Sometimes, employers are faced with the decision to terminate an employee when out-of-hours conduct comes to their attention. It could be drug or alcohol use, violence or some other criminal activity that offends the employer and raises questions about the employee’s continued contract.

When dismissing employees for out-of-hours conduct employers should be careful to ensure the conduct is firstly, relevant to the employee’s position and secondly, serious enough to justify dismissal.

The test:

In Rose v Telstra, the Commission considered whether out-of-hours conduct may justify a dismissal. The Commission found circumstances must be limited to where:

• the conduct must be such that, viewed objectively, it is likely to cause serious damage to the relationship between the employer and employee; or

• the conduct damages the employer’s interests; or

• the conduct is incompatible with the employee’s duty as an employee.

A recent case concerning an employee who was unfairly dismissed over drug offences allegedly occurring outside of work hours shines a light on this important topic.

The Fair Work Commission examined the dismissal of an employee who was terminated following an annual police check that revealed he had been charged with possession of ecstasy and unlawful possession of explosives in October 2012. The magistrate had fined the applicant $350 and no conviction was recorded against him.

The applicant had been employed since 2007 as a driver by the employer. He was responsible for transporting clients to medical appointments locally and to places including Adelaide and Melbourne.

The applicant was terminated for breaching the employer’s Code of Conduct. The employer argued undertaking criminal checks of employees was a condition of its government funding and there would be concern for staff with a history of substance abuse, child abuse and domestic violence.

The Commissioner accepted the applicant’s evidence that he had come into ecstasy some years earlier, had tried it around the time of his grandfather’s death and had not used it since. The Commission also accepted evidence that the explosive was a firecracker. There was no evidence the applicant was a drug user or that he was ever impaired by drugs at work.

The Commission found the conduct complained of must have a requisite connection to the employment and must be so serious as to indicate a repudiation of the contract of employment.

The employer argued the conduct of the applicant was not compatible with the respondent’s responsibility to the community. The Commissioner was not convinced there was enough of a connection between the out-of-hours conduct of the applicant and his employment to cause serious damage to the employment relationship.

The Commission concluded the respondent reacted in a manner disproportionate to the conduct:

‘… even if the connection is there I am not satisfied that the conduct was of such a serious nature to suggest a repudiation of the employment contract by the Applicant.”

In Kolodjashnij v J Boag and Son Brewing the Full Bench considered an appeal after an employee was found to be in breach of the employer’s safe driving policy by driving with a blood alcohol content of 0.154.

In the decision the Commission found:

“Not every breach of a policy will provide a valid reason for termination of employment. However in circumstances where the policy is both lawful and reasonable and an employer has stressed the importance of the particular policy to the business and made it clear to employees that any breach is likely to result in termination of employment, then an employee who knowingly breaches that policy will have difficulty making out an argument that there is no valid reason for the termination.”

The Commissioner also did not consider the letter given to the applicant satisfied the need for the applicant to be provided with notice of the reason for dismissal for the purpose of giving him an opportunity to respond.

There was no issue with respect to the applicant’s performance, who had an unblemished record.

The Commissioner found the dismissal was harsh and unjust and found the applicant was unfairly dismissed.

The remedy:

The applicant did not seek reinstatement and the Commissioner did not consider reinstatement appropriate.

The amount awarded by the Commissioner was the compensation cap, which was $19,364, the full amount the employee could have received.