In a recent decision, Daniel Pawelczyk v Commonwealth Bank of Australia [2024] FWC 2115, the Fair Work Commission (FWC) addressed the critical question of whether misconduct occurring outside of work hours can justify dismissal. The case provides guidance for Employers on handling out-of-hours behaviour and its impact on the employment relationship.

The Decision in Pawelczyk v CBA

In this case, Mr. Pawelczyk was dismissed for sending a series of threatening and hostile messages to his manager, Ms. Obeid, outside of working hours. The Commission ruled that while these messages were sent during personal time, they were directly connected to his employment, as they arose from workplace grievances and created a significant psychosocial risk. The decision highlights the relevance of employer policies, such as CBA’s Group Conduct Policy, which applied “at all times” to employee interactions.

The FWC ruled that Mr. Pawelczyk’s out-of-hours conduct posed a serious risk to the workplace and irreparably damaged the trust required for the employment relationship to continue. This decision underscores the key principles for determining when out-of-hours behaviour is sufficiently connected to employment to justify dismissal, as established in Rose v Telstra and further developed by subsequent cases.

Key Principles from Rose v Telstra and Ventia Australia Pty Ltd v Pelly

The Rose v Telstra [1998] decision is the cornerstone of Australian employment law when it comes to out-of-hours conduct. According to Rose, an employee’s dismissal for conduct outside of work hours can only be justified if:

1. The conduct causes serious damage to the employer-employee relationship,
2. The conduct damages the employer’s interests, or
3. The conduct is incompatible with the employee’s duties.

In Ventia Australia Pty Ltd v Pelly [2023], these principles were affirmed. The FWC clarified that the conduct need not be repudiatory but must demonstrate a breakdown in the trust required for the employment relationship. As in Pawelczyk, out-of-hours conduct that directly undermines the employer’s trust or violates established workplace policies can be grounds for dismissal.

Establishing the Nexus: Conduct and Employment

Establishing a connection between out-of-hours conduct and the employment relationship remains pivotal. The cases of Sydney Trains v Bobrenitsky [2022] and Newton v Toll Transport Pty Ltd [2021] provide a comprehensive framework for assessing this nexus. Both decisions emphasized that:

• The nature of the conduct,
• The role and duties of the employee,
• The context of the employment relationship, and
• The potential harm to the employer’s interests and other employees

are critical factors. In Pawelczyk, the FWC considered these factors, concluding that the hostility and frequency of the messages sent to Ms. Obeid, although outside of working hours, were intrinsically linked to the employment and posed significant harm.

Lessons from Stephen Keenan v Leighton Boral Amey and the Limits of Employer Control

Not every out-of-hours conduct justifies dismissal. In Stephen Keenan v Leighton Boral Amey, the FWC found that inappropriate behavior at a social event unrelated to work did not have the necessary connection to the employment relationship, demonstrating the limits of employer control over purely private behavior.

Similarly, the case of Applicant v Respondent involved a flight attendant’s misconduct in a private setting, which was ruled insufficient to warrant dismissal. These cases demonstrate that purely private conduct, unrelated to work or employer interests, generally does not justify termination unless it has a tangible impact on the employment relationship.

Broader Implications in the Sexual Harassment Jurisdiction

When considering sexual harassment claims, courts have often applied a broader interpretation of the employment nexus. In cases like Vergara v Ewin and South Pacific Resort Hotels Pty Ltd v Trainor, the definition of "workplace" was expanded to include areas and situations beyond the physical office space, demonstrating that out-of-hours conduct, particularly in cases of harassment, can still be linked to the employment relationship, even if it occurs outside working hours.

Practical Implications for Employers

The decision in Pawelczyk and these precedents offer practical guidance for Employers:

1. Clear Policies: Ensure workplace policies, such as codes of conduct, extend to out-of-hours behavior that affects the workplace. In Pawelczyk, the CBA’s Group Conduct Policy applied “at all times” and was a key factor in the FWC’s decision.
2. Holistic Assessment: When assessing out-of-hours misconduct, consider the totality of circumstances, including the nature of the conduct, the employee’s role, and the potential harm to other employees or the business.
3. Health and Safety Obligations: Employers must manage psychosocial risks. In Pawelczyk, the employer’s obligation under workplace health and safety laws was crucial in linking the out-of-hours conduct to the employment relationship.
4. Case-by-Case Analysis: Each case must be analyzed individually. Not all out-of-hours conduct will justify dismissal, but when behavior directly impacts the employment relationship, employers have the right to take disciplinary action.

Conclusion

The decision in Pawelczyk v CBA reinforces the nuanced approach required in dealing with out-of-hours conduct. Employers must tread carefully but assertively when addressing behavior that threatens the health, safety, or integrity of the workplace. By drawing on the principles established in cases like Rose v Telstra, Ventia v Pelly, and Keenan v Leighton Boral Amey, Employers can ensure that their disciplinary actions are both lawful and justified.

Daniel Pawelczyk v Commonwealth Bank of Australia [2024] FWC 2115 (15 August 2024) (U2024/3942) COMMISSIONER MCKINNON

[2024] FWC 2115

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