The Fair Work Commission’s recent decision in Chambers v Toll Transport Pty Ltd[1] (the Decision) is a useful reminder for employers that not all ‘out of work hours’ misconduct by employees may give rise to a valid reason for dismissal especially in the context of a Christmas party.
The decision is a welcome segue as we transition to a period of the year where many employers hold Christmas functions to celebrate the year. We suspect many employees will be keen for celebrations, especially after dealing with the many unique challenges imposed by COVID-19. Nonetheless, it is important for employers to temper the keenness of employees by understanding the employment law risks involved.
Our top three (3) tips for employers
For employers planning (or have already planned) their Christmas party, this article is a useful reminder as to the type of conduct, occurring outside work hours and/or the workplace, which may constitute valid grounds for disciplinary action such as dismissal.
Tip 1 – Clarify the scope of the event
Tip 2 – Conduct refresher training on policies
Tip 3 – Planning ahead of the Christmas party
What happened?
Two (2) employees, both union delegates, attended a union meeting and stayed overnight in a hotel. The employer paid for their airfares, accommodation and meals. They were able to attend the union meetings on delegate’s leave – paid leave provided by the employer to attend union training, campaign activities or conferences. Following the conclusion of the union meeting, both employees consumed alcohol at the restaurant of their hotel.
For the avoidance of doubt, union delegates are not ‘employed’ by a union. Rather, they are employees of an employer who are also a member of a union and have accepted specific union responsibilities. They are distinguished from organisers and industrial officers who are often employed by a union to assist their members.
There was subsequently a disagreement on the terms and conditions of employment that applied to a portion of the employer’s employees. The two (2) employees, as union delegates, disagreed with each other. The disagreement became violent, and one of the employees tore off his jumper and goaded the other for a fight. The other employee acted in self-defence and knocked him down. Neither employee was wearing a uniform of their employer at the time of the fight.
The employer terminated both employees, after an investigation and show cause process, for reasons of serious misconduct (although they were paid their notice periods). The employer asserted the fight constituted ‘out of work hours’ misconduct because both employees were on delegate’s leave (paid by the employer), staying at accommodation and enjoying meals paid by the employer and the fight was caused by a work-related conversation.
What were the findings of the Commission?
Certain ‘out of work hours’ conduct may justify the dismissal of an employee, depending on whether it damages the employer’s interests (such as reputation) or is otherwise incompatible with an employee’s duties as an employee. The Commission applied the decision in Rose v Telstra[2] where it was stated:
It is clear that in certain circumstances an employee’s employment may be validly terminated because of out of hours conduct. But such circumstances are limited,:
- the conduct must be such that, viewed objectively, it is likely to cause serious damage to the relationship between the employer and employee; or
- the conduct damages the employer’s interests; or
- the conduct is incompatible with the employee’s duty as an employee.
In essence the conduct complained of must be of such gravity or importance as to indicate a rejection or repudiation of the employment contract by the employee.
[our emphasis added]
The Commission was invited by the employer to consider the matter of Drake v BHP Coal Pty Ltd; Bird v BHP Coal Pty Ltd[3], involving a Christmas party, where it was stated:
I am also of the view that the fact that 90 people including 60 employees of [the employer] and their families were gathered in one venue with a common purpose of celebrating Christmas, is sufficient to establish that the event was work related….[I]t is likely that where a large group of its employees gather in a public venue and consume alcohol and some of that group have a physical altercation, that [the employer’s] interests will be damaged.
[our emphasis added]
On the other hand, the Commission was invited by the employee to consider the matter of Keenan v Leighton Boral Amey NSW Pty Ltd[4], involving an ‘after party’ organised by employees following a Christmas party, where it was stated:
The social interaction which occurred there was not in any sense organised, authorised, proposed or induced by [the employer]. Those who gathered there did so entirely of their own volition….[I]t was conduct which occurred in essentially a private social setting, albeit involving persons sharing a common employer who had just attended an official Christmas function, it was not conduct which could be regarded as indicative of a rejection or repudiation of [the employee’s] employment contract”.
[our emphasis added]
In practical terms, the employees in the Decision sought to argue the fight occurred during their private time and when they were on leave, away from work, to perform union duties. They were not wearing uniforms and therefore the reputation of their employer could not have been affected.
The Commission accepted the employee’s arguments. It agreed there was no evidence the employer’s reputation or interests had been damaged. No members of the public witnessed the fight and associated it with the employer. The Commission accepted the employees were on leave, and therefore not ‘at work’. Even if it was assumed the employees’ attendance at the union meetings were considered connected to the workplace, what they chose to do after the meetings was their own ‘free time’. Furthermore, the employer voluntarily paid for the expenses. It was under no obligation to do so.
It would also appear the cooperation of the employees during the employer’s investigation was viewed favourably. The level of cooperation was considered by the Commission as a factor weighing against the employee objectively indicating he was rejecting his employment contract.
Our top three (3) tips for employers
For employers planning (or have already planned) their Christmas party, the Decision is a useful reminder as to the type of conduct, occurring outside work hours and/or the workplace, which may constitute valid grounds for disciplinary action such as dismissal.
Tip 1 – Clarify the scope of the event
- Specify the hours which will constitute the ‘official’ work Christmas party. Any private arrangements between employees afterwards would not form part of the Christmas party. Employees bear their own risks when attending non-official events.
- Ensure staff are reminded workplace policies will apply during the ‘official’ event.
- If non-employees are attending (such as family members, guests or clients), consider reminding employees, in writing, of appropriate standards of behaviour.
Tip 2 – Conduct refresher training on policies
- If there is a code of conduct or appropriate behaviour policy in place, consider undertaking brief refresher training in advance of the Christmas party with employees.
- Consider whether there are appropriate safeguards in place for pictures being taken by employees at the Christmas party. Think about whether you need to issue any directions to your employees to avoid posting inappropriate pictures of the Christmas party.
- Emphasise any social media policies which are in place.
- Ensure your senior employees are reminded of the need to supervise junior employees and display exemplary behaviour consistent with workplace policies.
Tip 3 – Planning ahead of the Christmas party
- Inform employees who they can confidentially report their concerns to in the event of an incident at a work Christmas party. Be prepared to conduct an investigation at short notice.
- If alcohol is being consumed, ensure employees are not drinking to an excess and increasing the risk of injuring themselves. Manage health and safety obligations such as by ensuring employees are provided with transportation.
As the lawyers for employers, we can provide employers with salient advice prior to and after a work Christmas party. Should you require assistance with conducting training or dealing with an incident (knock wood) that has arisen at a Christmas party, please contact us to arrange an obligation free consultation on +61 (07) 3876 5111
Written By
Principal
NB Lawyers – Lawyers for Employers
Assisted By
Dan Chen
NB Lawyers – Lawyers for Employers
About the Authors
Jonathan Mamaril leads a team of handpicked experts in the areas of employment law and commercial law at NB Lawyers – Lawyers for Employers who focus on educating clients to avoid headaches, provide advice on issues before they fester and when action needs to be taken and there is a problem mitigate risk and liability. With a core value of helping first and providing practical advice, Jonathan is a sought after advisor to a number of Employers and as a speaker for forums and seminars where his expertise is invaluable as a leader in this area as a lawyer for employers.
Dan Chen is a lawyer at NB Lawyers – Lawyers for Employers, and specialises in employment law. Dan is passionate about assisting business owners, small and large understand their obligations under Australia’s complex workplace relations system
[1] Wayne Chambers v Toll Transport Pty Ltd [2020] FWC 5819.
[2] Rose v Telstra [1998] AIRC 1592
[3] Bradley Drake v BHP Coal Pty Ltd; Bird v BHP Coal Pty Ltd [2019] FWC 7444.
[4] Keenan v Leighton Boral Amey NSW Pty Ltd [2015] FWC 3156