Australia: What is in a relationship? Legal perspectives on office romances

Managing office romances is a difficult task, especially where the employees work together. However, there are two decisions in unfair dismissal cases which have upheld the dismissal of employees who were in a relationship with subordinates. In both cases, the Commission recognised that in those situations the employees had a duty to disclose the relationship to their employer, as the relationship gave rise to a conflict of interest.

Mihalopoulos v Westpac Banking Corporation [2015] FWC 2087


The applicant was terminated from his role as Bank Manager by his employer Westpac Banking Corporation (the respondent) on 22 September 2014. His termination was made on the basis that his employer had lost trust and confidence in him due to his misconduct. The applicant's contract specified that he adhere to Westpac's policies, including their Code of Conduct and conflict of interest policy.

The applicant had conducted an affair with a subordinate (Ms A) since February 2014. Ms A reported directly to the applicant and lived with the applicant until their relationship ended. The applicant's employer alleged that he was dishonest about his relationship and that he did not disclose it, despite the likely conflict of interest.

During his examination-in-chief, the applicant agreed that he "positively advocated for promotional opportunities for Ms A". However, the applicant asserted that there was no conflict because Ms A was a high performer and that the bonus and promotional opportunities he gave her were based upon this.

A co-employee gave evidence that she attempted to change Ms A's lunch break for a business-related reason and that the applicant's response was to state that "under no circumstances are you to change [Ms A's] lunch break time".

The applicant's supervisor gave evidence that he had raised the issue of whether the applicant was in a relationship with anyone at the bank in an informal meeting in May 2014. He recalled that he had stated to the applicant words to the effect of:

"I have heard some rumours from outside the Wollongong Branch that [Ms A] seems to be spending a lot of time in your office and the door is constantly locked. Is there anything I need to know about that?"

The applicant stated that he responded with words to the effect of:

"As per the development plan which you know about, I have been spending a fair bit of time with [Ms A] to help in her development for a new home finance role."

The Branch Manager at another branch gave evidence that he interviewed Ms A for a role at that branch. After the interview, the applicant approached him and told him Ms A had been offered a role at CUA paying $90,000. According to the Branch Manger, the applicant said to him "She's worth the $90,000 as she'll give 110% to the role. She'll be successful".

According to the applicant, on Wednesday 20 August 2014 he called his supervisor to tell him about the relationship [with Ms A] and that it had now ended amicably. However, before his meeting with the supervisor, the applicant stated that "events took place that were quite serious and I disclosed those events to Mr Fedder, as well". The applicant stated that "there was an altercation at the apartment that me and Ms A used to reside in. I went to the police".

The applicant's supervisor also gave evidence that he met with the applicant on Monday 25 August 2014 and that they had a conversation to the following effect:

"Applicant: I need you to know, I lied to you. I have been in a relationship with [Ms A] for six months. We went on holidays together to China. I felt guilty being away, I've cut the kids off and I want to reconnect with my wife. [Ms A] and I share an apartment and I tried to break it off with her last week. It did not go well. She was very unstable. I was put in a bad position. Ms A threw something at me and I had to defend myself. I had to go to the emergency department.
Supervisor: I'm disappointed. You're a senior leader. You did not disclose this to me even after I asked you. You should have disclosed this to me and we would have implemented appropriate measures. For example, there's a Regional Manager who is in a relationship with a home finance manager who is not a direct report and we have put in place measures there. You've made a series of poor decisions. As you know, there's been a lot of rumours about this."

The applicant commenced unfair dismissal proceedings when he was dismissed.


It was held that the applicant's failure to disclose his relationship with Ms A, especially when combined with his dishonesty in lying to his manager about the affair on two separate occasions, constituted a valid reason for the applicant's dismissal.

The FWC upheld the respondent's decision to summarily dismiss the applicant. It was stated:

"To be blunt it should be obvious to any reasonably intelligent person that for a manager in an organisation such as Westpac to form a romantic relationship with a direct subordinate creates the potential for a conflict of interest. The applicant should have disclosed his relationship with Ms A – at least from the time they moved in together – to his supervisor. This would have enabled the respondent to put in place appropriate arrangements to manage any potential conflict of interest."

Senior Deputy President Hamberger stated that Mr Mihalopoulos had a duty to disclose the relationship and failing to disclose the relationship and lying about it was a valid reason for dismissal. This dishonesty prevented Westpac from being able to take measures to manage the conflict and avoid the perception of favouritism.

It was held that, whilst employers cannot stop employees from forming romantic relationships, "in certain circumstances, such relationships have the potential to create conflicts of interest. This is most obviously the case where a manager forms a romantic relationship with a subordinate – especially where the manager directly supervises the subordinate. It is virtually impossible in such circumstances to avoid – at the very least – the perception that the manager will favour the subordinate with whom they are in a romantic relationship when it comes to issues such as performance appraisals, the allocation of work, and promotional opportunities".

Corey v Attorney-General's Department [2005] AIRC PR956106 (25 February 2005)


The applicant applied under section 170CE of the Workplace Relations Act 1996 for reinstatement following what he alleged was a harsh, unjust or unreasonable termination.

In his position, the applicant was required to maintain a Top Secret level security clearance. The Attorney General's Department alleged the applicant lied in his security interview, including about details regarding an extra-marital affair with a subordinate. It was also alleged that the applicant breached the APS Code of Conduct and provided misleading answers regarding his extramarital relationship, as well as other incidents. It was suggested that as this affair was not disclosed and was concealed from managers, it represented a conflict of interest.

The applicant submitted that he did not believe that there was a conflict even though he was responsible for assessing the subordinate employee's work performance and had actively ensured she remained under his supervision. He agreed that when he realised that their relationship could constitute an apparent conflict of interest he should have disclosed the situation to his superiors.

The applicant further agreed that he had not made such a disclosure and that he had not sought to "publicise" the relationship, but denied taking steps to conceal it. He also agreed that he took active steps to have a decision reversed that would have removed his subordinate from his direct supervision, even though returning her to his supervision would have reinstated the conflict of interest situation.

The applicant denied giving dishonest answers to questions asked by the interviewer in his security interview about his marriage and about relationships outside his marriage. He claimed that the interviewer had asked him if he had had extramarital affairs and he had replied in the negative as he considered his relations outside of marriage to have been "extramarital relationships" rather than "affairs".


It was held that the applicant's termination was not harsh, unreasonable or unjust.

The evidence was found to support the existence of a conflict of interest as the applicant continued to supervise the employee with whom he had developed a personal and sexual relationship. The applicant conceded that, in hindsight, he should have informed his managers or superiors of the situation and taken steps to avoid the conflict.

It was held by Commissioner Deegan that: "There is no doubt that the applicant committed a number of breaches of the APS Code of Conduct. The evidence is persuasive and in most respects the applicant has admitted the behaviour which the Department found constituted the breaches".

Commissioner Deegan held that a number of valid reasons existed for the termination of the applicant's employment and "the applicant's responses would have constituted such a reason without any need for the other matters to have been taken into account. Given the nature of the employment and the seniority of the position the Department could not be expected to retain in employment a person with such a blatant disregard for the truth".


These decisions are very useful for employers faced with these types of scenarios. However, navigating this type of situation will be made easier by:

  1. Including conflict of interest provisions in employment contracts;
  2. Requiring employees in their employment contracts to comply with the employer's policies (but without incorporating those policies into the contract);
  3. Having conflict of interest policies, that refer to relationships between supervisors and subordinates and require the disclosure of conflicts of 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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions