The Fair Work Commission has upheld a recent decision to dismiss a bank manager who sexually harassed a work colleague while intoxicated at an ‘out of hours’ work-related social event, notwithstanding his long period of service of 35 years and previously unblemished disciplinary record.
We discuss the importance of the decision in terms of employees being held accountable for their conduct in accordance with modern societal behavioural standards, regardless of time and place, and share other key learnings for employers.
Background
The male employee was 17 years old when hired in 1985 by the large financial institution (Bank).
At the time of his dismissal in April 2021, the male employee was employed as a Senior Relationship Manager and, after 35 years, had a clean employment record with the Bank.
On 10 March 2021, the Bank held a compulsory professional development workshop for staff at Optus Stadium, which ran from 8:30am to 4:00pm and was attended by approximately 160 employees.
The Bank had afterwards arranged a non-compulsory social event from 4:30pm to 6:30pm, at a sports bar located near Optus Stadium and funded a bar tab for the attendees. After the bar tab had closed at approximately 7:00pm, the employee and a small group of employees remained at the sports bar and continued to consume alcohol they purchased. At approximately 9:45pm, an incident occurred that led to the employee’s dismissal from his employment with the Bank.
Incident
One of the employee's female co-workers complained the following day that he had inappropriately grabbed her buttocks at the social event, with CCTV footage corroborating the complaint. The footage showed the employee reaching his hands towards the middle part of the complainant’s lower buttocks and moving it up towards her waist over a period of a few seconds.
Subsequent events
The Bank conducted a workplace investigation and found the incident to be substantiated. The employee was found to have breached the Bank’s Code of Conduct and Sexual Harassment policy and his employment was terminated for serious misconduct.
In pursuing his unfair dismissal claim, the employee argued that, among other things, he had not breached the Bank’s policies, because his conduct at the social event did not have a sufficient connection to his work and therefore could not form a valid ground for dismissal.
Decision and reasons
The Commission ultimately found that the employee was fairly dismissed.
Notwithstanding that the incident occurred outside of work hours and after the official conclusion of a non-compulsory social event, the Commission held that the employee’s conduct had a sufficient connection to his employment. It was found to be significant that the parties were only socialising together at the sports bar because they had earlier attended the workshop in the course of their employment.
The employee’s personal circumstances were considered by the Commission to be a significant mitigating factor as to whether the dismissal was harsh and therefore unfair in nature. He had no formal educational qualifications or experience working outside the banking industry and was suffering from a depressive illness. Further, the Commission took into account the employee’s service of 35 years, previously exemplary behaviour and also noted that the incident was likely a direct consequence of his excessive alcohol consumption.
Nevertheless, the Commission emphasised that modern standards of behaviour have raised the bar for what is considered a consensual physical interaction in a workplace context, which in this case outweighed the catastrophic nature of the dismissal for the employee. In particular, the Commission found that he:
“Should have exercised extreme caution in engaging in any physical contact particularly of a sexualised nature with a junior work colleague, especially when both parties were known to each other to be intoxicated."
Key learnings
The Commission was similarly critical of the Bank questioning its decision to host the social event at a nearby sports bar where it provided unrestricted access to free alcohol for more than two hours. In particular, the Bank should have better considered its policies when choosing the venue for the social event, the provision of free alcohol for an extended period, and the failure to properly supervise the event and arrange safe transport home for intoxicated employees.
Importantly, management failures of this type expose a well-meaning employer to vicarious liability for the trauma experienced by an employee who is the victim of sexual harassment by a work colleague.
Developing and implementing strategies to address sexual harassment, and managing complaints, can be complex and difficult. Please get in touch with our Workplace and Employment team if you require any assistance in managing sexual harassment in the workplace.