As co-workers spend their days working side-by-side, sometimes romantic relationships can develop. Unfortunately, this can create major legal risks for a company, can undermine office productivity, and can lead to uncomfortable interactions in the workplace that affect business operations. HR managers need to understand what they can and should do to protect their companies from a litigation and to protect their companies from other adverse consequences of workplace relationships.
Owen Hodge Lawyers can provide legal guidance on developing an effective workplace relationship policy. We have helped many companies to reduce litigation risks, and to ensure they are able to maintain a professional work environment by establishing a fraternisation policy that makes good sense for their organisation. Contact us today to learn more.
HR Managers Need to be Proactive in Dealing with Employee Relationships
In George Mihalopoulos v Westpac Banking Corporation T/A Westpac Retail and Business Banking  FWC 2087, the Fair Work Commission in Sydney upheld a summary termination of a long-serving bank branch manager as a result of a romantic relationship the branch manager was engaged in with a woman who reported directly to him. The relationship was not disclosed and the bank manager denied the relationship when asked on two separate occasions by the regional general manager. Ultimately, the existence of the relationship was confirmed for the bank when the manager was charged with the breach of an Apprehended Violence Order that had been taken out against him by the female employee.
The bank said that the manager had breached the corporate code of conduct, undermining the necessary relationship of confidence and trust. The bank manager’s employment was terminated for dishonest conduct and a failure to disclose a conflict of interest. The Fair Work Commission agreed the summary termination was appropriate and that the termination of the banker’s employment was not harsh, unjust, or unreasonable.
Senior Deputy President Hamberger dismissed the bank manager’s application alleging wrongful termination, finding the dishonest conduct and the conflict of interest to be valid reasons for the termination. SDP Hamberger acknowledged that preventing all inter-employee relationships, and resulting conflicts of interest, is not possible for employers and that workplace relationships can and do happen with some frequency. However, the failure to disclose the conflict of interest in this case was a clear example of dishonesty and the bank manager’s misconduct was sufficiently serious to justify dismissal.
The case may have gone differently for the bank if the bank had not had certain policies and practices in place. For example, the bank provided special training for employees (including the terminated manager) about how to manage conflicts of interest. A superior had also asked about the relationship and been given a dishonest answer.
So, what can your company learn from cases like this one, and how can you protect your business from harassment claims when relationships go bad or unfair termination claims when employees need to be let go due to undisclosed relationships? The key is effective management of employee relations.
Tips for Dealing with Workplace Relationships
To help make sure your business does not face legal problems due to workplace relationships:
Put a disclosure policy into effect.
Employees who become involved in relationships should be required to disclose this romantic involvement so your HR department can take steps to make sure the relationship does not create business problems. Be sure the disclosure policy is in writing, that all employees are aware of it, and that there are clear protocols in place to make sure it is followed.
Develop a conflict of interest policy and protocol.
When a manager or supervisor begins a relationship with a subordinate, make sure that there are is a protocol in place to prevent either an actual conflict of interest or the appearance of a conflict. This could mean reassigning one of the employees in question.
Provide staff training.
All staff should be made aware of policies on relationships and of anti-harassment rules. Managers and supervisors, in particular, should be trained to supervise subordinates appropriately, and to recognise and respond to conflicts of interests.
Include details on consequences of failure to follow workplace relationship policies.
You must provide detailed information on the penalties that will be implemented if an employee fails to disclose a relationship as required by company policy. The Disclosure and Workplace Relationship policy your business creates should detail the exact disciplinary actions that may be taken, including potential termination for failure to provide open and adequate disclosure of a work relationship.
Document infractions and disciplinary proceedings.
If an employee is believed to be lying about a relationship or is accused of failing to disclose a romantic attachment to a co-worker, document the misconduct. Put warnings and requests for information in writing. If a relationship is discovered, document the disciplinary proceedings and steps taken to show you are following your code of conduct in disciplining or terminating the employees involved.
Take steps to prevent unwanted romantic advances.
Employers need to be careful not to allow harassment to occur in the workplace, as they can be held responsible if there is no training and codes of conduct are not in existence. A process also must be in place to handle complaints privately, quickly, and effectively.
Don’t let an employee relationship threaten your company’s financial security or productivity. Call us at 1800 770 780 or contact us via OHL@owenhodge.com.au to schedule an appointment with one of our experienced employment lawyers.