Cotton On under fire for requiring employees to be “fun” and “keep it real”: Why your business should have a code of conduct too

“Keeping it real” is part of the ethos at retailer Cotton On

Clothing retailer Cotton On has been forced to defend its directions to employees, after it was revealed Cotton On workers are required to follow a code of conduct that includes vague concepts of being “fun” and “keeping it real”.

According to reports in Fairfax, Cotton On employees potentially face “disciplinary action, which many include counselling, warnings, or instant dismissal” if they are found to be engaging in “unacceptable conduct”, including not following the retailer’s values of “fun, entrepreneurial, keeping it real, family, ethical and engaged”.

A Cotton On spokesperson told Fairfax there could be a “misalignment” with the value of “keeping it real” if for example, an employee was “found to behave in a manner or represent themselves in a way that was not honest, genuine, respectful and transparent”.

Not being “fun” at work could relate to an employee being unpleasant or not being respectful or acting in good faith and spirit.

But the spokesperson said the code of conduct is not a performance management tool for Cotton On’s more than 19,000 employees.

In a statement provided to SmartCompany, Cotton On said the article is inaccurate and “a misrepresentation of our culture, values and employment practices” and reiterated the code of conduct and values contained in it are “not conditions of employment”.

“We are extremely proud of our culture and the values upon which this culture is built and we absolutely encourage our team members to embrace and embody these,” Cotton On said.

“Our code of conduct itself is not a performance management mandate,” a spokesperson for the company told SmartCompany. 

“The purpose of this guide is to ensure all Cotton On Group team members are aware of, understand and comply with required standards of behaviour.”

Andrew Douglas, principal in the workplace relations team at M+K Lawyers, is familiar with Cotton On’s workplace policies as the retailer is a client of M+K Lawyers. While Douglas has not been directly involved in the company’s code of conduct, he told SmartCompany there is no explicit reference in the document to termination of employees who do not embody the company’s values.

Instead, Douglas says it is “refreshing for a business like Cotton On to clearly articulate in a code of conduct the values and expectations of employees in simple and clear terms”.

Rather than criticising a company for using terms such as “fun” and “keeping it real”, Douglas says employers should be congratulated for using common vernacular in place of “legalistic jargon”.

However, Holding Redlich workplace lawyer Evan Willis told SmartCompany it may be difficult for employers to enforce a value such as “keeping it real” without risking unfair dismissal liability, the meaning of which is ambiguous.

“This would be worsened if employees were summarily dismissed for serious misconduct, which requires a greater degree of severity of conduct,” Willis says.

While Willis says employers are entitled to include directions to employees within a code of conduct, he says the policies must be reasonable and “say exactly what the employer means”.

“Otherwise an employer seeking to rely on the policy may not have a valid reason for dismissal or the dismissal might otherwise be harsh,” he says.

“Employers should be careful when issuing workplace policies or codes of conduct to make sure they do not threaten sanctions for failure to comply with loosely defined buzz words or amorphous concepts.”

Douglas believes all employers should consider adopting a code of conduct, which are well supported in employment law as a way to manage the performance of employees.

“All businesses should have a code of conduct sitting above workplace behaviour policies so they know what good behaviour looks like and can manage bad behaviour,” Douglas says.

Douglas says codes should be written in language that all employees can understand quickly and utilised by managers to show employees what good behaviour in the particular workplace looks like.