Legal Q&A: Morality clauses

David Green, partner and head of the employment and pensions unit at Charles Russell, offers guidance on the legal implications of morality clauses.

Q Our US parent company has asked us to include a 'morality clause' in a contract for a senior employee, which would detail what he can and cannot do in his private life. Can we do this here?

A Even if the employee was prepared to sign a contract which included such a clause, to enforce it, the company would have to show that his behaviour was likely to affect his ability to do his job.

If the individual was particularly senior and his role, the business and the company's reputation were dependent on his 'moral standing', it might be possible to enforce such a clause. The company would have to show that the individual's 'immoral' behaviour would bring the company into disrepute to justify taking any action.

In addition, if the morality clause was itself in any way discriminatory - ie, if its definition of 'morality' stated that the employee was only permitted to have relationships with members of the opposite sex - that will be in breach of new regulations which will make discrimination on the grounds of sexual orientation unlawful from December 2003. The clause would be unenforceable and the employee would be able to bring a discrimination claim.

If an employee worked for a public body, they could claim under the Human Rights Act 1998 for breach of his right to respect for private life and the general prohibition on discrimination.

Q To what extent can employees' activities outside work affect their continued employment?

A In general, what an employee does in their private life outside work should not affect their employment. However, it could be reasonable to dismiss someone for their conduct outside work if it damaged, or could damage, the employer's reputation. This would depend on the nature of the conduct, the employee's role and the nature of the business.

In each circumstance, employers should always follow fair procedure, by investigating and giving the employee the opportunity to answer the allegations.

If the activities outside work involved drugs or criminal convictions, employers should be aware that they do not automatically justify dismissal if they are irrelevant to the employee's work.

Q Can we ban office relationships?

A If a company wishes to have such a policy, it needs to ensure there are good business reasons for it, that any disciplinary action or dismissal for a breach of the policy follows a fair procedure, and that it treats all employees consistently so that they are not open to allegations of unfair dismissal or sex discrimination. Examples could include a female employee being dismissed while a male employee was retained, or a female employee suffering any detriment compared with a male employee, such as by being transferred to another office.

There may also be Human Rights Act implications as mentioned above in relation to the right to respect for private life.