Mr Ihab Shoukry v The Star Pty Ltd T/A the Star

[2012] FWA 9435

[2012] FWA 9435

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr Ihab Shoukry
v
The Star Pty Ltd T/A The Star
(U2012/8403)

COMMISSIONER CARGILL SYDNEY, 9 NOVEMBER 2012

Alleged unfair dismissal.

[1] This decision arises from an application made by Mr I Shoukry (the applicant) pursuant to section 394 of the Fair Work Act 2009 (the Act) for relief in respect of the termination of his employment by The Star Pty Ltd T/A The Star (the respondent). The applicant’s dismissal occurred on 22 May 2012 and his application for relief was lodged with Fair Work Australia (FWA) on 25 May 2012.

[2] The matter was dealt with by an FWA Conciliator but did not settle. It was heard by me in Sydney on 10 and 11 October 2012. The matter proceeded by way of hearing as I considered that it was appropriate to do so having taken into account the factors set out in section 399 of the Act.

[3] The applicant was represented by Mr Barwick, solicitor and the respondent by Mr Steele, of counsel. Both appeared with permission.

[4] The applicant gave evidence. His witness statement dated 13 August 2012 was marked Exhibit Applicant 1. His oral testimony is at PN20-990 of Transcript.

[5] The respondent called two witnesses in its case:

Mr M. Harbidge General Manager of Property Operations for the respondent. His witness statement dated 14 September 2012 was marked Exhibit Respondent 9 and his oral testimony is at PN 996-1392 of Transcript;

Mr R. Wagemans Patron Liaison Manager for the respondent. His witness statement dated 5 October 2012 was marked Exhibit Respondent 11 and his oral testimony is at PN 1415 - 1647 of Transcript.

FACTS AND EVIDENCE

[6] The respondent operates The Star casino in Sydney. Prior to September 2011 it was known as Star City Casino (Star City). The applicant was first employed by Star City in December 2004. He was engaged as a Security Officer, initially on a casual basis. He says that he undertook a four day course of induction at that time, two days of which related to working at the casino and two days of which concerned working as a Security Officer.

[7] The applicant’s evidence is that he recalled receiving a policy manual during that induction, the contents of which were briefly explained. He says that there was no discussion about any internet and email policy. The applicant also says that his ability to read English was not good when he commenced his employment with the casino.

[8] It is the evidence of Mr Harbidge that new employees in the Security Department, including the applicant, underwent an eight day induction training course. The syllabus for the training was approved by the Casino Control Authority and included 16 hours covering areas such as vision and values, policies and agreements, employee benefits, code of conduct, harassment and bullying and OH&S. A copy of the syllabus is at Attachment MH16 to Exhibit Respondent 9. A copy of the training manual is at Attachment MH17 to the Exhibit. The respondent concedes that this training manual does not refer to any email and internet policy.

[9] The applicant left his employment with Star City in December 2007 for personal reasons. He was re-employed as a casual Customer Liaison Officer in the Security Department in early July 2008 pending him regaining his security licence at which time he again became a Security Officer. The applicant’s evidence is that he was not required to undergo further induction at that time although I note that his letter of offer, Attachment MH2 to Exhibit Respondent 9, indicates that his first day at work was to involve participation in Star City’s induction program.

[10] The letter of offer notes that information about employees’ responsibilities is contained in the policies and procedures set out on the employer’s intranet.

[11] The letter also purports to attach, among other things, a Code of Conduct booklet. The applicant could not recall whether the booklet had in fact been attached however he believed that he had received and read the letter.

[12] At some point in 2009, possibly September, the applicant was promoted to the position of a Level 5 Senior Security Officer. He did not undergo any formal training for this role. Prior to the applicant’s promotion to this position his only computer access at work was for the purpose of typing up reports, he had no login or user name and did not use the email system. Upon his promotion the applicant was provided with access to emails.

[13] It is Mr Harbidge’s evidence that, although the applicant did not have a personalised email account before this promotion, he did have access to the intranet by way of computers in the staff cafeteria and the Learning Centre, as did all employees.

[14] The applicant again left his employment with Star City for personal reasons. He says this was in 2009 and Mr Harbidge says that it was early in January 2010. The latter seems more likely as the evidence discloses that the applicant was using his work email account to distribute the material which led to his dismissal, in September, November and December 2009 and up to 8 January 2010. There is then a break in the distribution until 31 March 2010.

[15] The applicant was re-employed as a full-time Customer Liaison Officer in the Security Department in March 2010. The letter of offer dated 17 March 2010 is Attachment MH3 to Exhibit Respondent 9 and is in similar terms to the letter referred to in paragraph 10 above. Again it purports to attach a Code of Conduct booklet. The applicant could not remember whether such a booklet had been attached. The applicant accepted the offer of employment on 18 March 2010 and commenced work on 22 March.

[16] The applicant’s evidence is that, as with his previous re-employment, he was not required to undertake further induction. I note that the letter of offer again indicated that his first day at work would involve participation in the Star City induction program.

[17] In June 2011 Star City’s parent company, Tabcorp Holdings Limited (Tabcorp) established a new wholly-owned subsidiary company, Echo Entertainment Group Limited (Echo). All of Tabcorp’s casino operations assets were transferred to Echo which was subsequently demerged from Tabcorp. On 15 June 2011 Echo became the ultimate holding company for Star City. In September 2011 Star City changed its name to The Star but remained the applicant’s employer.

[18] In October 2011 employees of The Star were offered new contracts of employment. Coincidently, the applicant was promoted at this time to the position of Security Supervisor. His letter of offer dated 8 October 2011 and proposed employment agreement is Attachment IS3 to Exhibit Applicant 1 and also Attachment MH4 to Exhibit Respondent 9. The applicant accepted the new employment agreement on 16 October 2011.

[19] The new employment agreement contains an “entire agreement” clause. It also contains a paragraph by which the applicant acknowledges and agrees with the company to discharge his previous contract of employment which is wholly replaced by the new agreement. The letter of offer includes the words “... you and the Company agree that your existing employment contract with the company will be wholly discharged and extinguished, and replaced by this new offer”. It goes on to note that the applicant’s service, leave and other related entitlements will continue to be recognised.

[20] The applicant’s evidence is that, in his new role, he was paid an annualised salary whereas beforehand his wage had been set by the relevant enterprise agreement. It is also his evidence that his hours, duties and reporting line changed.

[21] At all relevant times the respondent and its predecessor have had in place a Code of Conduct. This document has changed from time to time. At paragraph 20 of his statement, Exhibit Respondent 9, Mr Harbidge sets out extracts from the Code as it applied from 27 July 2004 - 2009, 2009 to 23 May 2011, 24 May - October 2011 and October 2011 onwards. Copies of the various versions of the Code are at Attachments MH6, MH7, MH8 and MH9 to the Exhibit.

[22] Each version of the Code includes a statement that use of the respondent’s systems for non-work related activity is not permitted except as detailed in the “Use of Email & Internet Policy which applies to all internet, email and voice communications”. Employees are directed to that and to the Privacy Policy. The Code also contains a long list of policies, including those just referred to. It informs employees that the policies are available on the intranet, from the Learning Centre, their manager or supervisor. Later versions also refer to the policies being available from “ISO Easy” and “Eon”. I gather that these are computer based resources within the respondent’s systems. The Code also informs employees that the policies form part of the Code, that the documents change from time to time and that they should familiarise themselves with any updates.

[23] Each of the versions of the Code which applied from 2009 onwards also specifically states that “(n)o offensive, potentially offensive or pornographic images are to be displayed or transmitted in the workplace. This includes media such as but not limited to mobile phones and computers.”

[24] The applicant’s evidence is that he could not recall the Code which covered the period 2009 to early 2011 talking about offensive or pornographic images being transmitted in the workplace. He provides a copy of the Code which he believes was in force between 2004 to early 2011, Attachment IS1 to Exhibit Applicant 1.

[25] At all relevant times the respondent and its predecessor have had in place a policy concerning the use of email and the internet (IT policy). This policy, and its title, has altered from time to time. At paragraph 21 of his statement, Exhibit Respondent 9, Mr Harbidge sets out extracts from the policy as it applied from 27 September 2001 - 16 May 2005, 17 May 2005 - 2006, in and around 2006, from 17 May 2007 - 15 June 2011, from 16 June - 13 July 2011 and from 14 July 2011 onwards. Copies of the various versions of the policy are at Attachments MH10, MH11, MH12, MH13, MH14 and MH15 to the Exhibit.

[26] Each version of the IT policy makes it clear that activities such as the use of the respondent’s system for the distribution of pornographic material is not permitted.

[27] It is the evidence of Mr Harbidge that the applicant received periodic training in workplace policies including the Code of Conduct and the IT policy. He says that this occurred in the context of quarterly training sessions which are required for all of the casino’s security officers. Mr Harbidge provides a copy of the applicant’s training record as Attachment MH18 to Exhibit Exhibit Respondent 9. That shows that the applicant completed training relating to the Code of Conduct and equal employment opportunity on various occasions in 2005, 2006, 2008, 2009 and 2011. It appears that several of these were delivered on-line as they are noted as being an “eCourse”. Further information concerning the dates of the applicant’s on-line training in the Code of Conduct is contained in an email dated 22 May 2012 from the respondent’s Training and Development Manager which was tendered by Mr Barwick. Due to an oversight this document did not receive an exhibit number.

[28] The applicant agreed that he had received refresher training in the Code of Conduct but his evidence is that he was never specifically trained in relation to the IT policy at any time during his employment. The applicant testified that he understood that he had to comply with policies which were set down by management and he agreed that some of those policies were located on the intranet. His evidence is that he never saw the IT policy and it never occurred to him that there might be such a thing.

[29] In August 2007 the then Security Manager, Mr Lomax, issued a memorandum for distribution to employees in the Security Department. The memorandum is Attachment MH19 to Exhibit Respondent 9 and Attachment RW1 to Exhibit Respondent 11. The memorandum concerns the display of pornographic material in the workplace and makes it clear that any such actions would not be tolerated regardless of how the material was stored or portrayed, whether it was for gratification or amusement and regardless of whether or not there was any intention to offend anyone.

[30] The memorandum also makes it clear that such actions breach the respondent’s Code of Conduct, EEO Policy and Sexual Harassment Policy. There is no mention of the IT policy. Mr Lomax also expresses the view that he regards a failure to report such conduct on the part of others to be equally culpable.

[31] It is the evidence of Mr Wagemans that he was required to provide a copy of this memorandum to a number of the Security Officers, ensure that they read it in his presence and have them sign to acknowledge that they had read it and understood their obligations under the Code and policies mentioned earlier.

[32] It is his evidence that he had a meeting with the applicant for this purpose. Mr Wagemans testified that the event was clear in his memory as it was the only time he had met formally with the applicant in his office. Mr Wagemans’ evidence is that the applicant read the memorandum quite carefully and he observed the applicant sign the document. He believed that he would have filed the document on the applicant’s personnel file as was his practice, however could not recall actually doing so. There is no signed copy in evidence.

[33] Mr Wagemans’ evidence is that he made a notation on the applicant’s records as to the events in the previous paragraph, Attachment RW2 to Exhibit Respondent 11 and Attachment MH20 to Exhibit Respondent 9. There is an obvious typographical error as to the date of the notation which is shown as “21/01/1900”. Mr Wagemans’ evidence is that he is not aware of the reason for this date but believes it could be due to the computer defaulting to it. An unknown person has written the date “21/08/07” next to the relevant entry.

[34] The applicant’s evidence is that he clearly recalled the incident that led to the memorandum from Mr Lomax but could not remember whether he had read the document prior to these proceedings. The applicant testified that he had left his employment with the casino in 2007. I note that the unchallenged evidence of Mr Harbidge is that the applicant left in December 2007. The applicant agreed that, if he had read the memorandum in or around August 2007, he would not have been in any doubt that sending pornographic emails to work colleagues via the casino’s computer system was not permitted.

[35] As a result of issues which arose during the course of an inquiry conducted under the Casino Control Act 1992(NSW), the respondent instigated an internal investigation into the email accounts of certain employees. That investigation incidentally uncovered emails with pornographic content. For logistical reasons, further analysis of the email accounts was outsourced to MCAA Australia Pty Ltd (MCAA).

[36] The analysis by MCAA disclosed several employees who had exchanged a high volume of pornographic emails. One of these was the applicant. It is the evidence of Mr Harbidge that the applicant had sent in excess of 2,800 pornographic images to fellow employees and third parties. Further, in the period from 1 January 2010 onwards, the applicant had sent to other employees 50 emails which contained or attached images of hard-core pornography. Copies of that material are in Attachment MH25 to Exhibit Respondent 9. Many of these emails include multiple images.

[37] The applicant agrees that in the period between 2009 and January 2011 he received and sent a number of emails which contained or attached pornographic images. He also agrees that the “vast bulk” of this material was received by him on his home computer. He then transmitted the material from his personal email address to his work email address and distributed it to his colleagues, sometimes with the addition of a comment or message.

[38] The applicant initially testified that he deleted the emails after sending them. He later agreed that, at least in respect of one of the attachments titled “49 FOTOS HD”, he sent it on multiple occasions in 2009 and 2010. The applicant’s evidence is that he may have retained the material in his work email account or perhaps someone sent it back to him and he re-forwarded it on each occasion.

[39] It is the applicant’s evidence that he deliberately did not send the emails to people he thought would be offended by them and only sent them to those he regarded as friends. He had received similar material from some of the recipients. The applicant’s evidence is that because he had received such material he assumed that it was normal to distribute it to others. He testified that no one complained to him about receiving such emails from him. The applicant denied sending any of the material to particular colleagues for flirtatious purposes.

[40] The applicant agreed that he did not know what any of the recipients would do with the material he sent them or whether other persons in the workplace might see the material by accident if it was opened in their presence. The applicant also agreed that the emails contained a logo identifying that they had been sent from the respondent’s Security Department.

[41] It is the applicant’s evidence that between 2009 to early 2011 there was an unchallenged workplace culture of employees sending and receiving emails with pornographic content. This included supervisors and managers. The applicant’s evidence is that this culture was condoned by management. He could not recall anyone within the Security Department being disciplined for such activity.

[42] The applicant’s evidence is that the culture referred to in the previous paragraph changed in early 2011 when an employee was dismissed for “doctoring” a staff photo. His evidence is that one of the supervisors or managers told employees at a pre-shift meeting not to send any non-work related emails. The applicant’s evidence is that there was no other communication from the respondent about the issue. The applicant stopped sending any emails with pornographic or otherwise offensive content after that time.

[43] It is the evidence of Mr Harbidge that the results of the investigation and analysis referred to earlier were presented to a meeting of senior managers on 16 May 2012. A sub-group was formed to deal with any disciplinary action. Mr Harbidge was part of that sub-group which was called the Executive Leadership Team (the Team).

[44] It is the evidence of Mr Harbidge that, in order to have a fair and consistent process, the Team formulated a test to determine the level of disciplinary action to take against employees alleged to have distributed pornographic material. This test was that, if anyone had sent 10 or more emails containing hard-core pornographic images from 1 January 2010 onwards, they were to be presented with the relevant material and, in the absence of a suitable response, were to be summarily dismissed.

[45] Further, those employees who were supervisors or managers who had received but not distributed relevant material and those who had sent fewer than 10 such emails during the relevant period were, after interview and a chance to respond, to be provided with a final warning. All other employees who had received any such material were to be reminded of their obligations under the respondent’s policies.

[46] It is the evidence of Mr Harbidge that, on the basis of these criteria, five employees, including the applicant, were identified for possible dismissal and 16 were issued with final warnings. Mr Harbidge agreed that the applicant had sent some of the emails to supervisors and managers who had failed to report the conduct. He also agreed that some of those individuals had forwarded offending material. Mr Harbidge’s evidence is that no supervisor or manager in the Asset Protection Team was dismissed as a result of this disciplinary process.

[47] Mr Harbidge contacted the applicant on 21 May 2012 to arrange a meeting for the purpose of discussing the emails. The applicant was informed that he could bring a witness and he attended the meeting, which was held on 22 May, with a support person. The respondent’s HR Manager was also present.

[48] There is a difference between the evidence of the applicant and that of Mr Harbidge as to the length of the meeting. The applicant says that the meeting went for five to seven minutes, there was a break of two or three minutes at the most and then he was informed that he was being dismissed. Mr Harbidge says that the first part of the meeting took 15 to 20 minutes, the break took about 10 minutes and then the meeting reconvened for another 10 minutes.

[49] Mr Harbidge showed the applicant a copy of his training record and the applicant agreed that it was an accurate record. The applicant was shown relevant parts of the Code of Conduct and the IT policy. He indicated that he was familiar with the Code but less so with the IT policy although he agreed that it applied to him. The applicant’s evidence is that the part of the Code that he was shown was not in place at the time he sent the emails but was the one which was current at the time of the meeting.

[50] The applicant agrees that there were two folders of emails on the desk but says he was shown only one. He disagrees that he was taken to the contents but rather says that he grabbed one of the folders and looked at one of the emails. The applicant told Mr Harbidge that he had sent a couple of the emails but not all of them. He now accepts there were at least 50 which he had sent.

[51] Mr Harbidge asked the applicant for an explanation. The applicant said that he was sorry, he hadn’t intended to offend anyone and it had happened a long time ago. The break in the meeting referred to earlier then took place. During that break Mr Harbidge and the HR Manager discussed the applicant’s response and decided that he should be dismissed.

[52] It is the evidence of Mr Harbidge that the reasons for this decision were: the applicant’s use of the respondent’s system to distribute a large volume of hard-core pornographic material which was a serious breach of the Code and other policies and fell within the criteria set out in paragraph 44 above; the applicant had provided no satisfactory explanation for his conduct or by way of mitigation; and, Mr Harbidge had lost trust and confidence in the applicant.

[53] The meeting reconvened and the applicant was informed that he was to be dismissed. A letter of termination dated 22 May 2012 was received by the applicant on 24 May. It is Attachment IS5 to Exhibit Applicant 1 and Attachment MH24 to Exhibit Respondent 9.

[54] The applicant seeks reinstatement. After being unemployed for a period of time he now works as a Security Guard on a casual basis. It is the applicant’s evidence that he had intended to continue working for the respondent for many years and hoped to become a Security Manager. It is his evidence that, if he is reinstated, he will work well and comply with the Code of Conduct and workplace policies. He retains a high degree of trust and respect for management at the casino and believes the employment relationship can be restored.

[55] It is the evidence of Mr Harbidge that reinstatement is not appropriate. He and the management of the respondent no longer have trust and confidence in the applicant.

SUBMISSIONS ON BEHALF OF THE APPLICANT

[56] A written outline of submissions on behalf of the applicant was provided prior to the hearing. Mr Barwick also made oral submissions.

[57] It is submitted that the applicant’s dismissal was unfair. The respondent failed to consider whether it had the contractual right pursuant to the October 2011 agreement to dismiss the applicant for behaviour which had occurred under his previous contract of employment. This is in circumstances where the parties had agreed that the earlier contract had been wholly discharged.

[58] Further, the respondent was wrong in concluding that the applicant’s actions had amounted to misconduct. His actions had been condoned by management and several managers had also engaged in the same practices. The respondent had also failed to properly train the applicant in the IT policy.

[59] In addition, the investigation process was flawed. An arbitrary number of emails and an arbitrary timeframe were chosen as part of the criteria leading to dismissal. The process was ad hoc and created a double standard that allowed several supervisors and managers to avoid dismissal. Further, the applicant was judged against a version of the Code of Conduct and IT policy which was not in force at the time of his actions.

[60] Mr Barwick noted that the applicant ceased distributing the relevant emails more than 15 months prior to his dismissal. He also noted that the applicant had been in a subordinate role at the time of his actions and that he had sent a number of emails to and received a number of emails from his managers and supervisors. The applicant was not counselled about his conduct.

[61] Mr Barwick submitted that the express intention of the parties in entering into the new employment agreement in October 2011 was to discharge the earlier contract. Mr Barwick referred to the letter of offer and to the terms of the agreement including the “entire agreement” provision as well as the acknowledgement section. He submitted that the comprehensive nature of the agreement makes it clear that it was to cover the field.

[62] Mr Barwick noted that the new agreement did not include an express term which permitted the respondent to dismiss the applicant for conduct that had taken place during the life of the earlier contract. He submitted that the respondent had waived its right to take disciplinary action in respect of that earlier conduct including under policies in force during that period.

[63] Mr Barwick submitted that the parties had, in effect, agreed to abandon any remedies for breach of the discharged employment contract. He referred to the decision of the High Court of Australia in Concut Pty Ltd v Worrell [2000] HCA 64 @ para 23 and to the decision of the New South Wales Court of Appeal in Castlemaine Tooheys Ltd v Carlton & United Breweries Ltd (1987) 10 NSW LR 468 @ 487.

[64] Mr Barwick submitted that the termination of the applicant’s employment amounted to a wrongful dismissal at common law. Such an act could not ground a valid reason under section 387 of the Act. Furthermore, the reason for the dismissal did not relate to the applicant’s conduct or capacity in his role under the new employment agreement. He submitted that the criteria in section 387 can only relate to the employment which is the subject of the application, not any earlier relationship.

[65] Mr Barwick noted that the respondent had not provided any evidence of the applicant’s unfitness to carry out the role of Security Supervisor. This was relevant in circumstances where the respondent retains trust and confidence in its other supervisors and managers.

[66] Mr Barwick submitted that the respondent had failed to consider the issue of management condonation of the applicant’s actions when the disciplinary action criteria was established. By setting this criteria the respondent had excluded other factors from consideration. The evidence showed that a number of supervisors and managers engaged in activity similar to the applicant. Mr Barwick noted that the memorandum from Mr Lomax stated that employees who failed to report relevant conduct were equally culpable with those who engaged in the conduct.

[67] Mr Barwick submitted that there had been no evidence that the applicant had been properly trained in relation to the Code of Conduct and IT policy. Consequently it was unfair to dismiss him for any breach of those policies and procedures.

[68] Mr Barwick provided a chronology and, by reference to that document as well as various exhibits, submitted that the versions of the Code of Conduct on which the applicant had been trained did not refer to the sending of offensive material. He submitted that the first occasion on which training in the relevant version of the Code could have taken place was in February 2011 which was after the applicant had ceased his conduct.

[69] Mr Barwick noted that, although the Code referred to the IT policy, there was no compulsion for employees to go to that material nor was there any training on it. No hard copies of the policy were provided. Further, there was no evidence that the on-line module training addressed the IT policy in any detail or at all. Mr Barwick submitted that an employer had to do more than announce that it had a particular policy and then not take steps to train employees about that policy.

[70] Mr Barwick submitted that, in the meeting on 22 May, the applicant had been taken to a later version of the Code of Conduct than had been in force at the time of the sending of the emails. He submitted that this could not be relevant to the disciplinary process and that Mr Harbidge’s evidence to the contrary is unreliable. Mr Harbidge should have taken greater care to have identified the policy in force at the time of the relevant actions.

[71] Mr Barwick emphasised that the applicant was firm in his desire to be reinstated. The applicant continues to have trust and confidence in his managers. It is noted that Mr Harbidge was not the applicant’s direct manager. Mr Barwick submitted that it was difficult to reconcile the evidence of Mr Harbidge as to the respondent’s loss of confidence in the applicant whilst retaining trust in the managers and supervisors who were also engaged in the email distribution.

SUBMISSIONS ON BEHALF OF THE RESPONDENT

[72] A written outline of submissions on behalf of the respondent was provided prior to the hearing. Mr Steele also made oral submissions.

[73] Mr Steele noted that the evidence established that the applicant had used the respondent’s email system to send more than 50 emails containing hard core pornography. He noted that Mr Barwick had suggested that the number of emails was 40, but submitted that the difference in these numbers would not affect the outcome in this case.

[74] Mr Steele submitted that, in addition to the extreme nature of much of the material sent by the applicant, the applicant’s conduct was notable in several respects. His actions took place over a lengthy period. The email traffic was largely “one way” with the applicant sending a substantial volume of material to others but receiving little in return. Mr Steele submitted that an analysis showed that, of the 32 separate sets of images distributed by the applicant, all but four originated from his personal home email address. In some instances the applicant stored the material on the respondent’s system for later distribution.

[75] Several emails were accompanied by messages which indicate that the recipient should take care when opening the attachments. Mr Steele submitted that this indicates that the applicant was aware that sending this material was illicit and forbidden. He also submitted that there is reason to suspect that some of the recipients may have told the applicant they were offended by the emails. Further, there is reason to infer that there was a predatory aspect to the applicant’s actions in relation to some particular recipients.

[76] Mr Steele submitted that the applicant’s conduct breached both the Code of Conduct and the IT policy. The existence of those documents had been brought to the applicant’s attention during his induction training, in his letters of employment and in the course of his periodic training during his employment. Mr Steele noted that, at the very least, the applicant had been directed to the Code of Conduct in each training session. The Code in turn directed employees to the respondent’s policies including the IT policy.

[77] Mr Steele noted that the applicant had conceded that he had knowledge of the 2004 Code of Conduct. He submitted that a major theme of that document is a requirement that employees act ethically and take responsibility for their behaviour. It also makes clear that use of the employer’s systems for non-work related activity is not permitted except as detailed in the IT policy. Employees are referred specifically to that policy.

[78] Mr Steele agreed that the Code of Conduct referred to a number of policies and accepted that Mr Barwick’s submissions might have force if the applicant’s actions had been in breach of a rule hidden in the fine print of the policies. Mr Steele submitted however that the applicant’s conduct was of a kind which, at the very least, should have caused him to make inquiries as to whether it was appropriate. He referred to Batterham v Dairy Farmers Limited [2011] FWA 1230 @ paras 279/280 (Batterham).

[79] Mr Steele submitted that the applicant could not hide behind his evidence that he never saw the IT policy. He submitted that the policies were readily available and did not change in substance over the relevant period. Each version emphasised the seriousness with which access to or distribution of pornographic images would be treated. Further, it was really a matter of common sense and ethical behaviour.

[80] Mr Steele submitted that the memorandum of Mr Lomax was very clear about what was prohibited behaviour. The seriousness of the issue was supported by the fact that each employee had been required to read and sign the document in the presence of their manager. Mr Steele noted that the applicant had not challenged the evidence of Mr Wagemans, rather he had testified that he couldn’t recall. Mr Steele submitted that Mr Wagemans’ evidence should be accepted. He submitted that a finding that the applicant had read the memorandum should counter any suggestion that he was in ignorance as to how his conduct would be perceived by his employer.

[81] It is submitted that the Tribunal has repeatedly held that distribution of pornographic material at work can be a valid reason for dismissal: Australian Postal Corporation v Rushiti[2012] FWAFB 7423 (Rushiti) and Queensland Rail v Wake (2006) 156 IR 393 (Wake). The applicant’s conduct involved him deliberately bringing into the workplace and distributing a substantial quantity of hardcore pornography. This was in clear breach of the respondent’s policies and ethical and appropriate behaviour. It constituted a valid reason for dismissal.

[82] Mr Steel submitted that the applicant was notified of the reason for dismissal and given an opportunity to respond. He submitted that the authorities made it clear that, even if a termination procedure could have been better, this was not determinative that a particular dismissal was unfair: Farquarson v Qantas Airways Limited (2006) 155 IR 22 @ para 41; Crozier v Palazzo Corporation (2000) 98 IR 137; and Batterham @ para 274.

[83] Mr Steel noted that, although the applicant disputed the duration of the meeting on 22 May, he agreed that there was nothing further that he had wished to say at the meeting. Mr Steele rejected the suggestion that the decision makers had been led into error by applying strict criteria. Mr Steel submitted that, regardless of the number and date chosen, the applicant’s case fell into the serious category. Further, the applicant’s response had been taken into account.

[84] Mr Steele rejected the submission that the respondent did not have the right to dismiss the applicant for conduct which had been engaged in before he entered the October 2011 contract. Mr Steele noted that the focus of the legislation is on dismissal as an employee and submitted that the Tribunal should not be drawn into making decisions about questions of breach or termination of contract: Byrne v Star City Pty Ltd [1998] AIRC 1213 (Byrne).

[85] Mr Steele submitted that the evidence shows that the applicant was aware that he was expected to behave ethically and with integrity. The applicant conceded that his position was one of trust and knew that he could access the relevant policies at any time. The fact that the applicant did not do so does not excuse his conduct: Williams v Centrelink PR942762 @ paras 58 and 62 (Williams). The memorandum from Mr Lomax was also relevant. Mr Steele submitted that, in any event, a reasonable person did not need training to know that distribution of hardcore pornography was wrong: Story v Star City Casino [1998] AIRC 1153; Micallef v Holden Ltd [PR900664] @ para 6; and Batterham.

[86] Mr Steele submitted that the applicant’s argument that his dismissal was unfair because his conduct had ceased more than a year beforehand should be rejected. Such an argument ignores the importance of deterrence, fairness and consistency of treatment in dealing with serious offences: D P World Sydney Limited v Lambley[2012] FWAFB 4810. Further, the fact that the applicant ceased his conduct is no excuse in circumstances where he did so only after the dismissal of another employee for similar actions: Toyota Motor Company v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [Print T4675] @ para 31. Mr Steele submitted that the applicant’s sustained and serious conduct could only be treated very seriously regardless of when or why it ceased.

[87] Mr Steele rejected the submission that there was a workplace culture which excused the applicant’s conduct. He referred to Rushiti @ para 41 and Williams @ paras 66/68. Mr Steele submitted that the evidence was that some supervisors and duty managers had received and possibly sent relevant emails. However, the applicant’s activities were never condoned by the respondent or by senior managers. Mr Steele rejected the submission that there had been a double standard in the treatment of employees.

[88] Mr Steele submitted that, in numerical terms alone, there was no workplace culture of the distribution of pornography. Further, the applicant’s evidence that he was careful about who he sent emails to and the messages he sent with several of them showed that he was aware that what he was doing was inappropriate and was not going to be condoned by others especially senior managers.

[89] Mr Steele rejected the allegation that there had been inconsistent treatment of the applicant. He referred to Sexton v Pacific National (ACT) Pty Ltd PR931440 and Williams @ paras 71/73 and submitted that the evidence showed that the applicant had been grossly more involved in the distribution of the relevant emails than other employees. Mr Steele submitted that the respondent had adopted reasonable objective criteria in considering employees who had been identified as involved. He noted that a different outcome did not mean that there had been different treatment.

[90] It is submitted that the applicant’s claim should be dismissed. In the alternative, reinstatement should not be ordered.

SUBMISSIONS ON BEHALF OF THE APPLICANT IN REPLY

[91] Mr Barwick noted that not all matters which involved the inappropriate use of an employer’s computer system to access or distribute pornographic material resulted in the dismissal of an applicant’s claim. He referred to Flanagan and others v Thales Australia Limited trading as Thales Australia[2012] FWA 6291.

[92] Mr Barwick submitted that the decision in Byrne was distinguishable as it did not involve the discharge of an employment contract by agreement as in the present matter. He submitted that the unlawfulness of a party’s conduct in relation to a contract of employment could not be divorced from the issues which are relevant under section 387. Further, the respondent’s actions in dismissing the applicant in breach of his contract did not amount to a “fair go all round”. Mr Barwick submitted that, even at common law, the applicant would have been entitled to proper notice.

CONCLUSIONS

[93] Section 396 of the Act sets out four matters which must be decided in applications of this type before the merits of a claim are considered. Those matters are:

“(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.”

[94] As will have been apparent from paragraph 1 of this decision the application was made within the period required in subsection 394(2). There is no issue that the applicant is a person protected from unfair dismissal. Paragraphs (c) and (d) of subsection 396 have no relevance in the present matter.

[95] Section 385 provides that a person has been unfairly dismissed if FWA 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.”

[96] Paragraph (a) is clearly met in relation to the applicant. Paragraphs (c) and (d) have no relevance.

[97] In order to decide whether the dismissal of the applicant was harsh, unjust or unreasonable it is necessary to turn to section 387 which sets out the factors which must be taken into account by FWA. Those factors are as follows:

“(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 FWA considers relevant.”

[98] The first matter which must be taken into account is whether there was a valid reason for the dismissal. The meaning of valid reason has been the subject of much consideration by the Courts as well as by this Tribunal and its predecessors. There seems to be general acceptance of the often quoted words of Northrop J in Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371.

[99] Before considering the reason relied upon in this case it is necessary to address the submissions that the respondent had no right to dismiss the applicant for conduct which had occurred prior to the parties entering into the new employment agreement in October 2011.

[100] There is of course no dispute that the parties agreed to a new contract of employment in October 2011. However, this did not sever the underlying employment relationship which continued on an ongoing basis from March 2010 through to the date of the applicant’s dismissal. I accept that the circumstances may be different from Byrne’s case and I also accept that the constitutional basis for the legislation has changed since that case was decided. However, the relevant part of the Act is still directed towards issues concerning dismissal from employment rather than questions arising from the termination or discharge of an employment contract.

[101] In my view, whatever contractual rights and remedies may be available to the parties as a result of the terms of the October 2011 contract, the respondent had the right to consider and, if appropriate, take action in relation to the applicant’s conduct prior to that contract.

[102] Although this was not argued, it could be the case that the applicant’s conduct prior to the break in the employment relationship between January and March 2010 should not form part of the case against him. On the basis of the criteria which it applied, the respondent disregarded emails which had been sent before 1 January 2010, however it appears that three were sent in that month but before the applicant left the casino.

[103] I now return to the question of whether there was a valid reason for the dismissal. The reason relied upon for the termination in this matter relates to the alleged misconduct of the applicant. In this regard I have to determine for myself whether the alleged misconduct, or any part of it that is contested took place and, if so, whether it amounted to a valid reason for the termination: King v Freshmore (Vic) Pty Ltd [Print S4213].

[104] There is no serious dispute in this case as to the applicant’s conduct although there is a contest as to whether it formed a valid reason for his dismissal. It is clear from the evidence that the applicant used his employer’s email system to send to other employees a substantial quantity of emails which contained or attached in one form or another material which is sexually explicit and/or pornographic. Many of these could be described as “hard core”. In several instances the attachments contain multiple images and some were sent on more than one occasion.

[105] The exact number of the hard core emails sent by the applicant is a little unclear. The respondent says it was more than 50 during the period September 2009 to January 2011. It is said on the applicant’s behalf that he sent or received 40 emails in the period following 1 January 2010. As best as I can determine he sent 13 in 2009, three in January 2010 and then 34 in the period following his re-employment in March 2010 through to the end of January 2011 when the practice ceased. Even accepting that it is this last number which is relevant it is still a substantial quantity of material.

[106] It is also relevant to note that the applicant agreed that the “vast bulk” of the material originated from his personal email account on his home computer. The applicant deliberately sent this material into the employer’s system for distribution. I consider that it is more probable than not that the applicant stored at least some of this material on the work system. I reject the applicant’s suggestion in his evidence that someone may have re-sent the material to him each time for him to distribute again. That is just not logical.

[107] It is also of note that the applicant’s conduct took place over an extended period even if the time before March 2010 is disregarded.

[108] I consider that, viewed in isolation, there can be no doubt that the applicant’s conduct amounted to a valid reason for his dismissal. However, it is said on the applicant’s behalf that his conduct could not be a valid reason as there was a workplace culture at the casino in which such behaviour was condoned by management. I agree that there appears to have been a culture among a group of employees some of whom were supervisors or duty managers of exchanging inappropriate emails. However I am not satisfied that there was any wider culture. The overall size of the workforce and the number of employees engaged in the behaviour does not support such a finding. Further, there is no evidence of any condonation by senior managers or at a corporate level.

[109] It is also said that the applicant’s conduct could not be a valid reason for his dismissal as he was not trained in relation to the IT policy, was not properly trained in relation to the Code of Conduct and was dismissed for breaching versions of policies which were not in place at the time of the conduct. There was no suggestion that the Code or policies themselves were in any way unreasonable. As the Full Bench decisions in Rushiti and Wake make clear it is appropriate that employers take steps to prevent the dissemination of pornographic images in the workplace.

[110] I accept that the applicant may not have received specific training on the IT policy. However, he had been trained in relation to an early iteration of the Code of Conduct, knew that it changed from time to time and had been directed to the Code in each of the training sessions referred to in paragraph 27. Further, each version of the Code referred employees to other policies and where to access them. The applicant was clearly proficient in the use of computers, at least by the time he was engaged in sending the relevant emails, if not before. There seems to have been no impediment to him accessing the policies on-line or in hard copy.

[111] There is also the issue of the 2007 memorandum from Mr Lomax. I accept the evidence of Mr Wagemans that the applicant read and acknowledged the memorandum. Mr Wagemans was clear and firm in his evidence and provided a cogent reason for his memory of the event. In contrast, the applicant did not deny that it may have happened, rather he could not recall it. It follows from this finding that he read and acknowledged the memorandum, that the applicant could not have been in any doubt that the distribution of pornographic images in the workplace would be viewed with the utmost seriousness by his employer.

[112] In addition I note and endorse the comments of His Honour Deputy President Sams at paragraph 280 of Batterham. There are certain types of conduct which as a matter of common sense should not be engaged in in the workplace. The distribution of hard core pornography is one of these.

[113] I consider that the applicant’s actions amounted to misconduct and provided a valid reason for his dismissal.

[114] I am satisfied that the applicant was notified of the reason for his dismissal and was afforded an opportunity to respond. I note that, although the applicant disputed the length of the meeting of 22 May 2012, he agreed that he had said everything he wanted to at that meeting. There was no unreasonable refusal to allow the applicant to have a support person at that meeting. The applicant was not dismissed for performance reasons.

[115] I have had regard to paragraphs (f) and (g) of section 387. The respondent is a large employer with dedicated human resources management specialists. I am satisfied that these factors were reflected in the procedures which were followed in effecting the dismissal.

[116] There are three matters which I wish to address under paragraph (h). The first is the extended period of time between the cessation of the misconduct and the dismissal. In certain circumstances such a delay could be considered to be unfair, for example, if the respondent had known about the misconduct at an earlier point but had failed to take steps to deal with it or if the applicant’s actions had involved some minor policy breach. However in this case the respondent acted promptly upon becoming aware of the conduct which was of a very serious nature.

[117] The second matter is the respondent’s formulation of the criteria which triggered the type of disciplinary action which was taken against different employees. Mr Harbidge agreed that there was no scientific basis to the selection of the number 10. However in my view there is nothing inherently unfair in the respondent filtering the more serious conduct from the less serious. In particular, there was no unfairness visited upon the applicant by selection of this number. If, for example, he had sent 11 emails and others who had sent nine were not dealt with in the same fashion he would have had cause for complaint. However, as indicated earlier, the number sent by the applicant was much higher. The selection of the date of 1 January 2010 was not to the applicant’s detriment as it had the effect of removing from consideration all of the material he had distributed in 2009.

[118] The third and allied matter concerns the issue of whether there was any inconsistency of treatment between the applicant and others. I consider that the criteria chosen by the respondent were reasonable and were applied consistently. In my view a failure to report the distribution of the emails, though an important matter in itself, is in a different category to actually distributing them. The fact that the process resulted in a different outcome for the applicant compared to those other employees does not establish any inconsistent treatment.

[119] In all of the circumstances and having taken account of each of the factors in section 387 and my findings thereon I have determined, on balance, that the dismissal of the applicant was not harsh, unjust or unreasonable. It follows from this and other matters addressed in paragraphs 95 and 96 that the dismissal was not unfair.

[120] The application is dismissed. An order PR531037 to this effect is issued at the same time as this decision.

[121] It should be noted that, in deciding this matter, I have given consideration to the need to ensure that a “fair go all round” has been accorded to each of the parties as provided in section 381(2) of the Act.

COMMISSIONER

Appearances:

A. Barwick, solicitor, for the applicant

M. J. Steele of counsel, with S. N. Ratu for the respondent

Hearing details:

2012.

Sydney.

October 10 and 11.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR531036>