For years John Galliano made headlines around the world for his work as a leading designer with fashion house Dior. However, Mr Galliano recently made headlines of a different kind when he was convicted by a French Court for making racist comments in public. Shortly after Mr Galliano’s conduct became public earlier this year, Dior terminated his employment. This was despite the fact that Mr Galliano’s conduct did not occur during work hours, on work premises or while acting in any official capacity for Dior. Although Mr Galliano did not seek to challenge the lawfulness of his dismissal, this case highlights the important issue for employers of the circumstances in which they may lawfully terminate the employment of an employee for out of hours conduct.
Background
In February this year it was alleged that Mr Galliano made a series of racist remarks towards fellow patrons at a Paris café. It was also alleged Mr Galliano had made racist remarks towards a woman in the same café in October 2010. Shortly after the allegations became public, a mobile phone video emerged of a separate incident involving Mr Galliano in which he is seen to say to two women “I love Hitler” and “People like you would be dead today. Your mothers, your forefathers, would all be f---ing gassed”.
In France, it is a criminal offence to make “public insults based on origin, religious affiliation, race or ethnicity”. The maximum penalty for this offence is six months imprisonment and a fine of 22,500 Euros. During the hearing of the charges, Mr Galliano claimed that he could not recall making any racist remarks at the café, citing an alleged addiction to alcohol, barbiturates and sleeping pills. On 8 September 2011, Mr Galliano was convicted and received a suspended fine of 6,000 Euros and was ordered to pay a symbolic fine of 1 Euro to each of his victims as well as the complainants’ legal costs.
Shortly after the allegations became public and before Mr Galliano was charged by the police in relation to his behaviour, Dior moved swiftly to terminate Mr Galliano’s employment for what it described as “odious behaviour”. This was notwithstanding the fact that Mr Galliano did not make the alleged comments during work hours, on work premises, at a work function or while he was acting for Dior in any official capacity. Mr Galliano did not seek to challenge the lawfulness of his dismissal.
The legal position in Australia
The Fair Work Act 2009 (Cth) (the Act) prohibits an employer from terminating the employment of an employee who qualifies for the protection afforded by the Act where the termination would be “harsh, unjust or unreasonable”. In summary, a termination will satisfy this criteria when there is no valid reason for termination and the employer has not afforded the employee procedural fairness in the termination process.
The law recognises that there is a distinction between an employee’s work and private lives. Put simply, it has been established that an employee’s out of hours conduct will not constitute a valid reason for termination unless there is a sufficient connection between the employee’s conduct and the legitimate interests of the employer.
This was illustrated in the case of Kolodjashnij v J Boag and Son Brewing Pty Ltd [2010] FWAFB 3258. In that case, the employee was a process worker in the packaging department at the James Boags Brewery (the Company). One evening the employee was charged by the police with driving his car with a blood alcohol content well above the legal limit (i.e. 0.154). The employee advised his supervisor of the incident and the Company investigated the matter. The Company had a responsible drinking policy (the Policy) which made it clear that drinking to excess and driving outside of work hours, even on personal business and in a private car, would breach the Policy. After considering the matter, the Company terminated the employee’s employment.
The employee lodged an application with Fair Work Australia (FWA) alleging that the termination of his employment had been harsh, unjust or unreasonable as his conduct had occurred outside of work hours and in his private vehicle. The employee had also voluntarily brought the matter to the Company’s attention. FWA upheld the dismissal, finding that the employee had knowingly breached the Policy, and the Company had a legitimate interest in seeking to maintain its reputation in the community as a proponent of responsible drinking.
Further, an employer may lawfully terminate the employment of an employee for out of hours conduct where the conduct constitutes serious misconduct at common law. In essence, the conduct of an employee will constitute serious misconduct at common law where it is inconsistent with the continuation of the employment contract. It is common for written employment contracts to define serious misconduct as including, amongst other things, the circumstance where the employee has engaged in conduct which damages the reputation of the employer or brings the employer into disrepute. A high profile example of such a termination occurred earlier this year when the Brisbane Lions Football Club dismissed star forward Brendan Fevola for serious misconduct after he was involved in a series of off-field incidents.
Lessons for employers
The out of hours conduct of an employee will be a valid reason for termination of employment where there is a sufficient connection between the employee’s conduct and the legitimate interests of the employer. Whether this connection exists will need to be looked at on the facts of each case. It is presumed that Dior considered that the strong public association between itself and Mr Galliano meant that it had little choice but to terminate Mr Galliano’s employment in order to try to distance itself from Mr Galliano’s comments and be viewed as an organisation that does not condone racism. It is important that an employer thoroughly investigates any allegations of inappropriate out of hours conduct by an employee and gives the employee an opportunity to respond to the allegations before making any decision to terminate the employee’s employment. If not, the employer may be found to have “jumped the gun” and its decision to terminate may be subject to successful legal challenge.