Risky Business: The legal hazards of relationships in the workplace

Since there have been workplaces, there have been workplace romances. Given many workers spend more waking hours each day in the office than anywhere else, it is only natural that relationships blossom around  the water cooler. Yet as a slew of scandals over the past year have demonstrated, love in the workplace can have considerable adverse consequences for employers and employees alike.

In the most recent of these, two senior AFL executives resigned — perhaps following some persuasion —  after having affairs with younger colleagues. But unlike another notorious scandal of late, involving a relationship between Seven boss Tim Worner and his executive assistant Amber Harrison which ended in litigation, the AFL saga is unusual.

Neither of the AFL executives, Simon Lethlean and Richard Simkiss, supervised or otherwise exerted direct influence over their workplace lover, such that the usual conflict of interest concerns were absent. While both were married, infidelity does not provide grounds for dismissal. Nor were there any suggestions of sexual harassment, an all too frequent conclusion to unrequited desires in the workplace. Finally, AFL CEO Gillon McLachlan admitted that the relationships had not impacted on productivity: “They are both highperforming executives.”

Why, then, were they shown the door? What was so “inappropriate” (in McLachlan’s words) that the two men lost their jobs? Of course, Lethlean and Simkiss in fact quit, such that the AFL is not in need of legal justification. But whatever one thinks of the scandal — a Guardian Australia columnist described it as “patronising moralism” from the AFL — it raises interesting legal questions.

This article will begin by considering the proposition that an employer has limited ability to regulate the outof-office activities of an employee. It then reviews the areas in which workplace relationships legitimately attract the attention of employers: conflict of interest, sexual harassment and reputational damage. It concludes by contemplating two unresolved questions: what disclosure demands can be made of staff, and could an employer prohibit relationships between employees?

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First published in Ethos. Article written by John Wilson, managing legal director at Bradley Allen Love Lawyers and Kieran Pender, Law Clerk. The authors acknowledge the assistance of Robert Allen in the preparation of this article.