Rose v Telstra Corporation Limited (1998) AIRC 1592

Telstra Corporation Limited

Introduction

The following cases discuss how an employee can be suspended and eventually terminated for conduct outside of work. While less common, it does occur. And there are small margins when an employer can suspend and/or terminate an employee for conduct outside of work. This case developed the test that the Courts use to determine whether conduct outside of work can form grounds for suspension and termination. While the case is 25 years old the test itself was confirmed by the Full Bench in another case in 2021. Therefore, it is still relevant for the modern employee and employer.

Facts

Mr. B. Rose (the Applicant) was an employee of Telstra Corporation Limited (the Respondent) as a Grade 3 Communications Officer in Tamworth. His primary role included fixing faults, installation, and maintenance. Therefore, always interacting with customers and expected to maintain Telstra’s image. Due to connection issues and an unexpectedly increased workload, Mr. Rose agreed to stay in Armidale for 4 days to help manage the workload in the area. Mr. Rose was paid a travel allowance of $108.45 per night away. He could send that money any way he saw fit.

On the third night, Mr. Rose had gone to a nightclub with Mr. Carl Mitchell, an acquaintance who is friends with a co-worker from the area. Both men had been drinking and Mr Rose had consumed close to 10 standard drinks. When Mr Mitchell went missing during the night Mr Rose tried to find him. Upon finding him Mr. Mitchell was aggressive and told Mr. Rose to “Fuck Off”. Eventually following Mr. Rose back to their table, and then ripped his shirt open, which Mr. Rose insinuated that Mr. Mitchell was trying to start a physical brawl. Eventually, both went back to their accommodation (where Mr Rose was staying with Mr. Mitchell at St Kilda Hotel) around 2 – 3 AM.

Upon arriving back to the hotel room Mr. Rose had moved all the furniture from the center of the room to create a makeshift fighting rink. Inviting Mr. Mitchell to fight Mr. Rose to ‘settle what began at the nightclub’. After back and forth Mr. Mitchell forced his fist through a window and struck Mr Rose’s chest with a broken piece of glass. Ambulance and Police were called where Mr Rose needed 12 stitches and Mr Mitchell was taken into custody.

Mr. Rose was unable to work the following day. Calling the local supervisor about what had occurred the night before. However, when Mr Rose returned to work Monday 14 November 1997 (the next working day) he was suspended with full pay. Early December Mr Rose was asked to provide an explanation for the events that occurred. On 24 December 1997, he was suspended, but now without pay. He continued to be on suspension until April when he was eventually terminated on 1 April 1998, due to ‘improper conduct’. Mr. Rose filed for an Unfair Dismissal claim shortly after.

Mr. Mitchell had been charged with a conviction of malicious wounding and sentenced to 4 months imprisonment. However, he resigned from his employment with Telstra on 30 January 1998.

Note, that neither man had worn their uniform in the nightclub. However, the St Kilda Hotel owner was aware that both men worked for Telstra.

Considerations

The Court had to decide whether the termination was `harsh, unjust or unreasonable’ as identified in s.170CG(3) of the Workplace Relations Act 1996 (The Act). Including considerations of whether there was a valid reason for terminating Mr. Rose considering his conduct. Whether he was notified of that reason. Whether he was given an opportunity to respond. And any other relevant matters.

The Court had decided that Mr. Rose was notified of the reason for his termination, provided an opportunity, and that other relevant matters were considered. Therefore, the most important issue was whether Mr Rose’s conduct, outside of working hours, provides a valid reason for dismissal.

Outcome

In the outcome Vice President Ross discusses case law that clearly stipulates an abundance of occurrences where employees were terminated due to their conduct outside of work. Therefore, similar situations have occurred in the past and will continue to occur. However, each case’s circumstances and roles were distinguishable from Mr. Rose’s case. Vice President Ross was able to set out the test for how to validly terminate an employee due to out-of-hours conduct. Including whether:

  • “Objectively, the conduct is likely to cause serious damage to the relationship between employer and employee.
  • The conduct damages the employer’s interests.
  • The conduct is incompatible with the employee’s duty as an employee”.

Considering these requirements, Vice President Ross found that the actions in the St Kilda Hotel lacked a foundational connection to the employer. Therefore, did not provide a valid reason for his almost 4 months of suspension and termination. This decision was based on the fact that Mr. Rose was not wearing a Telstra uniform, was not ‘on call’, and the incident took place in a private hotel room. There was no connection to Telstra or its reputation.

Due to the lack of connection to Telstra, the suspension and termination were considered harsh and unlawful.

Conclusion

This case, while not the first of its kind, does stipulate the test for what conduct outside of work hours can constitute grounds for suspension and termination. The basis is that the conduct does have to have a strong connection to the employer. Relevant factors would include whether the employee was wearing a uniform, if they were in a public place, or place someone of their profession would likely reside, and if the actions taken would be condemned by the employer. A more contemporary and recurring example is whether an employer would condemn vaping or common illicit drugs such as marijuana. An employer does have the right to protect their image, however, there is a reasonable extent which an employee is no longer associated with a business.