Is a criminal conviction grounds for dismissal?


Is a criminal conviction grounds for dismissal?

Dismissing an employee for out of hours conduct can be a contentious issue. But is a criminal conviction relating to a non-work incident a valid reason for dismissal?


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Can we dismiss an employee if they have been convicted of a criminal offence for an incident that happened out of work hours?

This question  was recently sent to our Ask an Expert service.  

Q We have discovered that an employee has been convicted for culpable driving and had their driver’s licence suspended for 12 months and a suspended prison sentence. The company has a policy which states that criminal activities in the workplace, if proven after proper investigation by the company, will result in summary dismissal.

The incident occurred on a weekend and he was not performing work for the company at the time of the offence. The employee is employed in our pharmaceuticals warehouse and is not required to have a driver’s licence as a condition of their employment.

The employee has had a previous warning regarding poor performance and our warehouse manager wants to use his conviction as a valid reason for dismissal. Would the employee’s conviction for culpable driving be sufficient reason to dismiss the employee?
A The conviction of an employee for a criminal offence does not necessarily have any effect upon the employee’s employment. While an employee’s behaviour outside of working hours can be grounds justifying dismissal, it will only have an impact on their employment to the extent that it can be said to breach an express or implied term of the contract of employment.

For example, an accountant who is convicted for an act of dishonesty committed outside their employment might be said to have breached an implied term of their contract of employment. Another example that may justify dismissal could be a conviction for culpable driving by a truck driver. There needs to be a direct connection between the out of hours conduct and the worker's employment.
In this case, it may be difficult for the employer to succeed in arguing that the employee’s duties in the warehouse could be said to have breached an implied term of the employee’s contract of employment. 

Damage to employer’s reputation

Another relevant factor regarding out of hours conduct is whether the reputation of the business is likely to be damaged by the employee’s conviction. For example, a conviction for culpable driving may be likely to damage the reputation of a transport company, but not necessarily a manufacturer. 

Company policy – drink driving

There is also a question regarding the reasonableness of the company’s policy regarding criminal offences, in the context of out of hours conduct. Where the employer can make out a legitimate interest in the conduct of its employees outside working hours, a policy aimed at regulating that conduct and protecting the employer’s legitimate interests will generally be regarded as reasonable.

A policy aimed at restraining employees from committing criminal offences outside working hours may not always be seen to be something that is a legitimate interest of the employer.
For example, a manufacturer of alcohol whose has a company policy relating to responsible drinking would have a legitimate interest in ensuring its employees did not use its products in a manner which was contrary to law, might bring the product into disrepute, or could contribute to the case for further restriction on sales.

An employer whose responsible drinking policy referred to excess drinking outside working hours, even on personal business and in a private car, was deemed reasonable by the FWC in an unfair dismissal matter. See Kolodjashnij v J Boag & Son Brewing Pty Ltd [2010] FWAFB 3258.

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