Workplace relationships not unlawful, but difficult if there’s a power imbalance

Workplace relationships are not uncommon, but uneven power dynamics and the potential for harassment make them a tough issue for businesses, says one human resources expert.

Relationships between managers and their staff were put back in the spotlight by an ABC’s Four Corners investigation this week, which aired allegations that senior government ministers Christian Porter and Alan Tudge had engaged in inappropriate conduct with younger staffers.

The stakes are arguably higher for elected ministers in relationships with younger co-workers than managers and leaders in other sectors. But high-profile scandals such as these show office relationships are not uncommon.

According to the 2019 Australia Talks survey, 13% of couples met at work and one-third met online. Just three years earlier, 40% of Australians between 35 to 50 had met their partners at work, according to a survey by Relationships Australia.

Angela Knox, an associate professor of human resources at the University of Sydney’s Business School, says a consensual relationship between co-workers is not unlawful but “it’s an ethical conundrum”.

“There’s nothing in the industrial relations framework or the Fair Work Act that says you cannot have a relationship with someone else,” Knox tells SmartCompany.

But Knox says problems arise when one person in the relationship reports to the other, and managing these lines of accountability and responsibility becomes tricky.

“Where there’s an imbalance of power and particularly when that can impact things like promotions, performance ratings, pay and bonuses, career opportunities, then that’s really critical,” she says.

The importance of transparency

Organisations could adopt guidelines similar to the so-called “bonking ban” that Malcolm Turnbull introduced as prime minister in 2018 to discourage co-workers from having relationships, says Knox, but such directives would not be legally enforceable.

“It’s probably more common for workplaces to say that any relationship needs to be declared,” she says.

Such declarations would then give businesses an opportunity to make changes if one person in the relationship is reporting to the other, suggests Knox.

“In that way, it’s removing some of the potential imbalance of power. It will still exist, but it won’t be as immediately consequential.”

Workplace harassment

Power imbalances are often key factors in cases of workplace harassment, and the #MeToo movement has brought attention to the line between consensual relationships and harassment.

Financial services giant AMP has been troubled by allegations of sexual harassment since 2017. This year, key members of the AMP leadership team resigned from the company following the scandal caused by the promotion of Boe Pahari, who was disciplined in 2018 for sexually harassing a female colleague.

AMP CEO Francesco De Ferrari was even questioned before a federal parliamentary inquiry in September about whether there was a systemic cultural problem at his company.

Small businesses are not immune to cases of sexual harassment either, and the Sex Discrimination Act applies to all organisations regardless of their size.

In July, the Full Circuit Court upheld a lower court’s decision that the owner of a small legal practice in northern NSW should pay $170,000 for damage after subjecting an employee to months of sexual harassment.

Leadership obligations

Leadership coach Hema Kangeson says leaders must be clear about workplace policies on relationships, bullying and harassment because “the standard we walk past is the standard we accept”.

“If you’re saying you’re a company that really believes in an inclusive culture, a culture of belonging and psychological safety, you have to make sure it’s not just in your branding, but when you … interview to when a person starts and joins the company. It has to be very, very clear,” she says.

“And if anything then happens, leaders need to pick it up straight away and follow up, and not wait until six months later or one year later. It needs to be caught right from the start.”

When asked about relationships built on power imbalances, Hema says she often sees the junior staff member penalised.

“What I’ve seen time and time again, is they would actually penalise the person in the junior position and not the person in the senior leadership position because a lot of businesses are more worried they’re going to lose the talent,” Hema explains.

“But they don’t realise in the long term, it’s going to impact the whole brand of the company,” she says.