The issue of when it is and is not okay to terminate an employee for conduct that occurs outside of the workplace can be a tricky one.  A recent case considered the impact of criminal charges.

The employee was a young apprentice butcher working in a small retail store in regional NSW.  He was charged by police with being an accessory after the fact to murder. His employer subsequently spoke with his parents and said there was concern about the effect of the criminal charge on the business. The employee was terminated and later brought an unfair dismissal application.

The Commissioner considered the initial jurisdictional issue of whether or not the dismissal was in accordance with the Small Business Fair Dismissal Code (the ‘Code’) and held that it was not. The Code requires a two step process for serious misconduct. It is not enough to simply hold a belief that the employee engaged in the alleged misconduct. The second step is to assess if that belief is in fact reasonable. This second element involves the concept of investigating the allegation or issue to determine its truth.

Turning to the substance of the claim, the Commissioner held on balance that there was a valid reason for the dismissal. In support of this was the employee’s aggressive behaviour (including holding a knife) upon finding out about the charge and that his identity in relation to the charge was public knowledge as a result of local media coverage. Importantly it was stressed that the finding was based on the particular circumstances and employers cannot presume that criminal conduct outside of work is always a sufficient basis or valid reason for termination.

Despite finding that on the facts there was a valid reason, the Commissioner went on to find the dismissal was nonetheless harsh and unjust. Of note, the employee was over two thirds of the way into his apprenticeship and the employer had failed to consider the option of retaining him and still adequately dealing with other employee and customer concerns. Consequently the employee was denied procedural fairness. An award for six weeks compensation was made.

Lesson for Employers

Generally speaking one’s conduct out of work is a personal matter. There are however situations where out of hours conduct can impact negatively on the employment relationship and potentially be grounds for termination.

The other aspect, raised in relation to the Small Business Fair Dismissal Code, is that it is not enough to simply have a belief that an employee has engaged in serious misconduct. It is necessary to consider whether that belief is reasonable. Practically this may mean making enquiries to verify information or conducting an investigation into the matter.

This case also highlights the importance of procedural fairness and that what this means in practice will vary depending on the situation. On the facts a key issue was that the employee was not far from finishing his apprenticeship and this should have been factored into the decision-making process.

Christine Broad

Solicitor

BlandsLaw