Serious Personal Relations At Your Business!

13 NOVEMBER 2018 COMMERCIAL & BUSINESS LAW LITIGATION & DISPUTE RESOLUTION
Workplace relationships

Serious Personal Relations At Your Business!

Recently, following the revelation of a sexual relationship between the Deputy Prime Minister and his younger staff member, the Prime Minister has amended the ministerial code of conduct and prohibited all sexual relationships between ministers and their staff members. Whilst employers may not need to ban relationships in the workplace, it may be important for there to be an employee code of conduct relating to conflicts of interests. For example, where a manager engages in a relationship with a subordinate and is responsible for the promotion of that employee. An employee engaging in a relationship which goes against the organisation’s code of conduct could be grounds for dismissal.

There was a case like this a few years ago. In this case, a bank manager (who was married and had children) engaged in a sexual relationship with a woman, who was also married. The woman directly reported to the bank manager and he was responsible for promotional recommendations. 

During their relationship, the bank manager recommended to his superior that the woman was performing exceptionally and deserved a promotion (even though she had only been with the bank for less than 12 months). After this promotion, rumours began to circulate about the relationship between the bank manager and the woman, and employees began to notice the two of them arrive and leave together. Also, the woman was sometimes in the bank manager’s office with the door locked. When the bank manager was asked by his superior about the rumours, the bank manager blatantly lied and denied the relationship and said his door was locked because his door was faulty. The bank manager was dismissed.

He complained to the Fair Work Commission that his dismissal was unfair. However, the Commission decided that his dismissal was not unfair because the bank had clear policies of honesty, professionalism and a duty to avoid conflicts of interests. The relationship between the manager and his subordinate created a significant conflict of interest and the manager was dishonest about this relationship.