Can misconduct at the company’s Christmas party give rise to valid grounds for dismissal? Sometimes, it can. However, the Fair Work Commission (FWC) decided in Stephen Keenan v Leighton Boral Amey NSW Pty Ltd [2015] FWC 3156 that it may not be that straightforward. The FWC may still not consider conduct, including verbally aggressive behaviour and sexual harassment, adequate reason for dismissing an employee if it is not sufficiently connected to their employment. Below we examine the facts of the case and the key lessons employers can take away.
What Happened?
In this case, Leighton Boral Amey Joint Venture (LBAJV) dismissed its employee Stephen Keenan due to alleged misconduct at the company’s Christmas party in December 2014.
LBAJV organised the event to last between 6pm – 10pm. The event had an unlimited service of alcohol and LBAJV had not put a manager in charge to supervise conduct. During the event, Keenan became inebriated and was involved in a series of incidents, including:
- directing offensive language to a company director and another senior employee;
- asking a female colleague for her phone number; and
- disparaging another female colleague with offensive language.
After the function officially ended at 10 pm, Keenan went with a group of colleagues to an unofficial afterparty. LBAJV had not hired the public bar for the event. During this time, Keenan called a female colleague an offensive term and kissed another female employee on the mouth. He further told her that he was going to dream about her that night.
Due to his actions at the Christmas function, LBAJV dismissed Keenan.
What Does the Law Say?
In assessing whether or not the dismissal was unfair, the FWC took into account the eight criteria listed under section 387 of the Fair Work Act 2009 (Cth). Of the eight, the first criterion was the most applicable. It relates to whether there was a valid reason for the dismissal taking into account the safety and welfare of other employees.
Continue reading this article below the formWhat Did the Commission Decide?
This case turned on the fact that the primary conduct which gave rise to his dismissal took place outside the scope of Keenan’s employment. That was because it was outside the time and venue of the official work function. It, therefore, constituted a private activity.
The FWC further referenced the case of Rose v Telstra Corporation Limited [1998] AIRC 1592 (‘Rose v Telstra’) which LBAJV used as a defence. It highlighted certain circumstances where “out of hours” misconduct at the company’s Christmas party would also constitute valid grounds for dismissal. On considering the two grounds below, the FWC ultimately held that they were not valid.
1. LBAJV was not vicariously liable
Vicarious liability often comes up in the context of employers and employees. The concept refers to situations where the law holds an employer responsible for the conduct of its employees. This liability arises provided the employee conducts acts in the course of their employment.
LBAJV stated an employer must be vicariously liable for an employee’s sexual harassment to dismiss the employee for the act. They argued that Keenan’s conduct fell into this category since it constituted sexual harassment.
However, because the conduct occurred outside of working hours and function, the law held LBAJV was not vicariously liable. Since LBAJV would not be held vicariously liable, Keenan’s conduct was not an “out of hours” misconduct that constituted a valid reason for dismissal.
2. The conduct did not damage the harassed employee’s capacity to perform her duties
In Rose v Telstra, the court held that if the misconduct adversely affected the harassed employee’s work or capabilities, this would be enough to constitute valid dismissal,
However, in this case, there appeared to be no lasting damaging impact on any of the other employees involved. They had either left the company or were unconcerned and hence this was also not a valid reason.
Concerning Keenan’s conduct during the actual Christmas function, the FWC held that:
- Keenan’s disparaging remarks to a fellow employee were serious enough to be a valid reason. However, taking into consideration Keenan’s good record and his high state of intoxication, the dismissal was still unfair; and
- all other conduct was not serious enough to be a valid reason for dismissal.
The FWC emphasised that employers cannot hold their employees to the same standard of conduct at functions where they provide unlimited alcohol.
The FWC also criticised LBAJV’s actions with regard to the service of alcohol. In particular, LBAJV failed to place anyone with authority to supervise employee conduct which exacerbated the incidents that took place.
Lessons for Employers
This case provides a few important lessons for employers. Firstly, it is important that you have policies in place that manages employee behaviour at work events. This might include limiting the service of alcohol and ensuring that employees are properly supervised by managers.
Secondly, when determining whether it is appropriate to dismiss an employee, you should carefully consider whether the conduct actually warrants dismissal. You can avoid unnecessary complaints to the Fair Work Commission by implementing appropriate dismissal procedures.
Key Takeaways
This decision is significant for employers as it highlights that unfair dismissal cases will ultimately turn on the facts. The case ultimately provides several key lessons for employers, including that:
- employers should ensure that if alcohol is served at a work event there is someone there to supervise staff and ensure that alcohol is served responsibly;
- employers may need to lower the standard of conduct at which they hold their employees at office functions, particularly where alcohol is served; and
- when considering whether an employee’s conduct at a function constitutes valid grounds for dismissal, it is important to take into account whether or not the conduct took place during the official work event and therefore within the employment relationship.
If you have any questions about your obligations as an employer, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
In the case of Stephen Keenan v Leighton Boral Amey NSW Pty Ltd [2015] FWC 3156, the Fair Work Commission decided that verbally aggressive behaviour and sexual harassment may not be adequate grounds for dismissal. Legally, it depends on if the conduct is sufficiently connected with their employment. Such incidents should be assessed on a case-by-case basis to determine whether it is appropriate to dismiss an employee for misconduct outside of work hours.
Unfair dismissal refers to where an employee’s dismissal is harsh, unjust or unreasonable. If an employee considers they have been unfairly dismissed, they must apply to the Fair Work Commission within 21 days of the dismissal to decide whether the dismissal was just. Where an employee is terminated for behaviour outside of work hours, this may constitute unfair dismissal.
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