John Wilson: out of hours, out of bounds — when to sack

article-body

“It takes many good deeds to build a good reputation, and only one bad one to lose it.” — Benjamin Franklin

Public servants are the face of the Commonwealth government, adequately remunerated for their services by taxpayers’ funds. It is arguable that for this reason alone they should be held to generally higher standards in connection with their employment. Yet to what extent should those standards encroach into their private lives?

The APS Code of Conduct, found at section 13 of the Public Service Act 1999 (Cth), sets the high water mark. Element 11 purports to impose an obligation on all APS employees to “behave in a way that upholds the APS Values … and the integrity and good reputation of the APS at all times”.

If strictly applied, this obligation would greatly expand, well beyond the established principles of the common law, the extent to which the Commonwealth (as the employer of APS employees) can control the conduct of their employees when they are off duty.

The ‘out of hours’ test

The relevant common law test, which applies to all other public and private employees, has been expressed in the case of Rose v Telstra as follows: for out of hours conduct to form a valid basis for dismissal, it must be of “such gravity or importance as to indicate a rejection or repudiation of the employment contract by the employee”.

Such circumstances include where the conduct damages the employer’s interests by bringing it into disrepute. The ground came into being in 1777, when it was first held lawful for a master to dismiss their servants (who were deemed never to be off duty), on the basis that their “moral misconduct”, such as drunkenness or sexual misconduct, would reflect badly on the reputation of their master.

More recently, a number of Australian cases have traced out the boundaries of when the potential injury to an employer’s reputation by an employee’s out of hours conduct could warrant their dismissal.

‘Material risk’

In Farquharson v Qantas, a Qantas employee punched a fellow employee at a hotel during “slip time” between international flights, knocking out a few of his teeth. The aggressor was not arrested or charged, the incident did not receive any attention in the media, and the hotel indicated that it regarded the matter as closed.

However the Australian Industrial Relations Commission held that an employee’s out of hours conduct that gives rise to a “material risk” of damage to an employer’s interests, even if there is no actual damage, constitutes a “valid reason” for the dismissal (although in the circumstances it may still be harsh, unjust, or unreasonable).

‘Sufficient connection’

Kolodjashnij v Boag’s involved the termination of an employee for breaching his brewing company employer’s Responsible Drinking Policy by driving a non-work car outside of work hours while above the legal blood-alcohol limit.

The policy was adopted to safeguard the employer’s interests to protect the employer’s reputation as a proponent of responsible drinking. It was held that a policy directed at restraining employees from engaging in (criminal) conduct that could have a deleterious impact on the employer’s legitimate business interests does have a “sufficient nexus” with the employment to be a reasonable imposition on an employee.

Hussein v Westpac concerned Westpac’s dismissal of an employee when he was convicted for fraudulently using an ANZ bank card, in circumstances with no direct connection with his employer.

The Industrial Relations Court of Australia found there was a “relevant connection” between the out of hours conduct and the employment, and therefore a “valid reason” for the dismissal. The position required integrity, honesty, and trustworthiness — qualities with which his conduct was clearly incompatible. In determining whether the dismissal was harsh, unjust, or unreasonable, the Court considered that as an ambassador of the bank with the Turkish and Greek community, if his conviction became publicly known, it could have damaged Westpac’s reputation within the area.

Finally, in the case of Corrective Services NSW v Silling, a senior correctional officer in NSW (and therefore a public servant) was dismissed after he was convicted of assaulting his wife and daughter for a third time. There was no evidence that the convictions affected, or would affect, the integrity or reputation of the public service.

Backman J, in his leading judgment, found that the “necessary connection” between the out of hours conduct and the employment was not satisfied. Indeed, he cited a number of authorities where the dismissal of a police officer for committing an offence was held to be harsh, unjust, or unreasonable. Like all relevant factors, the incompatibility between duties and out of hours conduct needs to be carefully reasoned – it cannot simply be taken as a given on face value.

Public service higher standard

The above cases provide important guidance on the requirement of a sufficient connection between the conduct and the APS employment so as to create a material risk to the employer’s reputation.

However, the application of the Rose and Telstra principles has not yet been tested in the context of a breach of the APS Code of Conduct. As APS employees will likely be held to a higher standard (albeit not to the literal extreme of Element 11), those cases do not necessarily set the outer bounds of when out of hours conduct might validate an APS employee’s lawful dismissal.