Can you dismiss an employee for intoxication? – Employment Law Update

It would be intuitive to think that an employer could fire an employee for turning up to work intoxicated, or missing work due to a hangover. However, two cases have highlighted that this is not always the case in Australian employment law.

It is important that employers understand what conduct will justify summary dismissal. In general, summary dismissal is only lawfully allowed if the employee’s serious misconduct is completely incompatible with the continuation of employment. What constitutes ‘serious misconduct’ is also interpreted by reference to employment agreements and policies.

Termination for calling in sick after heavy drinking

The case of Avril Chapman v Tassal Group Limited T/A Tassal Operations Pty Ltd considered the employment of Ms Chapman by Tassal Group Limited as a factory worker. On the afternoon of 25 April 2017, Ms Chapman left a message for her manager:

Hi Michelle, its Avril one of your most loved pains in the a***. Um its ANZAC day, my birthday, and I admit I have over indulged so I’m taking into account one of the golden rules be fit for work and I’m not going to be fit for work so I won’t be there. But um love ya, catch ya on the flip side.

On her return to work on 27 April 2017, Ms Chapman received a letter from her employer alleging misconduct. The letter stated that she had breached the employer’s Code of Conduct because:

“You had deliberately made a decision to consume alcohol to the extent that you would not be fit for work on 26 April 2017 when you were required to attend and be in a fit state to carry out your duties safely.”

Ms Chapman denied that her actions were deliberate, stating that friends had dropped by unannounced to celebrate her birthday. Her employer found that the allegations had been substantiated, and terminated her employment. In making this finding, her employer took into account the fact that she had previously received a warning for similar conduct.

Ms Chapman brought an unfair dismissal claim against the company. The Fair Work Commission (FWC) found that the employer had misused the significance of the prior warning. Ms Chapman had previously left a similar voice message, but was warned for using offensive language rather than calling into work sick due to alcohol consumption. On this basis, the FWC found that the dismissal was harsh and ordered compensation be paid to Ms Chapman.

Termination for turning up to work intoxicated

The case of Willis Australia Group Services Pty Ltd v Mitchell-Innes considered the position of an employee who was summarily dismissed for being intoxicated at work. The employee, Mr Mitchell-Innes, travelled to Melbourne to attend a work conference. The night before the conference, he went out for dinner and drinks with his colleagues and became intoxicated. When Mr Mitchell-Innes arrived at the conference the next day, he appeared to still be intoxicated, and smelled strongly of alcohol. His employer considered this to be misconduct, relying on the policies of the company which prohibited intoxication at work. He was provided with a termination letter alleging the following misconduct:

1. That you attended the Willis Melbourne office including Sales 2.0 training in a state of intoxication which was noticed by your peers and other Associates;
2. That you behaved in an unprofessional manner on Willis premises and in public by being intoxicated;
3. That you were asleep and intoxicated in the public space of a hotel.

Mr Mitchell-Innes brought a claim against his employer, alleging that he had been unlawfully dismissed. At first instance, Taylor DCJ found that Mr Mitchell-Innes’ misconduct was not severe enough to warrant summary dismissal. Further, the policies the employer relied upon allowed summary dismissal only if an employee’s misconduct had the potential to “seriously damage Willis’ reputation” or “endanger the well-being of Willis’ staff.” As no clients witnessed Mr Mitchell-Innes’ behaviour, he could not have caused any reputational damage to his employer. Taylor DCJ awarded Mr Mitchell-Innes significant compensation.

On appeal to the New South Wales Court of Appeal, the court found that Mr Mitchell-Innes’ was not lawfully dismissed. They considered that his conduct did not damage the employer’s reputation, and was not in ‘serious circumstances’, which was required for summary dismissal under the relevant clauses of his employment contract. However, the court upheld the employers appeal to reduce the compensation payable.

Tips for dealing with intoxicated employees

1. Ensure that employment contracts, policies and agreements clearly address misconduct, summary dismissal, and drugs and alcohol.
2. Record warnings provided to employees for inappropriate activity. Prior warnings in relation to inappropriate conduct can strengthen a case for lawful dismissal. However, employers cannot use warnings for low-range conduct to justify termination for something more serious.
3. Employment agreements and policies should be carefully drafted so that they allow flexible responses to employee misconduct. The criteria for serious misconduct and summary dismissal should be clearly spelt out, but should not be overly restrictive.

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