Legal Q & A: Morality clauses

By David Green, partner and head of the employment and pensions unit at
Charles Russell

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

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.

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