’tis the season… for a legal hangover

Employers beware, the Christmas party is nearing and we could all be in for a legal hangover in the morning!

With the end-of-year festivities nearing, and employees taking the term “silly season” a little too literally, employers need to be mindful that their duty of care to employees is not confined by the office walls…but just how far does this duty of care go?

Employers are required to take ‘all reasonable steps’ to prevent sexual harassment and ensure as far as reasonably practicable the health, safety and welfare of their employees. If employers fail to take such reasonable steps to prevent sexual harassment, they risk being vicariously liable for the actions of their employees and agents.

In the past employers have hesitated to terminate employees following complaints of inappropriate conduct (including sexual harassment) due to countless cases where procedural deficiencies in the investigation and termination process led to a finding a dismissal was harsh, unjust or unreasonable. However, in the current era of #metoo, the Fair Work Commission (FWC) is increasingly calling #TimesUp on inappropriate behaviour and cases have been more favourable to employers than ever, reinforcing the ability to create (and insist on) healthy, respectful and inclusive workplaces.

In Carmelo Sapienza v Cash in Transit Pty Ltd T/A Secure Cashthe FWC held the termination of Mr Sapienza’s employment for inappropriate conduct (including asking young female employees of a client for ‘cheeky’ kisses and asking when they will leave their boyfriends and run away with him) was not harsh, unjust or unreasonable, despite him not being afforded the opportunity to respond to the reasons for termination.

In Homer Abarra v Toyota Motor CorporationCommissioner Harper-Greenwell accepted evidence the group leader had created a “weird and dirty atmosphere” frequently making sexual remarks and commenting on the appearance of female team members:

“By allowing behaviours of such a nature to take place it is evident that the working environment, although not hostile, was uncomfortable for some and at the very least was an unhealthy work environmentThe comments made by [the group leader] to the young female employees in my view were, in fact, a rather blatant form of benevolent sexism which has no place in the workplace.

The Commissioner held Toyota had a valid reason to sack Mr Abarra finding:

“He was responsible for developing and encouraging an environment in which inappropriate behaviour was expected and encouraged and even at the hearing demonstrated a complete lack of remorse or recognition of the seriousness of his conduct

In Taylor v Star Track Express the FWC upheld the summary dismissal of a StarTrack forklift driver, with 17 years’ service, for directing racial slurs at colleagues. The Commissioner found that taking the approach that language was not offensive because no one had complained had:

regrettable and disturbing parallels with the recent exposure of incidents of sexual harassment in the employment context, which has created what is referred to as the #MeToo movement”.

The Commissioner observed the employee:

seemed to be unable to appreciate that the racial components of his workplace ’banter’ was not ‘part and parcel’ of a ‘knockabout’ workplace” finding: “In simple terms, a line is crossed when race or ethnicity is included in any communications with co-workers, and any suggestion of being well intentioned does not provide a defence or justification for conduct that is fundamentally unacceptable… crudity can be tolerated, racism cannot”.

The FWC took into account the employer’s zero tolerance policy for racism – which included a training video entitled “Expect Respect” – in its culturally and ethnically diverse workforce, the FWC was:

“not prepared to disturb the balanced and properly considered determination made by the employer”. 

So before you cheers your egg-nog to the end of the year, employers need to be prepared and pro-active in avoiding an end-of-year legal hangover.

  • Reinforce core values emphasising those focused on respect and inclusiveness and lead from the top role modelling appropriate behaviours.
  • Remind your employees of the Company Codes of Conduct dealing with drugs and alcohol, sexual harassment, discrimination and other unacceptable and inappropriate conduct.
  • Remind employees that the Codes of Conduct apply to all Company functions and client events where the employee is representing the Company.
  • Serve plenty of food and non-alcoholic drinks at functions.
  • Ensure that your function venues engage in responsible service of alcohol.
  • Appoint a senior manager to stay sober and supervise your functions to ensure all employees are adhering to the Codes of Conduct.
  • Ensure all employees have a safe method of transport home.
  • Deal with all complaints and conduct investigations promptly and remove employees from potentially harmful situations.
  • Follow the correct procedure when issuing formal warnings or summarily terminating employees that earn a spot on the naughty list this year.

This article was written with the assistance of Jessica Luker, Law Graduate.


Fay Calderone

A highly regarded employment lawyer, Fay advises on proactive compliance, discrimination and performance management.

You might be also interested in...

Employment & Workplace Relations | 27 Nov 2018

Taken for a ride: Foodora rider found to be an employee

In a controversial decision, a single Commissioner of the Fair Work Commission has found that a delivery rider engaged as an independent contractor by food delivery company Foodora was, in fact, an employee.

Employment & Workplace Relations | 18 Oct 2018

New rights for casual employees – what you need to know

From 1 October 2018 new rights that apply to casuals have come into effect which employers should be aware of.