A recent decision of the Fair Work Commission (FWC) in Sydney, Australia has highlighted the risks of inter-office relationships, particularly between managers and their subordinates.

The FWC upheld Westpac’s summary termination of a long-serving branch manager who had been romantically involved with one of his direct reports.  The bank became aware of the relationship after the manager was charged with breaching an Apprehended Violence Order (AVO) the female employee had taken out against him when the relationship broke down. The manager was found to have breached Westpac’s code of conduct in a manner which undermined the relationship of trust and confidence.

So when are office relationships okay?  There is nothing employers can do to stop employees forming romantic relationships, but certain relationships have the potential to create conflicts of interest, the most obvious one being between a manager and direct report.  The Senior Deputy President commented that, “It is virtually impossible in such circumstances to avoid – at the very least – the perception that the manager will favour the subordinate with whom they are in a romantic relationship when it comes to issues such as performance appraisals, the allocation of work, and promotional opportunities.”   

The manager’s fate in this case may well have been different had he disclosed the relationship. One of Westpac’s witnesses gave evidence that, had he known about the relationship, he could have put appropriate measures in place to address the conflict of interest, such as moving the female employee to a different branch.

While accepting the manager’s submission that the dismissal was ‘devastating’ to his career prospects, the FWC did not agree that the dismissal was disproportionate to his misconduct.

The decision in George Mihalopoulos v Westpac Banking Corporation T/A Westpac Retail and Business Banking [2015] FWC 2087 was handed down on 15 May 2015.