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Hefty damages awarded for ‘drunk at work’ sacking

Submitted on Friday, 19th December 2014

An insurance broker that sacked a state manager accused of being drunk at a work training conference has been ordered to pay him almost $300,000 after a court found his behaviour did not amount to gross misconduct, particularly in light of the company’s practices in relation to alcohol.

In late October 2012, the manager travelled to Melbourne for the conference and went for drinks at a pub with colleagues, paid for by the company, following a staff dinner. Early the next morning, the manager returned to the hotel where they were staying, but, unable to find his room key, slept on a bench until a duty manager woke him shortly after 7am and arranged a key.

Three other state managers gave evidence to the NSW District Court that the manager was intoxicated when he arrived at the conference at about 9am, alleging that he smelled of alcohol, spoke loudly and inappropriately and was slurring.

The manager left the conference later that morning and met with a colleague to work on budgets before returning to his accommodation. Later that day, he was asked by his immediate supervisor, the company’s Asia-Pacific chief executive officer, to return to Sydney. Following an internal investigation, the manager was dismissed on 9 November.

Hearing his civil claim for damages on the grounds of wrongful dismissal, the court’s Judge Taylor found that on the balance of probabilities, the manager was “at least to some extent” intoxicated when he arrived at the conference. But he was not persuaded that the level of intoxication – nor the impact of this on the manager’s behaviour – was significant, or that his conduct was disruptive.

“There was no evidence of any aggression, violence, offensiveness, swearing, physicality or unsafe behaviour,” Judge Taylor said.

“The observation of his intoxication made at the rear of the room by the other state managers … was that (he) smelt of alcohol, and for a short period when he involved himself in the table discussion, he spoke loudly and lacked seriousness. This seems minimal in terms of the effect on others, especially in view of the lack of evidence from other junior staff or the presenters.”

In relation to claims that the manager had thrown a lolly and made animal noises, Judge Taylor said the former was not an unusual practice for the company when it attempted to encourage participation in work exercises, and that the latter was apparently to one person, another state manager, while referring to a recent safari trip. He pointed out that the manager had spent most of his time at the conference at the back of the room working alone on his iPad.

Significantly, the Judge said the company’s approach to alcohol consumption was relevant to the seriousness that should be attributed to the manager’s intoxication. He noted the company submission that the trip to the pub was a work-related function, and said it routinely met the cost of alcohol consumed at employee gatherings, “irrespective of the quantity consumed or the ultimate level of intoxication of the participants”.

“Standing alone, these matters do not enhance the seriousness of the intoxication, or suggest that it involved a significant departure from common company standards.”

Judge Taylor said that at the time, alcohol consumption in a work context was not uncommon amongst employees of the company, who were “expected to socialise and consume alcohol with clients and prospective clients”.

He referred to unchallenged evidence that the CEO advocated a policy that its brokers “follow the client” in relation to alcohol consumption. While acknowledging that there were no clients present at the pub, Judge Taylor said this approach was one of the matters that informed “whether excessive consumption of alcohol on one occasion, or the arrival at work later that morning hungover or in a state of low-level intoxication, is sufficient to constitute gross misconduct warranting termination”.

Despite finding that the manager had engaged in misconduct, the Judge said “a proper reading” of his employment contract and the company’s policies, in the context of its practices in relation to alcohol, indicated that intoxication at work “of itself” did not warrant summary dismissal for gross misconduct.

“Something more is required, some aggravating conduct such as repetition of the intoxication, a severe level of intoxication, adverse impact on employee or client safety, violence, offensive conduct or offensive language, a serious impact on reputation or significant financial loss.

“But none of these features or other aggravating features existed in this case. Here there was a manifestation of low-level intoxication, without other consequences or behaviour of significance.

“It was not serious misconduct in serious circumstances.”

Judge Taylor noted that another employee who drank with the manager the night before did not attend work the next day “presumably … because of her condition” and that she was not summarily dismissed. The manager’s conduct should be regarded “as a solitary, one-off event in a period of almost nine years’ employment”, he said.

The court ordered the company to pay the man $296,650 in damages, comprised of amounts for lost salary, retention bonuses, long service leave and interest. Judge Taylor took into account that the manager’s contract entitled the company to terminate his employment with six months’ notice and assessed his damages on this basis.

Victorian Chamber's experienced team of workplace relations consultants can provide up-to-date, independent and accurate advice on a broad range of workplace relations matters, including dismissals. Victorian Chamber's associated law firm, CCI Lawyers, can provide expert legal advice. 

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