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Are companies going too far in seeking to regulate the private lives of their employees?

Michael Ryley looks at the decision of McDonalds to fire their CEO for having a relationship with an employee.

Shareholders in McDonalds will doubtless have been surprised to hear that their very successful CEO Steve Easterbrook has been fired for having a relationship with a colleague. They will be disappointed to hear that the market value of the burger chain is £3.4 billion lighter as a result. Whilst it might be reasonable for the company to take the line that senior employees must uphold corporate values, no matter how successful they may have been, just what values are we talking about?

This is not a 'MeToo' case. There is no issue of morality here. It was a consensual relationship. Moreover, if McDonalds feels that it is reasonable to dismiss Mr Easterbrook for this transgression, why are they paying him $27 million in severance pay?

We are forced to ask whether McDonalds is upholding an appropriate value here. Are companies going too far in seeking to regulate the private lives of their employees? After all, many employees spend a substantial percentage of their working hours at work and hence many employees find their life partners in the workplace as a consequence.

Would an employment tribunal be likely to uphold the decisions of an employer to dismiss where employees are in breach of such policies in the UK? From a UK perspective, a dismissal for this reason looks uncomfortably close the boundaries of legal protections such as the right not to be discriminated against on grounds of marital status or Article 8 of the Human Rights Act 1998, which provides for respect for private and family life.

Nevertheless, employers have a legitimate concern about workplace relationships. It makes perfect sense to have a policy in the staff handbook providing guidance; but if employers choose to have one they should ensure that it is reasonable and proportionate. Moreover, they should ensure that policies are applied in a way which is sensitive to circumstance.

Relationships between senior and junior employees can be a particular problem: does this set up a conflict between making appropriate management decisions and personal interest? Another concern is the fact that an employer is vicariously responsible for the actions of an employee in the course of their duties.

In the context of the workplace, a lovers’ tiff can quickly become an issue of employment law, typically giving rise to constructive dismissals or discrimination claims. There has been a tendency for the courts to interpret the concept of acts done “in the course of an employee’s duties” very widely, so that work social events such as Christmas parties are as much a matter of concern for an employer as what happens in the office or on the shop floor – though perhaps no court in this country has as yet gone quite as far as the recent decision of a French court which found that an employee who died in the course of having sex with a stranger during a business trip had died in an “industrial accident” giving rise to a claim by the family against the employer for compensation. Employers are often concerned not so much about the relationship as the prospect of its breakdown and the tensions that can arise in the workplace if this is acrimonious.

As a consequence of these risks, employers – especially across the Atlantic – have started to introduce policies restricting relationships in the workplace. Some employers have relationship agreements which regulate relations between two employees who form a relationship, so called “love contracts”. McDonalds clearly have a restrictive policy. We cannot be far away from the time when employees will feel the need to take legal advice before asking a fellow worker out on a date.

The prudent employer will be aware of the potential conflicts in the workplace from employee relationships, whilst at the same time recognising that human beings are naturally attracted and wish to form relationships. Consistent with that balance, the following steps could be taken which would provide the employer with some protection:

  • Have a policy which draws attention to the risks associated with relationships and requires employees to avoid putting themselves in a position which otherwise creates a conflict of interest or has adverse implications for the employer. Provide for flexibility and discretion rather than being unduly proscriptive.
  • Explain what is required as regards standards and treat each party to the relationship equally regardless of sex or status.
  • Avoid outright bans on relationships other than in certain exceptional cases; these may well result in unfair dismissals in the UK
  • Consider whether it would be appropriate to introduce a disclosure requirement where workplace relationships form
  • Ensure that awareness is raised generally in the workplace about what is appropriate and what is unacceptable in terms of the interaction between employees. Train management to identify and to deal with these issues. Inappropriate behaviour can result in claims of harassment, bullying, assault and discrimination. Employees are only human – that creates a degree of risk which employers have to live with – but that is not to say that employers cannot insist on proper standards of behaviour.

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