As flexible work arrangements and the employee right-to-disconnect become standard features of modern workplaces, employers are grappling with a difficult question: to what extent can you regulate an employee’s conduct outside of work hours?
On one hand, employees are entitled to enjoy their private lives without undue interference. On the other, employers need to protect their businesses, manage reputational risk, and ensure workplace harmony. Missteps in this area can expose businesses to unfair dismissal claims, discrimination complaints, or general protections (adverse action) claims.
Understanding the limits of lawful regulation is critical for employers seeking to balance business interests with employee rights.
The legal test: Rose v Telstra
The starting point is the decision of the Australian Industrial Relations Commission in Rose v Telstra Corporation Limited [1998] AIRC 1592.
In this case, two Telstra employees were involved in a fight during a work-funded trip. The incident occurred after hours, in a private hotel room, and resulted in the stabbing of Mr. Rose and criminal convictions for the other party.
After being alerted to the incident, Telstra dismissed Mr. Rose, arguing the behaviour was incompatible with employment.
The Commission disagreed. It found the dismissal to be unfair, holding that the fight – while inappropriate – was not sufficiently connected to the employment relationship. The incident had not caused serious damage to the employment relationship, nor had it harmed Telstra’s reputation or business interests.
The case established that out-of-hours conduct will only justify dismissal where it has a relevant connection to employment, meaning:
- the conduct is likely to cause serious damage to the employee–employer relationship;
- it damages the employer’s legitimate business interests; or
- it is incompatible with the employee’s duties as an employee.
Why ‘reputational damage’ is hard to prove
Employers often argue that out-of-hours behaviour damages their reputation. However, tribunals require objective evidence that the conduct has caused harm. For example, if an employee posts offensive material on social media, an employer must show that the material was publicly connected to the business and that it impacted customer relationships or destroyed trust in the workplace. Simply stating that ‘this looks bad for us’ is not enough.
Reputational damage will generally only be upheld where:
- the employee holds a public-facing role or is closely identified with the business; and
- the conduct has been publicised in a way that directly affects the employer’s standing.
This sets a high bar for employers.
Social media and out-of-hours conduct
The Fair Work Commission has considered a number of cases involving inappropriate social media activity. One example involved a firefighter employed as a contractor to the Country Fire Authority who shared offensive material in a private Facebook group called ‘Sickos Video Sharing Group’(!) outside of work hours. The group was made up of current and former employees.
The dismissal was overturned, as the employee had not been trained in social media policy and the posts were not sufficiently connected to his duties. Although the employer argued that its actions were consistent with its attempts to address a “blokey culture hostile to the recruitment of female firefighters,” and to increase workplace diversity, the FWC found that the employee’s conduct was not sufficiently connected to work to establish a valid reason for dismissal.
The lesson is clear: policies must be clear, communicated, and supported by training if they are to provide a basis for action against misconduct.
Protected attributes and adverse action
Employers must also ensure that disciplinary action does not stray into unlawful territory under the Fair Work Act 2009 (Cth). The Act prohibits adverse action against employees because of protected attributes such as race, sex, disability, age, religion, political opinion, or family responsibilities.
This means employers cannot discipline or dismiss an employee where their out-of-hours conduct relates to these attributes. For example:
- Attending a political rally or protest outside of work cannot lawfully form the basis of disciplinary action.
- Engaging in religious or cultural practices outside of hours cannot be treated as misconduct.
Lattouf v Australian Broadcasting Corporation (No 2) [2025] FCA 669 demonstrates that even conduct that might be viewed as compromising the expected neutrality of the ABC did not allow the ABC to dismiss a reporter exercising her right to express a political opinion by posting on social media in her own time.
Adverse action claims carry significant penalties, and employers must take care to separate personal attributes from genuine workplace concerns.
Practical steps for employers
Employers can reduce their legal risks by:
- Implementing clear workplace policies: covering social media use, conduct during work-related travel, and expectations at work functions.
- Providing regular training: policies are only effective if employees understand them.
- Assessing the connection: before acting, ask whether the conduct has a real and objective impact on employment.
- Gathering evidence: ensure any reputational damage or business impact can be supported with facts, not assumptions.
- Considering employee rights: ensure action is not linked to protected attributes or personal circumstances.
Final word
Employers cannot -and should not -seek to control every aspect of their employees’ private lives. Disciplinary action for out-of-hours conduct is only lawful where the behaviour clearly impacts the employment relationship or the business’s legitimate interests.
Overreach carries real legal and financial risks. By taking a measured approach, grounded in sound policies, training, and evidence, employers can protect their businesses while respecting the boundaries of employee privacy.
How we can help
We understand that most employers have no interest in the out-of-hours behaviour of their employees. However, they must respond to a complaint. If you are considering disciplinary action for out-of-hours conduct, it is essential to proceed with care. Our employment law team can help you:
- Review and update your workplace policies;
- Assess whether an employee’s conduct has a sufficient employment connection; and
- Minimise the risk of claims under the Fair Work Act.
Before acting, seek legal advice to protect your business and avoid costly mistakes, Call us on 1300 882 386 or email us to discuss how we can help.
The information contained in this post is current at the date of editing – 7 November 2025.
