When employees engage in out-of-hours misconduct, it can negatively affect the reputation of the employer. When this occurs, employers often want to (and sometimes need to for damage control reasons) take disciplinary action against the employee/s concerned. If you want to know when it is possible to dismiss an employee for engaging in out-of-hours misconduct, read on.

What you need to know:

  • There must be a connection between the employment relationship and the out-of-hours misconduct.
  • The out-of-hours misconduct must regarded as being likely to cause serious damage the employment relationship and/ or damage the employer's interests and/or be incompatible with the employee's duty as an employee.
  • The out-of-hours misconduct must be of such gravity as to indicate a repudiation of the employment contract by the employee.

General

The advent of technology and the ability to be 'on line' almost anywhere at any time has negated the traditional view of work (i.e. sitting at a desk from 9.00am to 5.00pm). This creates interesting discussions in terms of workplace flexibility but it also creates a unique set of issues for employers who are increasingly finding themselves unable to monitor and/or regulate the conduct of employees outside of, but otherwise connected to, the workplace.

When misconduct does occur outside of the workplace, it is generally outside of the control of the employer which means that confidentiality can be compromised. As such, it is all too easy for salient incidents to go 'viral' which can cause irreparable harm to the employer's reputation. In such instances, the knee- jerk reaction of employers is to terminate the employment of the employee/s concerned but this is not always possible.

Recent Example

Michael Page Recruitment recently found itself at the end of a media maelstrom when a group of 22 employees acted out during a weekend at Mount Buller's Reindeer Ski Club. During the trip, which was not company-funded or sanctioned, the employees allegedly had a rambunctious couple of nights during which they became extremely loud and intoxicated, wreaked havoc on the premises (and subsequently refused to clean it up) and physically threatened the managers of Ski Club. The conduct was reported to have been so bad that the police were required to attend the premises

In a Facebook post that subsequently went 'viral', one of the managers of the Ski Club condemned the behaviour of the Michael Page employees. This Facebook post was picked up by media outlets leaving Michael Page scrambling into damage control. In a statement that it released on the Monday morning, Michael Page apologised for the conduct of its employees and stated that an internal investigation was underway and that all individuals allegedly involved would be interviewed and appropriate disciplinary action would be taken.

The accepted authority in these sorts of matters is Rose v Telstra Corporation Limited (1998) AIRC 1592 (Rose v Telstra). In accordance with this decision, an employee's employment may be terminated because of out-of-hours conduct provided that:

  • The conduct is likely to cause serious damage to the relationship between the employer and the employee; or
  • The conduct damages the employer's interests; or
  • The conduct is incompatible with the employee's duty as an employee.

Essentially, the conduct must be of such gravity as to indicate a rejection or repudiation of the employment contract by the employee.

Given the principles of Rose v Telstra, whilst we may never know what disciplinary action was taken by Michael Page against the employees, it is fair to surmise that several dismissals could have been implemented given the reputational damage caused to the Michael Page brand.

Applicant v Employer [2015] FWC 506

The 2015 decision of Applicant v Employer [2015] FWC 506 provides guidance on the issue of out- of-hours misconduct and whether it constitutes a valid reason for the termination of an employee's employment.

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. Madgwicks is a member of Meritas, one of the world's largest law firm alliances.