Australia: The price of a good time: employee behaviour at work functions

Key Points:

Employers should have reliable arrangements to ensure alcohol is served responsibly and employees are properly supervised at functions where alcohol is to be provided.

Drunkenly swearing at a boss or suddenly kissing a female colleague might not be ways to get ahead in business, but they won't necessarily be enough to get you sacked either. A recent decision of the Fair Work Commission, Keenan v Leighton Boral Amey NSW Pty Ltd [2015] FWC 3156, is a stark reminder of the need for employers to take adequate precautions to control the service of alcohol at functions and events.

The Christmas party

Mr Keenan drank two stubbies of beer before arriving at the firm's Christmas party, which was being held at a hotel. There he found that employees were able to help themselves to bottles of alcohol; there was no evidence that any employee was refused drink for being too intoxicated. Mr Keenan took advantage of his employer's hospitality by drinking an unknown quantity of alcohol during the party, and after it too, to the extent that at times his speech was slurred and incomprehensible.

During the party, Mr Keenan's conduct included telling a director to "f*** off mate", and asking a senior employee, Ms Stokes, "What do you even do? No seriously. Who the f*** are you? What do you even do here?".

He then turned his attention to a female manager. After asking her about her children, Mr Keenan then said words to the effect of "I want to ask for your number, but I don't want to be rejected". She did not respond to this or the three or four subsequent requests.

The employees take the party elsewhere

The party then came to an official close and a large group of employees, including Mr Keenan, moved on to the public bar area upstairs, which had not been hired for the party.

Mr Keenan's actions included:

  • returning to Ms Stokes, and stroking her cheek (which was not encouraged or invited);
  • asking another female employee "Why the f*** are you talking to Kevin?", and later telling her "I used to think you were a stuck up bitch, but Ryan says you are alright. If Ryan likes you then you must be ok". She was later found crying in the ladies' bathroom;
  • suddenly grabbing another female employee's head and kissing her on the mouth. She walked away; he later told her "I'm going to go home and dream about you tonight"; and
  • telling a fourth female employee that his "mission tonight is to find out what colour your knickers you have on".

Mr Keenan is dismissed - but is it unfair?

Mr Keenan was dismissed as a result of this night. Under section 387 of the Fair Work Act 2009 (Cth), whether a dismissal is unfair is assessed according to a number of criteria. Of particular importance in this case was the question of whether Mr Keenan's conduct provided a valid reason for dismissal.

Post-official party conduct not employment-related

Crucially, Vice President Hatcher ruled that Mr Keenan's conduct after the official function had come to an end could not be relied upon. He held that his conduct at the upstairs bar and at the taxi stand was properly characterised as private activity and therefore could not constitute a valid reason for dismissal.

This was for two reasons.

First, where an employer is vicariously liable for the conduct of an employee outside working hours, that creates a sufficient nexus with employment. In this case, however, Vice President Hatcher ruled that no prospect of vicarious liability arose, as this part of Mr Keenan's conduct was not connected with his employment because it was not "organised, authorised, proposed or induced" by his employer.

Secondly, private conduct by one person towards a second person with the same employer may damage the employer's interests if the second person's capacity to perform his or her duties is impaired by it. However, in this case there was no enduring adverse impact on the other employees involved, as they had either left the company, had minimal contact with him, or were not concerned by his behaviour.

Mr Keenan's behaviour at the party - serious enough for a sacking?

Neither telling a director to "f*** off", not repeatedly asking for a phone number, were held to be serious enough to be a valid reason for dismissal.

Mr Keenan's question of Ms Stokes - "who the f*** are you?" - on the other hand was. Put, however, in the broader context of Mr Keenan's good record, his state of intoxication (which was considered to be a mitigating factor) and other relevant circumstances, the dismissal was unfair.

Importantly, the manner in which alcohol was served at the party was considered to be an exacerbating factor. There was unlimited service of alcohol, employees were free to help themselves to bottled alcohol and the employer failed to place anyone with managerial authority in charge of supervising the conduct of the function.

Lessons for employers feeling festive

This case presents two important lessons for employers. First, prevention is better than the cure: employers should have reliable arrangements to ensure alcohol is served responsibly and employees are properly supervised at functions where alcohol is to be provided. This is so, even at venues whose owner/operator has undertaken to adhere to principles relating to the responsible service of alcohol.

Second, there is little doubt that Mr Keenan's conduct was highly inappropriate at times and deserving of opprobrium, but in the wake of the relevant events, the employer needed to consider carefully whether his conduct merited dismissal. The dividing line between what occurs within and what occurs outside the employment relationship can be difficult to identify, a point made by the detailed analysis of that specific issue in this case.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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