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Roses are red, violets are blue

You are my workmate, can I date you?

As Valentines Day approaches we thought we would share insights on an area we are sometimes required to advise on: how the law operates relating to workplace relationships, and specifically, can employers place a ban on intimate relationships between fellow employees?

As with any policy or rule an employer wants to put in place in the workplace, it will only be possible to implement if it is a “lawful and reasonable direction”.

Courts have traditionally been very slow to find that it is reasonable for employers to be able to impinge on what employees do outside of their work hours. It will only be where an employee’s out of work conduct has an impact on the employer’s business that an employer will able to place any sort of control on what employees do in their own time.

An outright ban on any employee being in an intimate relationship with any other employee is therefore unlikely to be enforceable, as why would a relationship between two employees working in two different parts of the business have any impact on the employer’s operations?

Where an employer is more likely to be found to have a legitimate ground to interfere with workplace relationships is where a conflict of interest may arise. The most obvious example is where a manager is in an intimate relationship with a subordinate. In such a scenario there is a risk that the manager will show bias towards the person they are in a relationship with. Even if the manager is at pains to ensure that all their direct reports are treated fairly, there is at least the risk that other employees (or the general public if it is a business in the public eye) will suspect that they will treat their “special someone” more favourably. It is likely that the importance of internal/external perception will be enough to give an employer a valid interest in such a situation.

In light of this, it is likely that a workplace policy that requires managers to disclose relationships with subordinates (or senior leaders to disclose relationships with anyone in the business) will likely to be held to be valid.

Where such a relationship is disclosed to the organisation, it is unlikely that an employer will be able to “ban” it, but it may be able to validly say that one or other of the employees in question will not be able to continue in their employment unless arrangements can be put in place to remove any influence the more senior employee has over their love interest (eg moving one or other of the employees to a different department). Depending on the nature and size of the business it may not be possible to do this and this could – depending on the facts of the case – give valid grounds to terminate an employee’s employment if they wish their relationship to continue.

A more vexed question is whether an employer has any right to interfere where it comes to light that two employees are having an affair, where one or more of the employees in a relationship (e.g. they are married). In our view, it would be difficult to justify how an employer could validly interfere in such a situation. The fact that an employee’s actions in their personal life may be viewed as immoral is unlikely to give an employer any ground to intervene unless this negatively affects the employer’s business, and it is hard to conceive of how this will be the case.

Employers should also be aware that in some States and Territories it is unlawful to discriminate on “lawful sexual activity”, this may impact on what action an employer can take when it comes to an employer’s attention that employees are in an intimate relationship.

 

Sexual harassment

It is important to distinguish on the one hand between consensual intimate relationships at work, and unwanted sexual advances. Sexual harassment is unlawful in the workplace, but the definition of sexual harassment makes it clear that it only relates to non-consensual activity. This might well apply to (for example) one employee asking another employee out on a date where it has been made clear that the other employee is not interested, as well as more direct forms of harassment (inappropriate comments, touching, etc). It will not, however, apply to any conduct between employees that is consensual.

Regardless of an employer’s views on (consensual) workplace relationships, it is fundamental that employers have systems and policies in place to address sexual harassment. Aside from the fact that employers will obviously wish to prevent their employees from being subject to such behaviour, employers will also wish to prevent the business from being held liable for sexual harassment occurring in their workplace. The law generally operates so that an employer will be held liable for the actions of a harasser in their workplace unless they have taken all reasonable steps to prevent sexual harassment from occurring. This will be the case regardless of whether the employer knew such conduct was occurring or not.

Unless an employer can show that they have done all that they reasonably can to prevent sexual harassment occurring in the first place (e.g. through clear communications that sexual harassment is not tolerated in the workplace), they are still likely to be found liable for such action even if they were not aware that it was occurring.

In Richardson v Oracle an employer was found to be liable for the sexual harassment that occurred in the workplace even though they had a sexual harassment policy in place which employees received regular training on. The shortfall in the policy was that it did not contain a clear statement that sexual harassment was against the law and that both the employee and employer could be liable. This was enough for a finding that (due to the defective policy) the employer had not done all it reasonably could to prevent sexual harassment occurring in the workplace.

 

Court decisions on workplace romances

Court decisions on the topic of bans on consensual workplace romances have been few and far between. We are not aware of any judicial consideration on outright bans on workplace relationship bans, however, the case of  Mihalopoulos v Westpac Banking Corporation, dealt with an employee’s duty to disclose a relationship.

In this case, Mr Mihalopoulos was a manager in an extramarital relationship with a subordinate. While Westpac policies did not specifically refer to a duty to disclose workplace relationships, Mr Mihalopoulos’ employment contract did require that Mr Mihalopoulos avoid situations which could give rise to real or perceived conflict of interest.

When Mr Mihalopoulos failed to disclose the relationship – and then lied about its existence – he was sacked.

In the subsequent unfair dismissal proceedings, the Fair Work Commission said that it was immaterial that the relevant contractual clause did not refer to workplace relationships expressly, saying “To be blunt it should be obvious to any reasonably intelligent person that for a manager… to form a romantic relationship with a direct subordinate creates the potential for a conflict of interest”.

It was held that the failure to disclose the relationship, in circumstances where there was a clear conflict of interest, compounded by dishonesty on the part of Mr Mihalopoulos in lying about the relationship when questioned by Westpac, constituted a valid reason for dismissal.

 

Final thoughts

Whilst it is unlikely to be possible to have an outright ban on workplace relationships, it is possible (indeed sensible) to have a policy in place which requires employees to disclose any potential conflicts of interest that may arise. Depending on the seniority of the employee and whether they manage or have any influence over other staff, it may be appropriate to require them to disclose relationships with other employees.

If you require advice or assistance with such a policy, please contact EI Legal. 

Due to the number of Valentines Day cards we receive we may not be able to respond to each one.

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