An employee's misconduct during and following his work's Christmas function was the subject of a recent decision of the Fair Work Commission.

Worryingly for employers, the Commission took a fairly narrow view of which allegations could be relied upon as being valid grounds of dismissal. Essentially, the misconduct which occurred following the official close of the function was found not to be relevant to the employee's relationship with the employer. There was also an examination of the employer's failure to regulate the employee's consumption of alcohol during the function.

In this eBulletin, we examine this decision and analyse its reasoning, especially in relation to the inconsistent definitions of 'the workplace' which have been applied in other decisions of the Commission and the Federal Court of Australia. We also discuss steps employers can take to prevent similar situations to this case arising for themselves in the future.

Bad behaviour at the work Christmas function

Picture this: you are attending your work's Christmas function where you witness one of your colleagues doing the following:

  • drinking heavily, including serving himself a succession of beers from the esky in the corner;
  • 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";
  • saying to a junior female employee "No seriously. Who the f##k are you? What do you even do here?"; and
  • 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".

You then witness this colleague 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 employers would assume that they would be entitled to dismiss an employee behaving in this manner for misconduct.

However, a recent decision of 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.

Investigation and dismissal

Stephen Keenan attended the official Christmas function of his employer, Leighton Boral Amey NSW Pty Ltd, 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 an unfair dismissal 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 view

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

  • 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;
  • 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;
  • 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
  • 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.

What is the 'place of work'?

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 '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 In another, 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 In the first case, it was found that the hotel formed part of the place of work, as the employer had an ongoing relationship with the hotel and regularly booked rooms for its employees there. It was not contested in the second case that the taxi cab formed part of the employee's place of work.

Employers may also be bemused 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 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

It is worthwhile noting, however, that in these cases, the broad definition of the '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, certainly did not benefit Leighton.

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 adverse 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.

Lessons for employers

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 we may hope for 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.

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, even if this behaviour occurs outside the workplace, may still be subject to disciplinary action;
  4. train employees in the relevant policies (including the disciplinary policy and procedures) and also train the responsible people for managing out of hours functions and events; and
  5. 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.