Can you dismiss employees for improper conduct out of working hours?

Unlike the film’s discreet encounters behind closed doors, news of this office-based copulation went global when it was filmed and viewed widely on social media, making a private moment between two people worldwide news.

The pair’s employer said it was treating the incident “very seriously” but employment lawyers claimed it was disputable whether the couple’s out-of-hours activity on company property constituted justifiable grounds for dismissal.

The big question is: is it fair for employers to dismiss employees for engaging in intimate liaisons at their place of work?

Before answering this, it’s important to note that sexual behaviour can be considered gross misconduct and the devil is in the detail of an organisation’s disciplinary policy.

Sexual behaviour as gross misconduct

In a nutshell, gross misconduct means behaviour, which is so bad that it destroys the employer/employee relationship and merits instant dismissal without notice or serious disciplinary action. Most employers will have a generic list of what constitutes gross misconduct including drinking on the job, taking drugs or behaving in a dishonest or aggressive way towards others. But can sexual behaviour specifically be included within company policies?

The answer is yes; at an employer’s discretion, sexual behaviour as well as other covenants can be included in the definition of gross misconduct, but must be communicated and demonstrated clearly to employees through staff handbooks and company-wide literature. Employees should know the types of behaviours that are likely to be considered gross misconduct and if sexual behaviour warrants action then you must be clear about the boundaries and how you expect employees to behave within a company.

In the case of GM Packaging v Haslem in Newcastle, 2014, sexual behaviour had been included within its policies but even at a legal level, it proved to be a grey area. This particular tribunal found that dismissing an employee who had engaged in sexual activity with another employee on work premises was unfair but the Employment Appeal Tribunal (EAT) subsequently ruled otherwise.

Regardless of company size, the EAT ruled that consenting sexual activity in the workplace can indeed justify a finding of gross misconduct.

So I’ve caught employees in the act, how do I follow correct procedure and discipline accordingly?

If faced with this situation, employees must be spoken to immediately and the policies they agreed to when starting the role at your organisation must be reviewed. Depending on the severity of the situation, it should be clearly communicated what sanctions will be enforced.

If your decision leans towards dismissal, be sure to seek guidance from your HR and legal team to ensure that correct procedures are followed. It might also be a good opportunity to communicate your company policies to the rest of the team to ensure there is no confusion surrounding behavioural expectations and subsequent company decisions.

As an employer, you must be fair, reasonable and consistent. There is an ACAS Code of Practice that provides practical guidance and principles to help you, setting out the basic requirements of fairness and, for most cases, providing a minimum standard of reasonable behaviour.

As a guideline, ask yourselves the following questions when faced with the decision:

  • Was the offence gross misconduct – that is, was it enough to destroy the contractual relationship?
  • Were correct procedures used? Take into consideration the law, resources and size of your company.
  • Have you considered the range of sanctions – transfer, demotion, suspension and dismissal?
  • Are there any mitigating factors to take into account such as past history, age, length of service and previous warnings?

In the case of the Marsh Ltd employees in New Zealand, it has not been reported whether or not the couple in question were subsequently dismissed, and without knowing the facts surrounding the case I can’t comment on whether the employees should face dismissal.

My advice to other companies is to ensure you detail the boundaries of sexual behaviour within your company policies. These should then be regularly communicated and understood by all employees so that if you are faced with a similar situation, it can be dealt with swiftly.

Work-based liaisons can be perceived as exciting but they don’t always turn out the way employees imagine. These days, with the heightened use of social media as highlighted in the Marsh Ltd case, employers should rightly take prompt action to avoid any negative impact on business reputation.

The clearer your policies are, the easier the decision will be as to whether to dismiss or not. The onus is on the employer to ensure policies are clear from the outset and are communicated effectively to all staff. The will mean that if any of your team are caught in the act, the situation is black or white, not 50 Shades of Grey.

About Hugh Hitchcock

Hugh Hitchcock is a director at DJM Solicitors, a commercial law firm providing legal services to clients across the UK and Los Angeles, Hong Kong and Japan. His career spans 23 years spent in media and corporate law, and he specialises in dispute resolution. He previously spent six years at a leading media firm that acted for Elton John and The Beatles’ record label Apple.

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  • Daniel Lawson

    Glad you agree with this proposed new legislation Charlie. I know you don’t usually see eye to eye with MPs and their policies! It is obvious that it’s red tape stopping SMEs from growing and this is a start to reducing it.