Two incidents in one night: when can an employer terminate an employee for inappropriate behaviour on a night out with colleagues?

A recent decision of the Fair Work Commission (FWC) in the matter of Keron v Westpac Banking Corporation [2022] FWC 221 has shed further light on the instances in which employees’ behaviour out of work hours can result in the termination of their employment.

Mr Keron, the Applicant in this case, was a senior banker at Westpac with 35 years of service, was dismissed after sexually harassing a female employee at a networking event after a workshop. The FWC has indicated that in modern Australian society, the bar for consent for physical and sexual interactions in a work-related environment has been significantly raised by the broader community. The FWC also reiterated that conduct outside of the workplace must have sufficient connection to employment. Notably, two related incidents on the same night may not be equally connected to employment, as was the case in this decision.

Facts

Mr Keron attended a professional development workshop and networking event arranged by Westpac. A group of attendees stayed behind after the event formally ended to continue socialising. One of the attendees, a junior female Westpac employee (Witness A) was seen patting Mr Keron’s shoulder and back. Later in the night, Mr Keron placed his hand on the lower part of Witness A’s buttocks for a period of several seconds (the First Incident).

A group of employees, including Witness A, then moved on to a local casino. As Ms Smith, an employee who was aware of the First Incident, was leaving the casino, she saw Mr Keron attempting to enter. She told the security guards not to grant Mr Keron entry. Mr Keron then followed Ms Smith towards the taxi rank and shouted numerous times, ‘Why did you do that?’ and referred to her with words such as ‘f*****g idiot’, ‘b***h’ and ‘w***e’ (the Second Incident).

The First and Second Incidents were reported to Westpac, who commenced an internal investigation. Mr Keron also faced a criminal charge relating to the First Incident. As a result of Westpac’s investigation, which found that the allegations had largely been substantiated and Mr Keron’s conduct was in breach of Westpac’s Code of Conduct, Sexual Harassment Policy, and Discrimination, Harassment and Bullying Policy, Mr Keron’s employment was terminated effective immediately. Mr Keron subsequently filed an unfair dismissal application, claiming, among other things, that that the conduct which was the subject of his dismissal did not occur in the course of his employment.

Decision

The FWC accepted from the evidence provided that both the First Incident and Second Incident occurred, although the description of the incidents in the termination letter provided to Mr Keron appeared to be exaggerated.

Having been satisfied that the relevant conduct took place, the FWC considered whether the resulting dismissal was unfair. The issues in dispute were whether there was a valid reason for termination based on the nature of the conduct, and whether the conduct was sufficiently connected to Mr Keron’s work.

Nature of the conduct

In regards to the First Incident, the FWC held that Mr Keron should have been aware that the current position amongst the community is that there is a high bar in terms of consent for physical and sexual interactions, particularly in work-related environments, where there can also be power imbalances between the staff involved. One party engaging in inappropriate touching does not justify another party doing the same. People must also be aware to act more carefully in circumstances where they know the other party is intoxicated and could have impaired judgment.

The FWC was also satisfied that Mr Keron’s behaviour towards Ms Smith in the Second Incident was unwelcome, offending, humiliating and threatening.

Therefore, the FWC was satisfied that the nature of the conduct was sufficient to constitute a valid reason for termination.

Connected to employment

The FWC noted that Westpac’s behavioural policies stated that they applied both in and out of work settings, although each applied to slightly differing extents. While the staff present for the First Incident were not in uniform, and the event was no longer an official Westpac event, they were there in the course of their employment.

Even though Mr Keron had no working relationship with Witness A or Ms Smith, the FWC was satisfied that the First Incident had sufficient connection to the workplace to form a valid reason for dismissal.

However, the Second Incident took place after the employees left the site of the work function. As Ms Smith and Mr Keron were previously unknown to each other, had parted from their colleagues, and were not wearing anything to identify them as Westpac employees, the FWC was not satisfied that the Second Incident had sufficient connection to Mr Keron’s employment to form a valid reason for dismissal.

Accordingly, the FWC was satisfied that Mr Keron’s dismissal was fair, but based only on the First Incident. The application was dismissed.

Take Home Messages

The FWC has stressed that allegations of unwelcome sexual contact between employees must always be taken seriously, particularly where there is a power imbalance between those involved. There is now a high bar as to what constitutes consent for physical and sexual interactions. Unwelcome sexual conduct will result in greater scrutiny and face higher standards than it may have in the past.

In addition, employers must consider whether inappropriate conduct has taken place in the course of employment before taking steps to terminate an employee’s employment. Factors including, but not limited to, the proximity to the workplace, the context in which the event occurred, the pre-existing working relationship between the parties involved, and the level to which the parties involved are identifiable as employees of the organisation are all important to consider.

If you have any queries in relation to this article, please contact Sathish Dasan on +61 8 8210 1253 or sdasan@normans.com.au, Ganesh Krishnan on +61 8 8217 1395 or gkrishnan@normans.com.au or Anastasia Gravas on +61 8 8217 1331 or agravas@normans.com.au.