Kefeng Deng v Westpac Banking Corporation
[2018] FWC 7334
•30 NOVEMBER 2018
| [2018] FWC 7334 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Kefeng Deng
v
Westpac Banking Corporation
(U2018/5696)
COMMISSIONER RIORDAN | SYDNEY, 30 NOVEMBER 2018 |
Application for an unfair dismissal remedy.
[1] Mr Kefeng (Ken) Deng (the Applicant) was employed by Westpac Banking Corporation (the Respondent) in a variety of positions between 2 October 2012 and 15 May 2018. At the time of his termination, the Applicant was employed as a Mobile Lending Manager at St George Bank.
[2] The Applicant applied to the Fair Work Commission (the Commission) for an unfair dismissal remedy in accordance with section 394 of the Fair Work Act 2009 (the Act), on 1 June 2018.
[3] Leave was granted, in accordance with section 596(2) of the Act, to allow the Applicant to be represented by Mr D O’Sullivan of Counsel with Mr B Andrews from Narado Lawyers and Solicitors and for the Respondent to be represented by Ms V Bulut of Counsel, with Ms J Mansfield from Ashurst Australia.
[4] Witness statements were attested by the Applicant for himself, Ms Amanda King (Senior Investigator, Group Investigations Team) and Ms Aimee Quintal (Acting Case Manager, Human Resources, Corporate Affairs and Sustainability) for the Respondent.
Background
[5] The Respondent terminated the Applicant due to the Applicant’s alleged serious breaches of:
(a) the Westpac Group Code of Conduct;
(b) the Westpac Group Technology Code of Use; and
(c) the Applicant’s Attestation Certificate.
[6] On 20 March 2018, Ms King sent the following email to the Applicant:
“Dear Ken
Thank you for your time today.
As discussed, the Bank requests you attend a meeting on Wednesday 21/03/2018 at 3:00pm at 275 Kent St, Sydney, NSW 2000. Once you arrive, can you please contact me or request for concierge to do so, and I will meet you downstairs and bring you up.
This interview will focus on the following: emails with applicant documents sent by you from your personal email account, and received by you on your St George email account, documentation received from a third part unrelated to a loan and dealings with an unaccredited person.
I have attached a copy of the interviewee process handout which provides you information about the interview process, please read this so you understand the process and other things you need to know.
As is your right, if you choose to decline to be interviewed I ask that you contact me prior to the interview time, if you still consent to meet on Wednesday, please confirm via return email.
If you need any support in dealing with this matter, ACCESS provides Westpac employees with confidential independent professional counsellors for a range of issues. ACCESS can be contacted on [telephone number redacted].
Please feel free to contact me directly if you wish to discuss anything further.” 1
[7] Relevantly, the attached Interviewee Process Handout identified that, as part of the interview process, Westpac “will provide you with details of the allegation or complaint against you.”
[8] This interview was delayed until the following day to allow the Applicant’s wife to attend as a support person. This interview was conducted at 11:00 am and lasted for five hours with two short breaks. The Respondent did not provide the Applicant or his wife with any food, tea or coffee during this interview.
[9] On 1 May 2018, the Respondent provided the Applicant with a “show cause” letter, identifying eight allegations, which said:
“Dear Ken,
Re: Intent to Terminate Employment
We refer to the recent investigation into your conduct as an employee of the Westpac Group, namely allegations of serious breaches of the Westpac Group Code of Conduct, your Lending Attestation Certificate and the Technology Code of Use Policy.
Your lending conduct has been subject of an investigation by Group Investigations & Intelligence, undertaken by Amanda King, Senior Investigator. This investigation included a thorough review of all available evidence and a formal interview with you on 22 March 2018, to seek your response to allegations regarding your lending conduct. You attended this interview accompanied by your support person, Lu Zheng. You stated that you understood the allegations against you and you responded in that context.
The purpose of this letter is to advise you of the findings of the investigation and to seek your response to your intent to terminate your employment.
The findings in respect of each of the allegations are detailed below.
Allegation 1
It was alleged that you used your personal email accounts, which are unsecure and unauthorised for work purposes, to send emails containing unencrypted confidential customer information to your work email address. Specifically:
• On 24 January, 21 April, 26 June, 12 July, 18 July 2017 and 6 February 2018, 7 emails were sent from your personal email address ([email address 1 redacted]) to your work email address, containing customer payslips/salary records, rental appraisal and accommodation documentation, employment letter, visa grant notice, bank statements and other confidential customer documents.
• On 21 June, 23 June, 26 June, 26 October, 13 November, 29 November, 6 December 2017 and 12 March 2018, 11 emails were sent from your personal email address ([email address 2 redacted]) to your work email address, containing customer payslips/salary records, accommodation documentation, bank statements, contract of sale, and other confidential customer documents.
• On 11 December 2017, 1 email was sent from your personal email address ([email address 3 redacted]) to your work email address, containing confidential customer documents.
None of the emails contain the original sender details showing the origin of the documents.
During your interview with the Group Investigations in response to this allegation, you advised that you operate the 3 aforementioned personal email addresses. You stated that customers send documents to these addresses at your request when they need to send large attachments which exceed the bank’s 25MB limit, so that you can then minimise the file size and send on to your work address. You also noted an example where a customer did not trust the Bank but trusted you, so asked for your personal email address to send their documents.
You could not explain why none of the 20 attachments to the identified emails were compressed in any way or over 25MB in size. You stated that you were ‘not happy’ to show the investigator your personal email accounts to evidence that the documents were sent to you by customers, and could not answer whether copies of the customer information and documents were still in your personal email accounts.
On balance, from your admissions and all information reviewed, this allegation was substantiated.
Allegation 2
It was alleged that you have sent emails containing unencrypted confidential information to your personal email accounts, which are unsecure and unauthorised for work purposes. Specifically:
• On 9 May 2017, 1 email was sent from your work email address to your personal email address ([email address 3 redacted]), containing confidential customer documents.
• On 1 June 2017, 1 email was sent from your work email address to your personal email address ([email address 2 redacted]), containing a loan application and borrower checklist.
During your interview with Group Investigations in response to this allegation, you advised that you did not know why you sent these emails with customer and loan information attached to your personal email accounts, and suggested that it may have been an accident. You also stated that you don’t know if the information is still in your personal email accounts. You also stated that you did not provide the customer information to the relevant referrer in either instance.
On balance, from all information reviewed, this allegation was substantiated.
Allegation 3
It was alleged that you have accepted customer documents from unrelated third parties to the loans. Specifically:
• On 21 April 2017, via email to your work email, you received an accepted an employment letter and payslips for a loan for customer WD & HZ*, from an unrelated third party;
• On 26 June 2017, you accepted all documents for a loan for customer HW & YC*, from an unrelated third party; and
• On 8 August 2017, via email to your work email, you received and accepted a loan application, account statement and rental agreement for a loan for customer DN*, from an unrelated third party.
During your interview with Group Investigations in response to this allegation, you advised that:
• In relation to the documents received on 21 April 2017 you don’t know who the email account belongs to but believe it would be the customer even though the email address is not on either customer’s profile;
• In relation to the documents received no 26 June 2017, you have no memory of ever speaking with the individual; and
• In relation to the documents received on 8 August 2017, you have no memory of receiving this or what happened, and that you did not originate a loan for this person.
On balance, from all information reviewed, this allegation was substantiated.
Allegation 4
It was alleged that you coded a loan for customer ZZ* to a referrer after the application and Customer Needs Review (CNR) had already been completed. Specifically:
• You first viewed the customer profile on 1 June 2017.
• The loan application was signed and Customer Needs Review was completed on 20 June 2017;
• Bank account statements for the customer were received on 11 and 12 July 2017; and
• You received the referral from Mr Shu on 13 July 2017.
During your interview with Group Investigations in response to this allegation, you could not explain why the referral from Mr Shu came through Sales Force over 3 weeks after the CNR and loan application were completed.
On balance, from all information reviewed, this allegation was substantiated.
Allegation 5
It was alleged that you knowingly dealt with an unaccredited referrer, Ms Yu, and then coded these referrals to an accredited referrer, Mr Shu.
During your interview with Group Investigations in response to this allegation, you stated that Ms Yu is Mr Shu’s business manager, which is like a PA. You stated that you are not aware of Ms Yu using Mr Shu’s referrer number but ‘anything is possible’. You also advised that you were not aware of Ms Yu ever referring loans to you because she does not have a referrer number.
We note that in an email from you to Carl Treuer, Business Development Manager, on 4 December 2017, you stated ‘Have you got Eileen’s [Ms Yu] code yet? So I can use her own code not Mr SHU.’ We therefore do not accept that you were unaware that you were dealing with an unaccredited referrer in your dealings with Ms Yu.
On balance, from all information reviewed, this allegation was substantiated.
Allegation 6
It was alleged that on 29 May 2017 and 30 May 2017 you sent confidential customer information to a third party to a loan, being the vendor’s agent, Mr MH*.
During your interview with Group Investigations in response to this allegation, you advised that Mr MH is your friend who you later helped to become an accredited referrer. You stated that the customer gave you verbal consent to provide the documents to the vendor’s agent.
On balance, from your admissions and all information reviewed, this allegation was substantiated.
Allegation 7
It was alleged that you used emailed copies of customer identification to complete the required Verification Of Identity (VOI) process. Specifically:
• On 12 April and 18 April 2017, you received emailed identification documents for customer PT* and used these in the VOI on 10 April 2017;
• On 4 May 2017, you received emailed identification documents for customer BG & YZ* and used these in the VOI on 5 May 2017; and
• On 11 December 2017, you received emailed identification documents for customer SW & BL* and used these in the VOI on the same date.
During your interview with Group Investigations in response to this allegation, you stated that:
• You would have sighted the original customer IDs at the time you met with them, and that if you had been unable to take a copy you asked the customers to email you a copy, which you then certified based on your memory of what the document looked like.
• If you received an email copy of a customer’s ID, you put the date you saw the original ID rather than the date of the email.
• You had met all the customers and saw their IDs.
On balance, from all information reviewed, this allegation was substantiated.
Allegation 8
It was alleged that you inserted scanned signatures into loan applications, in lieu of originals. Specifically:
• On 4 May 2017, you emailed customer BG & YZ* and requested them to ‘scan your application signature page in full. As I will need to print out and file as part of compliance’. The signature page emailed by the customer appears to have been inserted into the loan application and imaged on Panagon.
• The loan application for customer ZW & YW* has two application forms imaged on Panagon; one was signed (without printed names) by the customer but undated while a subsequent application was signed (with printed names) and dated by the customers.
During your interview with Group Investigations in response to this allegation, you stated that:
• With regard to the loan application for BG & YZ*, you believe you may have misplaced the signature page and asked them to scan their signatures and email to you, which you then inserted the signature page into the loan application.
• With regard to the loan application for ZW & YW*, the first application was signed in front of you in the initial interview but you might not have noticed it was not correctly signed. You said that the customer might have been too busy to meet you again to correctly sign and date the application form, so you asked them to send it to you.
• You did not fill out the missing sections yourself, it is not your handwriting.
On balance from all information reviewed, this allegation was substantiated.
In your interview with Group Investigations, you demonstrated a thorough knowledge of the Westpac Group policies and processes applicable to your work. We note that you have completed relevant training to ensure you understand both your obligations as a lender and as an employee of the Westpac Group, including Doing the Right Thing in Westpac (completed on 31 August 2016) and Lending Manager Attestation Certificate (completed on 8 November 2017).
Ken, we are deeply concerned about your failure to uphold your obligations as a lender which is placing the Bank and our customers at risk. We are also concerned that you have declined to provide access to or copies of the original emails containing the confidential customer information in your personal email accounts to confirm their origins, and have also declined to evidence or confirm whether or not any confidential customer information remains in your personal email accounts.
Your actions involve serious breaches of the Westpac Group Code of Conduct, your Attestation Certificate and the Technology Code of Use.
Code of Conduct:
We act with honesty and integrity
We comply with laws and our policies
We do the right thing by our customers
We respect confidentiality and do not misuse information
We value and maintain our professionalism
Lending Manager Attestation, and contained within this is the mandated adherence to:
St George Bank Consumer Lending Manual
Sales and interview process
Operational requirements
Sales and interview process, Referrer Lending Manager
Overall accountabilities
Technology Code of Use:
If you do not have approved access to external email, you are not permitted to send or receive external emails
Employees and contractors should not base critical business related decisions on information obtained from the Internet, including email, without first confirming the accuracy, authenticity and quality of that information.
Seriousness of concerns
Each of us is responsible for our own behaviour and we are all accountable for the choices we make. The Code of Conduct is designed to help you make the right choices and to illustrate how you are expected to meet the Westpac Group’s core values. The principles in the Code describe the conduct expected of all Westpac Group employees.
Ken, we find that your actions and behaviours have failed to meet the expectation that as a Westpac employee, you will always act in an ethical and professional manner.
In view of these serious breaches we now advise that we are considering terminating your employment.
Opportunity to respond
We would like to provide you with an opportunity to respond to our notification regarding the termination of your employment. Please provide your written response to me at [email redacted] by close of business Wednesday, 2 May 2018.
Please note that if you are able to provide your response prior to this date, this matter will be addressed sooner. If you choose not to respond, a decision will be made on the information available.
Please be reminded that the investigation and the outcome are confidential and should not be disclosed to any person unless you are seeking advice or support from your support person, or except where Westpac receives a background check request under the Protocol as explained below. …” 2
[10] The Applicant responded the following day, inside the short timeline determined by the Respondent:
“Dear Ben,
According to our formal conversation yesterday on 01/05/2018 in regards to the feedback of the investigation on my lending conduct performed by Wetpace Senior Investigator – Amanda King. You have also given me a copy of report – Re: Intent to Terminate Employment that followed by the formal interview between Amanda and myself on 22/03/2018. I am giving my response to the report in below, and my response will be consisted by 3 parts:
1. Response to each individual allegation in the report (8 Allegations in total);
2. My additional comments on Intent to Terminate Employment;
3. Summary and rectification plan.
Allegation 1 – the reasons of I transferred customer information between my personal email to work email I have already given in the interview i.e. Westpac email size limitation, at customers’ request ect. More importantly, I was not aware of such behaviour was not allow under the bank’s policy and procedure until the meeting with Amanda King on 22/03/2018. I cannot recall in any trainings I received from Westpac Group or saw any policy in writing that clearly states: Westpac staff member should never receive any customer information in personal email box and transfer to company email under any circumstances. What I can make sure is all supporting documents used in loan applications that I received directly from loan applicants. I have never accepted customers’ documents from any referral partner.
In order to protect my personal information and privacy, I am not willing to let any Westpac staff member to access my personal email account. However, after the interview with Amanda on 22/03/2018, I checked all my personal email accounts and confirmed that all customers’ information and documents have been deleted. I am willing to provide write confirmation to confirm this matter in the form that satisfactory to Westpac Group i.e. an email, or personal statement with my original signature, or Statutory Declaration ect. Please kindly advise if needed. On top of that, as I am now aware that staff member should not receive customers’ documents to personal email and transfer to work email. Therefore, I can guarantee that it will not happen again in the future.
Allegation 2 –due to the 2 incidents mentioned were more than 11 months ago (May & June 2017), I cannot recall the situation. As I have explained, this could be just an accident. Once again, after the interview with Amanda on 22/03/2018, I checked all my personal email accounts and confirmed that all customers’ information and documents have been deleted.
Allegation 3 – 1st incident mentioned date on 21/04/2017, according to my best knowledge and memory, it was sent directly from the customers. It is not hard to say and to be double checked that in Australia, any natural person is free to have more than 1 email accounts. But Westpac & St George Bank system only can record 1 email address per each customer. It seems not fair to say that it is “from an unrelated third party’ if the email address doesn’t match with customers’ only email recorded in St George system.
The 2nd and 3rd incidents mentioned date on 26 June 2017 and 08 August 2017; I have no memory to these 2 cases or related personnel. I recall in the interview on 22/03/2018, Amanda mentioned that she cannot find any St George CIS, loan quote or application related to those personnel that originated by me, so does this matches with my memory i.e. I cannot recall I have done anything to these 2 cases and related personnel. Unless more system record can be found and present to me for further recall and explanation, otherwise, I disagree the description of this Allegation that “I have accepted customer documents from unrelated third parties to loans”. Because, I have already explained the 1st incident on above and the 2nd and 3rd incidents simply, there are no loans related at all. Furthermore, I have no control on who can send emails to my work email account, as my work email address is not confidential information and it printed on my St George Business Card that I have give to many people for business development purpose; people don’t need to get my consent before they sent email through. Therefore, it is not fair to accuse a lending manager to accept customer documents from unrelated 3rd party simply because my work email receives some information.
Allegation 4 – the mentioned customer is a St George bank existing customer prior to initial interaction with me. I have explained in the interview on 22/03/2018 with Amanda King but my response isn’t recorded on the report. So I put it in writing in below:
This case like many other comment situations in reality, the referrer has to disclose and get consent from potential home loan customer before sent lead to St George via online Sales Force. However, many customers prefer to talk to STG lending manager first to discuss their situation over the phone to know if their cases are possible or not before give consent to referrer to send lead through. In this case, the customer gets my phone number from Mr Shu in SY Property and called me to initiate the interaction. In many cases, customer didn’t provide the feedback or referrer didn’t follow up with customer until later stage. Therefore, this is why the initial customer interaction, CNR and loan application were started prior to sales force lead from the referrer to STG, I still need to code in loan application in order for the referrer partner to get paid after loan settle. Also, there wasn’t enough emphasize on the timing of sales force lead received to loan application start, I was told by MA BDM in early 2017 that as long as the lead received before loan settle, it should be OK. Since late 2017, there were strong emphasize started from MA management and BDMs to lending managers that the online lead has to be received as the 1st thing before I can proactively contact the potential customer to start any home loan discussion.
In this case, I acted in an ethical and professional manner and to my best knowledge, the customer was genuinely referred from Mr Shu in SY Property.
Allegation 5 – I did not deal with an unaccredited referrer, Ms Yu and then coded these referrals to an accredited referrer, Mr Shu.
The referral business entity: SY Property and individual referrer: Mr Shu was established St George Bank referral partner before I start my job as STG lending manager. Both Mr Shu and Ms Yu were introduced to me by STG former Mortgage Alliance (MA) BDM Oleg Mazkovoi in early 2017 who told me that they are existing referral partner and not very happy about the STG lending manager they were dealing with, and would like to talk to another lending manager who can providing better customer service. I then talked to Mr Shu and Ms Yu over the phone separately; they both confirmed their positions in SY Property i.e. Mr Shu is the managing director and Ms Yu is the business manager work for Mr Shu in SY Property. Mr Shu also confirmed that all customer are directly referred from him, however, as he is very busy person, he prefer me to contact Ms Yu for general communications e.g. Bank promotion offers & campaigns, Business meeting & event invitations ect. Therefore, since Feb/Mar 2017, I start to receive Home Loan leads from SY property.
In mid-late 2017, the former BDM Oleg left STG and Carl Treuer has takeover as new BDM to look after the relationship with SY Property. Carl has also advised that if SY Property would willing to commit aiming to refer $3m home loan every month, St George Bank would like to offer a better commission structure to them. Therefore, he asked me to hep communicate with SY Property for the news and relevant paperwork to sign by Mr Shu. According to Mr Shu’s preference, I then forwards emails from Carl to Ms Yu and get Mr Shu’s feedback from Ms Yu as his representative. After the new commission take effective, Carl also asked me to help him set up a face to face meeting with Mr Shu at SY Property’s business premises as he needs to fulfil the compliance requirement to his BDM job. I then helped Carl to liaise with Ms YU via emails for the meeting. The meeting was finalized in some time around Oct/Nov 2017. I didn’t attend the meeting, but from Carl’s feedback afterwards, he met both Mr SHU and Ms YU face to face, checked their valid ID and visited the business address of SY Property. Everything is good, all compliance requirements are met. Carl then told me he is in the process to apply an individual referrer code for Ms YU under SY Property, once it done; Ms yu can refer her customers to St George for home loan. It will helps SY Property to achieve their enhanced monthly referral target i.e. $3m.
The email mentioned in Allegation 5 date 04/12/2018 [sic] was Ms Yu enquired me if her referral code is ready so she can starts to refer, I then sent the email to Carl on 04/12/2017. Carl called on next day (should be 05/12/2018 [sic] notify me over the phone that after review, Ms Yu didn’t pass STG internal compliance check as qualified referrer, therefore she will not get an code. I cannot accept any referrals from Ms Yu; Mr Shu is the only accredited referrer in SY Property. I then called Ms Yu to pass on the bank decision and ever accept any referral business from her.
In the interview on 22/03/2018, Amanda asked me repeatedly 3-4 times if I know & accepted any referral from Ms Yu on behalf of Mr Shu giving the fact that Mr Yu [sic] is a busy man and often travel to overseas. I replied a number of times that giving my best knowledge, all referrals I received from SY property are referred directly from Mr Shu, I don’t have any doubt to this. However, Amanda then asked me if it is possible that someone use Mr Shu’s code and refers customers on his behalf. Giving the fact that I am incapable to eliminate the infinite possibilities to this question she asked me, I replied anything is possible. Once again, I would like to state very clear in writing here: GIVING WITH MY BEST KNOWLEDGE, I BELIEVE ALL REFERRALS I RECEIVED FROM SY PROPERTY ARE DIRECTLY REFERRED FROM MR SHU. I AM NOT AWARE ANYONE ELSE USED HIS CODE.
Allegation 6 – Incident mentioned on 29/05/2017 and 30/05/2017 was related to the same customer that I helped her land + building loans as a house and land package. Both land and TBE loans were approved and settled prior to this date. The customer received builder’s email and asks her to provide evidence that her building loan has been approved by bank. Because the customer has language difficulty as she doesn’t know English at all, therefore, she visited the real estate agent who sold her the House & Land Package i.e. Mr MH seeks for help. He customer called me in Mr MH’s office and asks for such document. I said I can email her a copy of loan offer that she signed, she asked me to email it directly to Mr MH as Mr MH will help her to reply builder in English. Therefore, I emailed it with customer’s verbal consent. It was a coincidence that her agent Mr MH is someone I already know in person, as Mr MH is also my real estate agent manage my investment apartment. Mr MH later become an accredited referrer is a separate matter and has nothing to do with this incident.
Allegation 7 – As I have already explained in the interview on 22/03/2018 with Amanda, According to VOI requirement, I have met face to face with every customer that I have dealt with for home loan and oversight their original valid IDs thus I 100% fulfilled VOI and bank’s KYC requirements. It is not the requirement that lending manager has to copy customer’s ID on the spot of meeting and use it with the VOI.
All incidents mentioned in Allegation 7 are the situations that when I me customers face to face that I didn’t have access to copy machine or scanner so I have asked customer to send me copies of their ID that I have oversighted. I have double checked the ID copies I received in email and feel confident that it was the true copies of original ID I have seen in every case before I certify and complete the VOI.
Allegation 8 – Refer to customer BG & YZ, I may have misplaced their original signature page, therefore asked customers to sign again and email to me. Refer to customer ZW & YW, customers originally signed the application form but didn’t print their names and date. When I found the defect, I contacted the customers and required them to sign it correctly and completely wit name printed and dated. Therefore, there are 2 application forms imaged in Panagon. They are both signed by customers but one of them is uncompleted with no name printed and dated.
My additional comments on Intent to Terminate Employment:
Based on my response on the above, I do not think I have involved breaches of the Westpac Group Code of Conduct, and Lending Manager Attestation. I may have unintentionally breaches the Technology Code of Use as I didn’t know that Westpac staff member should not receive any customer information to personal email box and transfer to company email under any circumstances.
However, under the circumstances that I have not been giving any pre-warning or any chance & help of rectify and improve but Westpac directly terminate my employment, it doesn’t seem fair to me.
Summary and rectification plan
In summary, I would like to keep working for St George Bank as Mobile Lending Manager, and I also propose the following rectification plan for the future improvement to me job:
1. In order to protect my personal information and privacy, I am not willing to let any Westpac staff member to access my personal email account. However, after the interview with Amanda on 22/03/2018, I checked all my personal email accounts and confirmed that all customers’ information and documents have been deleted. I am willing to provide write confirmation to confirm this matter in the form that satisfactory to Westpac Group i.e. an email, or personal statement with my original signature, or Statutory Declaration ect. Please kindly advise if needed. On top of that, as I am now aware that staff member should not receive customers’ documents to personal email and transfer to work email. Therefore, I can guarantee that it will not happen again in the future.
2. I am now fully aware and will adhere to that I can only contact potential customer after received the Sales Force online lead with customer’s name and contact number No loan will be initiated before receive lead.
3. I will get customer’s consent in writing if they ever require me to send their information to any third party.
I am willing to open discuss the above rectification plan further if needed.” 3
[11] The Applicant’s termination letter of 15 May 2018 said:
“Dear Ken,
Re: Termination of Employment
We refer to our letter dated 1 May 2018 in which we advised you of the findings of a recent investigation into your conduct. The investigation found the following allegations to be substantiated:
1) that you used your 3 personal email accounts, which are unsecure and unauthorised for work purposes, to send and receive emails containing unencrypted confidential customer information to your work email address;
2) that you have sent emails containing unencrypted confidential customer information to your personal email accounts, which are unsecure and unauthorised for work purposes;
3) that you have accepted customer documents from unrelated third parties to the loans;
4) that you coded a loan for customer ZZ* to a referrer after the application and Customer Needs Review (CNR) had already been completed;
5) that you knowingly dealt with an unaccredited referrer, Ms Yu, and then coded these referrals to an accredited referrer, Mr Shu;
6) that on 29 May 2017 and 30 May 2017 you sent confidential customer information to a third party to a loan, being the vendor's agent, Mr MH*;
7) that you used emailed copies of customer identification to complete the required
Verification Of Identity (VOl) process; and
8) that you inserted scanned signatures into loan applications, in lieu of originals.
During the investigation, we note that you admitted to some of the allegations. Your actions were found to constitute serious breaches of the Westpac Group Code of Conduct, your Attestation Certificate and the Technology Code of Use.
Accordingly, we gave notice that we were considering the termination of your employment. You were provided with the opportunity to respond to this notice in writing, and we confirm that we have received your written response dated 2 May 2018. In your response:
• you generally reiterated the explanations you gave in respect of each allegation during your interview with Group Investigations;
• you stated that you have checked all of your personal email accounts and confirmed that all customer information and documents have been deleted, and you are prepared to provide written confirmation of this;
• you stated that you do not think you have breached the Westpac Group Code of Conduct or your Lending Manager Attestation Certificate;
• you stated that you may have unintentionally breached the Technology Code of Use as you did not know that you should not use your personal email address to receive customer information;
• you believe that you have not been provided any 'pre-warning' or chance to improve, and as such you believe that the termination of your employment would be unfair; and
• you proposed a 'rectification plan' in order that you can continue working as a St George Lending Manager.
We do not accept your explanations in relation to allegations 1, 2 and 3 that you were not aware of the Technology Code of Use and Westpac policy with respect to the handling of customer confidential customer information. We also do not accept your explanation that there was a file size issue which forced you to use your personal email addresses, given that in the instances alleged the files were under the Westpac size limit and were not compressed in any way. We also note that you never raised this as an issue prior to the allegations being put to you.
It is also our view that your explanations have been inconsistent; for example, you admitted that you had engaged in the breaches in allegation 1 but then stated that you were not aware of the policy. We also note that during the course of the investigation and disciplinary process, you have continued to refuse to cooperate by providing evidence of the origins of emails sent to and from your personal email addresses or evidence to confirm whether or not any confidential customer information remains in your personal email accounts.
Given your time as a lender and that you have undertaken training in all the relevant policies, we do not accept that you were unaware of the importance of complying with these policies and processes.
After careful consideration of the facts, your responses and in view of the serious nature of your actions and the repeated breaches of the Westpac Group Code of Conduct, your Attestation Certificate and the Technology Code of Use, we now advise that your employment with Westpac shall be terminated, effective close of business today.
In accordance with clause 48 of the Westpac Group Enterprise Agreement 2016 and your Employment Agreement with Westpac, you will be paid 4 weeks' salary in lieu of notice of the termination of your employment. All other entitlements will be processed through the payroll system on the next payday.
Australian Bankers' Association Industry Conduct Background Check Protocol (Protocol)
Please be aware that if you apply for future employment at other banks or financial institutions that have subscribed to the Protocol, you will be asked to provide consent for Westpac to complete a conduct background check about you. This may mean disclosing the fact that your employment has been terminated for misconduct to your prospective employer. In these circumstances, Westpac will have to provide the details of the category of misconduct as defined under the Protocol. Please also note that as part of our obligations under the Protocol Westpac will keep a record of this information.
Further information about the Protocol can be found on the ABA website [URL redacted].
If you have any questions related to the Protocol please contact the HR Service Centre on [telephone number redacted].
Support
I would also like to advise you that you remain eligible to utilise the Westpac Employee Assistance Program (known as Access) for three months after your separation from Westpac. This is a free, confidential counselling service that can assist you with any emotional considerations. The contact number for Access is [telephone number redacted].” 4
Evidence and submissions
[12] Due to the complexity and variance in the evidence and submissions, I have decided to deal with each of the allegations separately.
Allegation 1: Used 3 personal email accounts, which were unsecured and unauthorised to send and receive confidential customer information to your work email address
[13] Relevantly, the Applicant does not deny that he sent and received customer information to and from his three personal email addresses. The Applicant’s representative challenged whether the Applicant’s private email addresses were unsecured and unauthorised. Further, even if that were the case, the Applicant testified that he was unaware that his conduct was prohibited by the Respondent’s Technology Code of Use (TC).
[14] The Respondent identified the relevant provisions of the TC to include:
“1.1 Intent
The Westpac Group provides access to technology in order to achieve its business objectives and its vision of being an employer of choice. We recognise that using Westpac Technology has the ability to improve customer service, enhance business activities, enable organisational and individual learning. The Westpac Group incurs costs when it provides, maintains and administers its technology. There are also risks associated with allowing access to technology and systems that need to be appropriately managed. For these reasons, access to Westpac Technology is not provided unconditionally.
…
If this Code applies to you, then you must read it and make sure you understand it. If you need guidance, speak to your People Leader, the Group employee responsible for the project or services you are working on, your local technology support area or the relevant compliance team. In relation to any technical aspects of this document contact the Information Security Group.
This Code should be read in conjunction with the Westpac Code of Conduct, the Social Media Policy and the Information Security Policy.
…
‘Westpac Group’ or ‘Group’ means Westpac Banking Corporation, its brands, branches and subsidiaries within Australia and overseas, including but not limited to St. George Bank, BT Financial Group, Bank of Melbourne, BankSA, RAMS and Westpac New Zealand Limited.
2.6 Keep our information confidential
All users of Westpac Technology have agreed to keep our information confidential via their employment agreement, their independent contractor agreement or their agreement with a Group supplier, under which they provide services to the Group. Under these agreements you must not sell or transfer Group software, documentation or any type of Westpac information to any party.
Where there is a legitimate business need to send sensitive information within the organisation or externally, Group approved data protection processes must be followed.
Documents must be stored in a secure location that is backed up regularly.
Approved external hosted survey tools can only be utilised for the purpose of collecting non-sensitive information. Survey tools must not be used for hosting or storing sensitive information about the organisation, its employees or customers i.e. including passwords, personal identifiable information (PII) and account information as per the Consumer Outbound Email and SMS Security Standard.
2.7 Secure your portable devices
Information contained on portable devices (e.g. laptops, tablets, smartphones, cameras, audio recorders, USB memory keys) is especially vulnerable and special care must be taken to ensure that those items are secure.
Sensitive information must only be stored on Group owned or managed portable devices and must be protected by the use of encryption or other approved access control mechanisms.
Security Applications that are supplied on the MobileOS or pushed to said devices via MDM are Mandatory and MUST be enabled and run on a permanent basis on the device. This applies to both corporate devices as well as B.Y.O. devices.
All types of removable media (including but not limited to USB drives, memory sticks/cards and camera flash cards) are prohibited from use on any Westpac Technology unless appropriately authorised. …
2.8 Sending and receiving email external to Westpac
If you use Westpac Technology to send messages (e.g. email, SMS or text messaging, facsimile), you must be aware of and comply with the following messaging guidelines:
a) if you do not have approved access to external email, you are not permitted to send or receive external emails.
b) if you receive non-business-related files from unknown sources or senders via email, you must immediately delete the files without opening them. In addition, you must not send Group information in response to an email where the sender’s identity cannot be confirmed. Be aware that email is not a secure communication medium. For your own protection, and that of the Group, it is recommended that you confirm the identity of the intended recipient of any email message (e.g. contact the intended recipient by telephone).
c) if you wish to send an external email that contains sensitive information, such as customer information, tender documents or instructions of value, the email must be secured using approved procedures and products before sending. If you require this facility, contact your local technology support area for assistance. Where email encryption is not available or practical, an alternative and equally secure method of communication must be used.
d) care should be taken when using or providing your work email address on the Internet. This will assist in the prevention of receiving unsolicited (“spam”) emails.
e) all incoming and outgoing email messages and attachments are automatically checked for viruses. If this is not occurring or you suspect that you may have an attachment with a virus, you must not open the attachment. Contact your local technology support area for assistance.
f) the Group may block incoming and outgoing email messages. You may be advised where the Group has prevented the delivery of an email depending on the circumstances.” 5
[15] The Respondent submitted that it had not only provided the Applicant with training in relation to the TC, but that compliance with the TC had also been highlighted by the Respondent to the Applicant in the Applicant’s terms and conditions of employment.
[16] Ms Quintal, under cross-examination, agreed that if the Applicant was ignorant as to the provisions of the TC, that would be a mitigating factor and lower the level of seriousness of this allegation. 6
Allegation 2: Sent emails containing unencrypted confidential information to your personal email accounts which are unsecure and unauthorised for work purposes
[17] This allegation is also not denied by the Applicant. The Applicant accepted that the sending of two emails to his personal email account was in breach of paragraph 2.8(c) of the TC, but that he has no recollection of sending these emails to his personal email account, has no idea why he would want that information in his personal email account and that perhaps it was simply a mistake and that his email address had inadvertently been pre-populated.
[18] The Respondent submitted that the actions of the Applicant were deliberate and intentional. The Respondent claimed that to “auto-fill” the “To” box on an email, that the Applicant would have had to type in a portion of his name, then click on his name to auto-fill the box, then press the SEND button to send the email. The Respondent believes for all of these actions to be a mistake was unlikely.
[19] The Respondent highlighted clause 3(t) of the TC, which states:
“3. The use of Westpac technology for the following purposes is expressly prohibited:
t) accessing any non-authorised external email/webmail or social media system (including but not limited to Hotmail, Yahoo, AOL, Gmail) for Group business use.” 7
The Respondent submitted that the Applicant knew that he could not access his personal email accounts.
Allegation 3: Accepted customer documents from unrelated third parties to loans
[20] Ms King held concerns that the Applicant had accepted information for a loan that may not have been sent by the customer. Allegedly, such an action is in breach of the TC. Ms King did not believe the Applicant’s recent comments that he knew the customers on the basis that this commentary is contradictory to his comments during the interview on 22 March 2018.
[21] The Applicant explained that many customers would have more than one email address and that information could be sent by a customer from a different email address than the one recorded in the Respondent’s computer system for the customer. As an example, the Applicant indicated that he had three different private email addresses.
[22] Ms Quintal accepted that she had not contacted any of the customers to ascertain whether they had sent the information to the Applicant but had simply relied on the report of Ms King, who had also not made any attempt to contact any of the customers. Ms Quintal agreed that if she had contacted the customer and verified that the email did in fact come from the customer, that the allegation would not be substantiated.
[23] The Applicant submitted that the Respondent has not established that the Applicant had accepted information from third parties.
Allegation 4: Coded a loan to a referrer after the application and Customer Needs Review (CNR) had already been completed
[24] The Applicant met with a customer and completed their CNR on 20 June 2018. On 11 July 2018, the Applicant received additional information from the customer in relation to their loan. On 13 July 2018, the Applicant received a referral from Mr Shu for this customer and inserted Mr Shu into the documentation as the customer’s referrer.
[25] Ms Quintal testified that she had been involved in other disciplinary investigations in relation to this issue, however, she could not remember the names, circumstances or outcomes of those investigations.
[26] Under cross-examination, Ms King accepted that
“After a loan settles, you can’t retrospectively code that back to a referrer in my understanding.” 8
[27] The Applicant testified that the referrer can be coded after the CRN but not after a loan is settled.
[28] The Respondent did not refer the Commission to a policy or document in relation to any possible breach in relation to this issue.
Allegation 5: Knowingly dealt with an unaccredited referrer, Ms Yu, and then coded these referrals to an accredited referrer, Mr Shu
[29] The Applicant’s Attestation Certificate relevantly provided:
“I have not accepted, and will not accept, business from non approved referrers/brokers.” 9
[30] This allegation is a result of the following email exchange between the Applicant and Mr Carl Treuer:
“THE APPLICANT, 4 December 2017 3:17 PM
Hi Carl:
Have you got Eileen’s [Ms Yu’s] code yet? So I can use her own code not Mr SHU.
Thanks,
MR TREUER, 4 December 2017 3:42 PM
Still use Mr SHU for now. Will up date [sic] you tomorrow
Thanks,
Carl
THE APPLICANT, 4 December 2017 3:42 PM
No problem, mate! Will do for now.” 10
[31] Ms Yu is a business manager at SY Property Group, which is owned by Mr Shu. Ms Yu allegedly also acts as Mr Shu’s personal assistant. The Applicant had been advised by Mr Shu to contact Ms Yu whenever he was unavailable.
[32] The Applicant claims that Ms Yu was simply passing on the referrals from Mr Shu. Ms Quintal acknowledged that she did not speak to either Mr Shu or Ms Yu to ascertain the veracity of this statement.
[33] The Applicant provided uncontested evidence that Mr Treuer had met with Mr Shu and Ms Yu in October/November 2017 and had advised the Applicant that he thought it would be good for Ms Yu to get her own referral code. The Applicant gave the following explanation in the witness box:
“… The reason for this email chain, when I get a chance to look at it and because the reason is Karl actually met both Mr Shu and Ms Yu in their business premise back to like in October or November, and I wasn't in that meeting but I helped Karl to organise that meeting. So after he come back from the meeting he told me that like he meet both people and he's happy and he said that Ms Yu said - "Like, she has some customer want to refer and I think it is good for us to get Ms Yu her own referral code" and I said "Okay, if you think that's the case, please do it" and then it was like a month later or six weeks later that's when was the email chain happened, was Ms Yu tried to call me and ask "Hey, how did Karl go with my code?" and I said "I don't know but I can ask for you to Karl". This is how the whole things happened.” 11
[34] Neither Ms King nor Ms Quintal has spoken to Mr Treuer in relation to this matter.
Allegation 6: Sent confidential information to a third party to a loan, being the vendor’s agent, Mr Hu
[35] This allegation is not disputed by the Applicant. The Applicant claims to have been acting under the verbal instructions of the customer. Annexure E of Exhibit 1 is a translation of a personal statement signed by the customer on 19 July 2018. This statement read as follows:
“I, Mizuki SAI, hereby declare the following:
During 28-29 May 2017, I contacted my Lending Manger Mr. Kefeng DENG at the St George Bank to send a copy of my loan documents to my real estate Michael HU via E-mail. As I need Michael to translate these documents for me. Michael also needs to contact the Builder on behalf of me regarding the construction issues as my English is poor.
Furthermore, I authorized Kefeng DENG to directly reply any inquiry from Michal [sic] in relation to my loan information so that Michael could assist me on the communication with the Builder.
Attached please also find a copy of my NSW driver license and my contact details. Shall you have any questions. Please feel free to contact me. My first language is Mandarin, therefore, an interpreter is needed in all telephone conversations.
Mizuki SAI
19 July 2018” 12
[36] The Respondent submitted that by not encrypting these documents prior to sending them to Mr Hu, the Applicant was in breach of the TC.
[37] Ms King viewed the Applicant’s behaviour as a breach of the Code of Conduct because the Applicant did not have a record or a file note of the customer’s instructions.
[38] In response to a question from the Commission as presently constituted, Ms Quintal said:
“THE COMMISSIONER: The policy, the Westpac policy, in relation to this type of information being shared, does the consent have to be in writing?
MS QUINTAL: I'm not aware of there being a specific policy allowance for permission or granting consent to share information, on behalf of customers.
THE COMMISSIONER: Well, the obvious question then, what did you do to check Mr Deng's assertion that he was given verbal consent to share this information?
MS QUINTAL: I didn't take any further steps.”
[39] Under cross-examination, Ms King admitted that she had not attempted to contact the customer to see if they had authorised the Applicant to send this information to Mr Hu. Ms King also admitted that if the customer had authorised the Applicant to send the information then no breach of the Code of Conduct would have occurred in this instance.
Allegation 7: Used emailed copies of customer identification to complete the required Verification of Identity (VOI) process
[40] The Applicant does not deny this accusation.
[41] The Applicant claims that he always sighted the original documents when he visited a client but if there was no capacity to copy the documents, he asked the client to email him copies of the documents, which he then identified as true and correct copies. The Applicant claims that he made this assessment from his memory.
[42] The Applicant was not provided with a portable photocopier but was provided with a smartphone. The Respondent argued that the Applicant should have taken a photo of the documents with his phone.
[43] The Respondent submitted that the Applicant was being dishonest in relation to the manner in which he certified documents and in one instance backdated a document to a date prior to the actual meeting where the Applicant allegedly viewed the original documents.
[44] Ms King raised concerns that the Applicant may not be meeting with customers personally but conducting all of his business electronically. Such a practice would be in breach of the Respondent’s “Know Your Customer” process, which allegedly requires a face-to-face meeting.
[45] Ms King admitted under cross-examination that she did not contact any of the customers to ascertain whether the Applicant had previously sighted the original documents prior to receiving their emails.
[46] Ms Quintal acknowledged that she did not check with the customers that the documents signed by the Applicant were true and accurate copies of the original documents.
Allegation 8: Inserted scanned signatures into loan applications, in lieu of originals
[47] The Applicant admitted to inserting a scanned signature page into a loan document for a customer on the basis that the original page had been misplaced or may have had a typographical error which needed to be corrected.
[48] Ms Quintal admitted that she did not speak to any of the clients to check the veracity of the Applicant’s responses. 13
[49] Similarly, Ms King did not make enquiries with these customers:
“MR O’SULLIVAN: A customer, and then immediately above 102. Firstly with respect to the customer referred to above paragraph 99, did you speak to that person?
MS KING: No.
MR O’SULLIVAN: No. What about the two people referred to at paragraph 102?
MS KING: No.
MR O’SULLIVAN: No. Did you form a view as to whether the circumstances explained to you by Mr Deng were true or not?
MS KING: I had concerns about the validity of whether or not the customers had signed the document in its entirety. I did form that view.
MR O’SULLIVAN: Okay, and that's the main concern about allegation 8?
MS KING: In fairness - or, sorry, to explain, yes.
MR O’SULLIVAN: Yes. But it would have been an easy exercise, would it have not, Ms King, to speak to those particular customers and satisfy yourself whether that was or was not the case?
MS KING: That's - that is correct but it didn't change the fact that that had been inserted into a document.” 14
Other issues
[50] The Respondent also raised concerns that the Applicant had received a financial benefit from Mr Hu after he had referred his neighbour to Mr Hu’s real estate agency to sell a property. The Respondent is of the view that this activity is a breach of the Code of Conduct.
Legislation
[51] The relevant provisions of the Act pertaining to unfair dismissal applications are:
“381 Object of this Part
(1) The object of this Part is:
(a) to establish a framework for dealing with unfair dismissal that balances:
(i) the needs of business (including small business); and
(ii) the needs of employees; and
(b) to establish procedures for dealing with unfair dismissal that:
(i) are quick, flexible and informal; and
(ii) address the needs of employers and employees; and
(c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.
(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a "fair go all round" is accorded to both the employer and employee concerned.
Note: The expression "fair go all round" was used by Sheldon J in in re Loty and Holloway v Australian Workers' Union [1971] AR (NSW) 95.
382 When a person is protected from unfair dismissal
A person is protected from unfair dismissal at a time if, at that time:
(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(b) one or more of the following apply:
(i) a modern award covers the person;
(ii) an enterprise agreement applies to the person in relation to the employment;
(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.
385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.
387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that the FWC considers relevant.”
Consideration
[52] I have taken into account all of the evidence and submissions which have been provided by the parties. The fact that an issue has not been mentioned in this decision does not mean that it has not been taken into account.
[53] In order to ascertain whether the Applicant has received his statutory entitlement to a “fair go”, it is necessary to determine whether the allegations made against the Applicant have been substantiated and whether the disciplinary penalty of dismissal was an appropriate outcome.
[54] In King v Freshmore (Vic) Pty Ltd, a Full Bench of the Australian Industrial Relations Commission held:
“When a reason for a termination is based on the conduct of the employee, the Commission must, if it is an issue in the proceedings challenging the termination, determine whether the conduct occurred. The obligation to make such a determination flows from s.170CG(3)(a). The Commission must determine whether the alleged conduct took place and what it involved.
The question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the proceedings before it. The test is not whether the employer believed, on reasonable grounds after sufficient enquiry, that the employee was guilty of the conduct which resulted in termination.” 15
[55] In Edwards v Giudice, in a different legislative framework, Moore J made the following observation in relation to the operation of s.170CG(3) of the Workplace Relations Act 1996:
“The paragraph requires consideration of the validity of the reason when the reason is, relevantly, based on conduct of the employee. It is, in my opinion, difficult to avoid the conclusion that the Commission is obliged in such circumstances to investigate in the inquiry process contemplated by s.170CG(3) whether the conduct relied on occurred as a necessary step in the process of determining whether a valid reason existed.
The reason would be valid because the conduct occurred and justified termination. The reason might not be valid because the conduct did not occur or it did occur but did not justify termination.” 16
[56] The Applicant is alleged to have breached the Respondent’s Code of Conduct, TC and his Attestation Certificate. The Applicant has not denied every allegation, but has provided submissions and evidence in relation to what may be mitigating circumstances. I will now deal with each allegation.
Allegation 1
[57] I am satisfied and find that the Applicant did not have a comprehensive knowledge of the TC at the time of his actions. Due to the Applicant’s consistent use of his private email account to conduct business for the Respondent, such a finding is obvious. I can see no personal benefit for the Applicant in deliberately acting in contravention of this policy. I am prepared to accept the evidence of the Applicant that, due to the majority of the Applicant’s customers being of Chinese origin, a number of his clients had a mistrust in the banking system and would only send this information to the Applicant’s private account.
[58] I have taken into account and agree with the evidence of Ms Quintal that ignorance of the TC policy would lower the level of seriousness of this allegation. I find that allegation 1 is substantiated but at a lower level of seriousness than that considered by the Respondent.
Allegation 2
[59] Whist it is not readily understandable why the Applicant would send customer information from his work email to his private email, the simple fact is that this did occur. The Applicant cannot provide a reason as to why.
[60] Whilst I acknowledge that, on occasion, emails sometimes get sent in error, I accept the explanation from the Respondent that the Applicant would have had to undertake a number of deliberate computer actions to “auto-fill” and send an email to his private email account.
[61] The Applicant knew that this activity was a breach of the TC. I accept and find that the actions of the Applicant in breaching the TC was a deliberate act on his part and not a mistake.
[62] I find that allegation 2 has been substantiated.
Allegation 3
[63] I was not surprised to learn that the Applicant had a number of different private email address; such a practice is not uncommon. It is plausible that the customers of the Applicant also have more than one email address and may have sent their information from their alternate email addresses to the Applicant. The Respondent was obligated to make further enquiries as to the identity behind the email addresses which were not recorded in the Respondent’s database, but were the source of the provision of the customers’ information.
[64] As a result of the Respondent’s defective investigation, I find that allegation 3 is not substantiated.
Allegation 4
[65] The Respondent’s witnesses seem to be confused as to the cut-off time for inserting the name of a referrer into a loan process. Both the Applicant and Ms King gave evidence that a referrer cannot be inserted into a loan application after the loan settles. It is not in dispute that the Applicant inserted the name of a referrer before the loan was settled.
[66] As a result, I find that allegation 4 is not substantiated.
Allegation 5
[67] It is uncontested evidence that Ms Yu is a close business associate of Mr Shu. It is also uncontested that Ms Yu had met with Mr Treuer, without the Applicant, when Mr Treuer raised the possibility of Ms Yu being granted a referrer certificate by the Respondent. The email chain of 4 December 2017 between Mr Treuer and the Applicant can be interpreted in a number of ways. The explanation from the Applicant that he was simply making an enquiry on behalf of Ms Yu as to her certificate is a possibility. It would not have been difficult for the Respondent to clarify this situation. The Respondent should have interviewed both Mr Yu and its own employee Mr Treuer. It beggars belief that Mr Treuer was not interviewed in relation to this allegation. This failure further highlights the deficiencies in the investigation process.
[68] Due to the deficient investigation process, there is insufficient evidence to clarify what actually transpired in early December 2017. I find that allegation 5 cannot be substantiated.
Allegation 6
[69] The Applicant claims that he had been given verbal permission by the customer to provide her information to Mr Hu. Surprisingly, the Respondent did not believe the Applicant because he did not make a file note of this authorisation. Once again, the Respondent did not make an enquiry with the customer to ascertain the veracity of the Applicant’s response. The customer has now provided a signed statement supporting the Applicant’s submission.
[70] I acknowledge that the Applicant did not send this email to Mr Hu in accordance with the TC.
[71] Based on the uncontested evidence of the customer, this allegation has not been substantiated.
Allegation 7
[72] The Applicant claims that he only accepted email identification documents after he had previously sighted the original documents. The Applicant also submitted that there were reasons why, on occasion, that he could not make copies of the original documents at the face-to-face meeting. The Respondent was unable to challenge this evidence by the Applicant because, once again, it failed to contact any of the customers associated with this allegation.
[73] Whilst I accept that the Applicant’s approach may not fit within the boundaries of “best practice”, due to the lack of contradictory evidence, I find that the Applicant only used emailed copies of identification after he had earlier sighted the original documents.
[74] I find that allegation 7 is unsubstantiated.
Allegation 8
[75] The Applicant claims that he only submitted an emailed signature page in circumstances where the original page had been misplaced or that an error had been identified in the documentation prior to it being submitted.
[76] Once again, the Respondent did not check with the customers the veracity of the Applicant’s response. It would appear from the evidence that the Applicant was simply trying to overcome a deficiency in the customer’s loan application in an expedient manner.
[77] If the Respondent had been able to provide evidence from any of the customers that they only ever signed the emailed form, then a different interpretation could be given to the situation.
[78] I also note that the Respondent has only been able to produce two loan applications with this inadequacy. This low number supports the theory that this practice was only utilised in unusual or special circumstances, such as those identified by the Applicant.
[79] I find that allegation 8 has not been substantiated.
Other issues
[80] I agree with the Respondent that the Applicant receiving a fee for referring his neighbour to a real estate agent looks unusual, but I am satisfied that the Applicant has not breached any policies or codes of the Respondent by accepting the fee. Had the Applicant received a fee by referring one of the Respondent’s customers, then my finding would have been different.
[81] Based on the reasoning identified above, I am satisfied and find that the Respondent has substantiated allegation 2 and to a lesser extent allegation 1, due to the mitigating factor.
[82] When considering whether a termination of an employee was harsh, unjust or unreasonable, the oft-quoted joint judgement of McHugh and Gummow JJ in Byrne v Australian Airlines (Byrne) is of significance:
“It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.
… In Lane v Arrowcrest Group Pty Ltd, von Doussa J considered the example of the dismissal of an accountant who held a position of trust where it was discovered after the dismissal that the accountant had been systematically embezzling money from the employer. His Honour said it would be astonishing if the employer could not resist an allegation that the dismissal was harsh, unjust or unreasonable, within the meaning of the relevant award, by pointing to those facts discovered after the dismissal, so long as they concerned circumstances in existence when the decision was made. His Honour concluded:
“Whether the decision can be so justified will depend on all the circumstances. A circumstance, likely to favour the decision to dismiss, would be that fraud or dishonesty of the employee had caused or contributed to the employer's state of ignorance. A circumstance likely to weigh against the decision would be that the employer had failed to make reasonable inquiries which would have brought existing facts to its knowledge before the dismissal occurred.”” 17 [footnotes omitted]
[83] In analysing Byrne, a Full Bench of the Australian Industrial Relations Commission in Australian Meat Holdings Pty Ltd v McLauchlan held:
“The above extract is authority for the proposition that a termination of employment may be:
• unjust, because the employee was not guilty of the misconduct on which the employer acted;
• unreasonable, because it was decided on inferences which could not reasonably have been drawn from the material before the employer; and/or
• harsh, because of its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct.” 18
[84] I now turn to the provisions of section 387 of the Act to determine whether the Applicant’s termination was harsh, unjust or unreasonable.
Section 387(a): Valid Reason
[85] The meaning of the phrase “valid reasons” has been universally drawn from the judgement of Northrop J in Selvachandran v Peteron Plastics Pty Ltd:
“In broad terms, the right is limited to cases where the employer is able to satisfy the Court of a valid reason or valid reasons for terminating the employment connected with the employee’s capacity or performance or based on the operational requirements of the employer. …
Section 170DE(1) refers to “a valid reason, or valid reasons”, but the Act does not give a meaning to those phrases or the adjective “valid”. A reference to dictionaries shows that the word “valid” has a number of different meanings depending on the context in which it is used. In the Shorter Oxford Dictionary, the relevant meaning given is: “2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value.” In the Macquarie Dictionary the relevant meaning is “sound, just, or well founded; a valid reason”.
In its context in s 170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s 170DE(1). At the same time the reason must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must “be applied in a practical, commonsense way to ensure that” the employer and employee are each treated fairly…” 19
[86] In Rode v Burwood Mitsubishi, a Full Bench of the Australian Industrial Relations Commission held:
“… the meaning of s.170CG(3)(a) the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason.” 20
[87] In Qantas Airways Ltd v Cornwall, the Full Court of the Federal Court of Australia said:
“The question is whether there was a valid reason. In general, conduct of that kind would plainly provide a valid reason. However, conduct is not committed in a vacuum, but in the course of the interaction of persons and circumstances, and the events which lead up to an action and those which accompany it may qualify or characterize the nature of the conduct involved.” 21
[88] In B, C & D v Australian Postal Corporation t/a Australia Post (Australia Post), a Full Bench of the Commission held:
“A failure to comply with a lawful and reasonable policy is a breach of the fundamental term of the contract of employment that obliges employees to comply with the lawful and reasonable directions of the employer. In this way, a substantial and wilful breach of a policy will often, if not usually, constitute a “valid reason” for dismissal.” 22
[89] I am satisfied and find that the Applicant has breached the policies of the Respondent. Adopting the obiter in Australia Post, I find that the Respondent had a valid reason to terminate the Applicant’s employment.
Section 387(b): Notified of the Reason
[90] In Crozier v Palazzo Corporation, a Full Bench of the Commission said:
“As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170CG(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.” 23
[91] The Applicant was terminated on 15 May 2018. The Applicant’s termination letter identified the eight allegations that were part of the 1 May 2018 correspondence as the reasons for the termination. I find that the Applicant was notified of the reasons for this dismissal. I have taken this into account.
Section 387(c): Opportunity to Respond
[92] At a meeting in 1 May 2018, the Applicant was provided with a letter titled “Intent to Terminate Employment”.
[93] Surprisingly, the Applicant was only given 24 hours to respond to this detailed and complex correspondence. This timeframe is grossly inadequate and procedurally unfair. The Applicant was interviewed by Ms King on 22 March 2018. There was no further contact by anyone from the Respondent until the Applicant received an invitation to a meeting on 1 May 2018. At this meeting, the Applicant was presented with a six-page letter containing eight detailed accusations in relation to his conduct on 35 occasions dating back to April 2017. The Applicant was required to respond by 5:00 pm the following day. There was no opportunity for the Applicant to seek advice from a lawyer or an industrial relations specialist. I have taken this into account.
[94] In Wadey v YWCA Canberra, Moore J of the Industrial Relations Court of Australia said:
“… the opportunity to defend, implies an opportunity that might result in the employer deciding not to terminate the employment if the defence is of substance. An employer may simply go through the motions of giving the employee an opportunity to deal with allegations concerning conduct when, in substance, a firm decision to terminate had already been made which would be adhered to irrespective of anything the employee might say in his or her defence. That, in my opinion, does not constitute an opportunity to defend.” 24
[95] In Gibson v Bosmac Pty Ltd (Gibson), Wilcox CJ said:
“Ordinarily, before being dismissed for reasons related to conduct or performance, an employee must be made aware of the particular matters that are putting his or her job at risk and given an adequate opportunity of defence. However, I also pointed out that the section does not require any particular formality. It is intended to be applied in a practical, commonsense way so as to ensure that the affected employee is treated fairly. Where the employee is aware of the precise nature of the employer’s concern about his or her conduct or performance and has a full opportunity to respond to this concern, this is enough to satisfy the requirements of the section.” 25
[96] Applying the obiter in Gibson and a pragmatic definition of common sense, I am not satisfied that the Applicant was given a full opportunity or sufficient time to respond to the “Intent to Terminate Employment” letter. It is not good enough for Ms Quintal to simply say in the witness box that if the Applicant had asked for more time it would have been granted.
[97] I find that the Applicant was denied procedural fairness by not being given an opportunity to respond. I have taken this into account.
Section 387(d): Refusal of Support Person
[98] The Applicant was not prevented from bringing a support person to the disciplinary meetings.
Section 387(e): Warning about Unsatisfactory Performance
[99] The Applicant was not terminated for unsatisfactory performance. I note, however, that the Applicant had no previous disciplinary warnings on his employment record.
Section 387(f): Size of Enterprise – Procedures Followed
[100] The Respondent is a large employer. It would appear that it has followed its disciplinary procedures. I have taken this into account.
Section 387(g): Dedicated HR Management
[101] The Respondent has an extensive and dedicated HR team. I have taken this into account.
Section 387(h): Any Other Matter
[102] I have taken into account that, when asked, the Applicant refused to give the Respondent access to his personal email accounts to check whether any of the Respondent’s customers’ private information had been stored on the Applicant’s computer. This decision by the Applicant was misguided and unfortunate on the basis that it simply increased the suspicion of the Respondent and the Commission that the Applicant was not acting appropriately.
[103] I have taken into account that the Applicant’s investigation with Ms King on 22 March 2018 started at 11:00 am and lasted for five hours. I note that the Applicant and his wife did not have access to any food, tea or coffee during this meeting and that only two short breaks were taken during the entire five hours. I also note that the Applicant was shown some 30-40 documents during this meeting.
[104] The Respondent is a signatory to the Australian Bankers’ Association Industry Conduct Background Check Protocol (the Protocol). As a result of the Applicant’s termination and the existence of this Protocol, the Applicant has little or no chance of regaining employment in the finance industry. Whilst I understand that the motive behind the protocol is to ensure that disreputable people are not employed in the finance industry, in marginal cases, the result of this protocol provides a double penalty to an employee. I have taken this into account.
[105] I have taken into account that the Australian Government initiated a Royal Commission into the Banking Sector on 14 December 2017. I note the comments of Ms King in her report when she said:
“Conclusion:
It is paramount, albeit an expectation of the Bank, that all employees exhibit a high degree of professionalism, and act within procedural framework in all of their dealings.
This has never been more important than now with the heightened level of regulatory scrutiny that is currently being focused on the Bank.
By his actions Mr. Deng has placed the Bank in a position of potential financial, reputational and regulatory risk.
The Bank remains in the position of risk whilst Mr. DENG refuses to evidence or confirm, if he has deleted confidential customer information from his personal external email accounts.
Mr. DENG’s conduct and action have fallen well short of the required standard and should be given the appropriate serious censure and response.” 26
[106] I have noted the submissions of the Respondent in relation to the questions raised by the Commission, as presently constituted, in relation to the evidence given by senior executives of the Respondent at the Royal Commission as extensively reported in the media. Whilst I do not agree with the Respondent’s submissions on this issue, I have decided not to take the media reports into the conduct of the Respondent into account.
[107] I have taken into account the depth, or lack thereof, of the Respondent’s investigation into the eight allegations that were the reasons for the Applicant’s termination. The investigation, at best, appears to be nothing more than the opinions of Ms King. There has been not a single attempt to corroborate the responses of the Applicant by either Ms King or Ms Quintal. Not a single customer was contacted to ascertain whether the Applicant:
• met with them face to face;
• viewed their original identification;
• deliberately only gave them his private email address; or
• gave their personal information to a third party.
The Respondent did not even take the time to interview its own employee, Mr Treuer, to ascertain his understanding of the situation with Ms Yu. I have taken this into account.
[108] In Briginshaw v Briginshaw (‘Briginshaw’), Dixon J of the High Court said:
“The tribunal must feel an actual persuasion of its occurrence or existence before it can be found… Reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved… In such matters “reasonable satisfaction” should not be produced by inexact proofs, indefinite testimony, or indirect inferences.” 27
[109] I have taken into account that the Applicant was only given written notice of the allegations against him in the “Intent to Terminate Employment” correspondence on 1 May 2018 and that the Respondent required a response to these employment-threatening allegations within 24 hours.
[110] I have taken into account the Respondent’s new accusation that the Applicant has been dishonest during this process based on the variances between his answers to the questions of Ms King on 22 March 2018 compared to his sworn testimony before the Commission.
[111] The Applicant has raised a Jones v Dunkel 28 issue in relation to the non-attendance of the Applicant’s manager in the proceedings. The Respondent advised that this issue had been dealt with by my colleague, Commissioner McKenna, earlier in the proceedings. Whilst there is no mention of this decision by the Commissioner in the file history, which would be an extremely unusual event based on the Commissioner’s professionalism and commitment to process, I am prepared to accept the submission by the Respondent on face value and endorse the alleged decision of my respected colleague. However, the non-attendance of an individual manager does not explain why no management witness with an operational expertise or function was called to give evidence. I agree with the submissions of the Applicant that there is a void in the Respondent’s evidence on the basis that the Commission is unaware of what happens in reality in the workplace. From my previous experience, employees only working in accordance with an employer’s policies and procedures used to be called a “work to rule” campaign and identified as unprotected industrial action. Without an operational manager giving evidence, I am unaware of the actual workplace practices in relation to these policies. I have taken this into account.
[112] I have taken into account the training regime of the Respondent. The overwhelming majority of the training is computer-based and self-testing. The training does not appear to have any element of academic extension or rigour and can be completed, in some instances, in a matter of minutes. For example, the Respondent’s Attestation training module took the Applicant 3 minutes and 42 seconds in January 2017, 33 seconds in June 2017, 7 minutes and 9 seconds in November 2017 and 2 minutes and 35 seconds in April 2018. Having previously worked in vocational training for nearly 20 years, I question the actual capacity of this style of “tick and flick” training to embed the necessary skills and competencies into the employee operating the computer keyboard.
[113] I have taken into account that the Applicant stopped using his personal email for work purposes following the disciplinary meeting on 22 March 2018. The Applicant undertook this action without direction, prompting or request from the Respondent. This action supports the claim that the Applicant was unaware of the relevant provisions of the TC at the time of the accusation. I have taken this into account.
[114] I have taken into account that the Applicant had an unblemished personal file with the Respondent over his nine years of employment.
Conclusion
[115] I have previously found that the Respondent had a valid reason to terminate the Applicant. The Applicant’s action in sending the personal information of two of the Respondent’s customers to his personal email is undeniably reprehensible. The other seven allegations I found to be either unsubstantiated or greatly diminished (allegation 1).
[116] I accept that some of the Applicant’s answers may have changed between 22 March and August 2018. That is not unusual, nor is it a surprise. The Applicant was summoned to the disciplinary meeting without knowledge of the accusations. He was unprepared and unrepresented but provided answers over an arduous five hours whilst being bombarded with 30-40 documents ranging from selected emails to thick corporate policies. I place far greater credence on the considered and sworn statements and evidence of the Applicant that he provided at the Hearing. I find that the Respondent’s allegation of dishonesty has not been substantiated.
[117] Based on the obiter of Byrne, 29 Edwards v Giudice30and Australian Meat Holdings,31 I am of the view that the Applicant’s breach of the TC as identified in allegation 2 and to a lesser extent allegation 1 does not warrant the penalty of termination. The Applicant appears to be a model and successful employee who has tapped into a new market for the Respondent based on his ethnicity and cultural background. The breach of a policy which the Applicant acknowledges he did not fully comprehend does not warrant termination. I find that the decision to terminate the Applicant was harsh.
[118] I find that the Respondent has not proffered the Applicant the requisite level of procedural fairness. The process followed by the Respondent resembles that of a Star Chamber. The investigation process was flawed. Ms King failed to follow up on any of the explanations provided by the Applicant. The investigation by Ms Quintal was simply non-existent. Ms Quintal simply adopted Ms King’s report. For the Respondent to traverse between the disciplinary interview to the “Intent to Terminate Employment” interview without the Respondent even trying to corroborate the Applicant’s version of events was unjust.
[119] I find that providing the Applicant with only one day to respond to the “Intent to Terminate Employment” letter was also lacking in procedural fairness. The provision of a six-page letter setting out the eight allegations in detail to the Applicant was a positive step in the process by the Respondent. However, requiring a response within 24 hours is not pragmatic and blatantly unfair. It would not have been feasible for the Applicant to seek legal advice and provide a response in this timeframe. The Applicant was entitled to review all of the relevant emails, policies and accusations, seek legal advice, seek corroborative statements from his customers and provide a considered response. This denial of natural justice cannot be condoned. As a result, I find the Applicant’s termination to be unreasonable.
[120] The Applicant was entitled to receive his statutory entitlement of a “fair go”. The Respondent’s investigative process deprived the Applicant of this entitlement.
[121] I was surprised that the Respondent did not call any of the Applicant’s operational managers or colleagues. Their evidence may have put into context the actions of the Applicant. On face value, it would appear that the actions of the Applicant were haphazard in relation to the Respondent’s policies and procedures in that he complied with most of the policies but not necessarily all. The actions of the Applicant deserved to be the subject of disciplinary action and further training – perhaps even one-on-one training, but not the ultimate sanction of termination. I note that neither the Respondent nor any of the customers have suffered any financial loss due to the actions of the Applicant.
[122] Innuendo and assumption are poor substitutes for primary evidence. For the reasons stated above and following the obiter in Briginshaw,I find that the Applicant’s termination was harsh, unjust and unreasonable.
Remedy
[123] Having found that the Applicant was unfairly dismissed, I will now turn to the issue of remedy.
Statutory provisions
[124] The relevant provisions of the Act in relation to remedy are:
“390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) The FWC may make the order only if the person has made an application under section 394.
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.
391 Remedy—reinstatement etc.
Reinstatement
(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:
(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or
(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
(1A) If:
(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and
(b) that position, or an equivalent position, is a position with an associated entity of the employer;
the order under subsection (1) may be an order to the associated entity to:
(c) appoint the person to the position in which the person was employed immediately before the dismissal; or
(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
Order to maintain continuity
(2) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:
(a) the continuity of the person’s employment;
(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.
Order to restore lost pay
(3) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.
(4) In determining an amount for the purposes of an order under subsection (3), the FWC must take into account:
(a) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for reinstatement; and
(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.
392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”
[125] The Applicant submitted that the primary remedy under the Act is reinstatement and that such an outcome was appropriate in the circumstances, along with backpay and continuity of employment.
[126] The Respondent submitted that reinstatement would not be appropriate on the basis that:
• the Applicant’s lack of insight and contrition gives the Respondent serious concerns that the offending conduct of the Applicant may be repeated;
• the Applicant has acted dishonestly when responding to the allegations; and
• the Respondent has lost the necessary trust and confident in the Applicant.
Jurisprudence
[127] In Perkins v Grace Worldwide (Aust) Pty Ltd, the Full Court of the Industrial Court said:
“Trust and confidence is a necessary ingredient in any employment relationship. … So we accept that the question whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is impracticable, provided that such loss of trust and confidence is soundly and rationally based.
At the same time, it must be recognised that, where an employer, or a senior officer of an employer, accuses an employee of wrongdoing justifying the summary termination of the employee’s employment, the accuser will often be reluctant to shift from the view that such wrongdoing has occurred, irrespective of the Court’s finding on that question in the resolution of an application under Di 3 of Pt VIA of the Act.
If the Court were to adopt a general attitude that such a reluctance destroyed the relationship of trust and confidence between employer and employee, and so made reinstatement impracticable, an employee who was terminated after an accusation of wrongdoing but later succeeded in an application under the Division would be denied access to the primary remedy provided by the legislation. Compensation, which is subject to a statutory limit, would be the only available remedy. Consequently, it is important that the Court carefully scrutinise any claim by an employer that reinstatement is impracticable because of a loss of confidence in the employee.
… It is rare for any human being to have total trust in another. What is important in the employment relationship is that there be sufficient trust to make the relationship viable and productive. Whether that standard is reached in any particular case must depend upon the circumstances of the particular case. And in assessing that question, it is appropriate to consider the rationality of any attitude taken by a party.
It may be difficult or embarrassing for an employer to be required to re-employ a person the employer believed to have been guilty of wrongdoing. The requirement may cause inconvenience to the employer. But if there is such a requirement, it will be because the employee’s employment was earlier terminated without a valid reason or without extending procedural fairness to the employee. The problems will be of the employer’s own making. If the employer is of even average fair-mindedness, they are likely to prove short-lived. Problems such as this do not necessarily indicate such a loss of confidence as to make the restoration of the employment relationship impracticable.” 32
[128] In Colson v Barwon Health, a Full Bench of the Commission said, in relation to a decision of Gostencnik DP at first instance whilst denying leave to appeal:
“… error in concluding that “a loss of trust and confidence would make reinstatement inappropriate without examining whether the claimed loss of trust and confidence would have that effect”
… This ground of appeal rests upon a narrow conception of the operations of the workplace focussed on the day-to-day work of the Appellant with his professional colleagues, with scant consideration of the impact on the relationship between him and his immediate superiors on the operations of the workplace.
In his decision, the Deputy President specifically noted that the assertion that trust and confidence in an employee has been lost must be assessed on the evidence and an “assessment must be made as to the effect of the loss of trust and confidence on the operations of the workplace.”… a rationally-based concern of the Appellant’s immediate managers which would impact on the operations of the workplace and other evidence which supported their concerns that the Appellant would continue to challenge management at every opportunity and be a destructive presence in the Department, negatively impacting on the authority of managers, all of which are relevant considerations in respect of the operations of the workplace.
The Appellant has not substantiated the proposition that the Deputy President failed to consider evidence in relation to the effect of a loss of trust and confidence on the operations of the workplace.” 33
[129] In Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter, another Full Bench of the Commission conveniently summarised this issue:
“The following propositions concerning the impact of a loss of trust and confidence on the question of whether reinstatement is appropriate may be distilled from the decided cases:
• Whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is appropriate but while it will often be an important consideration it is not the sole criterion or even a necessary one in determining whether or not to order reinstatement.
• Each case must be decided on its own facts, including the nature of the employment concerned. There may be a limited number of circumstances in which any ripple on the surface of the employment relationship will destroy its viability but in most cases the employment relationship is capable of withstanding some friction and doubts.
• An allegation that there has been a loss of trust and confidence must be soundly and rationally based and it is important to carefully scrutinise a claim that reinstatement is inappropriate because of a loss of confidence in the employee. The onus of establishing a loss of trust and confidence rests on the party making the assertion.
• The reluctance of an employer to shift from a view, despite a tribunal’s assessment that the employee was not guilty of serious wrongdoing or misconduct, does not provide a sound basis to conclude that the relationship of trust and confidence is irreparably damaged or destroyed.
• The fact that it may be difficult or embarrassing for an employer to be required to re-employ an employee whom the employer believed to have been guilty of serious wrongdoing or misconduct are not necessarily indicative of a loss of trust and confidence so as to make restoring the employment relationship inappropriate.
Ultimately, the question is whether there can be a sufficient level of trust and confidence restored to make the relationship viable and productive. In making this assessment, it is appropriate to consider the rationality of any attitude taken by a party.” 34 [endnotes omitted]
Consideration
[130] I have taken into account the parties’ submissions on remedy.
[131] I do not accept the Respondent’s argument that if the Applicant is reinstated then he would repeat his inappropriate behaviour in the future. Following the disciplinary meeting on 22 March 2018, the Applicant stopped using his private email to conduct the Respondent’s business. He took this step without advice or direction from the Respondent. The Applicant also provided a rectification plan in his response on 2 May 2018.
[132] Based on the detailed questioning and lengthy allegations that the Applicant received from the Respondent’s representative and the commentary contained in this Decision, I have confidence that, from now on, the Applicant will not be sending customers’ information to his personal email address. I am also confident that the Applicant will not breach the Respondent’s policies and procedures in the future.
[133] I do not accept the submission from the Respondent that “it is evidence that the necessary trust and confidence has been lost”. Whilst this scenario may in fact be true, there is no evidence from anyone in the Applicant’s operational reporting line to support this suggestion. Trust and confidence are characteristics which exist in an employment relationship between manager/supervisor and employee. Trust and confidence are operational requisites of an employment relationship. It certainly doesn’t exist, nor could it, between an investigator and an employee. The Respondent relied on two investigator employees to give evidence in these proceedings, as a result, I am unaware if the operational managers of the Respondent have lost trust and confidence in the Applicant. The Respondent has not proven this assertion. I find that there has been no loss of trust and confidence between the Applicant and the Respondent.
Conclusion
[134] The Commonwealth Parliament determined that the primary remedy in the circumstances of an unfair dismissal is reinstatement. The Parliament deliberately determined this outcome for a reason, not because it was easy, but because it was fair and fitted within the boundaries of a “fair go all round”.
[135] I am of the view that if I simply awarded the Applicant compensation, he may still struggle to find alternate employment in the banking industry. This would inflict upon the Applicant an unfairness which is not contemplated by the Act. After all, but for the actions of the Respondent in dismissing him unfairly, the Applicant would still be employed by the Respondent.
[136] I find that reinstating the Applicant would not be inappropriate. In accordance with section 391(1)(a), I hereby order that the Applicant be reinstated to his former position with the Respondent.
[137] In accordance with section 391(1)(2), I hereby order the Applicant’s continuity of employment with the Respondent.
[138] The Applicant was dismissed on 15 May 2018, with the payment of four weeks’ notice. I note that the Applicant has not received any income since his termination. The Applicant has been without pay for 24 weeks. In accordance with section 391(3) of the Act, I order the Applicant be paid 10 weeks’ pay. I have deducted 14 weeks’ pay due to the misconduct of the Applicant in sending customers’ personal information to his private email address in breach of the Respondent’s policies.
[139] I so Order.
COMMISSIONER
Appearances:
D O’Sullivan, counsel, with B Andrews, solicitor, for the Applicant.
V Bulut, counsel, with J Mansfield and M Azzi, solicitors, for the Respondent.
Hearing details:
Sydney.
2018.
August 28, 30.
September 11.
Final written submissions:
The Applicant: 15 October and 12 November 2018.
The Respondent: 5 November 2018.
Printed by authority of the Commonwealth Government Printer
<PR702788>
1 Exhibit 5 tab 4.
2 Form F2 attachment A.
3 Form F2 attachment B.
4 Form F2 attachment C.
5 Exhibit 5 tab 2.
6 See PN1876, 1878.
7 Exhibit 5 tab 2.
8 PN2480.
9 Exhibit 5 tab 3.
10 Exhibit 5 tab 11.
11 PN596.
12 Exhibit 1 annexure E.
13 PN2096-9.
14 PN2538-42.
15 Print S4213 [23]-[24].
16 (1999) 94 FCR 561 [6]-[7].
17 (1995) 185 CLR 410, 465-7.
18 (1998) 84 IR 1, 10.
19 (1995) 62 IR 371, 372-3.
20 Print R4471 [19].
21 (1998) 84 FCR 483, 492A.
22 [2013] FWCFB 6191 [36].
23 (2000) 98 IR 137 [73].
24 [1996] IRCA 568.
25 (1995) 60 IR 1, 7.
26 Exhibit 6.
27 (1938) 60 CLR 336, 361.
28 (1959) 101 CLR 298.
29 (1995) 185 CLR 410.
30 (1999) 94 FCR 561.
31 (1998) 84 IR 1.
32 (1997) 72 IR 186, 191-2.
33 [2014] FWCFB 1949 [36]-[38].
34 [2014] FWCFB 7198 [27]-[28].
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13
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