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Free booze = free reign? Employee "unfairly dismissed" for unruly Xmas conduct

CaseFlash 09 July 2015

A decision by the Fair Work Commission last week has thrown into question the extent to which employers can require employees to comply with policies and procedure at work functions where alcohol is supplied, and discipline them for out-of-hours conduct.

The Facts

Stephen Keenan, a Team Leader with the Leighton Boral Amey Joint Venture (LBAJV), consumed a total of 13 drinks on the night of a work Christmas party, arriving at 7pm.

The Tribunal found that, once at the venue, Mr Keenan told a Team Leader trying to join a conversation – who was unknown to him – to “f*** off mate”, and asked a female colleague “Who the f**ck are you? What do you even do here?” Later in the night, he interrogated a different female colleague about her love life and asked for her phone number. When a male co-worker responded to her covert signal indicating her discomfort, Mr Keenan told the co-worker “I’m talking to her now f*** off”.

The official function and service of alcohol ended at 10pm, and a group moved upstairs to a bar attached to the venue. In an outside courtyard area, Mr Keenan said to another female co-worker “I used to think you were a stuck up bitch, but Ryan says you are alright”. In a later incident, Mr Keenan (then standing in a group of coworkers) kissed another female co-worker on the lips without warning. Soon thereafter, he called out at her in passing “I’m going to go home and dream about you tonight”.

When a group decided to move on to another venue, Mr Keenan attempted to follow them. While waiting for a taxi, he told a different female co-worker that it was his “mission” to find out what colour underwear she was wearing. When the group arrived at the third venue, Mr Keenan was refused entry and directed to a taxi.

In addition to the above, Mr Keenan also made various crude comments throughout the night about disliking or wanting to punch various colleagues, and hating his job.

Following complaints from various employees, the employer conducted an investigation that included interviewing those involved in the allegations. It waited until Mr Keenan returned to work in January to dismiss him for misconduct based on two counts of sexual harassment; the interrogation and request of a phone number from one co-worker, and the “unprovoked kissing incident” at the upstairs venue.

The Findings

The employer’s defence centred upon eight incidents it said constituted misconduct, and collectively amounted to a “valid reason” for the dismissal (under section 387(a)) of the Fair Work Act 2009). While Vice President Hatcher accepted the bulk of the employer’s evidence as to the incidents, he was unwilling to consider those incidents occurring after the official function concluded at 10pm. In so finding, he noted that:

“The time boundaries of the Christmas function were, in the notice to employees, identified as 6.00pm to 10.00pm. It can be inferred from the evidence that the physical boundary of the function was the venue booked for it, being the Endeavour Room. Employees were informed in advance that, in substance, LBAJV’s standards of conduct would apply at the function, but there was no suggestion of any expectation that those standards would apply to behaviour outside the temporal and physical boundaries of the function. The period spent by employees in the upstairs bar and out in the street after 10.00pm was outside of the workplace and outside of working time, however broadly construed the concepts may be.”

Vice President Hatcher considered that imposing liability on the employer for “out of hours misconduct” occurring in the upstairs venue (being the “kissing incident” accepted to be sexual harassment) would be “cast[ing] the net too widely over conduct occurring in a private social setting”. It was not behaviour “in connection with” the employment relationship, despite the fact that the contact occurred because of the Christmas party.

The incident at the Christmas party involving asking a female co-worker “who the f**ck” she was, while noted to be “aggressive, intimidatory and bullying behaviour”, was noted to be a “valid reason” for dismissal. However, Vice President Hatcher determined that as this allegation was not put to the employee in the course of the investigation, and not cited in the termination letter, it could not be relied upon as a basis for termination. The Vice President noted that LBAJV was a large company with several human resources specialists, making this procedural failure

In considering whether the dismissal was “harsh, unjust or unreasonable”, the Vice President made the observation 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 at the function. If alcohol is supplied in such a manner, it becomes entirely predictable that some individuals will consume an excessive amount and behave inappropriately.”

It was not appropriate, he said, for the employer to simply rely upon the venue serving alcohol responsibly and complying with the relevant legal obligations without taking steps to “satisfy itself as to how the Hotel would go about this”. This was so despite the employer having relevant policies in place, and an informal verbal announcement by a senior staff member reminding employees to “enjoy yourself” but to not “be that idiot I have to deal with on Monday morning”.

The Vice President found the dismissal was “harsh, unjust and unreasonable”, and has paused proceedings in order for the parties to make submissions as to remedies. The employee has sought reinstatement to his previous position, and this continues to be resisted by the employer.

Lessons for Employers

This decision is a reminder of the heavy onus on employers to manage the behaviour of employees at work functions involving “unlimited service of alcohol”. It is also a reminder of how the way in which an investigation into such incidents is carried out can have a considerable effect on the outcome in unfair dismissal matters. While several of the incidents involving Mr Keenan could have contributed to a “valid reason” for termination, the employer’s difficulties in clearly communicating the allegations to the employee, giving him an opportunity to respond on each separate allegation, and setting out clearly the basis for termination, led to an adverse finding for the employer.

In planning work functions involving alcohol, employers should be mindful to:

  • ensure that clear policies are in place regulating sexual harassment, bullying, and the consumption of alcohol (including at, or in connection with company functions);
  • be clear about conduct expectations at the event, for instance by sending an email which refers back to such policies;
  • remind employees of the start and finish time of the event, and ways to get home safely; and
  • be proactive in ensuring responsible service of alcohol conditions are complied with (to the extent practicable).

In conducting investigations into “out of hours misconduct’, employers should:

  • ensure all allegations are clearly identified and communicated in all correspondence with the subject of the investigation;
  • ensure the subject of the investigation has an opportunity to respond to each allegation;
  • consider obtaining an external investigator to minimise risks surrounding procedural fairness; and
  • seek legal advice on the risks of terminating an employee in these circumstances.

TressCox Lawyers’ Employment, IR and Workplace Safety team regularly advises on issues involving termination for misconduct, how to conduct an internal investigation, and policy preparation. Should you require advice on any of these matters, please contact Peta Tumpey on (02) 9228 9363.

Peta Tumpey, Partner

CaseFlash 09 July 2015
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