24 Aug 2010
Regulating employee behaviour in their private time
by Glen Bartlett, Regan Sterry
Employers can put in place policies that regulate the conduct of employees in their private time as long as the policies are reasonable and related to the practices of the business.
The amount of control that an employer can exercise over employees in their private time is back in the spotlight, following the recent decision of the Full Bench of Fair Work Australia in Nick Kolodjashnij v J Boag and Son Brewing Pty Ltd  FWAFB 3258.
While the traditional view is that employees are free to enjoy their private activities without scrutiny from their employer, courts and tribunals are increasingly allowing employers to encroach into the non-work activities of their employees because of the impact the behaviour might have on the employer's business interests.
The employer, the employee, and the Responsible Drinking Policy
Mr Kolodjashnij had been employed by J Boag and Son Brewing Pty Ltd for eight years and had exemplary employee conduct.
Boags had in place a Responsible Drinking Policy and all employees, including Mr Kolodjashnij, participated in training which "made it clear to employees that if they were caught drink driving, even outside of work hours and driving a private (non-company) vehicle, this would be regarding as a serious breach of the Responsible Drinking policy and could result in the termination of their employment."
On a Friday night, Mr Kolodjashnij was charged with drink-driving, in his own vehicle, with a blood alcohol content of 0.154. He voluntarily told Boags of his charge on his return to work the following Monday morning and was immediately stood down without pay.
Mr Kolodjashnij and management had two further meetings about the charges, after which time his employment was terminated. He then took action against Boags claiming that the termination was harsh, unjust or unreasonable.
At first instance, Commissioner Deegan found that this the termination was not harsh, unjust or unreasonable, and this ruling was upheld by the Full Bench.
In finding for Boags, Commissioner Deegan found that:
"An employer is entitled to have policies designed to protect the interests of the business and a legitimate interest in ensuring that such policies are observed by the workforce. There would be little point in having policies that were not enforced."
This is significant, as the ruling does not allow for employers to implement any policy regarding the behaviour of their employees in their private time. However, it does reinforce the views previously taken by tribunals and courts that policies which regulate the behaviour of employees in areas which may impact on the employer's business are reasonable. As Commissioner Deegan stated :
"A manufacturer of weapons or fireworks would have a legitimate interest in ensuring that its employees did not use its products in a manner which was contrary to law, might bring the product into disrepute or could contribute to the case for greater restriction on sales or even complete prohibition of the product. In my view the same applies to a manufacturer of alcohol."
In views supported by the Full Bench, Commissioner Deegan endorsed the findings in Farquharson v Qantas Airways Ltd (2006) 155 IR 22 that it is not actual harm to a business that is required. Instead, conduct which "might bring the product into disrepute" is enough to warrant employee discipline based on conduct which occurred in the employee's private time.
This view was also expressed in the New Zealand case of Smith v The Christchurch Press Co Ltd  1 NZLR 407 in which the court held that:
"It is not so much a question of where the conduct occurs but rather its impact or potential impact on the employer's business, whether that is because the business may be damaged in some way; because the conduct is incompatible with the proper discharge of the employees' duties; because it impacts upon the employer's obligations to other employees; or for any other reason it undermines the trust and confidence necessary between employer and employee."
Mr Kolodjashnij was not reinstated to his position at Boags. His exemplary work record was not sufficient to protect him from the potential damage done to the employer by his drink-driving behaviour.
Issues from this case for employers
Employers can use policies to regulate the out-of-hours conduct of their employees where there is a relevant link to the employment requirements of the employee. As such:
an employee working in the alcohol industry can have a policy for responsible drinking enforced against them;
an employee in the banking trade can have their employment terminated for committing fraud offences in their private time (Hussein v Westpac Banking Corporation (1995) 59 IR 103); and
a member of the police force can be disciplined for behaviour in their private time which is "patently inconsistent with the desirable character of a police officer" (Wickham v Commissioner of Police  SASC 6497).
Employers should review the interests of their business and implement policies that protect these interests even if it imposes obligations on employees in their private lives.