Richard Upton, a barrister who specialises in employment law, says employees need to be aware that what matters is not so much where the conduct takes place as the impact or potential impact on the employer's business.
To lead to legal dismissal, the offending out-of-hours behaviour must pass one of four tests, Upton says. These are:
The conduct has damaged the employer's reputation or business.
It is incompatible with the proper discharge of the employee's duty.
It has affected other employees.
It undermines the trust and confidence necessary between the employer and employee.
In the Hallwright case, Forsyth Barr considered its employee's out-of-hours behaviour had affected the company's reputation and it brought a public relations professional in to give evidence to that effect.
Although not common, cases of dismissal following unacceptable out-of-hours behaviour are heard by the ERA and Employment Court, says Upton.
In one case found to be a fair dismissal, staff of security product provider Tyco had gone to a bar for after-work drinks.
An employee, Paia Taurarii, punched another patron. Taurarii argued that his dismissal was inappropriate because the act happened on the street in front of the pub, outside work hours, and the victim was someone who wasn't an employee.
"The Employment Relations Authority," says Upton, "said it was quite clear he was [at the pub] because of the work function and he was a representative of the employer.
"There was a link and his dismissal was justified."
In Smith v Christchurch Press, one employee was dismissed for sexually harassing a colleague outside work hours, Upton says. Smith suggested to a colleague that she have lunch with him and took her to his house, where he made sexual advances. She acquiesced because she was scared of her colleague, but made a formal complaint about the incident to her employers.
Smith argued that it happened outside work hours because it was lunchtime, but the ERA found that the connection between the two arose from their employment and the incident had the potential to adversely affect the working environment.
The case went to the Employment Court and Court of Appeal.
The line between work and out-of-hours behaviour is often finer in small towns, says Upton. He cites the case of Tokoroa DJ John Dryden v The Radio Network (TRN).
Dryden, a breakfast host at Radio Forestland, shouted at the mayor at a public meeting, which prompted a letter to his boss from the mayor complaining about the radio host's "unprofessional" conduct which had the potential to "destroy the previous very good relationship between the office of the mayor and Radio Forestland".
Dryden argued that he was at the public meeting of his own accord as a citizen of Tokoroa. In its judgment the ERA commented that Dryden was a public figure in the community and strongly associated with TRN.
"Further, he was dressed in clothing clearly branded with the Radio Forestland logo." The ERA judgment said that he brought the TRN brand into disrepute.
Employers do need to be aware of the principle of "disparity of treatment", says Upton. "They can't impose one sanction on a favoured employee and then impose a harsher sanction on another employee in the same material circumstances.
"If they did so and the favoured employee is warned for out-of-hours behaviour and a second dismissed for the same conduct, the employer could be accused of disparity of treatment."
Upton expects to see more cases of employees dismissed for out-of-hours conduct.
Social media may blur the lines between work and private lives. For example, many people have fellow employees as Facebook friends.
They may also be broadcasting their opinions more widely than they could in the past.
Employee Joe Bloggs, for example, may list his employer in his Facebook profile. If he then brags about doing cocaine in his spare time, the employer may be justified in disciplining the employee, says Upton.
Likewise, making "morally reprehensible" controversial comments on Facebook or Twitter could also be seen as bringing the employer's reputation into disrepute.
Upton says where the person in question is the face of the organisation - for example John Campbell from Campbell Live - there is a lot less flexibility. Were Campbell to make controversial statements publicly they might not, in the public mind, be easily separated from the organisation he represents.
