Australia: Out of work employee conduct vs internal codes of conduct: The cases of Israel Folau and Jack de Belin

Recent cases involving Jack de Belin (St. George Dragons, NRL) and Israel Folau (Waratahs, Rugby Australia) have cast some interesting light on some of the issues that arise when an employer finds an employee engaging in out-of-work hours conduct that infringes on a code of conduct, and wants to enforce the code or policy.

Although the de Belin and Folau cases primarily involve issues between the player and the organisation running the sport (rather than the direct employer), they do illustrate questions that can arise when an employee's out-of-work conduct (or alleged conduct) conflicts with the organisation's values, policies and codes of conduct. Similarly, the cases have sparked a vigorous debate over whether the regulation of out-of-work conduct is over-reach by employers, especially if it raises questions of conflicting values.

These matters have lead us to ask: to what extent can an employee's personal rights be qualified by the contractual obligations owed by them to their employer and the employer's lawful and reasonable directions, as part of the employment deal?

The Folau case

Rugby Australia's Code of Conduct prescribed standards for all involved in Rugby, including the requirement to:

"Treat everyone equally, fairly and with dignity regardless of gender or gender identity, sexual orientation, ethnicity, cultural or religious background, age or disability. Any form of bullying, harassment or discrimination has no place in Rugby."

The Code also provided for appropriate use of social media, including requiring participants to avoid using social media as a means to breach any of the provisions of the Code.

While the full details of the network of contracts between Folau, his club and Rugby Australia are not public, it appears that he was bound by that network of contracts to comply with the Code of Conduct, even though there was apparently no express contractual provision specifically regarding his social media use.

There had been previous incidents of social media posting by Folau which Rugby Australia regarded as a breach of its Code of Conduct, particularly concerning respect for the LGBT community. Rugby Australia accordingly issued warnings to Folau in relation to such posts in 2018.

As many readers will be aware, early in 2019, Folau posted on Instagram that hell awaited drunks, homosexuals, adulterers, liars, fornicators, thieves, atheists, idolaters. Rugby Australia subsequently stood Folau down for breaching the Code, with the issue going before an independent panel, which concluded that his posts did in fact involve a "high level breach" of the Code.

A further hearing concluded that his conduct had constituted a breach serious enough to warrant termination of his 4-year contract (worth $4m). It must be noted that the process did give Folau extensive opportunity to respond to Rugby Australia's concerns and allegations.

As Folau's posts arise from his sincerely held religious beliefs, these events have brought with them debates over freedom of religious speech. Whilst Fair Work Commission proceedings to challenge the termination (citing it as an instance of religious discrimination) are on foot, the outcome thus far supports the view that while Folau has rights to express his opinions as a private individual, he cannot do so when that may have ramifications for his employer, and he has contracted with the employer not to contravene the Code of Conduct.

Folau had agreed to comply with the Code as part of his employment arrangements, and is thus unable to disregard it without consequence.

The de Belin case

The highly publicised matter involving Jack de Belin has been running in parallel with the Folau case, but has completely different origins. de Belin was suspended from playing in the NRL competition while charges of a serious sexual assault were outstanding against him. Again, the network of contracts between the League, the Dragons and de Belin included a commitment to comply with the NRL's policies which may change from time to time.

The Federal Court noted that de Belin had licensed his name, photograph, image, reputation and identity to the NRL, and had agreed to abide by the NRL rules as amended from time to time, which included a requirement that players maintain a reputation for high standards of personal conduct, including a reputation for respect for women.

Faced with very serious sexual assault allegations against de Belin, and in accordance with its right to change the rules as it thought fit, the NRL adopted a new rule which provided for players facing serious charges of that nature to be stood down from playing, while the charge was before the court. This decision was made within the context of what has been dubbed the NRL's "summer from hell" - a name given to the 2018/2019 off-season which saw an excessive level of player misbehaviour.

It is accepted by all involved that de Belin has pleaded not guilty and will be defending the charges, as well as the fact that no conclusion was being made about whether he was guilty of the offence that he had been charged with.

de Belin challenged the way that the altered policy applied to him in the Federal Court, with his legal team taking the argument that the new rule was both an unreasonable restraint of trade and a restriction on his right to work. The court subsequently concluded that the rule was reasonable, as there had been ample grounds to justify the NRL changing the rules as it did, based on the overall interest in the reputation of the sport, and its exposure to losses of various kinds arising from the Australian public's disapproval of de Belin continuing to play while facing such serious charges.

The Federal Court noted that the NRL was not in a position to assess whether the charges had substance, nor attempt to come to a rational conclusion on this by conducting an investigation, which would undoubtedly receive a lot of publicity and be a contempt of court while criminal proceedings were pending.

Justice Perry found that the position was akin to an employer suspending an employee during an investigation, and only for as long as would be necessary for the investigation to be completed. While being prevented from playing competition games would present serious disadvantages to de Belin, he could continue to train and otherwise go about his business with his club, and his pay ($545,000pa) would continue, so the disadvantages did not outweigh the NRL's reasonable interest in taking steps to protect its reputation and avoid financial disadvantages.

What do these cases show?

Both of these matters illustrate the propositions, which apply to all employers and employees, that:

  • Employers are entitled to require employees to comply with reasonable and lawful directions; and
  • Employees who are contractually obliged to comply with policies, including policies as changed by the employer from time to time, are bound to follow those policies, even if that involves some restrictions on out-of-work conduct.

The Folau case seems likely to test these ideas further, within both the Fair Work Commission and the public arena, where the issue of Folau's contractual obligations has been caught up in the debate surrounding protection of religious freedoms.

Numerous high-profile Australian politicians have weighed in on the religious freedom debate in recent months:

Barnaby Joyce: "You can't bring people's faith beliefs into a contract ... Your own views on who god is, where god is or whether there's a god should remain your own personal views and not part of any contractual obligation."
John Howard agreed: "...the question of the reasonable expression of a religious view should never be part of an employment contract - it has nothing to do with it."

Attorney General Christian Porter, contemplating legislation on religious freedoms, has taken quite a different view:

"It is intolerable that the state might intervene in private contracts ...People enter into employment contracts of their own volition all the time, and contracts of a number of types with a number of terms. ...What I would say is that we're not necessarily in the business in government of trying to prevent individuals privately contracting the terms of their employment in a fair and balanced and reasonable way with their employer in a range circumstances."

To similar effect, Fr Frank Brennan: "[the Folau situation] is a distraction from issues of religious freedom - it is a contractual dispute."

Clearly this is an issue with some way to go. Apart from these high-level issues, if you have a situation involving an employee engaging in problematic out-of-work conduct, what you can do will depend very much on the facts in any given situation, and issues of reasonableness, fairness, and whether the policy was properly communicated.

In this type of case, questions must be asked and answered in relation to whether the relevant provisions of a code of conduct or policy were a lawful and reasonable direction, and whether it is fair to enforce that direction.

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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