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Two of my employees are in a close personal relationship. Is it any of my business?

Posted by Stephen Booth on 1 Nov 2017

Two recent situations which gained a lot of media attention have raised the question of whether an employer can intervene in such a relationship, or even forbid personal relationships between employees. These cases also highlight some of the employment and management risks arising from relationships between colleagues.

Seven

In the case concerning Amber Harrison, Tim Worner and Seven West Media, a consensual relationship of about 18 months’ duration between Mr Worner, the CEO, and Ms Harrison, an executive assistant, soured. The relationship had been private, not open, since Mr Worner was married. When the relationship soured, Ms Harrison made complaints to Mr Worner, Seven West Media raised complaints of misuse of expenses against her, and an agreed settlement was negotiated, providing for payments to Ms Harrison, and Ms Harrison left Seven. Mr Worner continued in his position, although, when the issue went viral on social media, he issued a public apology, and missed out on a bonus.  

The case raised questions about whether or not Ms Harrison had complied with the terms of the settlement deeds requiring the return of confidential information, and therefore whether the rest of the money Seven had agreed to pay her was in fact payable. Ms Harrison took the “nuclear option” of sharing information on social media, and it turned into very public litigation, which Seven “won,” but at substantial cost and reputational damage.

AFL

In the AFL case, two senior executives departed their employment with the AFL after each had a consensual, private relationship with a junior female employee. Again, the executives were married, so the relationships were not open. The end of their employment gave rise to media discussion as to whether the AFL had any business interfering in consensual relationships and whether, in doing so, it was adopting the role of moral watchdog, because the main offence seemed to be dishonesty and betrayal of family values by the male executives, the relationships being consensual and there not being any publicly apparent complaint from the female employees.

Is an affair any business of an employer?

It is true that, generally speaking, an employer isn’t a moral watchdog, and it is not feasible to forbid close personal relationships between employees. However, it is legitimate for an employer to regulate relationships between staff, both because of the possible abuse of unequal power relationships between the parties to the relationship, and also because of the effect of a close relationship between two staff, or the perceptions that arise from that relationship, might have on other staff.

Where employees having an affair are at different levels of seniority, the risk of perceived favouritism and conflict of interest, and potential lack of fairness to others in the workplace, is obvious, and this is even more obvious where one indirectly or directly supervises and manages the other.

And where there is a disparity in power the risk of a sexual harassment claim, or a claim of discrimination, even in cases which began as a consensual arrangement, is real.

The risks of conflict of interest are substantially heightened when the relationship is clandestine. In the case of an open relationship, of which work colleagues are aware, potential conflicts of interest will be obvious, and can be dealt with. When the relationship is secret, the potential conflicts will not be transparent, but may well become the basis of gossip or resentment from other staff where there are rumours of a relationship, and a perception that there is favouritism, or that the senior employee is not impartial, or forms a unit with the junior employee who therefore has an unfair degree of influence.  

Whether either or both of the parties are cheating on their other partners is not generally the business of an employer, but the existence of a secret relationship which raises actual or potential conflicts of interest is definitely a legitimate concern for an employer.

The risk of claims of harassment also increases when the relationship is secret, particularly if the relationship unravels, and there are recriminations. In the absence of demonstrable fault, the departure of the junior (often the female) employee while the senior (often the male) employee stays on, is bound to look discriminatory. In considering action against either party, the focus needs to be on the way in which the conduct actually prejudices the interests of the employer or damages the employment relationship - such as the undisclosed conflict of interest - and not on the mere fact of the relationship. It should not be assumed that the senior employee is more valuable to the business, so should be kept on, whereas the junior employee is not so important, and should move on. 

In the Harrison/Worner/Seven West Media case there were issues about misuse of expenses, and misuse of work time, that related to the undisclosed conflict of interest. Any actual or apparent misuse of position or discrimination against other employees, may all be reasons for disciplinary termination, but consider both sides of the coin.

Do you have a policy about this?

The answer is probably “no,” so far as consensual personal relationship themselves are concerned. Apart from the usual harassment and discrimination policies, if something is to be regulated by policy to deal with these issues, it should be conflict of interest obligations, and an obligation to disclose any potential conflict of interest, so that it can be appropriately managed. This might fit within, or be covered by, an employer’s code of ethics or code of conduct.

If you need any assistance with developing policies to deal with potential conflicts of interest within the workplace, please contact Stephen Booth or Dominic Russell in our Employment Law Team:

Stephen Booth, Principal
Phone: +61 2 9895 9222
Email: sbooth@colemangreig.com.au

 

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