Maybe, but not automatically!
The Fair Work Commission decision of James Deeth v Milly Hill Pty Ltd  FWC 6422 shows that whilst serious misconduct outside the workplace can be a valid basis for dismissal, the employer must still afford the employee procedural fairness.
Mr Deeth was an apprentice butcher who was charged with being an accessory after the fact to murder. At first he was held in custody, but after a few days he was granted bail. In discussions with Mr Deeth’s parents one of the directors of the employer expressed his concerns about the reputational damage likely to be caused to the business by Mr Deeth’s criminal charges and told Mr Deeth’s mother that his employment was terminated with immediate effect.
Mr Deeth applied to the Fair Work Commission for compensation. The employer argued that it had a valid reason to terminate Mr Deeth’s employment because:
- the other employees at the retail butcher store would resign if they continued to employ Mr Deeth, resulting in the business no longer being viable; and
- customers would boycott the retail butcher store if they continued to employ Mr Deeth, which would have a devastating financial impact on the business.
The Fair Work Commission said that:
“what an employee does on his or her own time is a matter for him or her. There is no presumption that a criminal conviction alone is a valid reason for termination of employment, particularly where the criminal offence was committed outside of work. Even conduct outside of work involving criminal offences does not, alone, warrant dismissal”.
To summarily dismiss an employee for criminal conduct committed outside of the workplace an employer must demonstrate a “relevant connection” between the criminal activity and the employment.
The Fair Work Commission found that the employer was properly concerned about reputational damage and that there was a valid reason to dismiss Mr Deeth, but that the employer had failed to afford him procedural fairness because:
- he was not told of the reason for his dismissal until after it took effect and was not given an opportunity to respond;
- the employer told Mr Deeth’s mother of his dismissal and did not tell him directly; and
- the employer had not “put sufficient thought” into whether Mr Deeth could remain an employee and the employer could still “mitigate the perceived risks in relation to its employees and customers”.
The employer was ordered to pay Mr Deeth compensation in a sum equal to 6 weeks wages.
Take outs: Employers must avoid what the Fair Work Commission referred to as a “knee-jerk reaction”. Only in exceptional circumstances can an employer take account of the private activities of an employee in deciding whether or not to end their employment. However, if their private conduct gives rise to a real and serious risk of damage to an employer’s financial and commercial interests then this is a proper concern for an employer and may justify dismissal. However even if summary dismissal (instant and without notice) is appropriate, am employer must still afford an employee procedural fairness.