A recent case before the Fair Work Commission (‘FWC’) in Sydney has put employers on notice that they should have arrangements in place to ensure alcohol is served responsibly and employees are sufficiently supervised at work functions where alcohol is served. In Stephen Keenan v Leighton Boral Amey NSW Pty Ltd [2015] FWC 3156, Vice President Hatcher held that despite an employee’s “drunken”, “boorish” and “unpleasant” behaviour at the work Christmas party he had been unfairly dismissed in part because of the unlimited service of alcohol at the event.

The Christmas Party

Stephen Keenan was appointed a permanent Team Leader with Leighton Boral Amey NSW Pty Ltd (’Leighton’) in October 2014. On 12 December 2014 he arrived at the Leighton Christmas party about 7.00pm and gave evidence that he had consumed two stubbies of beer before arriving at the function. Whilst at the function Mr Keenan quickly consumed a large amount of alcohol and his estimate was that from the time of arrival until about 11.15pm he consumed about ten beers and one vodka and coke.

The Christmas party was held in the Endeavour Room in the Novotel Sydney Brighton Beach Hotel (‘Hotel’) from 6.00pm to 10.00pm and during that time the Hotel served beer, wine, some mixed drinks, soft drinks, finger foods and canapés. Whilst initially drinks were obtained from Hotel staff at a certain point in the evening attendees at the function were able to help themselves to bottled beer from an Esky-type container.

The allegations against Mr Keenan at the Christmas party can be summarised as follows:

  • Inappropriate behaviour and language which included:
    • swearing at a director and telling him to “f##k off mate” and then later commenting to others around him that “All those board members and managers are f##ked, they can all get f##ked.” One manager in particular is a “c##t” and “I hate working for Leighton. It’s a s##t place to work. In fact I just told the head of Leightons to f##k off”;
    • saying to a female employee “No seriously. Who the f##k are you? What do you even do here?”;
  • Sexual harassment of another female employee which included repeatedly questioning the employee about her personal life and relationship status and indirectly requesting her telephone number.

 
The ‘After Party’

The official Leighton Christmas party ended at 10.00pm with the cessation of service of alcohol in the Endeavour Room. A large group of employees which included Mr Keenan moved upstairs to the public bar to continue socialising and at this stage of the night they were buying their own drinks.

The allegations against Mr Keenan at the ‘After Party’ can be summarised as follows:

  • Sexual harassment of another female employee by leaning closely and trying to touch her face with his hands;
  • Bullying and inappropriate language to another female colleague including saying words to the effect of “I used to think you were a stuck up little b##ch” but a colleague “says you are alright.” If my colleague “likes you then you must be ok”;
  • Sexual harassment by kissing another female employee on her lips without her consent and then saying to her “I’m going to go home and dream about you tonight”; and
  • Sexual harassment of a different female employee by telling her that “My mission tonight is to find out what colour your knickers are”.

 
Investigation and Dismissal

In the days following the Leighton Christmas party numerous complaints were made against Mr Keenan by other employees to the effect of the bullet points above. Leighton conducted an investigation into Mr Keenan’s behaviour and had a meeting with him on 16 December 2014 during which the allegations were put to Mr Keenan, who initially denied them but later made limited admissions. It was agreed at the meeting that Leighton would consider the issues and convey its decision to Mr Keenan when he returned on leave in mid-January 2015.
 
When Mr Keenan returned from leave on 20 January 2015 he was dismissed by Leighton. The dismissal letter only outlined two allegations as being reasons for his dismissal:

  1. Sexual harassment of a colleague which included repeated inappropriate questions about her personal life and asking for her telephone number; and
  1. The sexual harassment of another colleague after the official function when he kissed her on the lips and said he would be dreaming of her later.

 
Mr Keenan commenced an unfair dismissal claim against Leighton. Vice President Hatcher considered the various witness recollections from the night of the party and found that he could not rely on Mr Keenan’s recollection given his significant intoxication.

The Fair Work Commission Decision

The FWC considered whether the two allegations in the dismissal letter were valid reasons for Mr Keenan’s dismissal and ultimately held they were not. The FWC found that Mr Keenan had been unfairly dismissed for a number of reasons including:

  • the manner of service of alcohol at the Christmas party including Leighton’s failure to exercise any real control over this;
  • Leighton’s failure to have appropriate supervision at the party including the fact that Mr Keenan was never cautioned about the amount of alcohol he was consuming nor did anyone from Leighton prevent Mr Keenan from helping himself to a substantial number of beers;
  • Mr Keenan’s behaviour after the official party where he kissed a colleague was not within the scope of his employment as it did not occur within the ‘place of work’ and did not sufficiently impact upon Leighton; and
  • Mr Keenan’s advances towards his female colleague whilst at the party was unwelcome but did not amount to sexual harassment.

 
Responsible Service of Alcohol

The FWC focused on Mr Keenan’s ostensibly unrestricted and unlimited alcohol consumption, criticising Leighton for not controlling the distribution of alcohol at the party.  Prior to the party a written reminder about appropriate standards of behaviour at the Christmas party was distributed to staff but Vice President Hatcher noted:

“In my view, it is contradictory and self-defeating for an employer to require compliance with its usual standards of behaviour at a function but at the same time to allow the unlimited service of free alcohol at the function. If alcohol is supplied in such a manner, it becomes entirely predictable that some individuals will consume an excessive amount and behave inappropriately.”

No Sexual Harassment at the Christmas Party

Vice President Hatcher held that whilst it was reasonable to determine that Mr Keenan’s conduct at the party was unwelcome and unpleasant and it was arguable that a reasonable person might in all circumstances have reasonably anticipated the possibility that the victim would be offended, humiliated or intimidated, he did not think that it had the requisite sexual nature as there was no express sexual advance or proposition, no use of sexual language or sexual innuendo and there was no express or implicit reference to sexual activity. It was found that Mr Keenan’s behaviour amounted to a “… boorish attempt by a drunk to lay the foundation  for a future relationship with a woman he hardly knew by making an oafish intrusion into matters of personal sensitivity” and this did not constitute a valid reason for dismissal.

‘After Party’ Conduct not Employment-Related

Importantly , Vice President Hatcher found that Mr Keenan’s conduct at the ‘after-party’ in the bar was not in connection to his employment. It was held that the social interaction which occurred there was “… not in any sense organised, authorised, proposed or induced by Leighton. Those who gathered there did so entirely of their own volition.” As such Mr Keenan’s conduct at the ‘after-party’ was merely incidental to his employment and there was no prospect of vicarious liability on the part of Leighton.

In addition Mr Keenan’s conduct at the after-party was considered by Vice President Hatcher to be conduct which occurred in essentially a private social setting and not conduct that could be regarded as indicative of a repudiation of Mr Keenan’s employment contract in circumstances where there were found to be no adverse effects on other employees as they had minimal contact with Mr Keenan in their day to day role with Leighton or they were not concerned with his behaviour at the ‘after-party’.

This appears to be a surprising conclusion given it appeared that Mr Keenan’s conduct at the bar had an impact on a number of his colleagues and as such it would seem reasonable that it be dealt with as a workplace issue.

The decision of Vice President Hatcher that Mr Keenan’s behaviour at the ‘after-party’ was not considered within the ‘place of work’ is contrary to other recent decisions of the FWC where a hotel (Applicant v Employer [2015] FWC 506)and a taxi cab (Gregory v Qantas Airways Limited [2015] FWC 1154) were held to be part of the place of work of each employee concerned. In addition the narrow definition of the ‘place of work’ or the ‘workplace’ in this decision is inconsistent with the broad construction of these terms in the FWC’s anti-bullying jurisdiction.

Lessons for Employers

Employers need to be circumspect when considering allegations against employees especially if there is uncertainty about whether the allegations occurred in the workplace. Although each situation will be dependent on the factual circumstances employers can still take the following lessons from this case:

  • Advise employees preferably in writing regarding their expected standard of behaviour at work functions both in company policies and before the event. The warning issued to employees may specifically state that behaviour beyond the work function can still be subject to disciplinary action if the employer’s reputation is damaged or the health or safety of others is endangered.
  • Review company polices periodically to ensure that employee’s expected behaviours in and outside the workplace are clearly set out and that there is appropriate and thorough disciplinary procedure in place and train employees in the relevant polices.
  • Ensure that those responsible organising work functions properly manage risk, including alcohol service. This case highlights that it is not sufficient to simply leave the responsible service of alcohol at a work function to the venue’s hosts. Employers should ensure that there is some form of monitoring employee alcohol consumption and behaviour.

 
Pointon Partners can assist in the review and/or drafting of workplace policies. If you have any queries about this case or employment matters generally please contact Michael Bishop or Amelita Hensman.

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