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Company culture

Code of conduct pitfalls to consider in employee free speech

Codes of conduct which restrict the ability of employees to make religious, political, and social statements, whether verbally or in writing, are common fixtures in employment contracts. Some companies seek to prohibit these types of expressions during work hours while other organizations impose more expansive restrictions.

Two recent incidents highlight circumstances where these clauses, if overly broad or vague, could be problematic. Employers must strike a balance between respecting an employee’s right to free speech, in jurisdictions where such legal rights exist, and the need for companies to protect themselves.

Australian courts to mull employee free speech issue

An unfair dismissal case in Australia may have significant implications for businesses that have employment contracts based on Australian law.

Earlier this year, Rugby Australia terminated a four-year employment contract with Israel Folau over a meme that the professional athlete had posted on social media. Folau’s former employer has asserted his actions breached the company’s code of conduct, which was incorporated as a part of the terms and conditions of his employment contract. Folau sued and is expected to argue the employment contract disproportionately restricts his freedom of religious expression.

If Folau is successful, it could set a precedent limiting the extent to which employers can restrict employees’ expressions of religious beliefs. Employment contracts with broad and non-specific restrictions on speech could expose companies to claims of discrimination or unfair dismissal.

Cathay Pacific battered over employee free speech restrictions

In addition to legal risk, businesses seen as overreaching in limiting employee free speech have suffered reputation damage as well.

This past summer, Hong Kong-based airline Cathay Pacific was plunged into crisis after the company dismissed several employees over their expressions of political opinion. The dismissals were seen as unreasonable moves by the company to stifle freedom of speech, which is technically protected under the Hong Kong Basic Law. Questions over whether the company’s senior management potentially contravened their company’s own code of conduct have also arisen.

Cathay’s code of conduct contains several rules pertaining to expression of political opinion, including a prohibition on harassment or discrimination on the basis of political opinion.

The firings could call into question whether staff who were sanctioned for expressing their political opinion were discriminated against by the senior managers who sanctioned them, which is technically not permitted under the company’s code of conduct.

Lawsuits on employment discrimination based on political affiliation are rare in Hong Kong where workplace discrimination laws focus predominantly on gender and age. So, while inconsistencies in Cathay’s code of conduct are unlikely to present significant litigation risk for the airline, they can further exacerbate the degree of reputation and financial damage that is being inflicted on the company by eroding the credibility of its workplace rules and company culture.

Considerations for effective free speech policies

Company codes of conduct that restrict employee expression of political or religious opinions need to be crafted with care. When establishing clear boundaries for expression of opinion and political activities, employers should consider whether policies would infringe on established legal rights such as the freedom of speech. Policies that are too broad run the risk of being seen as disproportionately restrictive, and, in some jurisdictions, could form the basis of lawsuits against the company.

Senior managers who are involved in enforcing the code of conduct need to have a thorough understanding of the scope of the rules and what the decision-making process is for handling violations. Businesses should be prepared to defend, with the support of documentation, any firing decisions that are made as result of a breach of the code of conduct rules.

Closing thoughts for employees

On the employee side, individuals should be aware of what their obligations to their employer are with respect restrictions on expression of political opinion, religious beliefs, and other social issues. Codes of conduct that are incorporated into employment contracts are binding on employees, meaning employment can be terminated if an employee breaches the code of conduct.

Potential breaches can be subtle, requiring individuals to really stop and think before they speak or post. If a company code of conduct restricts affiliation with the employer when making expressions of political opinion or religious beliefs, employees need to be mindful of circumstances where affiliation to their employer could be inferred. For example, comments posted to social media platforms such as Facebook could be seen as an affiliation to an employer if the user’s profile prominently states who his or her employer is.

In an environment where employers are increasingly more involved in policing employee expressions of political opinion and religious belief, exercising caution and pausing before acting is strongly advised.


This article was written by Helen Chan, a Regulatory Intelligence Expert for Thomson Reuters Regulatory Intelligence.

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