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Introduction

Read the full decision here.

What happens when a contracted shuttle bus driver of a Perth casino borrows money from a casino patron and is tardy in paying it back? A valid and reasonable reason for dismissal according the FWC. A lesson in out-of-hours conduct. It also underlines the importance of having a Code of Conduct.

Background

Perth’s Crown Casino contracts out its shuttle bus services to a third party. A bus driver borrowed $90.00 from a casino patron who had regular been a passenger on the shuttle bus driven the applicant.

When the applicant failed to repay the money within the agreed period, the patron complained to Crown. Crown passed on the complaint to the contractor. The contractor attempted to censure the applicant, but the applicant became verbally aggressive and stormed out of the meeting.

The applicant then complained to Crown employees that his job was in jeopardy, stating that he was not on duty when he borrowed the money and he had in any event paid it back.

Out-of-hours conduct

In determining this matter, the Commissioner agreed with the applicant:

“I accept [the applicant’s] evidence that when he borrowed the money from the patron of the Crown Casino who he knew as a passenger who used his bus, he was not on the bus. Rather when he borrowed the money, he was with the patron on the Crown Casino gaming floor.

“I also accept that when he approached the staff at the Crown Casino on two separate occasions he was not working”.

The Commissioner then examined out-of-hours conduct:

“A Full Bench of the Commission in the case of Anthony Farquharson v Qantas Airways Limited considered the question of whether out of hours conduct by an employee involves breaches of terms of the contract of employment, as follows:

“[18] In Rose v Telstra Ross VP undertook a detailed analysis of the law relating to termination of employment for “out of hours” conduct. Referring to the judgment of McHugh and Gummow JJ in Byrne v Australian Airlines, his Honour noted that the emergence of the modern law of employment can be seen as a movement away the status of servants in a master/servant relationship to a focus on contract with the result that:

‘[a]n employee’s behaviour outside of working hours will only have an impact on their employment to the extent that it can be said to breach an express or implied term of his or her contract of employment.’

“[19] The issue, then, is whether the ‘out of hours’ conduct involves a breach of an express or implied term of the contract of employment. Ross VP then considered the relevant implied terms:

“An employee’s implied duty of fidelity and good faith is particularly relevant here. One of the most concise and authoritative statements of what is generally encompassed by the duty of fidelity and good faith is to be found in Blyth Chemicals v Bushnells. In that case their Honours Dixon and McTiernan JJ said:

“Conduct which in respect of important matters is incompatible with the fulfilment of an employee’s duty. Or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee, is a ground of dismissal … But the conduct of the employee must itself involve the incompatibility, conflict, or impediment, or be destructive of confidence. An actual repugnance between his acts and his relationship must be found. It is not enough that ground for uneasiness as to future conduct arises.”

In the same case their Honours Starke and Evatt JJ note:

“The mere apprehension that an employee will act in a manner incompatible with the due and faithful performance of his duty affords no ground for dismissing him; he must be guilty of some conduct in itself incompatible with his duty and the confidential relation between himself and his employer.”

The obligations imposed by the common law duty of fidelity and good faith operate to prohibit acts outside of the employment which are inconsistent with the continuation of the employment relationship. But as Spender AJ observed in Cementaid (NSW) Pty Ltd v Chambers, ‘an actual repugnance between the employee’s acts and his relationship with his employer must be found’.

More recently the implied term of fidelity and good faith has been expressed as an obligation to serve the employer loyally and not to act contrary to the employer’s interest. In England this obligation appears to have been subsumed by the more general obligation of mutual trust and confidence. The implied term of mutual trust and confidence imposes reciprocal duties on the employee and employer that they shall not ‘without reasonable and proper cause, conduct themselves in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee’.

If conduct objectively considered is likely to cause serious damage to the relationship between employer and employee then a breach of the implied obligation may arise.

There is some support for the proposition that the existence of an implied term of trust and confidence in contracts of employment has been accepted in Australia.

The words `trust and confidence’ in this context are used in a contractual sense rather than as an ingredient of a personal relationship. As McCarry notes:

“… the words `trust and confidence’, just like the employee’s reciprocal duties of ‘fidelity and good faith’, do not now refer to the ingredients of a personal relationship, even if they once did. The words now represent, in shorthand form, a bundle of legal rights which have more to do with modes of behaviour which allow work to proceed in a commercially and legally correct manner than with ingredients in an interpersonal relationship.”

The above statement is consistent with the shift in the nature of the employment relationship, from status to contract, referred to earlier.

“[20] His Honour then formulated a summary of principle which has now been applied on a number of occasions:

“It is clear that in certain circumstances an employee’s employment may be validly terminated because of out of hours conduct. But such circumstances are limited:

  • 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.

In essence 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.” (References omitted)

The Commissioner’s conclusions

The Commissioner found that:

  • The applicant damaged the relationship between his employer and its client the Crown Casino.
  • Then, following disciplinary meetings with his employer, the applicant of his own volition approached Crown Casino staff about the fact his employment was in jeopardy. This caused his employer’s client, the Crown Casino, to make further complaints to his employer about his conduct.

“It is clear then that [the applicant’s] conduct damaged the interests of his employer. It damaged the relationship between his employer and its’ client the Crown Casino. In an attempt to repair that damage [the applicant’s] employer was forced to repeatedly apologise to its’ client for his conduct.

“I am satisfied that borrowing money from a person whom [the applicant] knew to be a passenger who regularly used his bus whilst at the Crown Casino and then not paying this money back when agreed was a valid reason for his dismissal.

“Separately, I am also satisfied that raising the fact that his employment was in jeopardy with staff of the Crown Casino was a valid reason for his dismissal”.

And in closely, the Commissioner noted:

“Whilst [the applicant] remains of the view that because he was not working when he borrowed the money this should not affect his employment. However as explained above his actions have damaged his employer’s interests and damaged the relationship between his employer and their client. The relationship was furthered damaged by him approaching Crown Casino staff and raising the issue of his job with them”.