss her on the mouth
  • tell a fourth female employee that it was his ‘mission tonight to find out what colour knickers you have on’.

DISMISSAL – WAS IT UNFAIR?

Mr Keenan was dismissed in January 2015, as a result of his conduct on the night of the Christmas function. The Commission held that whilst there were valid reasons for the decision, the dismissal was harsh in the sense that it was disproportionate to the gravity of the conduct, having regard to:

  • the lack of any significant ongoing workplace consequence of his behaviour
  • his good employment record (despite a prior incident relating to alcohol consumption at work)
  • his intoxication was a result of alcohol consumption at a Christmas function when he engaged in the relevant behaviour
  • the manner of the service of alcohol at the Christmas function and the employer’s failure to exercise any control over this
  • the availability of alternatives to dismissal
  • the severity of the penalty compared to the treatment of another senior staff member in an unrelated incident.

Importantly for employers, Vice President Hatcher did not consider Mr Keenan’s behaviour following the finish of the Christmas party was within the scope of his employment. Rather, the conduct was characterised as private activity, and therefore was not a valid reason for dismissal.

LESSONS FOR EMPLOYERS

This decision highlights the caution employers must take in assessing what conduct merits dismissal. This will be particularly relevant where the conduct may have occurred within the scope of employment. The line between what occurs inside and outside the scope of employment has proven difficult to identify and employee advocates are likely to rely on this decision as authority for limiting the scope of what can be taken into account by employers when considering dismissing employees.

The other key learnings from this decision are that:

  • employers should make it clear what standard of behaviour is expected of employees, and reflect that standard in its management of social (and other) functions
  • employers should review corporate policies to ensure the standard expected of employees is clearly set out and accessible
  • when hosting a function:
    • employers should take positive steps to ensure a function venue complies with responsible service of alcohol (RSA) guidelines – it is advisable that the importance of these standards are reinforced by employers, even where the venue has undertaken to provide service in accordance with RSA requirements
    • employers should consider whether employer supervision is provided during functions where alcohol is provided.