At a glance
Love hurts, especially when office affairs go wrong.
With an international study indicating that up to 47 per cent of people have an intimate sexual relationship with a co-worker at some time in their career, boards and senior management face a dilemma. Should they allow consenting adults to have an office fling or a long-term liaison, or do they have a right to regulate such relationships?
Peter Wilson FCPA, chairman of the Australian Human Resources Institute (AHRI), which was involved in the aforementioned study, warns companies against putting their heads in the sand.
“The ostrich approach, if anyone is still trying to do it, is ultimately futile and potentially very damaging, because then you’ll be on the back foot when something happens.”
Unwanted headlines hurt brand
Two recent high-profile Australian cases underscore the risk of reputational damage for corporations as a result of personal relationships in the workplace. Seven West Media chief executive officer Tim Worner is embroiled in a messy legal dispute with ex-mistress and executive assistant Amber Harrison, while an affair with his personal assistant has cost John Neal, chief executive of insurance giant QBE, A$550,000 of his bonus for failing to adhere to the group’s executive code of conduct.
John Wilson, a specialist in industrial relations and employment law at Bradley Allen Love Lawyers, says organisations “walk a fine line” when they attempt to intervene in the personal lives of employees. On the one hand, he says workplace relationships can raise difficult employment law issues such as conflicts of interest, disharmony, power imbalances and sexual harassment risks. On the other, the ability of employers to regulate the activities of employees out of hours is constrained.
“Any management action in this area will always be skating on thin ice. Securing the right balance is no easy feat.”
Intervention may be justified
John Wilson says the Worner case demonstrates that, in certain circumstances, employers should legitimately be able to regulate an employee’s out-of-work conduct given that it could adversely affect the company or its workers.
For instance, if a senior manager begins a relationship with his or her personal assistant, “there is considerable risk of vicarious liability for the employer if allegations of sexual harassment fly after the relationship goes south – as the present [Seven West Media] case illustrates.
“These risks would justify an employer intervening and perhaps transferring the assistant or the manager to another part of the firm.”
Yet if two colleagues in entirely different sections of an organisation start seeing each other outside the workplace, Wilson says the ability of the employer to regulate that relationship is limited.
If the Seven West Media and QBE cases are any guide, the fallout from failed affairs seems to be even more severe for women. Harrison has had to leave the organisation, while Neal’s personal assistant has also exited her role. Worner and Neal have kept their jobs.
Peter Wilson believes CEOs have to set the tone for workplace behaviour.
“The standards of expectation on them are higher because they are the ultimate executive custodian of the organisation’s values.”
Team morale and productivity can suffer if workplace affairs go sour
Joshua Vikis, a senior advisor at workplace relations specialist Employsure, recommends a policy detailing which types of relationships are permitted, along with guidelines for engaging in a romantic relationship with a colleague. Factors to consider include:
- determining whether to take a strict no-tolerance approach or a more lenient “discouragement approach”
- defining appropriate and inappropriate workplace behaviour
- setting a timeframe for informing management of the existence of a relationship.
Vikis says the policy must be included in the employee handbook and all staff should be aware of it.
“Ultimately, the issue when it comes to personal relationships in the workplace is how the impact is likely to flow over into other areas such as performance, confidential information, reputational damage [and] conflicts of interest,” he says.
Workplace relationship policies are an option
In such a litigious era, more companies are implementing workplace relationship policies in an effort to minimise their corporate risks.
Australia’s Fair Work Commission advises companies to consider the following key steps:
- Invoking a Conflict of Interest Policy that covers managers and subordinates, and outlines possible solutions; for example, reassigning one of the employees should a relationship form
- Implementing a Disclosure Policy that obliges those involved in an office romance to declare their relationship to human resources personnel
- Ensuring that policies on office relationships are clear to all staff
- Training supervisors to effectively manage any work relationships
John Wilson says while there are benefits to implementing such policies, in most cases they need to be phrased in an “aspirational rather than obligatory manner”.
He adds, “It should encourage employees to self-report workplace relationships because, in many cases, a mandatory direction to do so would not be a lawful and reasonable direction, and provide for the human resources manager to undertake a subsequent risk assessment.”
He adds that the policy could also cover the use of work-provided technology. This would cover instances where the relationship is taking place via workplace instant messaging or email, creating a greater connection – and risk – to the organisation.
John Wilson says implementing sensible policies and sensitively managing the risks will leave an employer well-placed to mitigate reputational damage from office romances.
“If office relationships do go sour, act quickly. Independently investigate any allegations of improper conduct, sexual harassment, conflict of interest etcetera and take appropriate action.”
Heart to heart
Peter Wilson suggests four steps to limit the risk of fallout from office affairs.
1. Declare it
Encourage workers to disclose a romantic relationship publicly rather than letting the rumour mill or social media run riot. While this becomes problematic in the case of an extra-marital affair, Wilson says senior colleagues at the very least should be notified.
2. Avoid fiduciary conflicts of interest
Particular dangers arise if a relationship involves people who are joint signatories to accounts or expenditure. In such cases, Wilson says it is best that the pair be separated – “that one party moves”.
3. Address employee concerns
It is a recipe for trouble if employees think performance targets for a colleague who is in a relationship with a manager may be softer than for other employees. So ensure lines of communication are open.
4. Get couples to sign a waiver
In the US, Wilson says, companies are increasingly demanding that employees in a consenting relationship sign a waiver so that the company is not held responsible if things go awry. Such a document, which both parties sign, typically acknowledges that a relationship is consensual; explains processes for both parties to follow if a relationship ends or ceases to be consensual; and verifies that the workers understand the company’s policies on sexual harassment and ethics.