Mr Matthew Boulton v Telstra Corporation Limited
[2019] FWC 370
•25 JANUARY 2019
| [2019] FWC 370 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Matthew Boulton
v
Telstra Corporation Limited
(U2018/6378)
COMMISSIONER SPENCER | BRISBANE, 25 JANUARY 2019 |
Application for an unfair dismissal remedy.
INTRODUCTION
[1] An application pursuant to s.394 of the Fair Work Act 2009 (the Act) was made by Mr Matthew Boulton (the Applicant), alleging that the termination of his employment from Telstra Corporation Limited (the Respondent) was harsh, unjust or unreasonable.
[2] The Applicant was employed by the Respondent from 15 March 2004, initially as a casual employee until 24 July 2006 when his role transferred to a full-time position, a position he held until the termination of his employment on 19 June 2018. The Applicant’s job at the time of his termination was a Mobility Sales Representative (MSR), and his employment was covered by the Telstra Enterprise Agreement 2015-2018 (the Agreement).
[3] The Applicant’s role with the Respondent involved him assisting business customers, in their retail stores in Cairns, with various mobile solutions, including selling mobile phones on behalf of the Respondent.
[4] In early 2018, it was alleged that the Applicant “privately” sold an iPhone 6 to Mr Rod Sherrington, a Telstra customer. Mr Sherrington experienced difficulties with the phone. On 12 March 2018, Mr Sherrington attended the Applicant’s place of work, and advised the General Manager that he was looking for the Applicant, who had sold him a phone outside Telstra which was “possibly imported from China”. 1 Following the events of 12 March 2018, and on receiving a complaint against the Applicant, the Respondent undertook an investigation. The Applicant’s employment was subsequently terminated.
[5] The Respondent’s termination letter (of 19 June 2018) to the Applicant stated as follows:
“Hi Matthew
Telstra is ending your employment and paying out your notice period
I met with you today, 19th June 2018, to take you through the findings of the investigation into alleged unacceptable conduct by you. As was explained to you, the investigation found you had engaged in unacceptable conduct. As a result, I have decided to end your employment.
Your employment will end immediately and Telstra will pay out your notice period.
The reasons for my decision to end your employment were discussed with you as part of the investigation process. In summary, I am ending your employment for the following unacceptable conduct:
• You are running a personal side business that conflicts directly with the interests of the Telstra Group
• You have failed to notify your manager and seek approval of this conflict of interest
• You were deliberately dishonest during the investigation, you intentionally lied on multiple occasions and engaged in deception
This breaches your employment contract and the Code of Conduct, and is not behaviour that is consistent with our Values. It is also a breach of Telstra’s Conflict of Interest Policy.
You were dishonest with me during the conduct investigation process when you told me that you did not have a side business, had no intention of setting one up and that you considered your actions selling phones outside of Telstra were in line [sic] Telstra’s Values, Code of Conduct and our Conflict of Interests policy.
I have considered carefully what disciplinary action to take as a result of your unacceptable conduct. In deciding to end your employment, I have taken into account all of the information available to me, including:
• all of the information from the investigation, including your version of events;
• your length of service;
• your behaviour and disciplinary record during your employment with Telstra.
…
Yours sincerely
Hayden Ali
Regional Mobility Manager
[redacted]”
(Emphasis added)
[6] The Respondent submitted that the Applicant was dismissed for misconduct which breached his employment obligations, and that the conduct in question, in summary terms, related to:
• The Applicant’s personal sale of mobile phones, which constituted a conflict of interest which ought to have been, but was not, disclosed to Managers; and
• The Applicant’s dishonesty to his Managers during the investigation process. 2
[7] The Applicant submitted that the investigation process was not procedurally fair, and that he was not provided the opportunity to seek clarification regarding the actual allegations which lead to his termination. Further, he submitted that he had been employed for a period of 14 years, without any prior incidents or warnings regarding his conduct, and that he was reaching his required performance indicators. He submitted that his termination was harsh, unjust or unreasonable and sought reinstatement, as well as compensation for lost wages and bonuses from the date of termination, to the date of any Order by the Commission.
[8] The matter was listed for conference, however was unable to be resolved. Directions were set for the filing of material. The Applicant was represented by Ms Stephanie Williams of Counsel and Ms Melissa Esposito of Esposito Lawyers, and the Respondent was represented by Ms Ann Fitzpatrick of Counsel and Ms Erin Hawthorne of Seyfarth Shaw Australia. The representatives were given permission to appear pursuant to s.596(2)(a). The matter involved some complexity, in that issues regarding the often difficult line between work and conduct out of hours, and important contractual obligations arose. Taking these complexities into account, the Commission was satisfied it would enable the matter to be dealt with more efficiently if permission were granted.
[9] The matter was heard at the Cairns Court Complex. The parties then requested further Directions to be set for the filing of final submissions after receipt of the transcript.
[10] Whilst not all of the submissions and evidence are referred to in this decision, all of such have been considered.
RELEVANT LEGISLATION
[11] Pursuant to s.394 of the Act:
“394 Application for unfair dismissal remedy
(1) A person who has been dismissed may apply to the FWC for an order under Division 4 granting a remedy…
(2) The application must be made:
(a) within 21 days after the dismissal took effect; or
(b) within such further period as the FWC allows under subsection (3).
(3) The FWC may allow a further period for the application to be made by a person under subsection (1) if the FWC is satisfied that there are exceptional circumstances, taking into account:
(a) the reason for the delay; and
(b) whether the person first became aware of the dismissal after it had taken effect; and
(c) any action taken by the person to dispute the dismissal; and
(d) prejudice to the employer (including prejudice caused by the delay); and
(e) the merits of the application; and
(f) fairness as between the person and other persons in a similar position.”
[12] Further, ss.385, 386 and 387 of the Act relevantly provide:
“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.
386 Meaning of dismissed
(1) A person has been dismissed if:
(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or
(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.
(2) However, a person has not been dismissed if:
(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or
(b) the person was an employee:
(i) to whom a training arrangement applied; and
(ii) whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement;
and the employment has terminated at the end of the training arrangement; or
(c) the person was demoted in employment but:
(i) the demotion does not involve a significant reduction in his or her remuneration or duties; and
(ii) he or she remains employed with the employer that effected the demotion.
(3) Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person's employment, to avoid the employer's obligations under this Part.
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.”
[13] Pursuant to s.390 of the Act:
“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.”
SUMMARY OF THE APPLICANT’S SUBMISSIONS AND EVIDENCE
[14] The Applicant refuted the reasons for the dismissal, and also relied on his prior work performance. He submitted that in accordance with the Agreement, he had received bonuses for achieving his sales targets. Evidence in support of the application was given by the Applicant.
[15] The Applicant stated he had suffered a psychological injury due to workplace ‘stressors’ and had taken a period of sick leave in February 2018. During this period of leave, he conceded he sold a phone to Mr Rod Sherrington, whom he had been introduced to by an ex-colleague, Mr Andrew Bayliss. The Applicant stated the transaction was a “private transaction”, 3 for which a receipt was provided to Mr Sherrington.
[16] The phone sold to Mr Sherrington was subsequently found to have a screen error, and Mr Sherrington and Mr Bayliss contacted the Applicant seeking a refund for the faulty phone. The Applicant submitted that he did not provide the refund as in his view, the phone was sold ‘as is’, privately, and hence he was not required to provide a refund.
[17] The Applicant submitted that text messages were exchanged, to the effect that Mr Bayliss and Mr Sherrington further requested the refund, otherwise the Applicant’s employment “would be jeopardised”. 4
[18] The Applicant submitted that Mr Sherrington attended the Applicant’s workplace and his home around 12 March 2018, and made contact with the Applicant’s Manager, Mr Hayden Ali, regarding the phone he had been sold. The Applicant stated that following these events, Mr Ali advised the Applicant that he would be notifying the Human Resources department that Mr Sherrington “posed a safety threat as he had disclosed to Mr Ali he had attended the Applicant’s home and the place of work of the Employer”. 5 Further, the Applicant lodged a complaint with the Queensland Police against Mr Sherrington.
[19] On or about 3 May 2018, the Applicant stated he was advised he was required to attend a meeting with the Respondent. At this meeting, the Applicant was informed of the allegations that he was conducting a business with Mr Bayliss and selling phones privately outside his employment. It was alleged that he had commenced a business selling phones and that such conduct was in conflict with the Employers Code of Conduct. The Applicant submitted that he denied these allegations but admitted to “having sold phones he had in his possession either as new or used and that he had purchased phones in multiples”. 6 The Applicant was not aware that this was in conflict with the policy, as “there was no commercial intent”.7
[20] The Applicant submitted that following this first meeting, he made enquiries with the Respondent regarding the matters raised at the meeting and the process. The Applicant submitted that he was not provided with copies of the notes, “on the basis that he could have taken his own notes”. The Applicant stated he was also not provided with any further information regarding allegations against him.
[21] The Applicant submitted that he continued to work, and was not stood down during the investigation.
[22] On or about 18 June 2018, the Applicant was requested to attend a second meeting on 19 June 2018 “in order to deliver you with the finding and outcome”. 8 The Applicant attended this meeting with a fellow employee as a support person and the meeting lasted for approximately three hours. The Applicant submitted that towards the end of this meeting, he was informed his employment was being terminated and he was provided with a “pre-prepared”9 letter, setting out the reasons for termination.
[23] The Applicant submitted that he was asked to verbally provide any response to the termination letter, but was not otherwise provided with a time in which to respond to the allegations which the Respondent believed to be substantiated. The Applicant submitted that as he was in shock, and he did not have a response at that time other than to deny the outcome. The Applicant submitted he was not afforded a “show cause” opportunity.
[24] The Applicant submitted there is no basis for the Commission to find that the Applicant’s conduct resulted in a loss of trust and confidence such that reinstatement would be inappropriate or impracticable.Notably, in his initial submissions, the Applicant submitted that the evidence supports that the Respondent continued to have adequate trust in the Applicant following the first meeting to allow him to continue working during the investigative process.
[25] The Applicant submitted the Respondent is a large employer, and by their evidence can manage staff from a distance. For the Respondent to provide an alternate position on sufficient terms, the Applicant submitted there would be no unreasonable burden placed on the Respondent.
[26] While the Applicant recognised that his role had been made redundant shortly after termination, he nevertheless submitted that there are “several other roles that [he] could work within the Telstra Corporation either locally as part of the local team, or otherwise as a remote worker from the Cairns office”. The Applicant sought an order of reinstatement that did not specify a position, only that the Respondent reinstates the Applicant to a position on terms which are no less favourable than his last position. Further, the Applicant sought maintenance of continuity of his employment.
[27] Further to the Hearing, the Applicant was directed to provide a further statement, regarding matters relevant to s.392, the consideration of remedy. The statement provided was objected to by the Respondent as it addressed broader issues. The parties were advised that only such parts relating to s.392 of the Act would be extracted for use in the decision in this matter, and that if any further concerns were raised a conference would be conducted on that point. No further objections were raised.
SUMMARY OF THE RESPONDENT’S SUBMISSIONS AND EVIDENCE
[28] The Respondent submitted that the Applicant’s conduct was in conflict with the Company Code of Conduct. Regarding the required compliance with company policies, the Respondent submitted that the Applicant was trained in all relevant policies, including conduct which presented a conflict of interest. Outside employment with a competitor was identified as a possible conflict of interest, which was required to be disclosed to management.
[29] Relevantly, the ‘Conflict of Interest’ policy document, referred to, provides as follows:
“Conflicts of Interest
Overview: This Policy sets out how we identify and manage conflicts of interest. This Policy is supported by the Conflicts of Interest Guidance Document. You are expected to read, understand and follow both of these documents.
Scope: This Policy applies to all employees and contractors of Telstra and its controlled entities (collectively “Telstra Group”) and to any other person notified that this Policy applies to them.
Policy Principles
0.1 You must do everything you can to avoid actual, perceived or potential conflicts of interest (‘conflict of interest’). This means you must ensure that your personal business, financial and other outside interests, dealings and relationships do not conflict with, appear to conflict with, or have the potential to conflict with your work for Telstra Group.
0.2 In particular you must do everything you can to avoid the following situations:
a) having a material financial interest or acting as a director, officer or employee in any competitor, customer or supplier with which Telstra Group does business;
b) accepting gifts, hospitality or other benefits that may affect your judgment or which may interfere with your ability to do your job or make decisions on behalf of Telstra Group. This includes accepting hospitality in a non-Telstra Group related capacity (e.g. as a guest of another person);
c) using your position at Telstra Group for personal benefit. This includes presenting yourself as a representative of Telstra Group for personal benefit;
d) involvement in outside activities which may affect your judgement or which may interfere with your ability to do your job, or make decisions on behalf of Telstra;
e) personal relationships which may affect your judgement or which may interfere with your ability to do your job or make decisions on behalf of Telstra Group;
f) any involvement in dealings between Telstra Group and a family member or close associate where your family member or close associate could potentially (or be perceived to) gain from, or have an investment in, a decision that you may make on behalf of Telstra Group
0.3 If you have a conflict of interest you must promptly notify your manager, disclose it through the company’s process and take appropriate steps to manage the conflict. You must excuse yourself from any decision making in relation to the situation that gives rise to that conflict. Review the situation with your manager, at least annually or when relevant circumstances materially change. If there is a material change you must follow the company’s process to re-submit the disclosure. If you cease to hold an outside position that has previously been approved, you should notify your Manager by following the Company’s process.
0.4 If you want to take on an outside position, what you need to do depends on your role and the type of position involved:
a) prior to accepting any outside position that involves a conflict of interest, or if an actual, potential or perceived conflict of interest situation arises, you must obtain approval from your manager and disclose it through the company’s process
b) if you are a member of the Executive Leadership Team you must obtain approval from your manager before you accept any outside position (regardless of whether it involves a conflict of interest) and disclose all outside positions through the company’s process
c) if the outside position involves becoming a director of a company that is itself listed or is the manager of a listed managed investment scheme, approval of the Telstra Board Nomination Committee must also be obtained before you can accept the position
Breach of Policy
Compliance with this Policy will be monitored. If you don’t comply with this Policy you could face disciplinary action. This may include termination of your employment or engagement. If you break the law you may also be personally liable.”
[30] The Respondent submitted that the Applicant’s immediate manager was Mr Degasperis (a previous employee of Telstra; employed at that time as the Mobility Team Leader Qld/QA), who was based in Perth. Mr Degasperis reported to Mr Ali (Regional Manager for Mobility), who was based in Brisbane; there was no immediate supervisor of the Applicant based in Cairns. Mr Degasperis was no longer employed by the Respondent at the time of the hearing, but submitted a witness statement 10 and was organised to provide evidence by phone from Perth. The Applicant’s representative did not require him for cross-examination.
[31] The Respondent submitted that on 12 March 2018, Mr Degasperis and Mr Ali became aware of the following:
“a) a Telstra customer, Mr Rod Sherrington, had been sold a mobile phone
outside Telstra direct activity, by Mr Boulton;
b) the device was faulty and Mr Sherrington required a refund and had attended
at the Cairns Telstra depot to demand a refund from Mr Boulton;
c) an ex-employee of Telstra, Andrew Bayliss, currently working as a Consultant
in Cairns, advised Mr Ali that Mr Boulton was buying phones and selling them
on Gumtree.” 11
[32] These allegations were raised with the Applicant by Mr Ali “over the course of several conversation on 12 March 2018”, 12 to which the Applicant denied having a “business on the side selling devices”.13
[33] The Respondent submitted that in response to these allegations, an investigation was undertaken. As a result of this investigation, the Respondent submitted that it obtained:
• copies of SMS messages between Mr Bayliss and the Applicant relating to the sale of mobile phones by the Applicant;
• records demonstrating the Applicant accessed phone sales internet sites from his work computer during work hours;
• evidence of the Applicant taking steps to renew an ABN registration in November 2017;
• evidence that the Applicant requested Telstra IT to re-set his computer after it was “inexplicably wiped” 14 on his return to work from leave on 5 March 2018.
[34] As a result of these findings, the Respondent submitted that a meeting was held on 3 May 2018 with the Applicant and a support person concerning the Respondent’s investigation into the allegations against the Applicant.
[35] The Respondent submitted that a transcript of the meeting was prepared by Mr Degasperis, and that issues arising out of the meeting were:
“a) Mr Boulton’s version of events changed. Initially, he said he was just dropping
off the phone to Mr Sherrington for an ex-colleague; then he said he had
bought it and later said it was a personal sale;
b) Mr Boulton was unclear on whether it was a new phone or a used phone;
c) Mr Boulton’s statements that he had never said to Mr Sherrington that he was
a Telstra employee appeared to conflict with the fact that Mr Sherrington had
gone to a Telstra shop about the phone and then gone to the Telstra depot to
try and speak with Mr Boulton; and
d) Mr Boulton initially denied selling any phones, he then said he had sold some
personal items and then said that he had sold maybe half a dozen. This was
inconsistent with what Mr Boulton had previously said to Mr Ali.” 15
[36] The Respondent submitted that it made further enquiries of Mr Bayliss, which resulted in provision of SMS messages between him and the Applicant regarding the “sale of new and used mobile phones, the use of warranties, setting up an e-commerce site and evidence of sale of another phone to Mr Rod Stevens”. 16 The Respondent submitted that further investigations were undertaken, including searches of the Applicant’s online activity while at work, obtaining a publicly available ‘cache’ internet recording concerning a Gumtree account apparently linked to the Applicant, and reviewing the Respondent’s network records concerning the use of the Applicant’s SIM card in Mr Steven’s phone.
[37] The Respondent stated that the Applicant was advised that a possible outcome of the investigation process, included termination of his employment.
[38] The Respondent submitted that at the second meeting of 19 June 2018, the Applicant attended with a support person, and again Mr Degasperis prepared a transcript of the meeting. The Respondent stated that at this meeting, the Applicant was shown documents obtained during the investigation and the Applicant was asked for any explanation or comment. The Respondent submitted that the following emerged from this meeting:
“a) Mr Boulton admitted sale of a mobile phone to Mr Sherrington;
b) It was put to Mr Boulton that he had also been involved in the sale of a phone to Mr Stevens. He denied any knowledge of that sale. He was shown records of SMS messages that he (Mr Boulton) had exchanged with Mr Bayliss concerning that sale. He was also shown data from Telstra’s network which recorded that Mr Boulton’s Telstra SIM Card had been inserted into Mr Stevens’s phone. Despite this, Mr Boulton continued to deny any knowledge of the sale;
c) Mr Boulton again admitted to having sold half a dozen phones over the
previous couple of years;
d) Mr Boulton again confirmed he had purchased phones online for his personal
use and then on-sold them;
e) Mr Bouton again confirmed accessing sites to buy devices, to using paypal
and uploading photographs of phones and accessories. He said the uploaded
photographs were for work purposes;
f) Mr Boulton was shown an exchange of SMS messages recording:
Mr Bayliss: How many 6 plus’s do you have left
Mr Boulton: Ah only 1 now been a good arvo :) and 2x S7 galaxies left,
more normal sized iphone 6 – 64 GB’s arriving earlier next
week
Mr Bayliss: Cool…lol maybe I should be selling mobile phones while I
get my business up and going
g) Mr Boulton admitted buying multiple phones on the internet. When asked why,
he responded he had a “shopping problem” and that it doesn’t really matter
what he was planning to do with them;
h) Mr Boulton admitted to buying multiple devices of the same type but said they
were for personal use;
i) A Gumtree account apparently associated with Mr Boulton, used for selling
mobile phones and accessories was discussed. Copies of ads from the site
where shown to Mr Boulton by Mr Ali. Mr Boulton denied association with the
account however the following matters link the account to him:
i) Mr Bayliss’ email advice to Mr Ali dated 29 May 2018 that the Gumtree
account was operated under a user name of “Matt”; with contact through
[redacted] and mobile contact [redacted];
ii) Mr Boulton admitted in the 19 June 2018 meeting that he had a personal
Hotmail account [redacted];
iii) Mr Bayliss’ telephone advice to Mr Ali that Mr Boulton wished to
establish an e-commerce site under the name “Daily Devices” or “Daily
D”;
iv) Mr Boulton admitted in the 19 June 2018 meeting that he mentioned
“Daily Devices” or “Daily D” in the context of an e-commerce site that
had never come to fruition;
v) The link to a cached page of Gumtree ads for the seller “Daily D” for
mobile phones and other items had the name “Matt” listed as the seller;
vi) The Gumtree page shows the seller as Daily D;
vii) In the 3 May 2018 meeting Mr Boulton said that the phone sold to Mr
Sherrington might have been placed on Gumtree;
viii) In the 3 May 2018 meeting Mr Boulton admitted to selling a range of
items on Gumtree or e-bay including phones and said that he sells fish
by that means too;
ix) Gumtree postings of mobile phones for sale in Cairns in May 2018 show
a Seller ID of Daniel, the name of Mr Boulton’s brother and a phone
number which Mr Boulton admitted had been registered to him some 18
months earlier; and
x) Photographs in the Daily D and Daniel postings show photographs of
phones and products placed on the same table top.
j) There was an ABN registered to Mr Boulton. Mr Boulton asserted there had
been no activity under that ABN, however it had been re-registered in late
2017;
k) Mr Boulton made allegations that Mr Bayliss has attempted to “set him up”
and had fabricated evidence but could give no plausible explanation as to why
that might be the case. His only explanation was that Mr Bayliss wished to
engage in character assassination;
l) Mr Boulton was shown SMS and email correspondence between him and Mr
Bayliss which referred to provision of receipts for payment, cash payments
and Paypal payments, collating warranties related to sale of mobile phones,
ACCC requirements for warranties and setting up an e-commerce site. Mr
Boulton did not deny these exchanges occurred. He said the warranty matters
and e-commerce site were hypothetical or part of research he was doing for
Mr Bayliss; and
m) Mr Boulton admitted that whilst on sick leave he had made enquiries of a
consultant in relation to the creation of an on-line business.” 17
[39] The Respondent submitted that towards the conclusion of the meeting, Mr Ali put to the Applicant that the SMS messages didn’t read the way the Applicant had suggested; “that he was selling multiple devices when he was incentivised to sell devices for Telstra; and it was implausible that Mr Boulton had bought multiple of the same devices for personal use as alleged by him”. 18
[40] The Respondent submitted that Mr Ali was “the decision maker”, and that matters informing the decision to terminate the Applicant were put to him as follows:
“First, Mr Ali was satisfied that Mr Boulton had been running a personal side business that conflicted directly with the interests of Telstra and failed to notify his manager or seek approval (thereby breaching Telstra’s policies). In particular, Mr Ali found that:
a) Mr Boulton sold mobile phones on at least 12 occasions:
i) Dec 2017/Jan2018 to Rod Stevens;
ii) 19/2/18 - 2 devices listed on Gumtree;
iii) 2/3/18 Sale to Rod Sherrington;
iv) 28/3/18 - 6 phones listed on Gumtree; and
v) 16/4/18 - 2 phones listed on Gumtree.
b) The re-registration of the ABN established an intent to conduct business
activity.
c) Mr Boulton had provided receipts for private sales.
d) Mr Boulton had discussed warranty obligations discussed with Mr Bayliss on multiple occasions.
e) Mr Boulton had made multiple enquiries regarding setting up an e-commerce site.
f) Mr Boulton ordered and sold stock of mobile phone devices and discussed the logistics of delivery and pick up by text message.
g) Mr Boulton had provided refunds for faulty merchandise.
h) Mr Boulton conducted activities in relation to the business whilst on paid
Telstra leave (sick and annual).
i) Mr Boulton had tested a faulty device with Mr Boulton’s official Telstra SIM
Card incurring SMS call charges to Telstra’s official account.
j) Mr Boulton had failed to notify his manager of any potential conflict of interest.
k) Mr Boulton had failed to seek approval of the conflict of interest by instead
denying that he was running a business.
l) Not complying with Telstra’s Code of Conduct in relation to devoting all time and attention to the performance of duties when at work, not performing duties faithfully and diligently; not promoting the interests of Telstra.” 19
[41] Further, the Respondent submitted that Mr Ali was satisfied that the Applicant had been dishonest throughout the investigation process, including dishonesty regarding the following:
“a) Saying he had complied with the conflict of interest policy knowing he had
breached it by selling phones privately;
b) Saying he had no intention to sell to Telstra Business customers when he had
sold a phone to Mr Sherrington (a Telstra business customer);
c) Saying he had never discussed selling phones from China to Mr Bayliss’
customers, when at least 2 devices were sold to his customers, and the
records showed there had been SMS and email dialogues between Mr Bayliss
and Mr Boulton regarding stock levels and warranties;
d) Saying he only sold surplus personal items when he was ordering more mobile
phone stock for resale;
e) Saying he never bought new or refurbished phones online with the intention of
selling the items for personal financial gain when he had done exactly that;
f) Saying he does not have a business outside Telstra when he has an ABN and
completed regular activities as if running a business;
g) Saying he had no interest in running an online store when he had obtained at
least 2 quotes to set one up;
h) When the sale of the phone to Mr Sherrington came to Telstra’s attention,
deliberately trying to hide his involvement by changing the Gumtree username
and taking down and blocking all listings under his name;
i) Saying he didn’t know about the phone sale to Mr Stevens when the Telstra
network records demonstrated that Mr Boulton’s official Telstra SIM cards had
been inserted into that phone;
j) Saying his exchanges with Mr Bayliss were hypothetical only when he was in
fact looking to set up an online store and was selling multiple devices.” 20
[42] Mr Ali had travelled from Brisbane for the meeting with the Applicant on 19 June 2018. The Respondent conceded that Mr Ali had taken a pre-prepared termination letter to that meeting, “to cover the possibility that termination of employment may have been an outcome”. 21 However, the Respondent denied that Mr Ali pre-judged the issues, and that the transcript of the 19 June meeting demonstrates that steps were taken to acquire explanations from the Applicant so that termination may be avoided. The Respondent submitted that as no meaningful responses were received, during that meeting regarding the investigation findings, the termination was effected.
[43] In accordance with the termination letter, the reasons for the Applicant’s dismissal were:
“a) running a personal business that conflicts directly with the interests of the
Telstra Group;
b) failing to notify his Manager and seek approval of the conflict of interest; and
c) deliberately being dishonest during the investigation, intentionally lying on
multiple occasions and engaging in deception.” 22
[44] Mr Ali, Mr Bayliss and Mr Degasperis provided witness statements for the Respondent, in this matter. At the Hearing, Mr Ali and Mr Bayliss were cross-examined on their evidence. As previously set out, Mr Degasperis was organised to give evidence by phone from Perth, however and he was not required for cross-examination.
Evidence of Mr Bayliss
[45] Mr Andrew Bayliss, freelance IT Consultant and previously an employee of Telstra, provided a witness statement, and gave evidence under cross-examination at the hearing in this matter. Mr Bayliss gave evidence that he does not sell mobile phone handsets to his business clients, instead he provides recommendations on what is in the market or referrals to businesses that do supply new mobile phone hardware.
[46] Mr Bayliss gave evidence that he has remained in contact with the Applicant since his time working for the Respondent, including occasionally seeing him socially. His evidence was that since approximately 2016, the Applicant has spoken about “buying and selling phones”, 23 and that from what the Applicant said Mr Bayliss understood him to be “buying cheap discontinued unused and unopened mobile phones online and selling them on websites such as Gumtree and eBay”.24 He gave evidence that in early 2017 the Applicant further stated he was selling “new discontinued genuine mobile phones from iPhone and Samsung sourced from China”,25 to which Mr Bayliss gave evidence that he recalled saying “good luck with that” as he had heard stories about refurbished phones “which were never good”.26
[47] He gave evidence that he had a number of discussions with the Applicant regarding e-commerce and website hosting generally, but he did not recall when the Applicant first mentioned a business idea. His evidence was that from mid to late 2017, the Applicant made comments to the effect that:
“(a) He was selling phones regularly and making good money;
(b) He had sold multiple devices…
(c) He was operating via the websites Gumtree and eBay;
(d) His brother and friends were also involved in selling devices;
(e) He wanted to grow his volume of sales;
(f) His business was going to be called Daily Devices; and
(g) He was looking to set up his own business website.” 27
[48] Mr Bayliss gave evidence that around October 2017, the Applicant said words to the effect that his mobile phone sales were increasing, and that it was “a good opportunity to get good money”, 28 that people were after “vanilla phones”29 (defined in Mr Bayliss’s evidence as “a basic phone without any add-ons or additional features”) and “Telstra wasn’t selling at the price people wanted”.30
[49] Mr Bayliss further gave evidence that the Applicant suggested, around November 2017, that he could start selling phones to Mr Bayliss’s clients. Mr Bayliss confirmed he would discuss this opportunity, but that if he referred a client to the Applicant, “I wanted to know that he would be able to provide a good service. I was concerned about my business credibility”. 31 He gave evidence that the Applicant “insisted that it wouldn’t be a problem and that no written warranty was needed”.32
Phone sales
[50] Mr Bayliss gave evidence regarding two sales made by the Applicant, to Mr Rod Stevens and Mr Rod Sherrington, clients of Mr Bayliss. In his evidence, he stated that in these dealings he emphasised that the Applicant should arrange warranties for the phones he was selling. He gave evidence that his impression of the Applicant’s dealings was that he was “doing a lot of sales”; 33 that the Applicant seemed to be “getting serious about his business”;34 and that the Applicant spoke of “plans to increase volume, get a business name and set up a website”.35
[51] In his witness statement, Mr Bayliss gave evidence that regarding the sales to Mr Stevens and Mr Sherrington, he merely acted as an intermediary, and the sales were not through his business; rather, the Applicant was the one selling the phones. However, at the Hearing, when cross-examined regarding the phone sale to Mr Sherrington, and the Applicant’s suggested comments that at the time of the sale, he and Mr Bayliss go into business together, Mr Bayliss gave evidence that “there were two business transactions, so I believed that we were in business already”. 36
Sale to Rod Sherrington
[52] Mr Bayliss gave evidence regarding the Applicant’s sale of a phone to Mr Sherrington. Mr Sherrington was a contact of Mr Bayliss, and following the sale Mr Sherrington contacted him advising that the phone wasn’t working.
[53] Mr Bayliss submitted that his understanding was the Applicant had “sold a lot of phones” 37 and that none of the other customers had experienced problems, such as those of Mr Stevens and Mr Sherrington’s phones.
[54] The Applicant agreed to refund and collect the device sold to Mr Sherrington. However, Mr Bayliss submitted that on 9 March 2018, he received a call from Mr Sherrington’s wife, who advised they had not heard back from the Applicant, and no one had come to collect the faulty phone. Mr Bayliss attempted to make contact with the Applicant, but received no response.
[55] Mr Bayliss sent correspondence to the Applicant on 12 March 2018, stating:
“Matthew I am meeting with Rod Sherrington at 11am today to follow the next course of action in relation to the device you had previously sold to them which has been faulty from day one. If you do not contact them prior to 11am today statements will be giving [sic] to his legal representation as well as lodging a complaint with the ACCC and Telstra Business”;
and
“Do not jeopardise you current 12 year positions [sic] with Telstra”. 38
[56] Mr Bayliss submitted that Mr Sherrington had made it clear he wanted his money back, otherwise he would escalate the problem to Tesltra and “cause problems for Matt”. 39
[57] At the date of his affidavit, 3 October 2018, Mr Bayliss submitted that Mr Sherrington still had the iPhone, and the Applicant had not refunded the money.
[58] At the Hearing, the Respondent provided text messages between Mr Bayliss and the Applicant, which included screen shots of conversations between the Applicant and his “customers”. One exchange was as follows:
“Hey thanks so much for that phone. Mum is super stoked. My mum lives in Fiji with my Dad and brother I am predicting that they will be keen on one of your phones as well. I will email you if this does happen to see what ones you have available”.
[59] To which the Applicant had replied:
“Good to hear… yeah let me know I will be around with them and others on the way”.
[60] A further SMS exchange read:
“Hey Matt my best friends chasing a s6 as well, maybe you can do one cheaper? Would really appreciate it, and will keep suggesting friends to you”.
[61] Following these screenshots was a text message “Happy customers”.
Evidence of Mr Degasperis
[62] Mr Degasperis in his statement set out that at the time of the Applicant’s dismissal he was employed as the Mobility Team Leader Qld/WA, however due to the current restructure under way he would shortly be finishing up employment with the Respondent. At the time of the Hearing in this matter, Mr Degasperis was no longer an employee of the Respondent.
[63] Mr Degasperis provided evidence that when he was employed with the Respondent, he had been based in Perth, with a team of 11 employees across Queensland and Western Australia, and therefore he did not have direct onsite supervision of these employees. Because he worked off-site from many of his team members, Mr Degasperis gave evidence that a high level of trust in the employees was required.
[64] The Applicant reported directly to Mr Degasperis, and had done so since his commencement in 2017. Mr Degasperis’s evidence was that the Applicant’s speciality area was mobile devices, solutions and products, and that his duties included selling devices and services. Mr Degasperis gave evidence that the Applicant’s work involved him working closely with “any account representatives that were aligned with the customers he was dealing with”. 40
Events of 12 March 2018
[65] Mr Degasperis’s statement set out that he received a call from an employee at the Cairns depot on 12 March, advising that Mr Sherrington, a Telstra customer, had turned up at the depot looking for the Applicant. Mr Sherrington had advised the employee that the Applicant had privately sold him a phone that didn’t work. Mr Degasperis asked for the customer’s details, so that he could make follow-up contact.
[66] Mr Degasperis’s evidence was that he contacted his manager, Mr Ali, and that agreement was reached that an investigation would be undertaken. Mr Degasperis stated that Mr Ali had made contact with Mr Bayliss about the mobile phone issue; and that the Applicant was advised that the matter would be looked into.
Investigation
[67] Regarding the investigation, and the documentation uncovered regarding the Applicant’s internet searches and the computer reset; Mr Degasperis’s evidence was that he was concerned that a lot of the information was “only indirect information”, 41 and that “we didn’t have a lot of supporting evidence”,42 hence he wanted to hear from the Applicant in response to the allegations.
Meeting of 3 May 2018
[68] Mr Degasperis invited the Applicant to the meeting of 3 May 2018; as part of his evidence, he submitted the invitation dated 2 May 2018. He submitted that he had reviewed all relevant information, and had the assistance of human resources in preparing the question guide for Mr Ali, setting out the key issues and questions to be raised with the Applicant. Mr Degasperis gave evidence that he kept full notes, and where he had to leave the room, he put a mark next to the question. He submitted that he typed the notes up “as soon as possible, while it was fresh in my mind”, 43 following which his original notes were disposed of in a secure bin. The notes were confirmed by Mr Ali.
[69] He submitted that the Applicant’s answers given in the meeting “didn’t really explain what had happened with Rod Sherrington”, and “included contradictions”, further that the Applicant “didn’t acknowledge that there was any potential conflict of interest”. 44
Additional investigations
[70] Mr Degasperis’ evidence was that during the additional investigations, on 14 May 2018 the Applicant raised a conversation indicating frustration with the process and seeking further guidance. Mr Degasperis’ evidence was that he explained the investigation was still in progress, that all outcomes were still open (including dismissal), and that “we were trying to understand what had occurred”. 45 He submitted that an email, confirming this conversation, was sent to the Applicant on the afternoon of 14 May.
[71] Mr Degasperis stated that the Applicant replied to this email seeking copies of the 3 May meeting notes, which Mr Degasperis submitted he was surprised to receive as “we had told Matt in the meeting of 3 May that he would not be provided with our notes”. 46
Second meeting of 19 June 2018
[72] Regarding the second meeting, Mr Degasperis gave evidence that he again compiled all relevant documentation, and prepared a question guide, which Mr Ali used to guide the discussions with the Applicant. Again, notes were prepared and confirmed by Mr Ali.
[73] Mr Degasperis stated that steps were taken during this meeting to ensure that the Applicant had a full opportunity to comment, and explain what had happened. He stated that the Applicant was taken through the evidence, shown the documentation, and asked to explain his side of the story. His evidence was that the Applicant’s “story” involved a lot of contradictions.
[74] Mr Degasperis’ statement of evidence set out that Mr Ali was the “decision maker”, and whether the evidence substantiated the allegations against the Applicant was at the discretion of Mr Ali. He submitted that Mr Ali’s decision about the findings was made “in the first break in the meeting”, following which, the Applicant was taken through the findings and asked to respond. The Applicant was advised that Mr Ali was “proposing to end his employment”, the Applicant was asked “if there was anything further he wanted to raise”, 47 and another break was offered for the Applicant to consider this.
[75] Mr Degasperis’ evidence was that the Applicant had been dishonest, which was a concern due to his requirement to work remotely. Mr Degasperis stated he no longer had confidence in the Applicant. Whilst it wasn’t his decision, Mr Degasperis stated he was comfortable with Mr Ali’s decision to dismiss the Applicant.
Evidence of Mr Ali
[76] Mr Hayden Ali, Regional Manager for Mobility for the Respondent, provided a witness statement and gave evidence under cross-examination at the Hearing in this matter. As part of his evidence, he stated he had 21 direct reports covering Queensland and Western Australia, which included Mr Degasperis prior to his position becoming redundant. The Applicant reported to Mr Degasperis.
[77] Mr Ali gave evidence that he has known the Applicant since 2004, when they both worked for the Respondent in the retail section. He submitted, “I regarded us as friends as well as colleagues … and we always got on well together both inside and outside or [sic] work”. 48
[78] Mr Ali’s evidence supported that of Mr Degasperis, regarding the steps undertaken during the investigation. Mr Ali gave evidence that the Applicant’s responses provided during the meeting of 3 May “were unsatisfactory”. 49 He stated that he felt the Applicant “wasn’t being transparent or giving us all of the information in response to our questions”.50 He submitted that in particular, he was concerned about:
“(a) Matt’s story around the phone changed. Initially he said that he was just dropping off the phone for an ex-colleague and then he said that he had bought it and he later said it was a personal sale;
(b) Matt was unclear on whether it was a new phone or a used phone;
(c) Matt’s statements that he had never said to Rod that he was a Telstra employee appeared to conflict with the fact that Rod had gone to a Telstra shop about the phone and then gone to the Telstra depot to try and speak with Matt; and
(d) Matt initially denied selling phones and then said that he had sold some personal items and then said he had sold maybe half a dozen. This was inconsistent with what Matt had previously said to me.” 51
[79] At the hearing, Mr Ali gave evidence that during the meetings of 3 May and 19 June, the Applicant gave answers which were “flat denials and there may have been some things that he couldn’t recall”. 52
[80] Mr Ali stated that he made the decision to dismiss the Applicant, and that prior to the meeting of 19 June, he had “formed a preliminary view based on the evidence that [the Applicant] had a case to answer”. 53 However, he submitted that despite the preliminary view, he hadn’t made a final decision about the issues or the outcome for the Applicant.54 He submitted the decision to dismiss the Applicant was made after considering what the Applicant had to say in the meeting of 19 June 2018. Mr Ali submitted that he was satisfied the Applicant “had sold at least two handsets”, and “had been looking into or taking steps to establish an e-commerce site”.55 He further submitted that he was satisfied the Applicant “had lied or failed to be honest about the issues” and that he “felt strongly that [the Applicant] had broken trust”.56
[81] The Respondent relied on the transcripts of both meetings in submitting that there was no unfairness in the treatment of the Applicant, and the effected termination. It relied on the evidence of Mr Ali and Mr Degasperis, and submitted that: the Applicant was advised of the issues Mr Sherrington had raised and that an investigation would be undertaken; Mr Ali requested the Applicant send through any records he had, which the Applicant failed to do; the Applicant was allowed a support person, and was advised of the nature of the meetings; the Applicant was advised of the Respondent’s concerns at the 3 May meeting, and was shown all documents available to the Respondent at that date and allowed an opportunity to respond; the Applicant was provided an update on 14 May, and advised a possible outcome of the investigation included dismissal; another update was provided to the Applicant on 16 May; the meeting invitation of 18 June confirmed the nature of the meeting and allowed the Applicant to invite a support person; the second meeting of 19 June was attended by the Applicant in the knowledge that his employment may come to an end.
[82] The Respondent submitted that at the 19 June meeting, the Applicant was shown all documents, allegations were put to the Applicant and he was given an opportunity to respond. The Respondent reiterated that the Applicant’s responses were unsatisfactory in light of the evidence and that the termination was hence effected. The Applicant was provided with breaks during the meeting.
[83] The Respondent conceded that it underpaid the Applicant in lieu of notice, and that this error had since been corrected.
CONSIDERATION
[84] In considering whether a dismissal is harsh, unjust or unreasonable, the Commission must have regard to the matters in s.387 of the Act:
(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
[85] In regard to the assessment of valid reasons, the Applicant submitted, in summary terms, that there were a series of mitigating factors and that he was cooperative during the investigation process and answered questions to the best of his ability. He stated that there was no valid reason for the dismissal, and further the termination was disproportionate to the gravity of the alleged misconduct. 57
[86] At the Hearing, the Applicant admitted to accessing external sites while at work, but denied that it was for handsets and accessories for the purpose of purchasing them; instead the Applicant stated he was browsing “not handsets and accessories. Anything in general”. 58 When questioned regarding his purchases of multiple handsets, and what he was planning to do with these purchases, the Applicant confirmed he had responded during the investigation by saying, “It doesn’t really matter. It’s my money. It’s my items. I own it”.59
[87] Regarding any “business” activity, and his involvement with Mr Bayliss, the Applicant gave evidence at the Hearing that Mr Bayliss had been “pressuring me to supply people he thought he could make money from in his own business, so this is where this looks like me supplying a phone to him because I’m ordering him one, but he himself was dragging me into his own affairs of looking as I was his supplier”. 60 As to statements he had made to Mr Bayliss regarding his sales, and the prospect of starting a business, the Applicant gave evidence at the Hearing that:
“… my embellishment to Drew Bayliss was to only forecast a possibility of running a business with him in the future. It wasn’t anything at that time. I was bolstering my position as a potential advocate for – if Telstra made me redundant, which they were talking about, I was sort of keeping him on the boil to say that – you know, making myself look bigger than I was in the situation at that time that he was trying to achieve with his own consultancy.
… It was a potential for the future. Nothing was actually transpiring.” 61
[88] In his final submissions, the Applicant conceded the evidence at the Hearing was as follows:
• The Applicant had received training on the Respondent’s conflict of interest policy; 62
• The Applicant admitted to sourcing mobile telephone handsets for [friends and family]; 63
• The Applicant admitted to giving a mobile telephone to Mr Bayliss for provision to Rod Stevens; and
• The Applicant admitted to giving a mobile telephone to Mr Sherrington in exchange for money.
[89] On the Applicant’s evidence, and given the “Respondent’s conflict of interest policies, the role performed by the Applicant at the time of his dismissal, the training received and the conduct admitted by the Applicant” the Applicant conceded that the Commission is “likely to find that failing to raise any perceived or actual conflict of interest arising out of the admitted conduct amounted to misconduct”. 64 Nevertheless, the Applicant submitted that his dismissal was harsh, unjust or unreasonable based on the outcome of the disciplinary investigation being disproportionate to the gravity of the conduct.
[90] The Applicant submitted that, while he breached the Respondent’s policy in failing to raise any perceived or actual conflict of interest arising out of his admitted conduct, “the breach of policy does not (of itself) mean that a dismissal is not harsh, unjust or unreasonable,” 65 and all of the circumstances must be taken into account.
[91] In accordance with his initial submissions, the Applicant maintained that he was not dishonest during the disciplinary process, rather the nature of the process “impacted on his ability to provide complete answers to the interviews”. 66 Mr Ali’s evidence at the Hearing was that at the second meeting the Applicant was upset, but was offered a number of opportunities to break during that meeting.67 Further, and in the alternative, the Applicant submitted that dishonesty does not automatically make the dismissal “one that is not unfair”.68
[92] The Respondent submitted that the reasons for termination constituted a valid reason for dismissal, and that these reasons were “sound, defensible and well-founded”. 69 It submitted that, based on the evidence before the Commission, it should be found on the balance of probabilities that the conduct occurred and amounted to a valid reason for dismissal.70 The Respondent submitted that regard should be had to the “accumulation of evidence rather than individual pieces of evidence”.71 It noted that many of the facts in this matter have been admitted by the Applicant, and that in regards to the facts which remain in dispute, the Respondent submitted the weight of the evidence favours a conclusion that the Applicant’s conduct was “in breach of the relevant policies and, in connection with the investigation, deliberately and knowingly dishonest”.72
[93] In addition to the Applicant’s conceded facts as stated above, the Respondent submitted the Commission is able to rely on the Respondent’s evidence, specifically:
“(a) Mr Degasperis’s affidavit was admitted without any cross-examination;
(b) Mr Bayliss was cross-examined narrowly and made no concessions in relation to the suggestion that he and Mr Boulton were not in business together. His evidence is otherwise unchallenged; and
(c) Mr Ali gave an explanation as to what he meant by Mr Bayliss being unknown to him. He said that he meant he did not work for Telstra. Mr Ali was also questioned about Mr Boulton’s state of mind during the disciplinary meeting on 19 June 2018. His evidence was that Mr Boulton gave bare denials to allegations, that he appeared upset when questioned about sale of mobile phones on Gumtree and that he was offered breaks as part of the process. Beyond that Mr Ali’s evidence was not challenged in cross-examination.” 73
[94] The Respondent also noted the Commission should rely on those documents and records which were not challenged by the Applicant, including, among other things: the records of the meetings, which the Applicant (when later provided with such) confirmed were true and fair records of the discussions held; 74 the SMS exchanges between the Applicant and Mr Bayliss in relation to phone sales to Mr Stevens and Mr Sherrington; Telstra’s Conflict of Interest Policy; the log of entries from the Applicant’s laptop; the IMEI log; and emails from Mr Degasperis to the Applicant regarding his work performance.75
[95] The Respondent submitted that the SMS exchanges produced, and the evidence given by the Applicant regarding his purchasing of multiple devices (only explained as being for personal use, and due to his online shopping problem), evidence a broader business operation on the part of the Applicant than just the sale of two phones. 76 Further, the Respondent submitted the evidence establishes that the Applicant had taken steps to ensure he had a current ABN,77 relevant to the sale of the devices.
[96] The Respondent submitted that the Applicant had engaged in an actual or perceived conflict of interest, in breach of its Conflicts of Interest policy. Whilst the conduct complained of related to out of work activities, there is “sufficient connection” between his employment duties for the Respondent, in retailing mobile phones, and engaging in the out of hours, private sales of mobile phone sets which amounted to competition and a conflict of interest. 78
[97] As noted in Rose v Telstra Corporation Limited, which dealt with out of hours conduct: 79
“In certain circumstances an employee's out of work activities may be in breach of an implied or explicit term of their employment contract. An employee's implied duty of fidelity and good faith is particularly relevant here. One of the most concise and authoritative statements of what is generally encompassed by the duty of fidelity and good faith is to be found in Blyth Chemicals v Bushnells. In that case their Honours Dixon and McTiernan JJ said:
"Conduct which in respect of important matters is incompatible with the fulfilment of an employee's duty. Or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee, is a ground of dismissal ... But the conduct of the employee must itself involve the incompatibility, conflict, or impediment, or be destructive of confidence. An actual repugnance between his acts and his relationship must be found. It is not enough that ground for uneasiness as to future conduct arises."
In the same case their Honours Starke and Evatt JJ note:
"The mere apprehension that an employee will act in a manner incompatible with the due and faithful
performance of his duty affords no ground for dismissing him; he must be guilty of some conduct in itself
incompatible with his duty and the confidential relation between himself and his employer."
The concept of a duty of fidelity and good faith is used as a matter of convenience to subsume a range of obligations which are intended to ensure that the employee renders honest and faithful service to the employer. They include:
- an obligation not to damage the employer's interests by disclosing or using confidential information obtained in the course of employment;
- an obligation to act honestly in handling the employer's property;
- an obligation not to earn any secret profits; and
- an obligation not to engage in employment outside of the hours devoted to their main job where the spare time work is for a competitor of the main employer and may damage the employer's business.
The obligations imposed by the common law duty of fidelity and good faith operate to prohibit acts outside of the employment which are inconsistent with the continuation of the employment relationship. But as Spender AJ observed in Cementaid (NSW) Pty Ltd v Chambers, `an actual repugnance between the employee's acts and his relationship with his employer must be found'.
More recently the implied term of fidelity and good faith has been expressed as an obligation to serve the employer loyally and not to act contrary to the employer's interest. In England this obligation appears to have been subsumed by the more general obligation of mutual trust and confidence. The implied term of mutual trust and confidence imposes reciprocal duties on the employee and employer that they shall not `without reasonable and proper cause, conduct themselves in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee'.
If conduct objectively considered is likely to cause serious damage to the relationship between employer and employee then a breach of the implied obligation may arise.
There is some support for the proposition that the existence of an implied term of trust and confidence in contracts of employment has been accepted in Australia.
The words `trust and confidence' in this context are used in a contractual sense rather than as an ingredient of a personal relationship. As McCarry notes:
"... the words `trust and confidence', just like the employee's reciprocal duties of `fidelity and good faith', do not now refer to the ingredients of a personal relationship, even if they once did. The words now represent, in shorthand form, a bundle of legal rights which have more to do with modes of behaviour which allow work to proceed in a commercially and legally correct manner than with ingredients in an interpersonal relationship."” 80
(Emphasis added)
[98] Further, in the case of Hussein v Westpac Banking Corporation, 81it was found that where the employee was convicted of credit card fraud in relation to activities outside of his work with Westpac, there was sufficient connection to his duties with Westpac to justify dismissal. In this case, it was also expressed:
“... a conviction on a drink-driving charge which occurred outside work hours would not be relevant to the employment of many people. However it would be of critical relevance to a truck driver or taxi driver. It seems to me that an appropriate test is whether or not the conduct has a relevant connection to the employment.” 82
[99] On the evidence, the Applicant’s conduct and further dishonesty in the disciplinary interviews provided evidence in support of the loss of trust and confidence, which was particularly pronounced as the Applicant’s work in Cairns required him to work remotely from his manager. 83
[100] It is recognised that there was a delay in the conclusions of the investigation, and there is some tension between this and the reliance on the breakdown in trust and confidence. However, even at the very last day, when the Respondent put the matters of conduct, and the evidence on which the allegations were based, to the Applicant, the Applicant remained evasive, obstinate, and inconsistent in his responses, in the face of direct evidence to the contrary. This reinforces the Respondent’s submission of a breakdown in trust and confidence, at the critical time, when Mr Ali was deciding on the appropriate outcome.
[101] As extracted at [29], the Respondent’s ‘Conflict of Interest’ Policy provides that employees “must do everything [they] can to avoid actual, perceived or potential conflicts of interest (‘conflict of interest’)”, and that if a conflict of interest does arise, the employee “must promptly notify [their] manager, disclose it through the company’s process and take appropriate steps to manage the conflict”. In accordance with the policy, actual, perceived or potential conflicts include among other things having a material financial interest in any competitor, using the employee’s position at Telstra Group for personal benefit, or involvement in outside activities which may affect their judgment or interfere with their ability to do their job. As conceded by the Applicant, he had been trained in the Respondent’s policies, including the Conflict of Interest Policy, with courses conducted in 2015, 2016 and 2017. 84 While he denied having seen the “Conflicts of interest guidance document”,85 in accordance with the aforementioned evidence, he has conceded that the Commission, in considering the policy and conduct, is likely to find his admitted conduct amounted to misconduct.
[102] On the evidence, there was a perceived or actual conflict of interest that the Applicant failed to raise with the Respondent. The evidence establishes that the Applicant was engaging in the sale of mobile devices to others for his own profit and that this at the very least, gave rise to a potential or perceived conflict. The Applicant was not an impressive witness. Where the Applicant’s evidence was in conflict with that of the Respondent, as set out the evidence of the Respondent’s witnesses was preferred. I accept and find that this breach of the policy amounted to misconduct, and that the Applicant was not truthful during the investigation process in relation to the conduct of selling phones.
[103] This breach of policy and dishonesty during the investigation is inconsistent with continuing employment, and forms a valid reason for the termination of the Applicant’s employment.
(b) whether the person was notified of that reason; and
[104] The Applicant was made aware of the allegations. It was conceded in the final submissions on behalf of the Applicant that he was notified of the reason for the dismissal. 86 The Commission is satisfied that the Applicant was notified of the reason for dismissal.
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
[105] The Applicant acknowledged that he was interviewed on 3 May 2018 and 19 June 2018, and at each meeting he was asked about his conduct and provided an opportunity to respond to allegations.
[106] In his initial submissions, the Applicant submitted that while he was of the view that he would be given an opportunity to show cause following the meeting of 19 June, he argued the Respondent had made a “pre-determination” and denied him the ability to provide a show cause response to the allegations.
[107] The Applicant submitted that the Commission should have regard here to findings in the recent decision of Milonas v Telstra Corporation Limited: 87
“Telstra could, and should, have provided written confirmation of its intention to dismiss, and granted the applicant what is understood to be a “show cause” process whereby any issues that the applicant wished to raise a means to dissuade the employer from dismissal could be provided and then carefully examined before a final decision was confirmed”. 88
[108] However, whilst the Applicant critiqued the procedure, the responses provided by the Applicant at the Hearing, did not alter his position. The Applicant acknowledged he had been shown the Gumtree notes, the SMS exchanges, the ABN, and other logs at the interviews, he stated they were put in front of him “in a manner that was very emotional at the time” and that he “didn’t feel at the time that it was a time for me to respond at all”. 89
[109] In his final submissions, he acknowledged that at the 19 June meeting, he was given an opportunity to respond to the reasons for termination, however, in accordance with his initial submissions; the Applicant maintained that the outcome of the 19 June meeting had been pre-determined, given the prepared termination letter, presented to him at the end of the meeting.
[110] The Respondent submitted that the Applicant was both notified of the reasons for dismissal and allowed an opportunity to respond to these reasons during the 19 June meeting. Further, that the “notification was given before a decision to terminate was made”. 90
[111] The Respondent further submitted that the Applicant had “multiple opportunities to respond”, and that the transcript of the 19 June meeting proves that the Applicant was provided a “full opportunity to respond to the allegations made against him”. The Respondent submitted that the transcripts of the two meetings demonstrate there were “painstaking attempts” to investigate what occurred, and to put all allegations to the Applicant to obtain his version of events. 91 The Applicant was provided all relevant documentation, and asked specific questions to elicit responses and replies to the allegations against him.
[112] While the Applicant had not been shown copies of the transcripts following the meetings of 3 May and 19 June, at the Hearing he was shown the documents and confirmed they provided a “mostly accurate” record of what was said in the meetings. 92
[113] The Respondent submitted that in accordance with the transcript of the 19 June 2018 meeting, there was no aggression or inappropriate questioning, and further the Applicant was afforded breaks to speak with his support person. The Applicant did not ask at any point for the meeting to be adjourned. The Respondent further reiterated that on the evidence, Mr Ali did not pre-judge the matters, and despite the pre-prepared termination letter, he had not made any final decisions ahead of this meeting. 93 The Applicant however, despite the opportunity, failed to provide any plausible explanation regarding the allegations.94
[114] The Respondent submitted that on this evidence, the Commission should find that the Applicant was notified of the issues and given every opportunity to respond. With regard to the procedural matters, it was reasonable that the Applicant be provided with the transcript of the meetings and also later to be provided with a “show cause” process involving written confirmation of the Respondent’s intention to dismiss the Applicant. However, the Applicant has been given complete opportunities prior to hearing and in his evidence, to provide his responses and such did not alter the conclusion.
[115] On the evidence, the Commission is satisfied that the Applicant had a reasonable opportunity to respond to the reasons for dismissal, and to defend himself.
(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
[116] The Applicant and Respondent both submitted that the Applicant was allowed, and did bring, a support person to the meetings of 3 May and 19 June 2018.
[117] I find that there was no unreasonable refusal by the Employer to allow the Applicant to have a support person for the relevant discussions that lead to the dismissal.
(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
[118] The reasons for the dismissal, did not relate to unsatisfactory performance.
[119] In final submissions, the Applicant noted that while unsatisfactory performance was raised as an issue at hearing, “for the purposes of determining whether the dismissal was harsh, unjust or unreasonable, the Applicant’s work performance is irrelevant because it did not form part of the reasons for the dismissal”. 95 The Applicant’s lengthy period of employment has been taken into account in addressing the fairness of the dismissal. The termination was appropriate in the circumstances.
(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
[120] The Respondent is a large business entity, and has dedicated human resources, and employee relations management specialists. The termination has been assessed on this basis, and whilst procedural matters were raised, I do not consider that they otherwise affect the overall fairness of the dismissal.
(h) any other matters that the FWC considers relevant.
[121] The Applicant submitted he was employed by the Respondent for over 14 years. He submitted that the Commission should have regard to this long, unblemished work history. He submitted that no evidence was before the Commission regarding any disciplinary or formal process undertaken by management in relation to prior of unsatisfactory work performance, other than the process which led to his termination, and that this should weigh in his favour. 96 However the Respondent refuted this. While issues relating to work performance did not form part of the reasons for the dismissal, there was evidence before the Commission that the Respondent noted the Applicant’s performance had been unsatisfactory at times, prior to the disciplinary proceedings.
[122] Given his length of employment in “a single industry”, the Applicant submitted that the Commission should have regard to the “significant impact” the termination of his employment has had on his ability to find alternative work in a regional town. The impact of the dismissal on the Applicant’s personal and economic situation has been considered. 97
[123] The Applicant reiterated that the Commission should have regard to the fact that the termination was pre-determined as evidenced by the letter of termination provided at the end of the 19 June 2018 meeting. The Applicant submitted this was printed before the meeting, and discussed with others, before it was presented to the Applicant at the meeting, with the reasons for termination. This has been considered in conjunction with Mr Ali’s evidence that he had flown to Cairns, and he was transparent that he had prepared the letter in circumstances where the Applicant was being given, at the meeting, a further opportunity to provide reasonable responses to explain his conduct. Mr Ali was a credible witness; he set out the Applicant and he had been friendly colleagues and his evidence was convincing regarding his commitment to afford the Applicant a fair process, prior to deciding the outcome. The Commission accepts Mr Ali’s evidence and concludes that while a letter had been prepared, it was, in the circumstances, a matter of convenience rather than to pre-determine the outcome of the discussions that had been organised.
[124] The Respondent submitted that the Commission should have regard to the fact that the Applicant “has never shown any contrition or recognition of having acted inappropriately”. 98 Further, that the Applicant stated in his evidence that he had in the past embellished facts to make himself look “bigger”, and had made things up; and hence he was not a truthful witness.99
[125] The Respondent made reference to the fact that, at Hearing, the Applicant first denied any sale to Mr Sherrington, and then admitted it was a sale “on a personal level”. While the Applicant characterised the transaction as a personal sale, the Respondent submitted that Mr Bayliss’s evidence and the SMS messages provided support that it was a business transaction. Further, the Respondent submitted that many of the Applicant’s statements at hearing were “evasive” and “argumentative”, and that his version of events changed often. The Respondent submitted: “It is reasonable to infer that Mr Boulton will simply say what seems expedient at the time to meet allegations put to him”. 100 The Respondent submitted that the inference to be drawn from the Applicant’s evidence at hearing is that “he continued to be dishonest”.101 The Applicant’s responses to the allegations favour against a continuing employment relationship.
[126] The Applicant was only paid two out of the four weeks’ wages in lieu of notice owed to him in accordance with the Agreement. The Applicant submitted that “on the evidence the Respondent submits that this was made in error”, and further that the Respondent’s evidence suggests the Human Resources team was consulted. The Applicant submitted that the Respondent, despite the dedicated Human Resources team, failed to pay the Applicant the legal minimum. This matter was remedied.
[127] Each of the matters identified by the parties has been considered. However, the overwhelming impression formed of the Applicant, on his own evidence and the documentary material, is that he was simply not credible. Had the Applicant been open and transparent throughout the process, a different view may have been concluded. Instead, the Applicant was evasive and only made concessions when absolutely required, and sometimes not even then.
CONCLUSION
[128] In relation to the termination of the Applicant’s employment, Mr Degasperis has given evidence that whilst he will no longer be in a Manager role, he would have concerns regarding the Applicant’s reinstatement. This position was reinforced by a lack of recognition by the Applicant, regarding the nature of his conduct and its impact on the Respondent. It is impractical for the Applicant to be reinstated, due to this lack of trust and confidence in him, and the unavailability of close supervision. The employment relationship had irretrievably broken down.
[129] The Applicant confirmed in his evidence that he had been trained on the Respondent’s Conflict of Interest policy and that he conceded the conduct may give rise to a finding of a potential or actual conflict-of-interest.
[130] The allegations on the balance of probability were made out, particularly taking into account the evidence of the Applicant whereby he provided admissions, regarding sourcing mobile handsets for friends and family and for Mr Bayliss (he said, for provision to Mr Stevens), and providing a mobile telephone to Mr Sherrington in exchange for money. Further references to the conduct of this retail business by him were apparent in the text exchanges and on the related documents raised with the Applicant. It has been taken into account that the conduct was alleged to have occurred outside his employment, but I am satisfied there is a sufficient nexus with the Applicant’s employment, to bring the conduct within the employment sphere.
[131] It was readily able to be interpreted that this conduct clearly aligned with a perceived or actual conflict-of-interest and presented breaches of the Respondent’s Code of Conduct and Conflict of Interest policy. The Applicant submitted the disciplinary response was disproportionate to the gravity of the conduct. However the Applicant’s conduct was directly non-compliant with the Respondent’s Conflict of Interest policy; he did not communicate his selling of these handsets to his Managers, and the private sale of phones, as evidenced by the issues that arose with Mr Sherrington, directly impacted on the Employer’s commercial business, given he was known to be a Telstra retail consultant. Therefore, this conduct compromised the Respondent, and in turn, his employment contract. The Applicant was not forthcoming in the investigation process, and did not at any stage take responsibility for his actions.
[132] The allegations were clearly investigated and put to the Applicant at two meetings where he was accompanied by a support person. He was given the opportunity to respond to the allegations, and the reasons, prior to the decision to terminate. The pre-prepared termination letter is acknowledged, as is the evidence of Mr Ali who had travelled for this particular meeting. His evidence was that an open consideration of the Applicant’s responses was made after the lengthy meeting, prior to making a decision to terminate. It is not considered that the dismissal was predetermined.
[133] The Applicant’s long employment history was taken into account. Any unsatisfactory work performance that the Respondent stated had emerged was not relied on as part of the reasons for dismissal, and therefore such has not been taken into account.
[134] The Respondent, in addressing alternative outcomes to this matter, submitted that there were currently no vacancies in Cairns. However it is agreed that it was not appropriate to continue the Applicant’s employment or to transfer him, given his responses to the allegations, the investigation, and at the Hearing as set out, which demonstrated the significant trust and confidence issues in continuing his employment contract, as raised by the Respondent.
[135] On balance, and taking into account all matter required by s.387 of the Act, I am not satisfied that the Applicant’s dismissal was harsh, unjust or unreasonable. While the procedure may not have been entirely without fault, that is all with the benefit of hindsight. This does not, in my determination, outweigh that on the evidence it can clearly be concluded there was a valid reason for dismissal and that the procedure afforded to the Applicant was generally fair.
[136] Therefore, based on the facts and circumstances of this matter, and for the aforementioned reasons, the application made pursuant to s.394 is dismissed. I Order accordingly.
COMMISSIONER
Printed by authority of the Commonwealth Government Printer
<PR704047>
1 Statement of Mr Degasperis, dated 2 October 2018, at 8.
2 Respondent’s final submissions dated 11 December 2018, at 2.
3 Applicant’s Outline of Submissions, undated, at 10.
4 Applicant’s Outline of Submissions, undated, at 12.
5 Ibid at 15.
6 Ibid at 18.
7 Ibid.
8 Annexure TD-5 to the Affidavit of Antonio Degasperis dated 2 October 2018; Applicant’s Outline of Submissions, undated, at 21.
9 Applicant’s Outline of Submissions, undated, at 23.
10 Exhibit 19; Transcript at PN1469.
11 Respondent Outline of Submissions, dated 4 October 2018, at 8.
12 Respondent Outline of Submissions, dated 4 October 2018, at 9.
13 Ibid.
14 Ibid at 10.
15 Ibid at 11.
16 Respondent Outline of Submissions, dated 4 October 2018, at 12.
17 Respondent Outline of Submissions, dated 4 October 2018, at 13.
18 Ibid at 14.
19 Respondent Outline of Submissions, dated 4 October 2018, at 15.
20 Respondent Outline of Submissions, dated 4 October 2018, at 16
21 Ibid at 17.
22 Ibid at 18.
23 Statement of Mr Peter Bayliss, dated 3 October 2018, at 6.
24 Ibid.
25 Statement of Mr Peter Bayliss, dated 3 October 2018, at 7.
26 Ibid.
27 Ibid at 8.
28 Ibid at 9.
29 Ibid.
30 Ibid.
31 Ibid at 11.
32 Ibid at 12.
33 Ibid at 55.
34 Ibid at 16.
35 Ibid at 55.
36 Transcript at PN1599.
37 Statement of Mr Peter Bayliss, dated 3 October 2018, at 44.
38 Extracted in the Statement of Mr Peter Bayliss, dated 3 October 2018, at 49-50.
39 Statement of Mr Peter Bayliss, dated 3 October 2018, at 50.
40 Statement of Mr Antonio Degasperis, dated 2 October 2018, at 5.
41 Ibid at 14.
42 Ibid.
43 Ibid at 17.
44 Ibid at 19.
45 Statement of Mr Antonio Degasperis, dated 2 October 2018, at 21.
46 Ibid at 22.
47 Statement of Mr Antonio Degasperis, dated 2 October 2018, at 33.
48 Statement of Mr Hayden Ali, dated 4 October 2018, at 3.
49 Ibid at 41.
50 Ibid.
51 Statement of Mr Hayden Ali, dated 4 October 2018, at 41.
52 Transcript PN1666.
53 Statement of Mr Hayden Ali, dated 4 October 2018, at 56.
54 Ibid.
55 Ibid at 57.
56 Ibid at 58.
57 B, C and D v Australia Postal Corporation T/A Australia Post[2013] FWCFB 6191; Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 465.
58 Transcript at PN319-PN324.
59 Transcript at PN368-PN371.
60 Transcript at PN456.
61 Transcript at PN481-PN483.
62 Transcript at PN72.
63 Transcript at PN390 – PN391.
64 Applicant’s Final Submissions, dated 27 November 2018, at 5.
65 Ibid at 8.
66 Ibid.
67 Ibid; Transcript at PN1676 – PN1677.
68 Applicant’s Final Submissions, dated 27 November 2018, at 8; APS Group (Placements) Pty Ltd v O’Loughlin[2011] FWAFB 5230; at [56] (2022) 209 IR 351.
69 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373.
70 King v Freshmore (Vic) Pty Ltd (unreported AIRCFB Ross VP, Williams SDP, Hingley C 17 March 2000) Print S4213 at [24]; Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681 at 685.
71 Luxton v Vines (1952) 85 CLR 352; United Group Resources Pty Ltd v Calabro No 5 [2011] FCA 1408 at [71]-[72].
72 Respondent’s Final Submissions, dated 11 December 2018, at 2.
73 Respondent’s Final Submissions, dated 11 December 2018, at 8.
74 Transcript at PN1507-1509.
75 Respondent’s Final Submissions, dated 11 December 2018, at 9.
76 Ibid at 31, 38, and 45.
77 Ibid at 46.
78 Rose v Telstra Corporation Ltd unreported AIRC, Print Q 9292.
79 Unreported AIRC, Print Q 9292.
80 Ibid at page 8-9.
81 (1995) 59 IR 103.
82 Ibid at 107.
83 Streeter v Telstra Corporation Ltd (2008) 170 IR 1; McIndoe v BHP Coal Pty Ltd (PR901846) 2 March 2001, Guidice J, Williams SDP, Bacon CJ.
84 Transcript at PN36.
85 Transcript at PN96-PN101.
86 Applicant’s Final Submissions, dated 27 November 2018, at 8.
87 [2017] FWC 6359.
88 Ibid at [66].
89 Transcript at PN1013 and 1020.
90 Previsic v Australian Quarantine Inspection Services (unreported AIRC, Holmes C, 6 October 1998) Print Q3730; Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.
91 Respondent’s Final Submissions, dated 11 December 2018, at 85.
92 Transcript at PN168-PN176.
93 Respondent’s Final Submissions, dated 11 December 2018, at 90.
94 Ibid at 91.
95 Applicant’s Final Submissions, dated 27 November 2018, at 8.
96 Ibid; Streeter v Telstra Corporation Limited [2008] AIRCFB 15; at [25] – [27] [(2008) 170 IR 1].
97 Applicant’s Final Submissions, dated 27 November 2018, at 8; Ricegrowers Co-operative Limited v Schliebs PR908351 (AIRCFB, Duncan SDP, Cartwright SDP, Larkin C, 31 August 2001) at [26] – [27]
98 Respondent’s Final Submissions, dated 11 December 2018, at 2.
99 Ibid at 10; Transcript at PN481; PN493; PN494; PN495.
100 Respondent’s Final Submissions, dated 11 December 2018, at 10.
101 Ibid at 72.
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