Can you fire a worker over 'out-of-work' conduct?

The Full Bench of the Fair Work Commission (FWC) has recently overturned its decision at the first instance that had found there was unfair dismissal when an employer terminated a worker’s employment for his “out of work” conduct.

The worker was dismissed for breaches of the Transport for NSW Code of Conduct related to a charge of high range drink driving on a day when “he was not rostered to work.”

The employer, Sydney Trains, hired the worker as a train driver. In August 2020, the New South Wales police arrested the worker while driving his vehicle on suspicion of “impaired driving.” They took him to the police station and administered a breath test. They found that he was driving at more than four times the legal limit for blood alcohol concentration. They then charged him with high range drink driving, which carries 18 months in prison.

A day after the incident, he attended work and drove a train. After a few days, he informed his employer that he had been charged with the offence. Later on, the employer told him that he was suspended from duty with pay while the matter was referred for an investigation.

After a thorough internal review, the employer informed the worker of his dismissal. The worker then filed an unfair dismissal claim in the FWC.

The FWC’s decision at first instance

When the case was first filed, the FWC found that the dismissal was harsh, unjust and unreasonable since it was an “out of work conduct that could never constitute a valid reason for termination.”

At the time, the FWC ordered reinstatement of the employee with lost remuneration paid, and ordered employment to continue.

The FWC’s decision at first instance was “stayed by consent” on terms agreed by the parties, but the employer submitted grounds of appeal, including that the FWC was wrong when it said there was no valid reason to dismiss. Among other reasons, the employer also said that reinstatement was not appropriate.

The considerations of the Full Bench (FWC)

The Full Bench agreed that the case was of public interest. It said the decision at first instance was “erroneous” because it was based on a “misapplication of the principles relating to valid reason and out of hours conduct.”

It held that “all the circumstances of the employment must be examined and that the express or implied terms of a contract of employment are relevant, but not determinative, to the connection between out of hours conduct and employment, where the conduct is relied on as a reason for dismissal.”

When does “out of work” conduct become a valid ground for dismissal?

In its consideration, the Full Bench said that “in certain circumstances, an employee’s employment may be validly terminated because of out of hours conduct,” but it clarified that such circumstances are “limited,” noting that:

• The conduct must be such that, viewed objectively, it is likely to cause serious damage to the relationship between the employer and employee; or
• The conduct damages the employer’s interests; or
• The conduct is incompatible with the employee’s duty as an employee.

Essentially, the Full Bench said that “the conduct complained of must be of such gravity or importance as to indicate a rejection or repudiation of the employment contract by the employee.”

The Full Bench also said that for a worker’s conduct to be considered a valid reason for dismissal, “the conduct must touch the employment,” explaining that “the out of hours conduct must touch the duties or the abilities of the employee in relation to the duties.”

The Full Bench’s decision

The Full Bench said that the conduct must have a connection with employment of “the requisite kind.” In the worker’s case, it found that the decision at first instance was wrong when it said the employer did not have a valid reason to dismiss the employee.

It then upheld the employer’s grounds for appeal. The decision was handed down on 16 March.