Workplace relationships: Can you be dismissed?

Workplaces relationships are not surprisingly a common occurrence given that Australian workers spend so much time with their colleagues. In fact, a Seek survey reveals that 30 per cent of Australians have had a romantic relationship at work. Workplace relationships, however, raise many questions around what is and isn’t acceptable in a work environment.

Particularly given the current social climate, where the MeToo movement has placed a spotlight on sexual harassment and the power dynamics within relationships. Workplace laws and internal policies of employers complicate this issue further, leaving many confused as to what is permissible. For instance, does the law require you to declare your workplace relationship to your employer? Or can employers outright ban them? And can you be dismissed for having one?

We’ll answer all these questions and more in this article.

Can your employer prohibit workplace relationships?

In 2018, Prime Minister Malcolm Turnbull introduced what became known as the “bonk ban” – a code preventing Parliamentary ministers from having sexual relationships with their staff. The move came after his cabinet was engulfed in controversy following revelations that Deputy PM Barnaby Joyce engaged in an extra-marital affair with his staffer.

The bonk ban is still in place in the Australian Parliament. But as a workplace policy, it remains an outlier. In the vast majority of cases, employers aren’t legally entitled to ban workplace relationships. In essence, placing such a ban on employees would in most cases fail the test of a lawful and reasonable order. This is because it would pose as an unjustifiable interference within employees’ private lives and out of hours conduct.

The Fair Work Commission states that “it is only in exceptional circumstances that an employer has a right to extend any supervision over the private activities of employees.” So if two consenting employees are seeing each other outside of work, their employer’s ability to regulate their relationship is very limited.

Do you need to declare your workplace relationship to your employer?

Workplace relationships may generally be beyond the scope of employer regulation. However, many do have policies in place that require employees to declare if they are in a romantic relationship with a colleague. An investigation conducted by Fairfax Media revealed that such policies are widespread amongst Australia’s largest companies. Of the 57 companies Fairfax contacted, 48 said that they had policies in place to address workplace relationships. None of these policies, however, were found to place an outright ban on office romances.

Many of these policies require those in a romantic relationship with a colleague to declare as such to a manager or the human resources department. This is to ensure that couples working in the same team can be separated so as to avoid any conflicts of interest and power imbalances.

Declaring a workplace relationship conflict of interest

Depending on your employer’s internal policies, you may be required to declare your workplace relationship to ensure they are aware of any potential conflicts of interest. This is especially the case if you are the subordinate or superior of the colleague with whom you’re romantically linked. Even if your relationship may not lead to a conflict of interest, you may still need to declare it to your employer if it leads to an appearance of a conflict of interest.

This is essential as it must be clear to all employees and the general public that there’s no suggestion of a conflict of interest. The Fairfax investigation found that many company policies prohibit couples from being in the same reporting line. This is the case at the Commonwealth Bank of Australia, which prohibits couples from being in the same team, particularly if one party is more senior to the other.

While at PwC Australia, employees must abide by a “Close Personal Relationships at Work” policy. This requires employees to declare if they are in a close personal relationship with a co-worker “where they are in a position to make or exercise significant influence on a relevant decision for that person.”

Can you be dismissed for a workplace relationship?

In most cases, it’s highly unlikely that you can be dismissed for simply being in a workplace relationship. However, it is possible to be fairly dismissed for reasons stemming from a relationship, like conflicts of interest. Or the sharing of confidential company information within the relationship. This is particularly the case if your employer requires you to declare any conflicts of interest. An unfair dismissal case that illustrates how conflicts of interests can arise in workplace relationships is that of  Mihalopoulos v Westpac Banking Corporation (2015).

The case involves George Mihalopoulos, a Westpac branch manager, who engaged in an extra-marital affair with a subordinate, “Ms A”. Mr Mihalopoulos was dismissed by Westpac for failing to inform the company about the relationship. After working together in the same branch for over a year, Mr Mihalopoulos entered into a workplace relationship with Ms A. This lasted from February to August 2014, during which time Mr Mihalopoulos secured Ms A bonuses and other career opportunities.

He was asked several times by senior management whether he was in a relationship with Ms A, but denied it. Mr Mihalopoulos finally admitted to the relationship at the end of August. This was because he and Ms A had had an argument which saw the police called and an AVO placed on Mr Mihalopoulos. He subsequently breached the AVO a few days later.

Bank manager is dismissed for serious misconduct

In September, Westpac summarily dismissed Mr Mihalopoulos for several reasons. Firstly, it alleged that he wasn’t forthright about his relationship with Ms A, having denied it existed when questioned about it. He also didn’t disclose that there might be a real or perceived conflict of interest.

Secondly, Westpac argued that Mr Mihalopoulos had breached his AVO and thereby put the company at risk of reputational damage. And thirdly, Westpac alleged that he had shared details of his relationship with subordinates. Mr Mihalopoulos subsequently filed an unfair dismissal claim with the Fair Work Commission (FWC).

The Fair work rules on the case

At Mr Mihalopoulos’ unfair dismissal hearing, the FWC Deputy President Hamberger declared that “employers cannot stop their employees forming romantic relationships.” But despite this, he found that Westpac had a valid reason for dismissing him. DP Hamberger ruled that “such relationships have the potential to create conflicts of interest.” He said that this is especially the case when a relationship forms between a superior and their subordinate.

“It is virtually impossible in such circumstances to avoid – at the very least – the perception that the manager will favour the subordinate,” said DP Hamberger. Ultimately, Mr Mihalopoulos’ dismissal was not found to be harsh, unjust or unreasonable. DP Hamberger ruled that his behaviour “fundamentally undermined the trust and confidence which is at the heart of the employer-employee relationship.”

Does it matter if your workplace relationship is an “affair?”

Your marital status generally isn’t a factor that an employer must take into account when considering the impact of your workplace relationship. They are, after all, not in a position to act as arbiters of morality. Having stated that most people in the workplace have views. Many spread the going’s on as gossip.

The fine line between workplace relationships and sexual harassment

Another factor that complicates workplace relationships is the potential for sexual harassment to arise either during or while attempting to initiate a relationship. Under the Fair Work Act 2009, sexual harassment constitutes an unwelcome advance of a sexual nature. It’s one that a reasonable person would anticipate would offend, humiliate and/or intimidate.

It’s not illegal to ask a colleague out on a date. However, an unwanted request to go on a date that’s framed in a way that’s disagreeable to the recipient could constitute sexual harassment. Sexual harassment can also take place even if a couple are involved in a consensual workplace relationship.

Example of sexual harassment in a workplace relationship

In the case Beesley and Hughes Lawyers v Hill [2020], the Federal Court found that a law firm principal’s attempts to initiate a workplace relationship with a paralegal constituted sexual harassment. The principal frequently propositioned the paralegal, who continually turned him down. Despite this, the principal continued emailing the paralegal, saying that he would keep trying anyway. He would also block the paralegal from exiting the office until she hugged him.

When the paralegal told the principal that she had a boyfriend in the UK (a falsehood designed to discourage him), she detected a more sinister tone in his emails. The principal began to imply that her work needed to improve, and that if they entered into a sexual relationship, he would overlook any performance issues. The principal also sent an email saying that the paralegal would regret turning down his propositions.

For these multiple instances of sexual harassment, the court ordered the principal to pay $170,000 in damages.

Conclusion

Have you been mistreated in the workplace?

If you have experienced unwanted sexual advances by a boss or colleague, A Whole New Approach can help. We are experts in helping Australian workers seek redress for sexual harassment, bullying and sex discrimination. If your in a relationship or ended a relationship it has now gone south, its now a toxic workplace, get advice, don’t suffer in silence.

For the last 20 years, our highly experienced team of employment relations experts have helped over 16,000 workers seek redress through the tribunals and commissions around Australia. We are not lawyers but Australia’s leading workplace representatives and advisors. We are proud of our staff and the outcomes they get for our clients. Call us today on 1800 333 666 for a free and confidential conversation.

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