In a recent Decision the Fair Work Commission (FWC) has put employers on notice for their role in "plying" employees with unlimited alcohol at work functions. In Stephen Keenan v Leighton Boral Amey NSW Pty Ltd (U2015/2778), 26 June 2015, Vice President Hatcher held that an employee had been unfairly dismissed despite his "drunken", "boorish", "unpleasant" and intrusive behaviour at the company's Christmas party, in part because of the unlimited alcohol served at the function.
The facts surrounded the evening of the Leighton Christmas party which involved a series of conduct by Keenan. The facts of the case involve behaviour over a period of about 5 to 6 hours, during which Keenan engaged in drinking (by his own admission) about 10 beers and 1 vodka and coke.
The allegations against Keenan are summarised as follows:
- Inappropriate behaviour and language which included swearing at a director and senior manager;
- Sexual harassment of Ms Kennedy which included repeated questioning about the employee's personal life and indirectly requesting her telephone number;
- Bullying of Ms Crosser – first occasion (at the function);
- Bullying of Ms Crosser by calling her a derogatory name (at the function);
- Bullying of Ms Stokes (first occasion at the function in which Kennan swore at her and acted aggressively toward her);
- Further harassment of Ms Stokes (second incident);
- Sexual harassment of Ms O'Reilly (where he kissed her on the lips); and
- Sexual harassment of Ms Kearns (where he know the colour of her underwear).
Leighton investigated the number of complaints and subsequently held a meeting with Keenan. It was agreed at the meeting that the company would consider the issues and would communicate its decision to Keenan on 20 January 2015 on his return from leave. Upon his return from leave, Keenan was dismissed by Leighton. In its dismissal letter, Leighton outlined two occurrences which were the bases for dismissal:
- Keenan's sexual harassment of Kennedy (point 2 above); and
- Keenan's harassment of O'Reilly (point 7 above).
Leighton argued that the two incidences constituted sexual harassment for which Leighton could be held vicariously liable under the Sexual Discrimination Act (SD Act) and therefore was grounds for dismissal.
Keenan contended that his dismissal was harsh, unfair and unjust and sought reinstatement.
The FWC considered whether the two allegations of sexual harassment relied upon by Leighton were valid reasons for Kennan's dismissal. Ultimately it held that there were not.
No sexual harassment at the function
The FWC considered whether the conduct of Keenan at the Christmas party itself (between the hours of 6pm and 10pm) consisted sexual harassment and therefore whether reliance on allegation 2 above (the sexual harassment of Kennedy) was grounds for dismissal. It was held, that although it was reasonable to conclude that Kennedy may have been offended, humiliated or intimidated, the line of questioning and demeanour of Keenan did not contain the "requisite sexual nature...no express sexual advance or proposition" and whilst it was "unpleasant..(and)..a boorish attempt by a drunk to lay the foundation for a future relationship with a woman he hardly knew (by making an) oafish intrusion into matters of personal sensitivity " were not sufficiently serious to constitute a valid reason for dismissal
After function activity no liability
Vice President Hatcher held that the majority of the allegations, being allegations 4, 6, 7 and 8, were held after the end of the company function (at or after 10pm) in the upstairs or on the street. After a lengthy discussion of the SD Act and consideration whether the activity was within the scope of Keenan's employment, Vice President Hatcher ultimately concluded that such conduct was private activity and therefore could not constitute a valid reasons for dismissal. At paragraph 101 of the Decision Vice President Hatcher states:
"I do not consider that conduct which occurred at the upstairs bar can be said to be in connection with Mr Keenan's employment. The social interaction which occurred there was not in any sense organised, unauthorised, proposed or induced by (Leighton). Those who gathered there did so entirely of their own volition. It was a public place. There was nothing in the Code of Conduct or relevant policies which suggested they had any application to social activities of this nature ... (and) no evidence that such expectations was communicated to employees"
It was held that Keenan's conduct in the upstairs bar was "merely incidental to his employment ", not rendered unlawful by the SDA Act and therefore not conduct for which Leighton was vicariously liable. The reliance by Leighton on point 7 of the allegations (the harassment of O'Reilly at the upstairs bar) did not constitute a valid reason for dismissal, "even though that conduct fell within the statutory definition of sexual harassment "
Bullying of Stokes
Vice President Hatcher considered that allegation 5 (the bullying of Stokes) was ground for dismissal. He held that Keenan was "aggressive, intimidatory and bullying...given that Keenan was an intoxicated middle aged man and Stokes was a much younger and smaller female. " He considered that on any reasonable view Keenan's behaviour constituted bullying and the incident constituted a valid reason for the dismissal. However, as allegation 5 had not been put to Keenan and he did not have a proper opportunity to respond, then Leighton could not retrospectively rely on the allegation for grounds for dismissal .
Vice President held that Keenan's dismissal had been harsh, unjust or unreasonable on the following basis:
- There was no evidence that Keenan's approaches to Stokes had any ongoing consequence for the workplace, that is, it did not impact her capacity to work;
- Keenan had previously a good work record in excess of 7 years of permanent employment;
- Keenan's behaviour at the Christmas party was "isolated" and "aberrant in nature";
- The provision of alcohol at the Christmas party was a mitigating factor as "alcohol tends to induce a loss of self-restraint and a sense of responsibility". The provision of alcohol was an exacerbating factor and in Vice President Hatcher's opinion "is contradictory and self-defeating for an employer to require compliance with its usual standards of behaviour...but at the same time allow the unlimited service of free alcohol at the function...I consider that the role of alcohol at the functions weighs, at least in a limited way, in favour of a conclusion that the dismissal was harsh ."
Lessons for employers
The lessons for employers are:
- Consider how much alcohol is served at your work function, what supervision exists at the function, and whether employees are adequately informed of their obligations under the workplace policies and workplace expectations;
- Ensure that your codes of conduct and behavioural policies are up to date and consider the wider contexts of employee interaction;
- If relying on sexual harassment reasons, ensure that you adequately consider the application of the SD Act; and
- When undertaking investigations of alleged misbehaviour ensure that all avenues are thoroughly investigated.
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.