When personal and professional lines blur with romantic relationships in the workplace, a conflict of interest can be career ending. This is the stark reality echoed in the Fair Work Commission’s latest ruling, where a director’s hidden affair leads to a justified dismissal.
Romantic Relationships in the Workplace
The Fair Work Commission in the case of Hickey v Mt Alexander Timber & Hardware Pty Ltd [2023] FWC 3059 determined that the dismissal of a director for not disclosing a romantic relationship with a subordinate was justified.
The director’s lack of honesty when questioned about the relationship further eroded the employer’s trust. Commissioner Tanya Cirkovic stated that while not all workplace romances need to be disclosed, in this instance, the director’s failure to inform his employer prevented the management of potential conflicts of interest.
The Employer fired the director in April for not revealing his intimate relationship with a contractor, who was also the estranged wife of a co-director, and for repeatedly denying the relationship.
During the unfair dismissal case, it was revealed that the director had been involved sexually with the contractor since January. The Employer had provided a show cause letter with allegations as follows:
- misuse of position,
- conflict of interest,
- dishonesty; and
- engaging in conduct causing serious and imminent risk to the reputation and/or profitability of the company
Dishonesty and Conflict of Interest
Although in the view of the Employer the conduct of a Director having a sexual relationship with a co-director’s estranged wife may have been viewed as deplorable, it was the dishonesty and failure to disclose regarding the relationship especially considering the employee’s dishonesty which was ultimately the problem.
The dismissal followed weeks of discussions.
The director contended that his dismissal stemmed from co-director jealousy and argued there was no policy mandating disclosure of the relationship. He maintained his right to privacy regarding his interactions with the contractor, stating that his private life did not affect his work duties.
The Commissioner recognised the potential for conflict and misuse of position in their work dynamic, ruling that the director should have disclosed the relationship. His failure to do so risked damaging the employment relationship. She found his responses post-meeting to be dishonest, undermining his employee duties and trust with the employer.
The Commissioner said as follows:
“I accept that not all romantic relationships formed in the workplace will warrant disclosure and in appropriate circumstances it is not suitable for an employer to govern the activities of an employee’s out of hours conduct. Nor is it in my view appropriate for this tribunal to sit in moral judgment of members of the community with respect to what are essentially private matters”[1]
Although the director was informed of his dismissal reasons, he wasn’t given a chance to respond, leading to his exclusion from business operations. Despite acknowledging the director’s personal and economic harm from the dismissal, the Commissioner concluded that the dismissal was valid, with the procedural flaw not outweighing his conduct.
3 tips for Employers, Human Resources and People and Culture Teams
Tip 1 – Transparency is Key in Workplace Relationships
This case highlights the importance of being open about romantic relationships in the workplace, especially when they involve subordinates or contractors. Such transparency is crucial to avoid conflicts of interest and maintain trust within the organisation. Employees, particularly those in leadership positions, should be aware of their company’s policies regarding workplace relationships and adhere to them strictly to prevent any potential ethical or professional conflicts.
Tip 2 – Honesty and Integrity are Fundamental
The director’s downfall was exacerbated by his dishonesty when questioned about the relationship. This underscores the importance of honesty and integrity in professional settings. Being truthful and upfront, especially in difficult or sensitive situations, is vital for maintaining credibility and trustworthiness in a professional role. Training in regard to these types of situations should be considered.
Tip 3 – Understanding and Abiding by Workplace Policies
The case underlines the necessity of understanding and complying with workplace policies and codes of conduct. Even in the absence of specific policies regarding relationship disclosures, it’s essential to consider how personal actions and relationships might impact professional responsibilities and the broader workplace environment, in particular conflict of interest. Senior employees and managers will be held to a higher standard.
[1] Hickey v Mt Alexander Timber & Hardware Pty Ltd [2023] FWC 3059 (29 November 2023) at 38
At NB Employment Law (formerly NB Lawyers), our employment lawyers Brisbane team offers an obligation-free consultation to deal with these types of matters – for employment law advice call us on +61 (07) 3876 5111 to arrange a consultation to discuss your inquiries and we will do our best to provide a helpful, practical solution
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About the Author
Jonathan Mamaril leads a team of handpicked experts in the area of employment law 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.
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