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FWC: Bullying, verbal abuse and sexual harassment did not justify dismissal

This is another case that reminds employers again about the risks associated with providing employees with access to unlimited alcohol at workplace functions.  In this case, the employer was found to have unfairly dismissed the employee despite a long list of incidents at the workplace Christmas party and the subsequent after party.

Background

The behaviour of the employee at the work Christmas party was inappropriate on a number of occasions.  The evidence led at the hearing was that the employee had 2 beers prior to his arrival at the function, followed by 10 more beers and a vodka and coke at the function and subsequent after party.

A key consideration for Vice President Hatcher in this case was how alcohol was served to employees during the function.  The function was held at a hotel venue and a temporary bar was set up where either one or two hotel staff served alcohol to the employees throughout the night.  However, at some point during the night it became the case that the employees in attendance at the function were able to help themselves to the bottled beer, meaning there was no control over the consumption of alcohol from that point.

The employee became quite intoxicated.  He was never refused service during the course of the night and proceeded to engage in a number of poor and inappropriate behaviours which were not remonstrated at any point by the employer. 

A summary of the incidents is as follows:

Incident 1

A senior manager interrupted a conversation between the employee and another high level manager.  The employee responded to the interruption by saying to the manager – ‘F—k off mate’.

Incident 2

Immediately following the first incident, the employee started a conversation with a female colleague during which he made some very offensive comments about the manager who had interrupted him and the Board members and managers of the employer generally.  When the female employee said that she did not agree with him, the employee said to her ‘What do you even do?’  The female employee laughed as she thought he was joking, and the employee went on to say aggressively “No seriously.  Who the f—k are you? What do you even do here?”

Incident 3

The third incident involved the employee approaching another female colleague and making further derogatory comments about the company and then proceeding to ask personal questions of the female employee – including questions about her relationship status and children.  He also said to her ‘I want to ask for your number, but I don’t want to be rejected’.  When another employee noticed that the female employee was feeling uncomfortable, that employee approached and sat down with them.  It was the female employee’s evidence that when the other employee intervened in the employee’s exchange with her, the employee said to him “I’m talking to her now, f—k off.”  The incident led to the female employee deciding to leave the function.

Incident 4

Following the official end of the work function, some of the employees moved to the public bar.  During this period of the night, the female employee who was involved with the employee in the second incident had a further encounter with the employee where he tried to start a conversation with her.  The female employee stated “At one point, he tried a number of times to touch the dimple on my chin. I pulled away from [the employee] and did not let him touch me.”

Incident 5

In an incident with yet another female employee, the female employee was having a conversation with another male employee.  After that conversation ended, the employee approached this female employee and asked her ‘Why the f—k are you talking to [male employee]?’

Incident 6

This occurred with the same female employee involved in the fifth incident and occurred again after the function had ended.  The employee approached this employee and said to her ‘I used to think you were a stuck up bitch, [employee’s name] says you are alright.  If [employee’s name] likes you then you must be ok.”  It was alleged that this comment made the female employee very upset.

Incident 7

Again involving another female employee, this incident occurred after the conclusion of the function when some of the staff had moved to the public bar.  They had interacted earlier during the night when the employee had told her that he did not drink spirits as they got him into trouble.  Later in the night the employee engaged in a conversation with this female employee where he told her he did not like a particular person at the Christmas function and that he wanted to punch them, to which the female employee told him just to ignore this person and have a good time.

The employee then asked the female employee to buy him a vodka and coke, which she did.  Following some further conversation, the employee ‘with no warning whatsoever, suddenly reached forward, held her face on both sides with his hands, and kissed her on the mouth’.  One of the witnesses to this act then distracted the employee whilst the female employee removed herself from the situation.  When she later walked passed the employee, it was alleged the employee said to her “I’m going to go home and dream about you tonight.”

One of the male employees who witnessed this event then guided the employee to the taxi rank.

Incident 8

The final incident occurred whilst a group of employees (including the subject employee) were gathered waiting for a taxi.  During this period of the night, the employee said to yet another employee ‘My mission tonight is to find out what colour are the knickers you have on’.  The female employee then replied They are white, touch my skirt and I’ll kill you’.  The female employee conceded that on this occasion she was not offended by the employee’s conduct.

Aftermath

Ultimately, the employee was dismissed from his employment as a result of these incidents, although only Incident 3 and 7 were relied upon for the dismissal.  The employee subsequently commenced an unfair dismissal claim.

The Decision

The Employer conceded that Incidents 1 and 8 as described were not sufficient reasons to justify dismissal.

After a detailed analysis of the case law around ‘out of hours conduct’ and the vicarious liability of employers for their employees engaging in sexual harassment type conduct, VP Hatcher discounted Incidents 4, 5, 6, 7 and 8 as they occurred following the end of the function and were therefore outside the scope of the employee’s employment.  Therefore, they could not be relied upon as valid reasons for dismissal.

To this effect, VP Hatcher stated:

“The time boundaries of the Christmas function were, in the notice to employees, identified as 6.00pm to 10.00pm. It can be inferred from the evidence that the physical boundary of the function was the venue booked for it… Employees were informed in advance that, in substance, [the Employer’s] standards of conduct would apply at the function, but there was no suggestion of any expectation that those standards would apply to behaviour outside the temporal and physical boundaries of the function. The period spent by employees in the upstairs bar and out in the street after 10.00pm was outside of the workplace and outside of working time, however broadly construed the concepts may be.”

VP Hatcher noted that the circumstances described in incident 7 were undoubtedly sexual harassment as contemplated by the Sex Discrimination Act 1984 but that there was no connection between that conduct and the employee’s employment such that it would constitute a valid reason for dismissal:

“The social interaction which occurred there was not in any sense organised, authorised, proposed or induced by [the Employer]. Those who gathered there did so entirely of their own volition. It was in a public place. There was nothing in [the Employer’s] Code of Conduct or relevant policies which suggested that they had any application to social activities of this nature… [The employee’s] conduct in the upstairs bar was merely incidental to his employment.”

VP Hatcher did say that the employee’s aggressive, intimidatory and bullying behaviour’ towards a much smaller and younger female in Incident 2 did constitute a valid reason for termination.  However, given that the Employer only relied upon incident 3 and incident 7 as reasons for the dismissal, the employee was never given the opportunity to respond to the allegations that emanated from Incident 2.  In VP Hatcher’s view, this then resulted in a procedural failure by the Employer.

VP Hatcher also noted that the employee had, prior to these events, a good work record and that this was conduct of an ‘isolated and aberrant’ nature, and therefore his dismissal could be considered harsh.  His Honour also noted that his conduct was a result of his intoxication and that this was a mitigating factor, although VP Hatcher indicated that this did not excuse the employee’s conduct.

Given the procedural failure in relation to the one incident considered to be a valid reason for dismissal, and then a number of mitigating factors listed by the Vice President, the dismissal of the employee was considered unfair.  The employee sought reinstatement and the parties have been given a further opportunity to make submissions around the appropriate remedy.

Comments on employers allowing unlimited alcohol

Of critical interest to Employers should be VP Hatcher’s comments about the Employer’s responsibilities in terms of the service of alcohol at the function.  His Honour stated:

“An exacerbating factor in that respect was the manner in which alcohol was served at the function. In my view, it is contradictory and self-defeating for an employer to require compliance with its usual standards of behaviour at a function but at the same time to allow the unlimited service of free alcohol at the function. If alcohol is supplied in such a manner, it becomes entirely predictable that some individuals will consume an excessive amount and behave inappropriately…”

Implications for Employers

This case serves as a reminder to Employers to ensure that they have protocols in place to make sure that inappropriate conduct does not occur at workplace functions.  Vice President Hatcher’s comments in relation to employer responsibility for alcohol consumption at these events are worth noting, as are his comments about post-function conduct.  Despite these comments, there are occasions where an employee’s conduct out of hours can constitute a valid reason for dismissal, so when in doubt, Aitken Legal recommends that Employers seek legal advice as to their rights.

Mark Bunch, Partner

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