The law largely recognises the right of employees to conduct themselves in their personal lives in the way they see fit without being subject to the rules and expectations of their employers while doing so. However, as the world has become increasingly interconnected, the conduct of employees outside of work hours has thrown employers unexpectedly into the spotlight in ways that many employers would rather avoid. Unfortunately, employees can often engage in criminal conduct in their own time which has the potential to negatively impact the performance of their role and the reputation of the employer.
The law recognises that employers are entitled to protect their reputations from negative impact by association with employees who commit crimes outside of work hours. In particular, where an employee’s out of hours criminal conduct may constitute a lawful reason to terminate their employment, even though the crime was not committed in the course of the employee’s employment.
The mere fact an employee committed a criminal act outside of work hours does not necessarily mean there is a valid reason for the termination of employment. There needs to be a sufficient nexus, a relationship of requisite degree, between the employee’s criminal conduct outside of work and the employment relationship.
Cases in this area demonstrate the specific nature of the employer’s business, the specifics of the employee’s role, and the specifics of the crime committed can result in varying outcomes for employers and employees alike:
- A National Sales and Marketing Manager of a national transport and logistics company was charged and convicted of a serious sexual offence involving a child.
- The employee was a person of some significance in the community and the crime was reported in the media.
- After bringing the article about the crime to the attention of the employer, the employee was stood down while the criminal matter was dealt with in the Courts. However, the matter attracted greater media attention as the case progressed and the employer summarily terminated the employee’s employment.
- The FWC found the employee’s crime itself was not a valid reason for termination of employment (as the child sexual offence did not impact or relate to his duties in his employment) but found the media attention had a serious and significant risk of damaging the employer’s reputation as a business and employer.
- The employee, who was an apprentice butcher of a small regional butcher shop, was charged with being an accessory to murder.
- When the employer learned about the charges, they summarily terminated the employee’s employment immediately without any process, alleging, without obtaining supporting evidence, that customers would boycott the store because of it and that other employees would be scared to work with the employee.
- The FWC found the crime had a sufficient connection with the employee’s employment and that the reputational risk in the small town was significant. However, the FWC found the dismissal was unfair because the employer did not undertake a procedurally fair process in the manner of dismissal.
William James Sandilands v Industrial Relations Secretary on behalf of Legal Aid NSW  NSWIRComm 1051
- A long-tenured legal aid solicitor was terminated after being charged and tried for a domestic violence offence.
- The employee was a criminal lawyer who did not practice in domestic violence offences and alleged the criminal conduct did not have a sufficient connection to his employment.
- The employee was provided considerable procedural fairness in the process undertaken before effecting the dismissal.
- The NSWIRC disagreed with the employee, finding the crime committed had a chance to impact the reputation of Legal Aid as a whole and the employee showed a lack of remorse for the crime.
- A train driver was terminated after being charged with a drink driving offence.
- The employee showed considerable and genuine contrition for their actions and complied with the employer’s code of conduct.
- The FWC found the termination was unfair because the offence did not have a requisite connection to the inherent requirements of the role and the risk of damage to the reputation of the employer was “hypothetical”.
- The FWC was also critical of the employer’s failure to consider the rehabilitation efforts of the employee.
The above examples demonstrate each matter will turn on its own facts and employers should be cautious to carefully consider the nature of the crime committed and the impact of the specific crime on the duties of the employee and the reputation of the employer before any decision is made to terminate employment.
Lessons for employers
- You can lawfully terminate an employee’s employment for certain out of work hours criminal conduct, but it is important to act in a considered manner once you become aware of the crime or criminal conduct.
- Not all crimes will warrant termination of employment. The mere fact an employee commits a crime is not enough.
- Before taking any action, an employer needs to consider whether the employee’s crime is incompatible with their duties (e.g. a taxi driver committing culpable driving) and whether there is a risk the criminal conduct could damage the employer’s interests or reputation.
- If an employer can show the incompatibility or potential risk of damage to reputation, then the employee’s employment can be terminated. But an employer still needs to effect termination in a “procedurally fair” way.