Can you dismiss an employee if you provide the alcohol?

The UK media has recently given considerable publicity to an Australian unfair dismissal case which reached perhaps surprising conclusions about misconduct outside the normal work environment and the provision of alcohol by the employer. The reported Australian case seemingly pointed towards companies being unable to dismiss employees for misconduct at work parties, if they have provided excessive alcohol.

The reported facts

In the recent Australian employment case which hit the UK headlines a team leader of a roadbuilding firm was found to have been unfairly dismissed in January 2015, when he was dismissed for sexual harassment of female colleagues and telling a company manager 'where to go' after being served unlimited drinks at the work Christmas party.

The Fair Work Commission in Australia held that office conduct requirements could not be maintained outside the work environment and employers may not be in a position to insist on the same standards of conduct at functions if alcohol is freely flowing.

The Commission found there was no evidence that the employee had engaged in bad behaviour in the workplace and called his conduct at the party “isolated and aberrant in nature”. It is reported as stating that “If alcohol is supplied in such a manner, it becomes entirely predictable that some individuals will consume an excessive amount and behave inappropriately”.

Additionally, the Fair Work Commission advised that Australian employers will need to be more cautious about serving alcohol when hosting work parties. The Commission's decision was reported in Australia as indicating that employers who fail to monitor the alcohol intake of employees at work functions may be restricted in terms of taking disciplinary action against employees or dismissing them for inappropriate behaviour.

But what is the position in the UK relating to conduct at work parties?

According to research conducted by the Chartered Institute of Personnel and Development (CIPD) in 2011, about two thirds of employers don’t have a specific policy on behaviour at office parties  while 10% of workers know of a colleague who has either been disciplined or dismissed for inappropriate behaviour at the Christmas party.  

Case law has established that when the law sets out potentially fair reasons for dismissal, it is capable of applying to conduct both inside and outside of work, "so long as in some respect or other it affects the employee, or could be thought to affect the employee, when he is doing his work" (Singh v London Country Bus Services Ltd). It is therefore potentially fair to dismiss an employee for conduct outside of the workplace. However it is important to carefully consider the nature of the conduct in question and whether it really relates to or is relevant to the employee’s working life.

Cases involving violence, sexual conduct or dishonesty are often likely to affect the employment relationship, either because of the specific nature of the employee’s work or due to general considerations regarding potential damage to the employer's reputation or the relationship of trust and confidence between employer and employee. However it is always important to make clear how and why an employee’s conduct outside work makes it unacceptable for them to remain in employment. It is advisable to seek legal advice if you are not sure whether the connection is close enough.

Some examples of cases in this area include: 

• In Eggleton v Kerry Foods Ltd, Mr Eggleton was found to be fairly dismissed after fighting off-site with a colleague. Whilst it was found that the fight actually took place in a car park across the road from his place of work, Mr Eggleton's conduct affected working arrangements since the other employee concerned no longer felt safe to attend work; 
• In Gimson v Display By Design Ltd, Mr Gimson had an argument with a colleague following the work Christmas party and punched another colleague attempting to diffuse the situation. Mr Gimson argued that as the incident occurred outside of work, it could not have been misconduct and he had been unfairly dismissed. The Employment Tribunal found that the events after the work Christmas party were sufficiently closely connected to work to have had an impact and that dismissal was a reasonable response; and 
• In Bhara v Ikea Ltd, Mr Bhara was a well-regarded employee who had arranged the Christmas party. After warning his colleague not to drink too much, a tussle took place between the two. Although both men played down the incident as a “wrestling match”, Mr Bhara was dismissed for “physical assault” which had a “damaging effect on the Ikea brand and therefore brought the company into disrepute”. The Employment Tribunal found that Mr Bhara’s dismissal was within the range of reasonable responses.

None of the key UK cases on ‘out of work’ conduct go as far as to say that an employer should expect bad behaviour if alcohol is supplied. In fact it appears from the case law that, on balance, the approach in the UK is somewhat stricter than the reported case suggests is the case in Australia. Many UK cases place greater onus on the employee’s responsibility to maintain high standards of conduct outside the workplace.

The legal position in the UK 

In the UK, whether a misconduct dismissal is fair will depend “on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee”. The relevant section also specifies that the ‘equity and substantial merits of the case’ will be taken into account. 

The Employment Tribunal will consider:

• Whether the employer can show that there was a genuine belief in the misconduct, based on reasonable grounds and following a reasonable investigation; and 
• Once a reasonable belief has been demonstrated, whether the employer can show that the dismissal fell within the ‘band of reasonable responses’.

A notable difference to the equivalent Australian test for unfair dismissal is that the Australian approach considers whether a dismissal is “harsh or unjust” whereas the UK test focuses more on “reasonableness”. 

Conclusion

Reports of this Australian case in the UK media took the stance that this employee could perhaps have expected to be dismissed in the UK. Whilst every case depends very much on its own facts, it is certainly true that dismissal for behaviour of this nature would on the face of it fall within the ‘band of reasonable responses’ in UK law.

However, context is important in any case of unfair dismissal. It will inevitably be more difficult for a UK employer to demonstrate the reasonableness of a dismissal for drunken behaviour where it has picked up the tab by supplying free alcohol, or where managers and senior members of staff have encouraged or facilitated excessive drinking.

It is always best practice to remind employees of the need to behave in accordance with workplace harassment and discrimination policies and to exercise moderation at work events. Regardless of legal jurisdiction, being ‘out of the office’ does not remove the obligation to encourage employees to behave responsibly. When they do not at work-related functions, you are still likely to be able to dismiss them for gross misconduct, but you will need to carefully consider any arguments that their actions were fuelled by you as their employer and the alcohol you provided. If in doubt, do take advice.