Mark Branagan

Open bar sinks employer

Mark Branagan

9 July 2015

Employment Disputes Employment Policies

The Fair Work Commission (FWC) has determined that an employee who sexually harassed a fellow colleague and told a senior manager to “f—k off mate” after becoming heavily intoxicated at a work Christmas party was unfairly dismissed.

Vice President Hatcher found that the dismissal was disproportionate to the gravity of the employee’s conduct for reasons including that the employer failed to exercise control over the amount of alcohol served at the function.

The employee attended the function in early December last year and consumed in excess of 11 drinks over the course of the evening. During and following the function the employee:

  • told a director of the organisation to “f—k off mate“;
  • spoke aggressively and offensively to two female colleagues, describing one of them as a “b—ch“, which caused her to become upset;
  • conducted an “interview” with another female employee, asking her if she was divorced and currently seeing anyone (including asking for her phone number) which caused her to feel uncomfortable and signal to another employee for assistance;
  • told another female employee he was going to go home and dream about her before proceeding to grab her face and kiss her on the lips; and
  • told a female employee that his “mission” was to find out what colour underwear she was wearing.

The behaviour occurred at various points in the evening, including at the function, at a bar upstairs from the function after the function had ended and in the street.

The following week, management become aware of the incidents and invited the employee to attend an informal discussion. A formal investigation followed, during which the employee was asked to respond to the eight allegations.

The employee provided answers which effectively confirmed only three of the allegations. At the conclusion of the meeting, management indicated to the employee that it required some time to consider the matter and would communicate with him after he returned from holidays in January.

That same afternoon, the organisation determined to dismiss the employee. In the termination letter provided to the employee in January, the organisation relied on two of the eight allegations to justify the dismissal.

In defending its decision to dismiss the employee, the organisation relied on all eight allegations at the hearing. The FWC was satisfied that the factual basis for all eight allegations could be established, but that only one of the allegations was serious enough to justify dismissal.

In concluding that the behaviour which occurred at the bar upstairs and in the street following the function did not constitute a valid reason for dismissal, VP Hatcher examined the authorities in relation to after-hours employee conduct.

He found that although the employee had engaged in sexual harassment of a fellow colleague, there was an insufficient connection between the employment and the conduct. He found instead that the employee’s conduct was “merely incidental” to his employment, given that it occurred at a public bar, which was not organised or induced by the organisation.

“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.”

Accordingly, the FWC could only examine the employee’s behaviour which occurred at the venue during the hours of the function. That behaviour was either not serious enough to justify dismissal or was not put to the employee as a reason for the termination of his employment.
The FWC noted that the most serious conduct which occurred during the function, in which the employee spoke aggressively to a female employee saying, “What do you even do? No seriously. Who the f—k are you?” constituted a valid reason for dismissal but was not noted in the dismissal letter because it was not regarded as being corroborated. The FWC was however “wholly satisfied” that the behaviour as described did in fact occur.

The FWC also criticised the organisation’s investigation, noting that it only described the allegations to the employee in very general terms without identifying the factual context, thereby preventing him from giving informed responses.

VP Hatcher noted a number of additional matters that were relevant to his finding that the dismissal was unfair. In particular:

  • the unrestrained service of alcohol was an exacerbating factor;
  • the employee’s conduct was an isolated incident;
  • the dismissal was disproportionate having regard to an incident that had previously occurred involving another employee of the organisation (the behaviour did not occur at the party);
  • the employee’s conduct would not have any ongoing consequences in the workplace; and
  • the employee had been unable to obtain alternative employment since the dismissal, although he had only attempted to obtain temporary or casual positions.

The FWC did not make an order in relation to remedy and instead invited the parties to make submissions on reinstatement in relation to the employee’s contact with one of the affected female employees.

The organisation’s failure to properly particularise the allegations to the employee weighed heavily in the employee’s favour. This decision is an important lesson for employers to ensure investigations are conducted thoroughly and all allegations of misconduct are accurately put to an employee.

It also highlights the problem for employers entertaining staff at functions and the need for clear communication of cut-off points (particularly in relation to alcohol) for the function.

As VP Hatcher noted, “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.” The provision of adequate management supervision during and at the conclusion of an event is therefore an important aspect for employers to consider.

We will keep you informed of further developments in relation to this decision.