Case Update: Can an employee be dismissed for misconduct off-the-job and outside office hours?

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In this Case Update series, I share summaries of recent Malaysian court decisions to explore the current approach taken by the courts when deciding on employment-related issues. You can find all the posts in the series by clicking here, including case updates on other legal areas by TheMalaysianLawyer co-founder Lee Shih.

The general position in Malaysian employment law is that the conduct of employees outside of the office and in their personal time is not relevant to the employment relationship. However, out-of-office misconduct may in some circumstances be serious enough to justify an employer taking disciplinary action against the employee, including dismissal.

The Industrial Court recently considered this issue in Sebastian Matthias Boehme v. Siemens Malaysia Sdn Bhd (Award No. 667 of 2017). Siemens, the Employer, terminated the Employee’s services following complaints received regarding the Employee’s behaviour at a hotel bar outside of office hours.

Brief facts

The Employee was on a work assignment at Pasir Gudang, Johor, from 28 April to 6 May 2015, and was staying at the Renaissance Johor Bahru Hotel, one of the Employer’s corporate partner hotels.

The Employer received an email on 12 May 2015 from the hotel regarding an incident on 3 May 2015, describing the Employee as being drunk and misbehaving at the hotel bar. On 13 May 2015, the Employee was called for a meeting with his manager and a HR representative, where he was verbally questioned. On 20 May 2015, the Employee sent an email apology to the hotel.

The Employer issued a show cause letter to the Employee on 28 May 2015, enclosing the original complaint from the hotel. The Employee responded in writing on 1 June 2015 admitting to all the allegations, and was informed that his case would be discussed by a disciplinary committee on 24 June 2015.

On 30 June 2015, the Employee was called for a meeting with the Employer’s Country Division Leader and the Head of HR, and was handed a letter of termination, and informed that his employment was being terminated.

The Employee’s contention was that he was at the hotel bar by himself during his leisure time and not in work attire. He also claimed that he had a clean disciplinary record with the Employer, and therefore that his immediate dismissal was without just cause.

The Employer’s contention was that the Employee had admitted to all the actions set out in the hotel’s complaint email, and that these actions, which include the following, constituted grave and serious acts of misconduct:

  • Disturbed and shouted at hotel guests and staff.
  • Sexually harassed one hotel bar staff by touching and holding her hands and attempting to kiss her, and swearing at her when she rejected him.
  • Fought with hotel guests, including punching one guest on the head.
  • Physically assaulted one hotel staff by strangling him and then attempting to kiss him inappropriately.
  • Attempted to throw items at hotel guests and staff.

The Employer contended that the Employee’s actions —

  • were inconsistent with the express and implied terms of employment, including the policies and procedures on misconduct set out in the Employer’s employment policy and the Employer’s business conduct guidelines;
  • were prejudicial to the Employer’s interests and reputation; and
  • were so grossly immoral that any reasonable person would say that the Employee could not be trusted.

Legal issues to be considered

The legal questions the Court had to consider were —

  1. whether the alleged misconduct had been established; and
  2. if so, whether the misconduct constituted just cause for dismissal.

Was there misconduct?

The Court concluded, after considering witness testimonies and the submissions of the parties — including the fact that the Employee had himself admitted to the allegations and apologised for his actions — that the Employer had successfully established that the Employer was guilty of the alleged misconduct.

This was fairly straightforward, as the Employee admitted to the actions set out in the hotel’s complaint.

Was the dismissal with just cause?

The Employer’s decision to dismiss the Employee was because the Employer viewed his misconduct as being very serious and grave, and of having been in violation of its Business Conduct Guidelines, which the Employee was aware of, and which formed part of the employment terms.

The Court found that the Employee had shown himself to be an employee that the Employer could not trust to uphold its values, and not behave in a manner that would expose the Employer to legal and reputational risk.

The Court therefore concluded that the Employer’s decision to dismiss was within the range of reasonable responses.

Although the Employee argued that his actions outside of office hours were personal, the Court found that the facts in this case showed that the Employee was on a work assignment on that day, and staying at a hotel paid for by the Employer, and thus his actions could not be said to have been disconnected from his employment.

As such, the Court held that the Employer acted justly in the circumstances, and upheld the dismissal.

Comments

Despite this decision, the general position on misconduct off-the-job and outside office hours is still that it is not by default relevant to the employment relationship. This case involved some unique facts:

  1. The Employer had clear “Business Conduct Guidelines” and “Policies and Procedures on Misconduct in Employment Policy” documents setting out misconduct, consequences, and disciplinary procedures. The documents formed part of the Employee’s terms and conditions of employment.
  2. The Employee voluntarily admitted to the allegations, and thus the Employer’s decision not to convene a domestic inquiry could be justified.
  3. The Employee testified that he gets aggressive and irresponsible when drunk, and that his behaviour was not “ok” and could damage the Employer’s reputation.
  4. The Employee’s misconduct was during a business trip, at the bar of the Employer’s corporate partner hotel. The fact that the hotel emailed the Employer further shows that the venue associated the Employee’s misconduct with the Employer.

In the absence of one or more of the above factors — in particular, if the misconduct was at an entirely independent location, or not at a venue which was directly linked to the Employee’s out-of-town work assignment — the Court’s decision may have been different.

An employer wishing to discipline an employee for off-duty misconduct would need to be able to show that the employee’s actions either —

  • were work-related;
  • were damaging to the employer’s business or reputation;
  • reasonably brought into question the employee’s character, such as showing that the employee is unethical, or not trustworthy; or
  • were sufficient to damage or sever the employer-employee relationship.
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