The morning after the night before, when alcohol is involved, can be painful for many reasons. In a recent case, the pain was felt by an insurance company which was held to have acted wrongly when it summarily dismissed a senior employee for turning up to a work conference intoxicated. On one view of things, there could be no more quintessentially Australian verdict than “judgment for the boozehound, with costs”. However, another view reveals the importance of weighing up employment policies carefully when considering summary termination of employment.

The employee in question disputed that he was intoxicated when he attended the conference at 9am on a Monday morning. This was a courageous position to adopt. The evidence showed that on the day before the conference (when the employee attended a pre-conference training session) he and his colleagues had attended a dinner at which the employee consumed six to eight drinks. Following the dinner, the employee and some other colleagues “kicked on” to an Irish pub, where he consumed a further eight or nine drinks.

The question of when the employee left the pub was the subject of great debate, although it did not ultimately determine the case. One of the insurance company’s witnesses gave evidence about the time shown on “a large clock above the door” of the pub. However, the evidence showed that there was no such clock, which perhaps suggests that sobriety may not have been in abundant supply for anyone on the evening in question. The fact that the pub was only licensed to stay open until 2am might have been thought to be determinative, but as there were EFTPOS receipts for payments by the employee at 4.16am and 6.45am, the question remained as murky as Guinness.

What was not in doubt, though, was that the next morning, the employee, as the Court put it, was observed to be “not at his best”. The insurance company relied upon a laundry list of alleged signs of intoxication, including being relaxed and playful, talking loudly, throwing a lolly at a colleague, making animal noises, and smelling strongly of alcohol.

The Court considered that many of these matters did not necessarily bespeak intoxication. As to the throwing of lollies, there was evidence that this was apparently a common method within the company of “engendering participation” in group activities. However, smelling strongly of alcohol is hard to explain other than by intoxication.

So although the Court found that the employee was intoxicated at work, it also found that the intoxication was not such as to endanger the wellbeing of the company’s staff, or to damage the company’s reputation, so that the intoxication did not meet the definition of “gross misconduct” as defined in the company’s policy. Indeed, the company’s policy specified that intoxication which was not gross misconduct should be the subject of the company’s Disciplinary Counselling Policy. This made the misconduct “mere” misconduct, and not “gross misconduct”, so that summary termination of employment was not justified.

To make things worse, the company did not itself comply with its own Disciplinary Counselling Policy. Its failure was not relevant to the employee’s breach of contract claim (because the breach was established by the dismissal) but it was relevant to the question of the employee’s loss, which was assessed at $290,650.75.

Summary termination is a serious matter, and there are many cases (like this one) where summary termination is held to be unjustified even where misconduct is established. If an employer wishes to rely on summary termination, it is vital to ensure that the contractual language, and even employment policies which may not be contractual, supports the basis of the termination.

One final matter. The employee in this case was not drinking alone on the night in question. Another employee of the company who left the pub with him did not show up for work intoxicated the next morning because she did not show up at all, and did not suffer any disciplinary action as a result. It is sometimes said that “the world is run by those who show up” but in this case the employee who showed up not only had to run the world, but then had to run the gauntlet of litigation as well. Sometimes, staying in bed may be the better part of valour.