Dismissal for conduct that occurs outside of work

Can an employer dismiss an employee for misconduct that occurred outside of work? To what extent are employers allowed to intrude into the private lives of employees? The Court of Appeal dealt with this issue in a recent case.

An employee of the Christchurch Press Co ("the Press"), Bryan Smith, asked a female co-worker, S (real name suppressed), out for lunch. They drove back to Mr Smith's house, where Mr Smith brought out some sandwiches and alcohol. It was cold in the dining room so, he suggested that they shift into his bedroom. S was wary, but Mr Smith assured her she was safe.

In the bedroom, Mr Smith offered to massage S's neck as she was wearing a neck brace, but she refused and told him she was in a happy relationship and was not interested in him. Finally, after more assurances, she sat on a cushion and Mr Smith massaged her neck.

Gradually he began to message under her top and commented on her breasts. S resisted and moved towards the door, but by this time Mr Smith had removed his shirt and was unbuckling his belt. He kissed her, placed his hand inside her skirt and started masturbating. S was scared and decided to acquiesce to prevent further trouble. Eventually, Mr Smith released her and she told him to take her back to work. Mr Smith suggested that they keep the incident quiet and she agreed.

S was ten minutes late back for work and was forced to reschedule an appointment. That afternoon, she asked a colleague to stay with her because she was afraid of seeing Mr Smith. The next day she complained to her supervisor about the incident. The Press held an investigation into the incident, and later dismissed Mr Smith for serious misconduct.

Mr Smith sued the Press for wrongful dismissal. He claimed, amongst other things, that the Press was not entitled to dismiss him as the incident had occurred outside of work. The Employment Court dismissed his case.

Mr Smith then appealed to the Court of Appeal. The Court of Appeal upheld the Employment Court's decision and again dismissed his case. "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 Smith's] conduct towards S was between two present employees, arose out of the work situation and, more importantly, had the potential to adversely affect the working environment. It is irrelevant that the actual sexual conduct occurred outside the workplace at lunchtime" Justice Gault said. As this case demonstrates, an employer may dismiss an employee for conduct that occurs outside of work and working time if that conduct has the potential to adversely affect the employment relationship.

More on Termination & Dismissal

An employer's rights: Surfing all the day	Driver lost license
Dealing with absent employees	Importance of procedural fairness
Must consult in redundancy dismissals	Dismissal must be procedurally fair
Misconduct discovered after dismissal	Another procedural fairness example
Dismissed for benefit fraud	Terminated before started
The danger of secret witnesses	Expired employment contract
Cannot intimidate employer	Cannot rely on police enquiry
Reasonable notice of redundancy	Contractural obligation must be met
Reinstatement and workplace democracy	Employment and criminal investigation
Attack not always good defence	Dismissal of persons in authority
Employee responds by going on offensive	Legality of secret video surveillance
ERA classifies contractor as employee	Redundancy law unchanged by ERA
Loss of use of company car	Significant difference
Resolution of criminal charges	Redundancy and changed hours
Discrimination for being non Asian	Cannot take retaliatory action
Failing to meet sales targets	Misconduct outside of work
Abuse of Internet & Email	Suicide and communication
Redundancy definition	Unjustified dismissal for pornography
Abandonment of employment

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