Crimes and misdemeanours abroad: When can an employer dismiss an employee for their actions outside work?

Managing misconduct in the modern workplace is challenging enough, but what about misconduct where it occurs outside work hours? The workplace’s relationships, expectations and legal frameworks become even more challenging to navigate in such circumstances. 
 
This article highlights situations where employers can act in response to such incidents and provides guidance on some of the critical factors which need to be considered.
 
The issue of behaviour outside the work context has come into the public focus in recent months particularly around the alleged historical criminal behaviour of a Cabinet Minister. Whilst Parliament is not the private sector, the public discourse highlighted the complexity private sector employers face in seeking to protect their employees and customers (including the public) from an employee who engages in misconduct outside the workplace. The following examples traverse the range of factors that may support the termination of such an employee in those circumstances.

1. Where the employee’s alleged act or incident outside the workplace relates to the employee’s specific work responsibilities

An employer can generally seek to discipline or dismiss an employee where adverse behaviour has occurred outside work and there is a link to the kind of work they do. ^[1]

In the decision of Aaron Hunt v Coomealla Health Aboriginal Corporation the Deputy President considered the circumstances of an employee engaged as an indigenous health worker who assaulted his domestic partner. Several days later she reported this to a CHAC manager. Mr Hunt was arrested and charged by the Victorian Police. After meeting with Mr Hunt about the incident on 11 February 2021, CHAC terminated his employment the following day. Mr Hunt lodged an unfair dismissal application. In determining that the dismissal was not harsh unjust or unreasonable, the Deputy President noted that Mr Hunt … did the very thing that he was employed to help other Aboriginal men avoid doing .Vice President Ross in Rose v. Telstra summarised this basis for termination of employment for out-of-hours misconduct as a circumstance where: …  the conduct is incompatible with the employee's duty as an employee.

2. Where employee behaviour occurs outside conventional work hours but proximate to it

An employee has a duty to uphold their work responsibilities as relates to their relationship with their employer, even if they are not at work.
 
The Fair Work Commission (FWC) determined that an employer acted appropriately in dismissing an employee who assaulted (‘groped’) a hotel worker.^[2] The worker was accommodated at the employer’s expense between shifts. The employer had a regular and ongoing arrangement with that hotel. The FWC referred to the employment contract (which required employer paid travel and accommodation) and employer reputation (see point 3 below) in the decision. The decision balanced the employee rights (to paid accommodation) and employee responsibilities to act appropriately while exercising those rights.
 
This again illustrates the importance of considering the specific factors of a case, including the employment relationship, along with the circumstances of the act in question. This case also highlights the vital role strong organisational policies, procedures and employment documents can play in contested matters.

3. Where the employee’s misconduct outside work impacts adversely upon the reputation of the business

For modern businesses, the public’s positive view of their brand can be the key to their continued success.  Thus, a criminal conviction or clear evidence of grossly inappropriate behaviour of an employee outside of work can significantly damage their employer’s brand and thus commercial interests.^[3] In fact, the Fair Work Regulations 2009 (Cth) include as one of the bases for finding serious misconduct …conduct that causes serious and imminent risk to … the reputation, viability or profitability of the employer's business.

The potential for significant reputational damage is amplified with news going ‘viral’, where the behaviour of an employee can rapidly become identified with their employer. Today, all businesses are potentially exposed to these damaging situations.This raises questions regarding what right an employer has to distance themselves from that employee.

Dismissal based on reputational damage needs proof of certainty that the alleged act has occurred rather than relying on mere suspicion.

For instance, action was brought against Legal Aid for dismissing a long term, senior solicitor after he was convicted of a domestic violence incident.^[4] Legal Aid successfully argued that continued employment of the solicitor would damage the organisations reputation, particularly in relation to representation, advocacy and prevention work in matters of domestic violence. The (former) employee sought to argue that his work with Legal Aid (predominately in drug related criminal matters) was not closely related to his offending, for the purposes of dismissal. The Commission did not agree and found that Legal Aid had acted appropriately in dismissing the Applicant because the NSWIRC was, … satisfied that Legal Aid had a legitimate interest in protecting its reputation.^[5]