By Greg Romeo, Solicitor, Kelly Workplace Lawyers
Under the recognized duty of co-operation and proper conduct, employees are obliged to conduct themselves properly at work and to co-operate with the employer. This obligation applies to all employment contracts via common law implication. The scope of this duty will sometimes extend to conduct engaged in outside of work on the basis that such conduct can seriously damage the employee/employer relationship and materially detriment the employer’s business interests and image. Whether ‘out of work’ behavior is considered a breach of the employment contract will depend on whether the court interprets the conduct as an intention to repudiate of contract on part of the employee, in an objective sense.
The Common Law Position – Rose v Telstra requirement of sufficient nexus
In stark contrast to the historical view of the ‘master-servant’ employment relationship, modern employment law places a far greater emphasis on the ‘contractual terms’ rather than ‘subordination’ in determing an employee’s responsibilities. The implication is that it is no longer an all pervasive relationship;
the employers ‘control’ only extending as far as the scope of the employment contract permits. However, where an employee’s out of work conduct is said to offend that contractual ‘workplace relationship’, there may still be contractual justification at common law for the employer to discipline or dismiss. Generally, the courts have taken the view that this is only to be the case where (Ross VP in Rose v Telstra):
- The off duty conduct, when viewed objectively, is likely to cause serious damage to the relationship between employer and employee; or
- The off duty conduct damages the employer’s interests; or
- The off duty conduct is incompatible with the employee’s duty as an employee
The problem with this seemingly pervasive threshold, is that it is evidently difficult to apply where the conduct has little connection with the workplace at all. This issue is exacerbated by technology and its emphasis on connectivity. Understandably, the courts have had some trouble in determing where to draw the line between ‘controllable conduct’ and that of a ‘purely personal nature’. As a result, it has been stressed that such decisions must be “carefully contained and fully justified” (Finn J in McManus) and that restraint should be limited to ‘exceptional circumstances’. The basic tenet to aid employers considering action is that the conduct complained of must be of such gravity or importance as to indicate a rejection or repudiation of the employment contract by the employee. Absent that intention, an employer will have no right to control or regulate an employee’s out of hours conduct. Cases that have found conduct as damaging or incompatible with employment performance to that extent have included:
- Orr v University of Tasmania- Where a university Professor having an affair with a student was found to be incompatible with his role in education.
- R v Teachers Appeal Board; ex parte Bilney- Where a teacher was found growing marijuana.
- In re Wearne (English Court of Appeal)- Where a solicitor established his house as a brothel.
- Allan v Commissioner of Australian Federal Police per Neaves J- Where a Police officer was found to be engaging in criminal conduct
However other cases show the courts reluctance to justify out of work constraint where evidence of a private-employment nexus is thin or where a propensity to affect the employer’s interests is minimal (Hussein v Westpac Banking Corporation).
In Rose v Telstra 1998, Rose, a technician for Telstra, was asked to assist in taking the workload off another branch by temporarily relocating. Rose accepted and booked into a hotel paid for on travel allowance expenses. One evening, Rose was involved in a fight, resulting in him being stabbed in the same hotel room. Rose notified his supervisor of his inability to work. Telstra was of the opinion that the incident amounted to improper conduct and was subsequently terminated on this basis. At trial, Telstra’s main argument was that the out of duty conduct has been brought into the scope of his employment given that travel allowance provided the location of the incident. The court was of the contrary opinion. In finding in favor of the employee, the court highlighted that the conduct had no sufficient connection to Rose’s employment duties. He had not been wearing the Telstra uniform at the time, he had not been on call and the incident did not occur in a public place. The court also found any propensity to cause harm to the interests of Telstra was weak. Thus, even though the incident had been reported on, evidence led illustrated that the incident was contained as a ‘local rumor’ and most reports failed to mention Rose’s employment status.
When company policy can expand the implied term and other industry specific considerations
Given the variability in applying common law principles, employers have been wise in attempting to expand the duty through the use of company policy. However, it is not as easy as simply denouncing all conduct which the employer wishes to control. Company policy will only be relevant (as far as it can be ‘incorporated’ into the employment contract) where it denounces conduct which is necessary in order to protect the specific business interests of the employer. This is often the case where an industry inherently requires that employees refrain from offensive conduct. For example, in Kolodjashnij v Lion Nathan breweries (2010), the court was of the opinion that an employee who worked at a brewery had been validly dismissed for drink driving outside of work hours. Particular attention was given to the fact the company had a responsible drinking policy which expressly prohibited such conduct. As a result, the conduct was much more readily taken to be as ‘an intention, on part of the employee that he no longer wished to be bound by the employment contract’. In coming to this conclusion, the high probability of the conduct affecting the employer’s product and image as a brewery was relevant. The court noted that not all policy can be incorporated in this way but it will be far more reasonable where the conduct evidences potential detriment on the employer in brand, image or consumer confidence.1 The lesson for employers is that company policy should be worded to prohibit conduct of employees which flagrantly offend the nature of the business.
1 there is no need to furnish actual evidence of material detriment on the business, only that it has potential to do so
The propensity for lying about off duty conduct to destroy the mutual relationship
In instances where the conduct is too private in nature to be sufficiently connected to the employment relationship, employers have resorted to claiming that the dishonesty on part of the employee upon company investigation of the incident is enough to ‘destroy the mutual trust’ of the relationship. However, while ‘lying’ as to one’s conduct may, in some instances, destroy the mutual trust and confidence essential to the employment relationship (see McIndoe v BHP), dishonesty which focused on protecting inherently private conduct will generally not be sufficient tin and of itself to cast doubt on honesty during work. This was the case in Streeter v Telstra, where an employee was dishonest as to her conduct at a work party involving sexual conduct in the presence of other employees. The conduct itself was too far removed from employment, being at a Christmas party and in a hotel room, and the dishonesty was said to be directed at her private interests and not at her interests at work. Thus, the dishonesty did not illustrate a ‘general dishonesty’ which would affect her employment. Resultantly, dismissal was not justified.
The scope of restraining off–duty social media interactions
The difficulty in finding a balance between work and private life has been exacerbated with the emergence of technology and, in particular, social media. While comments made on the internet may be similar to what is often said at the workplace or when out with colleagues, these remarks remain ephemeral.
Conversely, internet comments have a traceable existence and are often accessible by fellow colleagues and customers alike. In the latter case, the opportunity for detriment to befall a business is far more probable. In assessing the employment connection and any potential damage to the employer’s image, courts have tended to focus on the exposure of the comments, any limits on accessing the comments and the specificity and severity of allegations made. This question of fact is relatively difficult to assess.
In Fitzgerald v Escape hair design, a hairdresser brought an unfair dismissal claim against her employer. One allegation made by the employer was that the dismissal was fair on the basis that the employee had posted a public display of dissatisfaction on Facebook. The post in question stated ‘Xmas Bonus’ alongside a job warning, followed by no holiday pay!!! Whooooo! The Hairdressing industry rocks man!! AWESOME!!’ The post was only accessible by her ‘Facebook friends’ The court accepted that internet interactions outside of work is capable of throwing the employers reputation into disrepute and can be sufficiently connected with the implied and controllable duties of the employee. On this point, it was noted that Facebook comments can be seen by potentially an unlimited number of people and such comments made outside of work hours can subsist during employment hours; it remains on Facebook until removed. However, these particular comments lacked sufficient evidence here. This was because It had been limited to friends only (claims that 10 customers were friends who could have seen that comment has not been proven and it remained uncertain as to how long the comment remained online.
Even then, the comments were directed at industry matters, there was no identification of the business specifically and the chance that industry is affected by this comment was essentially non-existent.
Again, where a company policy outlines online expectations, an employer is better equipped to defend against unfair dismissal claims for it can illustrate a more conscious undertaking on part of the employee (not to mention the potential for company policy to be taken as part of the contract by implication). Even in absence of company policy, the courts are appreciating the sophistication of users of social
media sites and have been less inclined to accept ignorance on part of the employee. Additionally, where a number of colleagues or clients are exposed to or implicated in the comments, the inference that potential damage may follow will be stronger. Thus in Little v Credit Corp Group Unlimited, it was found that a direct attack on a third party to which the employer dealt with and an overt sexual comment on another employee was sufficient in itself to evidence a breakdown in mutual confidence; irrespective that company policy also prohibited such conduct.