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Employee Relationships and the Employment Relations Act
Personal relationships between employees are nothing new to the workplace environment. Indeed, if the familiar barometer of our social conscience - television - is to be believed, sexual relationships between employees are an expected part of employment : Shortland Street would be nothing more than a boring medical clinic in their absence.
What may come as a surprise to many employers, however, is the potential liability which they may face for sexual harassment claims arising out of workplace relationships.
A recent decision of the Court of Appeal, Smith v Christchurch Press Company Limited, has underlined the potential liability for employers in this area. The case had its origins in an incident which occurred between two employees in the same workplace. A male employee invited a female colleague to have lunch with him. She accepted, but unbeknown to her, the venue for lunch was to be at the male employee's home. Over the course of the lunch hour the male employee convinced his work mate to move into his bedroom.The woman was wary of the suggestion, but was assured that she would be safe and had nothing to worry about. That was, however, far from the truth. The male employee proceeded to indulge in inappropriate touching and intimate sexual contact. The woman was shocked at the conduct, but felt obliged to acquiesce to avoid any further trouble.
The woman subsequently brought the incident to the attention of her employer. The employer took the matter very seriously, and retained the services of an independent investigator to complete a report about the incident. The investigator interviewed both parties and provided conclusions to the employer. The employer concluded that the male employee's behaviour amounted to serious misconduct and dismissed him from his employment.
The male employee took issue with the employer's decision to dismiss him. Amongst other things, the employee disputed the employer's ability to take disciplinary action in respect of an incident which occurred outside of work hours and away from the workplace. In essence, he contended that a sexual encounter which occurred away from the employer's premises and during a break from work hours could not give rise to an employment problem.
The Court of Appeal did not accept the employee's arguments on this point. The Court said that it had long been recognised that conduct outside of the work relationship which brought an employer into disrepute might warrant dismissal. It held that the essential question was not where the conduct occurred, but rather its impact or potential impact upon the employer's business. In this way, it was relevant to consider whether the conduct was incompatible with the proper discharge of the employees' duties, whether it might impact upon the obligations owed by the employer to other employees or, more generally, whether it might undermine the necessary trust and confidence between employer and employee.
On the facts of the case, the Court found that the conduct was between two current employees, arose out of the work situation and, most importantly, had the potential to affect adversely the working environment. It was irrelevant that the actual sexual conduct occurred outside the workplace at lunch time.
There are a number of important messages about which employers should be aware as a result of this decision.
Employers might previously have taken the attitude that incidents which occur between employees at social functions (especially those held away from the workplace) were outside the realm of their responsibility. As this case demonstrates, that expectation is incorrect - employers may be asked to consider sexual harassment claims arising out of behaviour occurring between employees.
Employers should be aware that, as a general rule, most employees would prefer to have workplace incidents such as this dealt with in the employment context, rather than by referring the matter (where appropriate) to an outside organisation such as the Police. Employees are more likely to be comfortable with their employer (and possibly other work mates) being made aware of objectionable behaviour in the workplace, rather than exposing that behaviour to "outsiders".
Importantly, employers should be aware of the need to treat any claims of sexual harassment very seriously. Complaints of the type involved in this case need to be acknowledged, and dealt with quickly. The employer should ensure that an investigation is conducted in a fair but prompt manner. Most importantly, the employer should ensure that arrangements are put in place during the period of the investigation to ensure against unnecessary contact between the parties to the complaint - an employer may, for example, be subject to criticism by forcing an employee to continue to work alongside a person who is alleged to be his/her harasser.
Overall, employers would be well advised to seek urgent legal advice upon a complaint of sexual harassment being brought to their attention.
