Contrary to popular belief, an employee who engages in obviously drunken and inappropriate behaviour may still be able to successfully challenge their dismissal if it is not handled appropriately.

A recent unfair dismissal case is a salient reminder to employers to ensure that they manage employees consistently and be vigilant where particular risk factors are present (eg alcohol at work functions).

Facts of the case

In Keenan v Leighton Boral Amey NSW Pty Ltd [2015] FWC 3156 a work Christmas party went awry when a drunken employee began repeatedly swearing, making inappropriate comments to other employees and then sexually harassing several female employees at a function immediately following the Christmas party.

Multiple comments were made by other employees after the Christmas party and the employer commenced an investigation. The employer met with the employee initially informally and then formally to put the allegations to him. The employee was later dismissed on the grounds that two allegations of sexual harassment had been made out.

 

Findings

Despite what appeared, at least on face value, to be a valid reason for termination, the particular circumstances surrounding the allegations and the termination process meant that it was ultimately held that the dismissal was unfair.

It is interesting to note that Vice President Hatcher found that the employee’s behaviour did constitute a valid reason for dismissal but a number of key factors meant that the dismissal was nonetheless ‘unfair’. The matter was adjourned to consider whether reinstatement was possible on some basis and to allow the parties an opportunity to reach an agreement if they chose to do so.

We will consider in turn three important aspects of the decision:

a)    Conduct occurring outside the ‘workplace’

The employee’s inappropriate behaviour involved numerous separate incidents some of which occurred during the Christmas function and some of which occurred after the function by which time a number of the employees had continued the festivities at a different bar and later outside the premises.

 

Following the investigation of these incidents, the employer ultimately relied upon two allegations of sexual harassment, both of which occurred at the public bar upstairs from the function and after the work function had formally finished. It was held that this conduct did not occur within the ‘workplace’.

 

Whether or not conduct occurs in the workplace can be a grey area and is affected by a number of different factors. Some of these factors include the location and whether the activity in question is authorised by or at the behest of the employer.

 

b)    Consistent treatment of similar situations

The employer was aware of a separate incident, in the workplace and prior to the Christmas function, involving another employee who when talking to a female during a group meeting had sworn and used inappropriate language including a comment which potentially amounted to sexual harassment. However, the employer had not taken any action against that employee.

 

Critically, this posed a problem when the employer later sought to take action against the employee in this case for similar types of behaviour. Vice President Hatcher held that the employer had failed to consistently apply the same standard to all employees which contributed to the finding that the dismissal was unjust.

 

Consistent and fair treatment of all employees is very important. If the business has a Code of Conduct or similar, there needs to be consistent and uniform application of this and other policies to everyone. Aside from the obvious fairness aspect of this approach, failure to do so may also result in terminations being open to challenge. Termination for breach of company policies or standards is much more difficult to justify where the employer has failed to apply the same disciplinary procedures to different employees who have breached company policies.

 

c)    Supply of alcohol

In this case the employer had allowed an unlimited amount of free alcohol to be supplied to employees during the Christmas party. It was held that the supply and consumption of alcohol had contributed to the employee’s actions and the employer’s role in this had contributed to the dismissal being harsh. On the facts, employees were both served by bar staff and could access alcoholic beverages directly from an open container.

 

Furthermore, Vice President Hatcher commented that it was “contradictory and self-defeating” [para 133] for the employer to require employees to comply with the usual workplace policies during a function which involved an unlimited and free supply of alcohol.

 

Supply of alcohol is a problematic area and one that frequently comes up in relation to Christmas and end of year functions. There a number of different approaches. Removing alcohol completely is one, albeit not very popular, approach. Employers do not necessarily need to adopt this strict approach. They do however have an obligation to ensure that any alcohol is served responsibly and that employee behaviour is monitored to help avoid problems occurring. One way of managing this is to make sure a senior person within the business is appointed to monitor behaviour during the function and take action if required. Clearly limiting the supply of alcohol may also be an important factor.

 

Lessons for Employers

Each year we remind employers as the silly season approaches to consider carefully the potential risks of work Christmas functions. Alcohol is an obvious risk but is one that continues to cause many problems.

Employers have a responsibility to ensure that alcohol, if it is provided, is served responsibly and that the function is carefully monitored to minimise the risks of drunken behaviour. It is not enough to simply remind employees to drink responsibly and that the usual workplace policies apply to work functions. Steps should be taken well in advance of any function to consider what strategies will be implemented to make sure everyone enjoys themselves and that obvious risks are managed appropriately.

The other key take home issue from this case is to ensure that there is consistent treatment of employees who breach workplace policies. Otherwise it may appear that an employee is being ‘singled out’, which opens the door for a finding that any subsequent dismissal was unfair or unreasonable.  

 

Sarah Waterhouse

Solicitor

BlandsLaw