Employee Privacy Outside of Work Hours

In Australia, employers generally do not have the right to interfere in the private lives of their employees. However, there are exceptions to this when employers have a legitimate interest in the private actions of their employees. This article explains employers’ legal interest in employees’ private conduct and recent common law developments on employee privacy outside of work hours.

When Does An Employer Have An Interest?

Most people believe that their employer has no right to dictate how they behave outside work. Many employees feel that their employer has no right to know about their private conduct. In fact, an employee’s private life is their own business, unless it:

• Damages the employer’s interests;
• Is incompatible with the individual’s duty as an employee; or
• Is likely to damage the relationship between the employer and employee.

An employee’s private conduct is an employer’s concern if it represents a repudiation of the employment contract. This means that the action is so contrary to the agreement that it can be seen as a rejection of the contract.

In determining whether private conduct constitutes a repudiation of the employment contract, each situation is assessed on the facts. The employer should consider factors such as:

• The nature of the conduct;
• Whether the employee had received prior warnings for the same or other conduct;
• Whether the employee was honest and cooperative during any investigation and showed remorse, including taking steps to minimise the chance of repetition;
• The impact on the employment relationship;
• Employee’s position; and
• Length of employment.

Employee privacy and Criminal Convictions

An employee’s criminal conviction can amount to a repudiation of the employment relationship. For instance, if a bus driver is convicted of a drink driving offence and loses their driver’s licence, this conviction will clearly affect their ability to perform their work. It also raises serious questions about their suitability to discharge the position’s specific duties. Similarly, a bank is likely to find an employee convicted of fraud to lack inherent employment requirements.

Employee privacy and Conduct That Damages Employer’s Interests

An employee’s anti-social or illegal conduct can damage their employer’s interests. Certainly, an employer has an interest if an employee is involved in a physical altercation outside of work hours while wearing a work uniform or other identifying material. It may also be easier to establish the connection between employer interest and out-of-hours conduct for more senior employees who have a higher duty to serve the company faithfully. An employer may also be vicariously liable for their employee’s conduct after hours if they sexually harass, bully or discriminate against their colleagues.

An employer should set clear expectations for employee conduct both in the workplace and in their free time, including on social media and other public platforms. Employers should have employment policies and training on out-of-hours behaviour, particularly discrimination, bullying and sexual harassment. These policies should emphasise that conduct outside work remains the employer’s concern and can result in disciplinary action.

Duty To Disclose Private Information

Of course, workers do not have to tell their employers everything about their private lives. They can even lie to their employer during a workplace investigation into their private activities. In a recent case, the Full Bench of the Fair Work Commission found that employees are “not bound to be honest” during an investigation of out-of-hours conduct. This is a landmark decision given employers’ increasing interest in monitoring employees’ private lives.

Case Study

In 2019, Toll Group fired a driver who was involved in a violent physical altercation with another employee. The incident occurred outside a hotel following a union event when both employees were on paid union delegates’ leave. Toll terminated the worker for lying during the subsequent workplace investigation of the incident.

Toll determined that while the conduct did not occur at work, the employee’s subsequent conduct during the investigation amounted to a repudiation of the employment relationship. Toll asserted that the worker misled investigators when he claimed that his coworker attacked him from behind. Toll argued that while workers have a right to refuse to answer questions during an investigation, they must answer truthfully if they choose to cooperate.

The Full Bench found that employees do not have a duty to be honest about out-of-hours conduct. In fact, an employee does not have to answer questions about their private lives just because they are asked at work. This establishes a precedent that an employee has no obligation to be candid about their inherently private activities, as long as there is no genuine connection to their employment. The Bench did accept that dishonesty about private conduct may be a valid cause for termination in some circumstances. For instance, adverse action may be warranted if an employee damages an employer’s interests by intentionally lying about another employee.

Armstrong Legal can help if you have any questions about an employee’s right to keep their private life secret or an employer’s legal interest in out-of-work conduct. Please call 1300 038 223 to make an appointment with one of our experienced solicitors.