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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.


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  Dismissed for benefit fraud   Terminated before started
  The danger of secret witnesses   Expired employment contract
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  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
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  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  
  Alphabetical Index   Case Law Back to top
This article originally written by Alan Cressey the copyright of which is owned by The Evening Post
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Updated: 31st March 2010
Published: 15th March 2001
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