Part II – The Intersection of Criminal Law, Employment Law and Family Law: The Intersect Between Criminal Conduct and Employment

There are some circumstances that have been recognised by the courts as ones in which “out of hours” misconduct by an employee may constitute grounds for an employer to take disciplinary action, up to termination of employment.

The mere fact that a person has committed a criminal act outside of working hours does not necessarily mean that there is a valid reason for the person’s dismissal by his or her employer. There needs to be a relationship of the requisite degree between the criminal conduct and the employment.

In cases involving out-of-hours conduct, it is often contended that the necessary relationship between the conduct and the employment is established on the basis of an assertion that the conduct will in some way affect the employer’s reputation or compromise the employee’s capacity to perform his or her duties. However, there needs to be evidentiary material upon which a firm finding may be made that there is or will be the necessary effect; it is not sufficient merely to assert its potentiality: Public Employment Office, Department of Attorney General and Justice (Corrective Services NSW) v Silling [2012] NSWIRComm 118.

The criteria by which the necessary relationship was to be established was set out in the leading case of Rose v Telstra Corporation Ltd, IRCommA 1592; [1998] AIRC 1592, and this case is accepted as being the leading case in this area.

In this decision, Vice President Ross stated that:

“It is clear that in certain circumstances an employee’s employment may be validly terminated because of out-of-hours conduct. But such circumstances are limited:

1. the conduct must be such that, viewed objectively, it is likely to cause serious damage to the relationship between the employer and the employee;
2. the conduct damages the employer’s interests; or
3. the conduct is incompatible with the employee’s duty as an employee.”

The test to be applied is that “in essence the conduct complained of must be of such gravity or importance as to indicate a rejection or repudiation of the employment contract by the employee.”

Briefly, Mr Rose was involved in a fight with another employee while off-duty on a work trip funded by his employer.

VP Ross held that Mr Rose’s conduct lacked the requisite connection to his employment because:

1. the incident took place outside of working hours;
2. Mr Rose was not wearing his work uniform; and
3. Mr Rose was not “on-call” at the relevant time.

The incident took place in a hotel room and there was no evidence that the reputation of the employer had been tarnished by what occurred.

It was therefore not accepted that Mr Rose’s conduct, objectively viewed, was likely to cause serious damage to his employment relationship and he was therefore unfairly dismissed.

It was held that Telstra could not fairly dismiss Mr Rose because his misconduct was not sufficiently connected with his employment.

In cases involving out-of-hours conduct, it is not sufficient for the employer to simply assert that the conduct will in some way affect the employer’s reputation or compromise the employee’s capacity to perform his or her duties; there needs to be evidentiary material upon which a firm finding may be made: see Wakim v Bluestar Global Logistics [2016] FWC 6992.

Mr Wakim pleaded guilty on 1 April 2016 to a charge of engaging in an act of sexual penetration with a 13-year-old boy. On 12 July 2016, he was sentenced by the Victorian County Court to 20 months in prison.

On 4 May 2016 Mr Wakim was dismissed from his employment as National Sales and Marketing Manager with Bluestar Global Logistics (Bluestar) on the basis that his criminal conduct was in breach of various requirements of his employment. Mr Wakim challenged his dismissal on the basis that it was unfair because there was no valid reason for his dismissal and he was denied procedural fairness.

Mr Wakim appeared in court on Friday 1 April 2016, entering a guilty plea.

Mr Wakim had made a generalised disclosure to his employer about an incident which had occurred, but he did not disclose the specifics of his conduct or his guilty plea.

On Monday, 4 April 2016, Mr Wakim was contacted by a journalist from the Melbourne Herald-Sun newspaper who was doing a story about his guilty plea. Mr Wakim was not responsive to the inquiry, but then separately contacted the Managing Director and his manager to warn them about “the possibility of media interest in my court situation”. However even at this stage, Mr Wakim did not disclose the nature of his offence or his plea of guilty.

That evening a story was published about Mr Wakim in the online version of the Herald-Sun. The story’s headline was “Former Victorian Multicultural Affairs Commissioner Joseph Wakim guilty of child sex offence”, and featured a large photograph of him. He was described as founder of the Australian Arabic Council and a “prolific social commentator”, and as being employed in a “senior position with a logistics company”. It described him as having been charged with three offences involving a young boy including grooming, but that two of the charges were withdrawn and he had pleaded guilty to the charge of sexual penetration.

Mr Wakim emailed the Managing Director a link to the story at 9.23pm the same evening. The following morning, another manager and the MD, having read the article, discussed it together. These managers gave evidence that they were not fully aware at that time that Mr Wakim had pleaded guilty and spoke to Mr Wakim. The managers expressed their concern that their customers might ask whether Bluestar condoned such a crime, and Mr Wakim was instructed to leave the office and go home until further notice.

In doing so the managers expressed concern about Mr Wakim’s welfare. Part of this concern was apprehension about how other employees would react when they read the news story. Mr Wakim protested this, saying: “Sending me home is more punishment. I have been punished enough, daily. Being home alone now cannot be good for my welfare. It will make my situation worse. There must be another way”. However, the decision was not changed.

There was a further, very detailed, story about Mr Wakim published in the online Daily Mail on 6 April 2016. The headline was “Arabic Council of Australia founder who pleaded guilty to having sex with a boy called Adelaide a ‘paedophile’s paradise’ after working with troubled youth in the city”. The story, which contained a large picture of Mr Wakim, contrasted his offence with his statements and activities when working with street children in Adelaide in the 1980s.

Mr Wakim sought to continue to work but from home and to not have any contact with clients.

A decision was made to terminate Mr Wakim’s employment. Mr Wakim was told during a telephone conversation that termination of employment was in the best interests of the company. He was summarily dismissed.

Mr Wakim challenged the termination of his employment.

In the decision, Vice President Hatcher said:

[33] In this case, I consider that there is a firm basis upon which to conclude that Mr Wakim’s conduct significantly damaged Bluestar’s interests in respect of its relationships with its client and staff. There are three critical features in this case. The first is that Mr Wakim was a public figure, so that any serious criminal conduct on his part was always likely to attract media attention. The second is that Mr Wakim’s crime of child sexual abuse is one which, as he admitted in his evidence, is viewed with particular abhorrence in the community. The third is that there was widespread media coverage of his offence which identified him by name, contained his picture, described details of the offence, and in at least one case referred to his employment with a logistics company.

[34] The predictable result of this was that Bluestar’s clients and staff quickly found out about Mr Wakim’s offence after his plea of guilty. In relation to the current and potential clients, Mr Wakim was the primary point of contact within Bluestar, so that it is not surprising that Bluestar began receiving alarming communications from them. In relation to the staff, Mr Wakim was a senior manager and regarded as a leader in the business. It may reasonably be inferred that many staff would be disturbed by having to work under the direction of or in association with a person who had committed a child sex offence. Certainly Mr Thompson quickly became aware of disquieting comments between staff as to what had occurred.

[35] In short, the public disclosure of Mr Wakim’s offence rendered his continued employment untenable. If Mr Wakim had continued to be employed and clients and staff were required to continue to deal with him, there would undoubtedly have been ongoing damage to Bluestar’s reputation and its interests as a business and an employer. Mr Wakim submitted that he could have been given alternative duties which would not have required him to have contact with clients, but there was no evidence to support the proposition that such duties were available and in any event it would not have solved the problem of the requirement for him to interact with other staff.

It was found that Mr Wakim’s criminal conduct had the effect of irreparably damaging relationships with clients and other staff and rendered his continued employment untenable and this was a valid reason for dismissal.

In Applicant v Respondent (1999) AIRC 1524, the Full Bench of the AIRC dismissed an appeal by the employer against a finding that its dismissal of an employee for his out-of-hours conduct was harsh, unjust or unreasonable. The employer dismissed the flight attendant following an investigation into allegations that he had sexually harassed a fellow flight attendant in a hotel room paid for by the employer.

The Full Bench upheld the first instance decision that the company’s policies did not extend to the conduct of the dismissed employee that occurred in the complainant’s hotel room. The Full Bench noted that, although the employer in this case was responsible for providing and paying for the overseas accommodation, flight attendants have time off in foreign destinations which is clearly a break from employment obligations and (save for in the circumstances set out in Rose v Telstra) conduct engaged in during that time off is not something an employer can legitimately seek to regulate or control.

In David Paul Lonnie v WA Council on Addictions Incorporated [2023] FWC 1681, an employee was dismissed for the following:

1. serious breaches of the Respondent’s Code of Conduct by allegedly committing domestic violence against the Person Impacted; and
2. inappropriate use of the Respondent’s resources, being the Applicant’s phone and laptop, to subject the Person Impacted to emotional abuse.

Mr Lonnie worked with his partner (referred to as the “Person Impacted” in the decision).

Mr Lonnie began his employment in November 2011. He became the employer’s general manager of residential services in May 2021. Later that year, he entered a romantic relationship with the Person Impacted.

Mr Lonnie described the Person Impacted as “dishonest, actively deceptive, verbally abusive, unable to apologise, extremely crazy-making and hurtful.”

While Mr Lonnie admitted to making some unpleasant remarks in response to the “continual cycle of dishonesty and betrayal” from the Person Impacted, he asserted that he never acted abusively toward her.

He said that he believed he was continuously subjected to emotional abuse, betrayal, and gas-lighting, making it difficult for him to end the relationship.

In June or July 2022, the CEO, Ms Daws said she had become aware that the Person Impacted had flights booked to go to Bali with Mr Lonnie. A phishing security system on the Respondent’s computer system had detected an email from the Person Impacted’s personal email to the work email of Mr Lonnie. Ms Daws confronted the Person Impacted who disclosed she was in a relationship with Mr Lonnie. The Person Impacted later informed Ms Daws that Mr Lonnie was upset that it was out in the open, as he felt it was no one’s business.

On 17 November 2022, the Person Impacted came to see Ms Daws and disclosed that Mr Lonnie was physically violent and controlling towards her.

Ms Daws recalled at the hearing her observations and the conversation in the following terms:

She seemed very anxious and worried that David would lose his job. She said words to the effect of “Promise not to talk to David about it?’. I replied with words to the effect of “Does anyone else know about it.” She replied with words to the effect of “Yes, Nicola and Michele.” In my professional opinion, I thought she looked like she was having a PTSD reaction as she was physically shaking, her voice was uncontrollable and she seemed very scared and distressed.

Ms Daws said that whilst she informed the Person Impacted that she would speak to Mr Lonnie, the Person Impacted informed her that if she did, she would quit her job, sell her house, and leave town, and that Mr Lonnie was a scary man.

The Person Impacted continued to report to Ms Daws about conduct by Mr Lonnie towards her, including assaults and threats towards her. The Person Impacted reported conduct which occurred inside and outside of the workplace, such as Mr Lonnie throwing the Person Impacted’s phone at her, striking her in the head, after the Annual General Meeting. This incident occurred in the car park under the office.

The Person Impacted reported events across November and December, both at work and at places outside of work.

Mr Lonnie testified that on New Year’s Eve, the Person Impacted visited his place, and he said they were “intimate.”

The following morning, New Year’s Day, the Person Impacted experienced a severe headache, vomiting, and eventually lost consciousness.

Alarmed by her condition, Mr Lonnie called for an ambulance, and the Person Impacted was taken to one hospital and then transferred to another. Medical professionals informed Mr Lonnie of the serious brain bleed she had suffered, and there was uncertainty about her survival. The Person Impacted underwent surgery to address the situation.

Mr Lonnie then tried to focus on his work on 3 January 2023. However, he spoke to management and arranged to take leave from the end of the day.

Nonetheless, he was unexpectedly asked by his employer to attend the office the next day to discuss an issue with his company credit card, even though he was on leave. It was acknowledged at the hearing that this was an excuse to bring Mr Lonnie into the office.

Ultimately it was decided that Mr Lonnie’s employment could not continue and a premise was generated to ask Mr Lonnie to attend the office

Mr Lonnie presented to the office. Ms Daws’ evidence was that at a meeting with Mr Lonnie she read out a prepared statement, which included:

We are aware of matters that we have been advised by our board that we need to report to the police. Due to our obligations under the WHS Act for the psychosocial health of our employees, and because the use of Cyrenian House resources has been involved, this amounts to serious misconduct and we are terminating your employment immediately. You are required to hand back all Cyrenian House property including keys, laptop, credit card, vehicle etc. If you leave these premises with any of these items, it is also our intention to advise the police and look to a charge of stealing.

Ms Daws said that the Applicant did not attempt to disclose his side of the story and repeatedly asked whether the Person Impacted had informed Ms Daws. Ms Daws expressed the following:

Because I had heard so many detailed reports from [the Person Impacted], and from other employees I trusted, I was confident that [the Person Impacted] was telling the truth. I had no doubt in my mind that the Applicant had perpetrated violence on [the Person Impacted]. I recognised [the Person Impacted]’s reaction during her disclosures to me as trauma responses. You cannot fake the strong emotions and physical shaking that were happening to her as she disclosed some of the horrendous incidents.

Ms Daws observed that during the meeting the Applicant was doing something to his mobile telephone. She suspected that he was deleting evidence. On Mr Lonnie’s departure from the building, Ms Daws checked his mobile telephone to see that he had done a factory reset, therefore deleting any evidence, photographs, or mobile messages between him and the Person Impacted.

Ms Daws was however able to access a number of text messages from the Person Impacted.

Mr Lonnie had sent a large number of inappropriate text messages to the Person Impacted, expressing anger and frustration over their personal relationship. These messages were sent from his work mobile telephone and were later acknowledged by him as “ill-advised and disgusting,”

In one of the messages, Mr Lonnie warned the Person Impacted “not to undermine him at work,” implying that their personal issues could impact their workplace interactions.

During the meeting, Mr Lonnie was told that the board had decided to terminate his employment. He was asked to hand over the keys to the company car and leave behind the company mobile phone and laptop.

He was warned that failure to comply would lead to further potential criminal charges. According to records, when Mr Lonnie asked, “what other criminal charges she was talking about,” they told him: “domestic violence – you’ve got a problem.”

Several staff members were aware of certain alleged incidents between Mr Lonnie and the Person Impacted. A member of the management team was directly aware of the Person Impacted’s allegations, having heard them from the Person Impacted herself.

It is clear that there were a number of incidents involving Mr Lonnie and the Person Impacted, some of which occurred at work and some of which occurred outside of work.

When considering the range of conduct, at [175] the Commission noted:

…Whilst the intimidation and threat of violence may have been made ‘out of hours’ toward the Person Impacted as an intimate partner (not a co-worker), the intimidation and/or threat did not somehow extinguish when the Person Impacted entered the workplace. It continued to exist. That the conduct occurred away from the workplace did not alter this aspect of its character. There is simply no evidence to support a finding that the threat of violence or the intimidation arising from the offending text messages was confined to the parameters of the intimate relationship that existed outside of work and therefore had no bearing on the relationship of the Applicant and Person Impacted as co-workers within the same work environment. In my view, to adopt a standpoint to the contrary would be to impose an artificial construct that simply cannot be sustained.

At [184] it was also noted:

While [Mr Lonnie’s] conduct of sending the offending text messages…may have been engaged in out of hours, it can still properly be said to have a relationship to his employment. The Code of Conduct obliged him to ‘[r]efrain from any activity where personal or professional conduct is likely to compromise the fulfilment of [his] professional responsibilities’.

Thus, at [187] the FWC said the employer had a valid reason to dismiss the manager:

By engaging in the conduct that he did, namely, the sending of the offending text messages…[he] evinced a substantial and wilful breach of the Code of Conduct and the Safety Instruction.

The Commission noted, however, that an employer does not have an unfettered right to take action in relation to an employee who was facing criminal charges:

[124]…The limitations on an employer’s right to regulate, investigate and discipline an employee in respect of out-of-hours sexual harassment, or for that matter domestic violence, is clearly illustrated by the various cases referred to in this decision. In Commissioner for Railways (NSW) v O’Donnell, the High Court held that the fact that an employee had been arrested and charged with an offence did not of itself constitute misconduct warranting termination of employment. Nor is the conviction of a criminal offence, of itself, sufficient to warrant termination. The misconduct in question must have a relevant connection to the employment.

As noted above, the fact that a person has committed a criminal act outside of working hours does not necessarily mean that there is a valid reason for the person’s dismissal by his or her employer. There needs to be a relationship of the requisite degree between the criminal conduct and the employment.

It is critical therefore that when looking at whether there is the relevant connection between conduct and employment, that careful consideration must be given to the alleged conduct and the conditions of employment, including Codes of Conduct and the terms of an employment contract.

A CPD session on this topic is available as a recording here.
Part I of this paper was issued in the LLJ April 2025 edition.

Craig Green
Counsel, Dobson Mitchell Allport
May 2025