by Mark Curran, Partner, Kaden Boriss, Brisbane
Introduction
Mere evidence of modest intoxication at work will generally not be sufficient to dismiss an employee without notice. Something more is required as a manifestation of the employee's condition, such as damage to the employer's reputation or aggression to other staff or other unsafe behaviour. Further, in determining whether there is serious misconduct in relation to drunkenness, a court will consider not just the employment contract and policies, but also surrounding circumstances, such as relevant aspects of the culture at the workplace. These are the findings of the decision of Mitchell-Inness v Willis Australia Group Services (No 2) 2013/148638 (8 December 2014).
Facts
The Plaintiff commenced employment with the Defendant on 7 February 2004 and was appointed as its New South Wales General Manager on 11 April 2011. He attended a staff dinner in late October 2012 whilst in Melbourne for a training conference organised by the Defendant. Most of those who attended the dinner visited the Irish Times Hotel after the dinner. The Plaintiff and one or two other staff stayed at the hotel until the early hours of the next morning.
When the Plaintiff left the hotel, he accompanied the other remaining staff member (Ms Usher) back to the hotel they were staying. The Plaintiff could not find his room key and after sitting down on a bench near the lifts fell asleep. Shortly after 7.00 am the next day he was woken up, was given a room key and slept for some time in his room.
The Plaintiff attended the work conference as an observer at about 9.00 am. Some senior staff of the Defendant's noticed that the Plaintiff seemed affected by alcohol. The Plaintiff admitted to drinking 14 - 17 alcoholic drinks in the 16 hours before attending the conference. Three state general managers of the Defendant all thought the Plaintiff was intoxicated at the conference. One witness referred to the Plaintiff being about one hour late for the training session, smelling strongly of alcohol, laughing, talking loudly, slurring his words, making animal noises and throwing lollies.
On 9 November 2012, after an investigation conducted by the Human Resources Director for the Defendant, the Plaintiff's employment was terminated without notice, due to his condition at the conference. He sued the Defendants for damages for breach of contract.
Employment contract and polices
The termination of employment clause in the Plaintiff's contract of employment read as follows:
- you are guilty of serious misconduct;
- neglect to give your whole time and personal attention to the performance of your duties or absent yourself from duties without leave except in the case of illness or accident; or
- you disobey or neglect any of our lawful orders or directions,
then we may take disciplinary action or counsel you or in serious circumstances, we may summarily dismiss you.
The Defendant also had a Code of Work and Disciplinary Counselling Policy which dealt with intoxication and which was found to be part of the contract.
Legal Issues
Taylor DCJ noted the question to be determined under the contract was whether the conduct was serious misconduct in the circumstances. As the parties accepted the meaning of these words was no different to "gross misconduct", the general law in respect of summary termination of employment was relevant.
His Honour was not persuaded that the level of intoxication of the Plaintiff or the impact of intoxication on his behaviour was significant or that his behaviour was disruptive. His Honour noted that:
- one act of misconduct could justify dismissal only if it amounts to repudiation of the contract;
- intoxication constitutes misconduct only when it is intoxication at work or at a work-related function.
His Honour doubted whether the Plaintiff and Ms Usher remaining behind at the Irish Times until the early hours of the morning and becoming intoxicated could properly be regarded as being intoxicated at a work-related function. Whilst the drinking with Ms Usher was related to a work-related function, in that it followed one earlier in the night, his Honour did not think that this constituted misconduct.
However, the conference was not merely work-related but was "work". The Plaintiff attended the conference, his place of work that day, initially in a state of low level intoxication. His role at the conference was as an observer, a lower level of participation than a presenter or a coach, although the Plaintiff did involve himself in the program for some time. However, he spent most of the time with the rear of the room working on an iPad.
His Honour noted that there was no evidence:
- that there was any adverse effect on other staff, staff morale or staff behaviour as a result of the Plaintiff's intoxication;
- of any aggression, violence, offensiveness, swearing, physicality, or unsafe behaviour by the Plaintiff.
The observation of the Plaintiff's intoxication at the rear of the room by the other state managers was that the Plaintiff smelt of alcohol and for a short period when he involved himself in the table discussion he spoke loudly and lacked seriousness. His Honour thought this seemed modest in terms of the effect on others and there was little in the nature of the Plaintiff's behaviour that added seriousness to his intoxication.
The Court also accepted evidence that the Chief Executive Officer of the Defendant advocated a policy that it's brokers "follow the client" in respect of alcohol consumption. His Honour inferred that this approach involved not only that the broker was expected to consume alcohol if the client did, but also that the quantity of alcohol consumption was, at least to some extent, dictated by the client's behaviour.
His Honour held that:
However, none of these features or other aggravating features existed in this case. Here there was manifestation of "low-level intoxication, without other consequences of behaviour of significance."
In his Honour's view, the behaviour at the conference did not constitute a repudiation of the agreement or other sufficiently serious misconduct triggering the right of summary termination. It was not serious misconduct in serious circumstances. It followed from this that the Defendant's conduct in dismissing the Plaintiff summarily was in breach of the agreement and there was an entitlement to damages.
Damages
His Honour found that the assessment of quantum of damages required the Court to consider "the value of the chance of a loss, or the prospect of a gain" in the context of answering the traditional question "what would have happened if the contract had not been breached?"
However, no evidence was given by any person from the Defendant who had authority to terminate the Plaintiff's employment as to what would have likely happened if the Plaintiff had not been summarily dismissed. Doing the best he could on the evidence, his Honour assessed the Plaintiff as having a 60% chance of remaining in employment for approximately a further eight and a half months, without being given notice until 31 July 2013. His Honour therefore assessed the Plaintiff's damages as if he was given notice on 31 July 2013, some nine months after the incident occurred. That being the case, his employment would have ceased on 31 January 2014. Based on these parameters and having regard to the new employment the Plaintiff obtained on 1 February 2013, his Honour awarded damages in the amount of $265,895.01 comprised as follows:
| Lost salary | $99,092.94 |
| Lost retention bonus | $118,182.00 |
| Long service leave entitlement | $48,620.07 |
| _______________________________________________ | |
| Total | $265,895.01 |
Implications
In seeking to protect the interests of an employer in these types of circumstances, it will be not be sufficient to simply draft employment contracts and policies in a way which makes it clear that drunkenness at work warrants summary termination. The culture of the employer will also be relevant in any particular case in determining whether the intoxication in question justifies termination without notice. An employer that pays "lip service" to provisions in employment contracts and policies that prohibit intoxication at work by encouraging a culture of excessive drinking at work functions cannot expect a court to interpret those provisions in a vacuum and without reference to the context in which those provisions operate. Employers who wish to enforce such provisions must demonstrate they are serious about the topic of intoxication at work by developing a culture which is consistent its employment contracts and policies.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
