Festive Season Faux-Pas in the Workplace

As we move towards the end of year festivities arranged by the workplace is important to remember that employers continue to owe a duty of care to their employees at these events even if they are off-site.

Where these events are sufficiently connected to the workplace, unlawful conduct of employees (such as bullying, sexual harassment or abuse) can form the basis of a workplace complaint.

This article will cover festive season faux-pas employers can look to avoid by providing practical steps to mitigate the risk of a social event becoming a nightmare. Further, the article will provide an overview of potential liability issues for an employer should there be conduct of an employee that falls short of the employer’s expectations.

Our tips for employers to mitigate risk

  1. Review and consider your employment policies promptly. Employer’s policies are one of the first points of reference for Courts or the Fair Work Commission (FWC) to consider the liability of an employer for a cause of action relating to an employee’s conduct.
  2. Ensure that you monitor the service of alcohol at the function. In the decision of McDaid v Future Engineering and Communication Pty Ltd [2016] FWC 343, The FWC found that employers are required to take steps to ensure that alcohol is consumed responsibly. Employers may be liable for events and actions that occur largely to the irresponsible consumption of alcohol.
    The FWC will weigh up the culpability of the employer and the employee’s actions as a whole. Society no longer accepts alcohol consumption as an excuse for bad behaviour, violence or breaches of employer policies.
  3. Establishing clear boundaries for the duration of your social event, particularly a clear finish time for the event. Employees leaving the social event may continue as a group either at the same or alternate venue and the Court or FWC will consider whether the continuation ultimately could be construed as an extension of the employer’s event.
  4. Ensure that you, as the employer, appoint a staff member to monitor potential hazards. This was addressed in Keenan v Leighton Boral Amey NSW Pty Ltd [2015] FWC 3156 where the FWC recommended employers appoint a manager who was not consuming alcohol to monitor and attend to Occupational Health & Safety hazards at a work event.
  5. Prior to the social event, employers should email staff members with the standards of behaviour expected at the function and remind staff that breaches of any employment policy will likely lead to disciplinary action, up to and including termination. This reminder should also provide copies of the relevant policies for ease of reference.

Unfair Dismissal

If you choose to dismiss an employee for misconduct following a work social event, it is important to ensure that you dismiss the employee fairly or risk a potential unfair dismissal claim.

To recap, a person has been unfairly dismissed if the FWC is satisfied that:

  1. The person was dismissed;
  2. The dismissal was harsh and unjust or unreasonable;
  3. The dismissal is not a case of genuine redundancy; and if the employee worked for a small business, the dismissal was not done according to the Small Business Fair Dismissal Code; and
  4. The dismissal was not a case of a genuine redundancy.

The employee must have been employed for a minimum of six (6) months to bring an unfair dismissal claim, or 12 months if you have less than 15 employees.

Considerations for dismissal

In a range of decisions, Courts and the FWC have since identified that conduct outside of the ordinary place of employment can be disciplined (including termination) in the following circumstances:

  1. if the conduct occurred while the employee was in a company uniform;
  2. if the conduct occurred in a public place which enables the employee to be recognised;
  3. the conduct contravenes workplace policies, codes of conduct or handbooks;
  4. the conduct occurred at an event arranged by the employer;
  5. the conduct is likely to affect the employee’s work performance; and
  6. the conduct has potential damage the employer’s reputation.

We recommend that you seek legal advice if you are seeking to discipline or terminate an employee due to their actions at a workplace social event. The consequence of disciplining or terminating an employee incorrectly can lead to unfair dismissal or general protections claims.

It is advisable to remind all employees prior to the workplace social event of behaviour expectations and to reinforce that inappropriate behaviour may result in disciplinary action up to and including termination.

Vicarious liability

It is well established that employers can be held vicariously liable for discrimination and harassment that occurs in connection with a person’s employment. This liability extends to where employees use computers, phones or tablets to harass a person that has a connection to the workplace.

Sexual Harassment

Unlike unfair dismissal, Courts have not tried to narrow the scope between acts that occur in the workplace and work related social functions in relation to sexual harassment. Sexual harassment as defined in the Sex Discrimination Act 1984 (Cth) and Fair Work Act 2009 (Cth) occurs if a person makes an unwelcome sexual advance, or an unwelcome request for sexual favours, or alternatively engages in other unwelcome conduct of a sexual nature where a reasonable person, having regard to all the circumstances, would have anticipated the possibility that the person harassed would be offended, humiliated or intimidated.

The wide scope for vicarious liability for employers was examined in Leslie v Graham [2002] FCA 32, where the employer was found to be vicariously liable for sexual harassment which occurred between two (2) employees in a serviced apartment they were sharing while attending a work related conference.

The risk that you bear as an employer is that any action by an employee commenced for sexual harassment will more likely be heavily pursued against you as you will have a higher capability to pay any award of damages rather than the employee individually. It is imperative that employers take an active approach to mitigate the risks of sexual harassment in the workplace and at workplace social events.

Racial Discrimination

Likewise with sexual harassment, racial discrimination is a large risk at functions where employees are likely to be drinking. The decision in Gama v Qantas Airways Ltd (No 2) [2006] FMCA demonstrates the high degree of control employers are required to have over their staff.

In this case, the Federal Court found that Qantas was vicariously liable for racial discrimination where the remarks were made by, or in the presence of a supervisor and therefore considered to be condoned by Qantas.
We recommend that to guard against potential sexual harassment or racial discrimination, employers should have some senior management employees who are not drinking monitor the event and ensure that patrons are comfortable, and no employees commit an act of misconduct.

A reminder of the employer’s expectations should also be circulated prior to the event to provide employees with a clear reminder of acceptable conduct at workplace social events.

What to do if misconduct occurs?

It is important to seek legal advice before you act against an employee that commits misconduct at a work function. If you wish to discipline an employee, whether that be termination or a formal warning, you should consider whether the conduct occurred in circumstances where the conduct occurred in connection with the employee’s employment.

We note that the decision of Keenan v Leighton Boral Amey NSW Pty Ltd [2015] FWC 3156 is a reminder that employers are required to monitor and control the service of alcohol at social functions and take advice prior to termination of employees.

At this event, Mr Keenan made a number of derogatory comments to senior employees and Directors of the employer. More concerningly, at an afterparty (not sanctioned by the workplace), Mr Keenan also approached a female employee and made inappropriate sexual advances to her. This conduct resulted in the female employee being found in the ladies’ bathroom in hysterics.

The FWC ultimately determined that the conduct following the party was not employment related and could not be relied upon as the after-party was not condoned or endorsed by the employer. The FWC in this case determined that the actions at the workplace event did not justify dismissal and the employee succeeded in proving that his dismissal was harsh, unjust or unreasonable.

It is important to ensure that you are aware of your obligations at work social events and the potential implications that may result from actions of misconduct by your employees. Should you have any questions or concerns, please contact one of our employment lawyers for advice.

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The information in this article is not legal advice and is intended to provide commentary and general information only. It should not be relied upon or used as a definitive or complete statement of the relevant law. You should obtain formal legal advice specific to your particular circumstance. Liability limited by a scheme approved under Professional Standards Legislation.

Senior Associate Solicitor