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STAFF BEHAVING BADLY
ALCOHOL AND STAFF FUNCTIONS – RECENT CASES

 

UNFAIR DISMISSAL – FAIR WORK COMMISSION

Keenan v Leighton Boral Amey Joint Venture [2015] FWC 3156

The Fair Work Commission recently considered this case brought by an employee, Mr Keenan, who claimed he was unfairly dismissed after being accused by his employer of inappropriate behaviour, harassment and sexual harassment towards other employees whilst intoxicated at a work Christmas party.

The Fair Work Commission found the dismissal to be harsh because the dismissal was disproportionate to the gravity of his conduct and unjust because he was not accorded procedural fairness.

The Act requires the Commission to take into consideration certain matters in determining whether the dismissal was harsh, unjust or unreasonable, including:

• Whether there was a valid reason for the dismissal related to the person’s capacity or conduct.
• Whether the person was notified of that reason.
• Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person.
• Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal.
• If the dismissal related to unsatisfactory performance by the person – whether the person had been warned about that unsatisfactory performance before the dismissal.

There was also some question as to whether Mr Keenan’s conduct took place during or after the Christmas party, and whether his conduct was outside the scope of his employment and characterised as a private activity.

 

During Christmas Party

The Commission held that conduct within the workplace or in connection with the workplace has to be of a sufficiently serious nature to constitute a valid reason or reasons for dismissal.

The conduct that did not meet this threshold included:

• Asking a co-worker for her telephone number and requesting to meet with her and her children after hours of work, because such conduct was not of a sexual nature.
• Asking a co-worker why they are speaking to another particular co-worker using offensive language.

Conduct which the Commission did consider of a sufficiently serious nature included behaving in a way that is aggressive, intimidatory and bullying behaviour particularly given that Mr Keenan was an intoxicated middle aged male speaking to a smaller, younger female.

 

After the Christmas Party

The Commission held that Mr Keenan’s conduct at this time did not constitute conduct within the scope of his employment which could legitimately constitute a valid reason for dismissal, for the following reasons:

• It was conduct which occurred in essentially a private social setting.
• It was not conduct which could be regarded indicative of a rejection or repudiation of Mr Keenan’s employment contract.
• The conduct could not be said to be in connection with his employment, merely incidental to his employment.
• An employer does not have the legal right to intrude so far into the private lives of employees.

The Fair Work Commission found the dismissal to be harsh because the dismissal was disproportionate to the gravity of his conduct and unjust because he was not accorded procedural fairness.

The Commission held that the following additional factors contributed to the finding that the dismissal was harsh, unjust or unreasonable:

• The lack of any work consequences of the conduct.
• Mr Keenan’s good employment record.
• The isolated and aberrant nature of Mr Keenan’s conduct.
• The role of alcohol in Mr Keenan’s conduct – the fact that Mr Keenan was intoxicated was a mitigating factor, although this did not absolve him of responsibility.
• The service of alcohol at the Christmas function – contradictory and self-defeating for the employer to require compliance with its usual standards of behaviour at a function but at the same time allow the unlimited service of free alcohol at the function.
• The availability of alternatives to dismissal which were proportionate to the conduct involved;
• The personal consequences of dismissal for Mr Keenan.
• The severity of the penalty compared to the employer’s response to another employee’s conduct.

 

DAMAGES & BREACH OF DUTY OF CARE

Canny v Primepower Engineering Pty Ltd [2015] WADC 81

The District Court of Western Australia found that the employer had breached its duty of care by allowing staff to become intoxicated by supplying alcohol at a birthday party held in the workplace (a large mechanical and engineering plant).

The managing director, Mr Allan organised the party and provided food for a barbeque and 11 kegs of beer of various sizes.  Some people also brought their own alcohol.
Around 40-50 people attended the party from around 11am onwards, with around 20-30 people remaining at around 7pm.
During the party (from around midday onwards), workers attempted to start a large, disused Caterpillar diesel engine. At around 7pm, several apprentices attempted to start the engine by pouring fuel directly into the engine intake which caused a fire.  One of the apprentices suffered serious burns to 60% of his body.

 

Duty of care

The Court held that the employer owed a duty of care to its staff to ensure that the work premises were reasonably safe and in this case, the duty of care was breached.

In this instance, the workplace was mechanical workshop. Engines, machinery and flammable substances were located at the workplace. A variety of flammable substances were at the workplace.  Managing and supervising staff attended the party and were aware of and involved in the attempts to start the engine throughout the day.

The Court said that:

1. In this case, a reasonably safe work place was “one where alcohol is not permitted to be consumed when any work is taking place”.

2. The apprentices and supervisory staff should not have been permitted to consume alcohol. There was a failure to properly supervise the apprentices.

3. The amount of alcohol consumed and provided and the period of time over which the party took place was also taken into consideration:

This was not one beer consumed after work but a celebration involving the purchase of 11 kegs of beer. The consumption of alcohol began shortly after 11.00 am and was still in full swing at 7.00 pm. that evening. In those circumstances the potential danger was greater so Primepower should have taken greater steps in its duty as employer to protect employees. Primepower did not take any steps to protect the apprentices.

 

Insurance

The Court was also asked to determine whether the employer’s insurance policy granted them indemnity, given that it contained the following “reasonable precautions” clause:

[Primepower] must take all reasonable precautions to prevent injury to Workers and must comply with all relevant laws, including the Occupational Safety and Health Act 1984 as amended and replaced and Regulations.

In this case the Court held that because the managing director took no steps to protect the employees who were working on the engine and the managing director allowed copious amounts of alcohol to be consumed in the workplace over a significant period of time, it was not a matter of simply being negligent: the conduct was serious and deliberate.  As such, the insurer’s denial of indemnity was upheld.

 

Lessons for Employers

1. If you are hosting a work function where alcohol will be served at your place of work, be aware that the same workplace safety standards apply even if work is not necessarily being undertaken during the function.

2. Also be aware that if an accident does occur, your insurer may deny liability on the basis that you have failed to comply with workplace health and safety laws, depending on the terms of your insurance policy.

3. You may also wish to appoint a staff member to supervise the function and ensure that there are no problems, including making sure that alcohol is being served responsibly and that guests leave safely and have the appropriate transport home.

4. Also, ensure that work functions have clearly defined start and finish times and remind staff that workplace policies still apply during the function.

5. Carefully consider the unfair dismissal rules and obtain legal advice before dismissing a staff member as a result of poor behaviour or alcohol-related misconduct during or following a work function.

 

For further information please contact:

Catherine Vincent                                                                                                 Senior Associate                                                                                               Phone: (02) 9267 6263                                                                                         Email: Catherine@jemfish.com.au

Greg Jemmeson                                                                                                     Partner                                                                                                           Phone: (02) 9267 6263                                                                                         Email: Greg@jemfish.com.au

 

Disclaimer: The information in this article is correct as at 1 October 2015. This information is not to be taken as legal advice and at all times we recommend you seek independent legal advice regarding your own individual circumstances from your legal representative.