Australia: After-hours employee conduct: "What goes on tour stays on tour" – or does it?

After-hours conduct and its connection to employment

It is no wonder that as technology (accessibility of employees through email and mobile phones) blurs the borders and boundaries of the workplace, employers are finding it both difficult to regulate workplace behaviour "after hours" as well as finding it a necessity.

The types of after-hours behaviour by employees which end up being pursued by or against employers in court commonly involve sexual misconduct (which often involves alcohol), injuries sustained at events and of more recent times the (mis)use of social media (the latter being the subject of another article in this edition of Strateg-eyes).

Employers should consider both implementing rules for, and disciplining for breaches of, "afterhours" workplace behaviour if they:

• sponsor or host "social" events attended by employees
• have employees attending social events connected to their workplace (eg social events organised by customers, clients or suppliers)
• have employees going away or attending work conferences together
• provide accommodation for employees which results in employees living in close proximity to each other
• are sensitive about reputational and brand damage that may be sustained by employee misbehaviour
• have employees using social media

You're not the fun police, it's the law...

The incentive to regulate employees' behaviour outside the normal work environment are the legislative obligations which exist for employers as well as individuals (officers and employees alike) under both work health and safety and antidiscrimination legislation.

In particular, the primary duty of care of the person conducting a business or undertaking ("PCBU") under the harmonised work health and safety legislation (in New South Wales this is s.19 of the Work Health and Safety Act 2011) will apply if the after-hours event involves workers being "at work in the business or undertaking" . This duty also extends to ensuring that the "health and safety of other persons is not put at risk from work carried out as part of the conduct of the business or undertaking". If the after-hours conduct triggers this duty, and that will be debateable given the wording of the duty, then officers and "workers" (employees and a range of others) are also implicated as they have a duty to either, in the case of officers, exercise due diligence to ensure the PCBU complies with its duties or in the case of workers "(w)hile at work", to take reasonable care of their own health and safety and to ensure their acts or omissions do not endanger the health or safety of others (and also to comply with policies and instructions).

The Sex Discrimination Act 1984 (Cth) makes it unlawful for employees and other "workplace participants" to sexually harass each other as well as for an employer to sexually harass an employee. As regards "workplace participants" the area within which sexual harassment is regulated is at the workplace which the Act defines as "a place at which a workplace participant works or otherwise carries out functions in connection with being a workplace participant". The incentive for employers to seek to prohibit unacceptable workplace behaviour at after hours events is set out in s.106 which provides employers with a defence to the acts of employees and others, for which they are (otherwise) vicariously liable, provided they have taken all "reasonable steps". In the context of sexual harassment the case of Lee v Smith & Ors ¹ should serve as a solemn reminder. In this case part of the conduct complained about occurred at a private dinner party attended by work colleagues and where the complainant was allegedly raped by a work colleague against whom she had previously made complaints regarding his sexual harassment of her.

In South Pacific Resort Hotels v Trainor ² the sexual harassment which allegedly occurred after hours involved employees who lived in employerprovided accommodation. This case recognised that "in connection with employment" could have a broad application in terms of an employer's liability for after-hours conduct.

Where does the workplace stop and start?

The work health and safety and anti-discrimination laws provide the legislative basis enabling and indeed justifying the regulation of workplace behaviour and the continuation of the working relationship, such as at a regional conference (see Leslie v Graham³ ), in a car park used by employees (see Dobson v Qantas Airways Limited ⁴ ) or where workplace events led to an afterhours assault (see The Australian Workers' Union, Tasmania Branch v Adelaide Mushrooms Nominees Pty Ltd t/a Tasmanian Mushrooms ⁵ ) will continue the employer's "workplace obligations".

While it was made clear in the context of a workers' compensation claim in the NSW Court of Appeal recently that work social events and recreational activities "can well form part of the course of employment" (Pioneer Studios Pty Ltd v Hills ⁶ ), equally, it may be that after-hours conduct does not necessarily fall within the realm of the workplaces that legislation covers, but there is still a reputational risk created by employees' after-hours behaviour. Can an employer still require an employee to behave in a particular way? The answer is, in short, yes but on what basis? Older case law based such intervention and regulation on there being a "relevant connection to employment" ⁷ and this case law is still good authority.

This issue was recently considered in John Pinawin t/a RoseVi.Hair.Face.Body v Edwin Domingo ⁸ where, in an unfair dismissal context, Fair Work Australia qualified the notion that "(g)enerally employers have no right to control or regulate an employee's 'out of hours conduct'. Fair Work Australia affirmed that "if an employee's conduct outside the workplace has a significant and adverse effect on the workplace, then the consequences become a legitimate concern to the employer. A range of 'out of hours conduct' has been held to constitute grounds for termination because the potential or actual consequences of the conduct are inconsistent with the employee's duty of fidelity and good faith. This concept is closely allied to the implied term of 'trust and confidence' in employment contracts which relates to modes of behaviour which allow work to proceed in a commercially and legally correct manner". In this case the fact that the employer was a small business with a close personal relationship with the employee was another basis on which summary dismissal based on drug use, was justified.

In McManus v Scott-Charlton ⁹ the court held that an employer may legitimately seek to assert authority over any conduct which threatens order in the workplace or the reputation of the enterprise and this proposition has subsequently been approved in Farquharson v Qantas Airways Limited ¹⁰ and Kolodjashnij v Boag ¹¹ . The "order in the workplace" may represent the chain of command such as the relationship between managers and those under their supervision. Where conduct has a bearing on that relationship then the employer's concern about it (and subsequent action) will be legitimate - Civil Service Association of WA v Director-General ¹² ; Gera v Commonwealth Bank ¹³ ; Kalouche v Legion Cabs ¹⁴ .

And, in this age of social media, insulting and threatening comments made about another employee after hours but on a public forum can provide the basis of serious misconduct and summary dismissal ¹⁵ . However, comments made on Facebook that are foolish and inaccurate outbursts that do not damage an employer's business may not provide a valid reason for dismissal ¹⁶ . Despite the finding in Fitzgerald's case, Commissioner Bissett did state "(i)t would be foolish of employees to think they may say as they wish on their Facebook page with total immunity from any consequences".

How do you regulate the behaviour?

The regulation of appropriate, or inappropriate, after-hours workplace behaviour may be contained within any workplace behaviour policy or policy on social media, sexual harassment, discrimination or bullying because whether it occurs during or after work hours, the types of acceptable and unacceptable behaviour will be the same and should be treated accordingly. Another policy where conduct may be regulated is in any applicable drug and alcohol policy.

The only difference between during and after-hours behaviour will be that after-hours behaviour may be more difficult to link to the workplace ¹⁷ and thus employment in any given factual scenario, however the authorities, as outlined above, will allow an employer to take action where there is a connection between the context in which the after-hours conduct occurs and the employment and so the fact that such a difficulty may arise (in terms of a connection) in the future should not be a deterrent to exercising both in the documentation and practically, an appropriate level of control. The requisite connection between the conduct and the employment may be established by the laws referred to earlier or even where there is a threat to the "order of the workplace" or the employer's reputation or where the employee's conduct amounts to a breach of a contractual duty. As regards breach of contract, such an action may also be available (in addition to an implied breach of contract) if the employer's contract of employment with its employees sets out reasons which may lead to termination (summary or with notice) and these include conduct which "brings or may bring" the employer into disrepute.

As with all policies and contractual terms, the sanctions for any breach should be clear and they should be rigorously implemented and enforced, consistently as well as updated as may be required from time to time.

Conclusion

After-hours conduct can legitimately be the subject of employer regulation and disciplinary action through both the contract of employment and employment policies if it is necessary either in order to either ensure compliance with the employer's legislative work health and safety or anti-discrimination obligations or if it may cause damage to an employer's reputation or order of the workplace. It may be, in any given situation where damage or injury results from an employee's after hours conduct, that an employer can and should divorce the connection from employment and the workplace, however, it is prudent to at all times reserve the right to control actions which may lead to this liability given the encroachment of the workplace into people's private lives and the ever-increasing liability which results.

Footnotes

¹ [2007] FMCA 59
² [2005] FCAFC 130
³ [2002] FCA 32
⁴ [2010] FWA 6431
⁵ Commissioner PC Shelley – T10691, 5 September 2003
⁶ [2012] NSWCA 324
⁷ Rose v Telstra Corporation Limited (1998) unreported, AIRC
⁸ [2012] FWAFB 1359
⁹ (1996) 70 FCR 16
¹⁰ [2005] AIRC 982
¹¹ [2010] FWAFB 3258
¹² [2002] WASCA 241
¹³ [2010] FMCA 205
¹⁴ (1998) 81 IR 415
¹⁵ O'Keefe v Williams Muir's Pty Limited t/a Troy Williams The Good Guys [2011] FWA 5311
¹⁶ Fitzgerald v Dianna Smith t/as Escape Hair Design [2010] FWA 7358
¹⁷ Streeter v Telstra Corporation Limited (2007) AIRC 679

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.