Catching the Office Cupid: Navigating the legalities of Fraternisation Policies in organisations - Part II

The regulation of workplace relationships, particularly between supervisors and subordinates, has been a subject of legal scrutiny across various jurisdictions. Examining international precedents provides valuable insights into how different legal systems handle Fraternisation Policies and may provide a source of some broad principles that could be applied in India.

New Brunswick Court of Queens's Bench: A Case of Just Cause for Dismissal

In a notable decision by the New Brunswick Court of Queen’s Bench in the case of Abrams v. RTO Asset Management, the court addressed whether a workplace romance could justify dismissal. The case involved a regional manager who was dismissed for engaging in a sexual relationship with a subordinate and failing to report it as required by company policy. The employer’s investigation revealed that the manager not only engaged in the relationship but also provided the subordinate with confidential company information and advice that benefited her.

The court relied on the precedent set in Henry v. Fox to determine if the employer had just cause for dismissal. It considered two key questions: (i) whether the evidence established employee misconduct on a balance of probabilities; and (ii) whether the misconduct warranted dismissal due to a breakdown in the employment relationship. The court concluded that the manager’s actions constituted a conflict of interest and dishonesty, justifying the dismissal. The summary judgment was granted to the employer, with costs awarded, emphasising the importance of maintaining trust and integrity within the workplace.

California Law: The Right to Privacy and Workplace Policies

In the United States, the right to privacy is a fundamental right enshrined in both the United States and California Constitutions. The landmark case of Hill v. National Collegiate Athletic Association affirmed that privacy protections extend against private actors, not just governmental entities. This means that an employer’s policy or agreement that violates an employee’s right to privacy is void and unenforceable. The case of Semore v. Pool further reinforced this principle, where an employee successfully challenged a random drug test policy on the grounds that it violated his constitutional right to privacy. The decision highlighted that any policy intruding on an employee’s privacy rights is against public policy and cannot be enforced.

In the landmark judgment in Lawrence v. Texas, wherein the US Supreme Court ruled that state laws criminalising sodomy between consenting adults are unconstitutional, the US Supreme Court extended privacy protections to intimate choices by unmarried as well as married persons, recognising these decisions as part of the ‘liberty’ protected by the Due Process Clause of the Fourteenth Amendment. This case underscored an emerging awareness that adults have substantial protection in deciding how to conduct their private lives, including matters pertaining to sex.

Barbee Case: Management-Subordinate Relationships

In Barbee v. Household Automotive Finance Corp, the California Court of Appeal dealt with a case where a national sales manager was terminated for engaging in a relationship with a subordinate, in violation of the company’s policy against supervisor-subordinate relationships. The court held that supervisors do not have a privacy right to engage in intimate relationships with their subordinates. The decision was grounded in the potential issues of sexual harassment and the appearance of favouritism such relationships could create.

The court reasoned that such policies are essential to prevent conflicts of interest and maintain a fair and professional work environment. Consequently, the supervisor in the Barbee case had no reasonable expectation of privacy in pursuing the relationship, and the company’s action to enforce its policy was upheld.

Fraternisation policies, while aimed at preventing conflicts of interest, favouritism, and maintaining professionalism, must be crafted with care to avoid infringing on employees’ fundamental rights. The Constitution of India, particularly through the right to privacy, sets a high standard for any policy that seeks to regulate personal relationships. The judiciary’s evolving stance, as seen in landmark cases such as Supriyo and Puttaswamy, underscores the importance of personal autonomy and the necessity for policies that do not unreasonably intrude into the private lives of employees.

A Fraternisation Policy that outright prohibits any form of relationship in the workplace could overstep and violate the rights granted to employees under Articles 19(1)(a), 19(1)(c), and 21 of the Constitution. Such a policy would likely be seen as an excessive intrusion into personal freedoms, as it restricts individuals’ rights to express themselves, form associations, and live with dignity and personal liberty. Instead of prohibitive measures, employers may consider alternative approaches that respect these rights.

One viable alternative is the implementation of a disclosure policy which the employees are required to sign-off on while being onboarded, requiring employees to disclose any romantic relationships or close personal associations with colleagues in the workplace, particularly where there is a reporting relationship, and non-disclosure of such relationships being a reasonable cause for termination. The employee’s consent to such disclosure forms the foundation of a valid contract under the Indian Contract Act, 1872. Crucially, the requirement of a ‘lawful object’ under the Contract Act may be argued to be satisfied in this context, as the policy serves the legitimate purpose of safeguarding the organisation from conflicts of interest, favouritism, and potential legal disputes, such as harassment claims. This gives the employer a reasonable position to argue that the policy, when supported by employee consent, does not violate privacy or personal liberty rights but rather strikes a balance between the employer’s duty to manage workplace dynamics and the employee’s right to personal autonomy.

In this way, employers may effectively navigate the complex legal terrain of workplace fraternisation, ensuring both compliance with constitutional rights and the protection of legitimate business interests. Ultimately, the validity and enforceability of a Fraternisation Policy (requiring such a disclosure) would need to be legally assessed on a case-by-case basis, to ensure safeguarding business interests while being compliant with constitutional protections.

To read Part I of this two-part article, click here.

About the authors: Siddhartha George and Varnika Sharma are Partners, and Satyajit Nair is an Associate at Poovayya & Co.

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