Managing people is probably the least desirable aspect of being a business owner – and that’s when times are good.
Lawyers Weekly’s sister publication, My Business, asked employment lawyer Geoff Baldwin how employers can deal with some of the more challenging aspects of people management.
Business owners and operators can usually expect that the challenges of managing staff will be limited to questions of how well and effectively employees do their job. What employees do in their private lives is usually not something an employer needs to worry about. But what happens when an employee’s private life starts to have an impact on the workplace?
There are different ways in which problems of this kind can arise.
Personal issues impacting the workplace
Possibly most self-evident is the situation where something done by an employee outside of the workplace, and outside of working hours, impairs the employee’s ability to carry out the function of his or her job. An obvious example is the employee who drives a cab at night, then sleeps on the job during the day.
A second category is the employee who misbehaves away from the workplace and out of working hours, but in a context which links the conduct to the workplace – for example, the employee who makes inappropriate sexual advances to a fellow employee while drunk at the office Christmas party in the evening at a nearby hotel.
The challenges presented
Many employers are uncertain about how best to deal with problems arising out of the interaction between work and private life.
This hesitancy can arise out of doubts about the rights of an employer to take action in relation to an employee’s personal or private activity, which has only indirect links to the workplace. There can also be a concern that the employer could be accused of unlawful discrimination.
In considering the potential impact of the law about unlawful discrimination, it is important to understand just what “discrimination” in this sense is. An employer choosing one in a number of employees for promotion is discriminating, by selecting one rather than any of the others, but that’s fine as long as it’s not against the law.
The main Fair Work Act 2009 reference to discrimination does not define this, but instead refers to a number of state and federal pieces of legislation to determine what kind of discrimination is “unlawful”. The NSW legislation is the Anti-Discrimination Act 1977.
Taking the example of sex discrimination (others grounds include race, age and sexual preference) and using the context of employment, discrimination is unlawful under the Anti-Discrimination Act if an employer treats one employee:
• “less favourably than” an employee of the opposite sex would be treated; and
• in circumstances which are “the same… or not materially different”.
In applying these tests, the law also:
• treats “sex” as including the “sex of a relative or associate”;
• views an act as having been done on the ground of sex if it is done on the ground of a “characteristic that is generally imputed to persons of that sex”; and
• includes in the notion of discrimination the imposition of some (unreasonable) requirement or condition with which a “substantially higher proportion” of people of the opposite sex can comply, but the person discriminated against cannot, or does not, comply.
This may sound complicated, but a good litmus test for whether intended action might be challenged as (unlawfully) discriminatory is to reverse the genders, and test the intended action again. For example, a requirement under which each of the women in the office is expected to provide a cake every month for morning tea would be rapidly exposed as being discriminatory by imagining it the other way around: all the men being required to bring a cake, but none of the women.
Connection to the workplace
The rights of an employer to take action where outside activities have consequences in the workplace – as with the sleepy casual cab-driver – are fairly straightforward.
A little more complex are those cases where the misbehaviour occurs outside the workplace. A recent case involved an employee who had attended an offsite seminar (run by the employer) at which alcohol had been consumed. A handful of attendees had then gone to a bar, where more alcohol was consumed and the employee made inappropriate sexual advances toward a co-worker. He was ultimately dismissed for this conduct.
While the seminar was a work function in the sense of being held at a venue hired by the employer and at which work-related activities had taken place prior to a dinner, the move to the bar was simply a decision made by a few attendees who wanted to party on, although there was some evidence that drinks continued to be paid for at the bar on one of the employer’s credit cards.
Part of this additional complexity, of course, is not just the question of whether an employer has the right to take action in circumstances of this kind, but also whether they are obliged to do so. Commonly, an employer may wish to disown responsibility for what might be seen in many ways as simply a personal and private matter unconnected to the workplace.
In situations of this kind, however, it is always a question of fact, and a common yardstick is the “but for” test. Would the people involved have been together in the bar “but for” the fact that they were both employees of the same employer?
However, precautions can be taken. While employers will often legitimately want to encourage social or other informal interaction between employees, risks can be minimised by holding seminars, workshops and social functions during working hours or immediately afterward and, if practicable, on work premises.
While an employer obviously is much more likely to be held accountable for something that happens in the workplace itself, the ability to control the environment and things such as the supply of alcohol, as well as the ability to close the function and the workplace at a specified time, should help to demonstrate that all reasonable steps have been taken to minimise risk.
In any of these circumstances, it is always advisable to document what you have done, and to record your reasons. If you say nothing until a complaint is made, your explanation is likely to look like an excuse made up after the event. It’s much better to be able to point to a written record which you made at the time.
Geoff Baldwin is a lawyer in the commercial and employment law team at Stacks Champion.