Employers’ rights to dismiss over out-of-hours conduct

by Human Capital04 Sep 2012

A recent Fair Work Australia decision by the Full Bench has shed light on the circumstances under which an employee may be summarily dismissed for serious misconduct out-of-hours.

In the case of RoseVi.Hair.Face.Body v Edwin Domingo [2012] FWAFB 1359 the Full Bench accepted that the summary dismissal of a hairdresser whose work performance was adversely affected by his drug use was fair, but warned the same conclusion would not necessarily be reached in all cases of out-of-hours misconduct.

On the issue of when out-of-hours conduct could become a workplace issue, the Full Bench returned some notable observations that pertain to all employers. Employment law experts at Clayton Utz highlighted the following points:
 

  • The bench emphasised that generally, employers do not have the right to control or regulate an employee's out-of-hours conduct. However, where the employee's conduct outside the workplace has a "significant and adverse effect" on the workplace, then the consequences become a legitimate concern of the employer.
     
  • In light of the case example mentioned, when an employer holds the belief that an employee's conduct justifies grounds for immediate dismissal, in any subsequent unfair dismissal proceedings the court will consider whether this belief was based on ‘reasonable grounds’.
     
  • Employers are obliged to discuss the conduct of the employee before making a termination decision. In most circumstances, in order to demonstrate that a belief is held on reasonable grounds, it would be necessary to have a discussion with the employee about the perceived misconduct and pay regard to his/her explanations.
     
  • A range of out-of-hours conduct may be held to constitute grounds for termination because its actual or potential consequences could be contrary to the employee's duty of fidelity and good faith. In this case, the employers were concerned about the impact of the employee’s drug-use on their business. They had experienced problems with his reliability (he was responsible for opening the salon on time) and they were conscious of the WHS implications of his erratic behaviour.

While the Full Bench stressed that its conclusion should not be seen as one that would necessarily be reached in all cases of out-of-hours misconduct, it is clear, from this decision, that in some cases, employees will be justifiably dismissed for their out-of-hours conduct. Employees should be made aware that where their out of work misconduct has an adverse effect on the workplace, there may be reasonable grounds for dismissal pursuant of the relevant Fair Dismissal Code.

 

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