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Excerpt from this article first published in Human Resources Magazine, Issue 137 - 18 September 2007
In a recent case of the Australian Industrial Relations Commission (“AIRC”) found that an employee ("Ms Streeter") had been unfairly dismissed when she was terminated for having sex in front of other employees, treating other employees with disrespect and lying during an investigation.
The conduct that Ms Streeter was dismissed for occurred at a staff Christmas party and in a hotel room which several of the employees had privately organised to attend after the staff Christmas party. The AIRC held that there was a sufficient connection between her out of work conduct and her employment as the employer could have been held to be vicariously liable for her conduct. Accordingly, the AIRC had to address whether Ms Streeter’s conduct warranted the termination.
The facts are straight forward. At the staff Christmas party Ms Streeter had grabbed her manager’s bottom in the presence of the manager’s wife. At the hotel room after the staff Christmas party, it was found that Ms Streeter had sex with at least one male colleague whilst being only a few feet away from other employees in the hotel room. The lights were off during this time and Ms Streeter was under the impression that the other employees were asleep. On the same evening, it was found that Ms Streeter locked herself in the hotel room's bathroom with two male colleagues. When another employee wanted to use the bathroom, Ms Streeter opened the door and was wrapped in a towel. Ms Streeter allowed the employee into the bathroom, then dropped the towel and jumped into the bath naked with the two male colleagues whilst the employee was on the toilet.
The AIRC had to consider whether Ms Streeter’s conduct amounted to sexual harassment. The Sex Discrimination Act (“the Act”) provides that a person can sexually harass another person if they engage is unwelcome conduct of a sexual nature in relation to the person harassed. The AIRC determined that the words ‘in relation to’ in the Act requires that the conduct either must be done with that person in mind or have a connection with that person. It was not enough that the sexual conduct offends another person.
The AIRC held that Ms Streeter’s conduct in grabbing her manager’s bottom was conduct that was in ‘relation to’ her manager. However, while the AIRC characterised this conduct as inappropriate and probably constituting sexual harassment, it was held that the conduct did not amount to anything other than a relatively minor misdemeanour.
Ms Streeter’s behaviour in dropping her towel and jumping naked into a bath with two male colleagues whilst in the presence of an employee on the toilet, was found not to be conduct ‘in relation’ to the employee and accordingly, it did not amount to sexual harassment. The AIRC found it relevant that the employee could have asked Ms Streeter and the two males to leave the bathroom whilst she went to the toilet, rather than insisting on being let into the bathroom. The AIRC stated that it seemed that the employee showed Ms Streeter no more respect than Ms Streeter showed her.
The AIRC characterised Ms Streeter having sex with a male colleague whilst only being a few feet away from other employees in the room as unwelcome sexual conduct. However, the AIRC found that this conduct was not ‘in relation’ to the other employees in the room and accordingly, it did not amount to sexual harassment. One of the factors that the AIRC considered relevant in determining whether the conduct was ‘in relation to’ the other employees was that the conduct took place in a hotel room with the lights out at a time when Ms Streeter thought that the other employees were asleep. In the event that the AIRC was incorrect, it found that the conduct would only amount to sexual harassment of the most indirect kind.
The final issue for consideration of the AIRC was Ms Streeter’s lying during the employer’s investigation into her conduct. The AIRC found that, given the inherently personal nature of the conduct Ms Streeter had lied about, her dishonesty did not destroy the trust between Ms Streeter and the employer, and accordingly was not a valid reason for termination.
In conclusion, the AIRC said "on the whole I consider she is a woman more sinned against than sinning". The employer was ordered to re-employ Ms Streeter at another location and pay to her any remuneration she lost as a result of her termination.
This case shows that employers must be cautious when terminating employees for conduct that occurs out of work hours and for conduct that may amount to sexual harassment. The employer in this case has indicated that it will appeal the AIRC’s decision, so be aware that new developments in this area may arise shortly.
Jessica Lee
Lawyer
