In recent news, two former ANZ traders have sued the ANZ bank
in separate proceedings before the Federal Court of Australia, for
losses allegedly sustained by them as a result of their employment
having been terminated by the bank. In late January, one of the
traders, Mr O'Connor, dropped his claim against the bank,
saying that he was not prepared to put his family through a
difficult fight, and the associated financial and emotional
Mr Alexiou, who is continuing his claim, was stood down by the
bank in September 2015, following findings by the bank of
inappropriate conduct including lewd and explicit communications
about sex and drugs, over the internal chat terminal used by
Mr O'Connor sued the bank for damages allegedly suffered by
him as a result of the termination of his employment in October
2015, which also, according to the bank, arose from inappropriate
and sexually explicit communications, as well as for allegedly
spending $37,000 on the company credit card for non-work related
Both Mr Alexiou and Mr O'Connor sued ANZ for damages, more
than $30 million between them, for deferred shares and bonuses, and
future income which they say they have lost as a result of their
Both traders alleged as part of their claims that their
dismissals were unlawful, unfair or in breach of their contracts,
because the conduct for which they were allegedly being dismissed
was conduct of a type which was in fact encouraged or condoned,
directly or indirectly, by ANZ.
The crux of Mr Alexiou's ongoing argument is that the
trading floor culture of sex, drugs and alcohol is at odds with
what the bank dictates in its policy documents as acceptable and
expected conduct, but was nevertheless tolerated, and that it was
therefore unreasonable for the bank to dismiss him for engaging in
conduct that was in line with the real culture of at least part of
This case raises an interesting issue: what happens when an
employer condones and tolerates inappropriate behaviour? Can the
employer still discipline an employee engaging in that conduct, on
the basis that it is inconsistent with company policies and
While each situation will turn on its own facts, what is clear
is that it becomes more difficult for an employer to argue that
certain behaviour is inconsistent with company policies and
expectations when, in fact, the behaviour complained of is a
regular occurrence in the company, and is often ignored or dealt
In one case, employees had a beer at lunch and were dismissed
for it. It was held that they were unfairly dismissed, despite
there being a clear written policy of zero tolerance for drinking
alcohol at work, because the company's approach to disciplining
employees who did have a drink at work was inconsistent. It was
unfair to allow some employees to have a drink over lunch, while
dismissing others for the same behaviour.
In another case, employees have been held to have been unfairly
dismissed for swearing in the workplace, because the workplace
tolerated a culture of swearing (though tolerating generalised
swearing may not condone swearing abusively at a particular person,
if that distinction is reasonable in the context).
These cases turn on what would be "harsh, unjust or
unreasonable", the criterion for general unfairness for unfair
dismissal in the Fair Work Commission (FWC). Mr Alexiou and Mr
O'Connor were paid too much to make a claim in the FWC, so they
sued in a common law court. The relevance of condoning behaviour
there will probably not be fairness as such, but the validity of
the application of (allegedly disregarded) policies as grounds for
their termination, and the requirements for termination to be found
in their contracts. In particular, did their conduct amount to
"serious misconduct" if, as alleged, such conduct was
common and condoned?
Colourful allegations of this sort also serve a tactical purpose
in attracting media attention, which might be used as a pressure
point to assist in settlement negotiations.
The publicity thus far has already prompted comments by ANZ
Chief Executive Shayne Elliot that the bank is determined to stamp
out such conduct, and to tackle Alexiou's claim in court. It
remains to be seen whether the proceedings will continue to a
hearing, or settle confidentially. No-one wants to air their dirty
laundry in public, but the public perception of a settlement on
undisclosed terms could be difficult for ANZ. We'll await the
outcome with interest.
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.
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When employees engage in out-of-hours misconduct, it can negatively affect the reputation of the employer.
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