Mr X v Commonwealth of Australia T/A Department of Defence - [2013] FWC 9140

[2013] FWC 9140

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Mr X
v
Commonwealth of Australia T/A Department of Defence
(U2013/12123)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN

ADELAIDE, 20 NOVEMBER 2013

Application for unfair dismissal remedy - storing and e-mailing inappropriate material - investigation process - harsh and unjust - remedy.

[1] On 1 August 2013 Mr X lodged an unfair dismissal application in relation to the termination of his employment, on 18 July 2013, by the Commonwealth of Australia T/A Department of Defence (Defence). Because of the issues associated with this termination of employment I have agreed with the parties that Mr X will not be identified in this decision. It follows that other Defence employees who have given evidence are not identified by name. For the avoidance of any doubt, the parties have been separately advised of the names of the persons referred to in this decision.

[2] Mr X’s application was the subject of a Directions Conference on 19 September 2013. At this conference, both parties confirmed that they did not consider any initial or jurisdictional issues relevant to the application. Both parties gave notice that they sought grants of permission to enable representation by legal practitioners.

[3] Whilst I note that there were some issues associated with the provision of information in preparation for the hearing of the matter, this hearing proceeded on 24 and 25 October 2013. Mr X was represented by Mr Bourne, of counsel and Defence by Ms Raper, of counsel, pursuant to grants of permission made under s.596(2)(a) of the Fair Work Act 2009 (the FW Act).

[4] The essence of Mr X’s application is that the termination of his employment for serious misconduct was unfair in so far as it was founded on his e-mailing and storing of inappropriate material.

[5] There is no dispute that Defence complied with its policies and procedures relative to the steps taken to decide the termination of Mr X’s employment. At issue is whether Defence adequately informed Mr X of its policies, expectations and the consequences of non-compliance. Further, the parties dispute whether Mr X’s specific behaviours warranted termination of employment and whether the process in this respect ensured fairness.

[6] The background to the application is set out below.

[7] Mr X is aged 62 years. He worked for the Royal Australian Air Force (the RAAF) in two periods, for nearly 26 years. In 2009 he resigned from the RAAF and accepted a similar function, within Defence. Over much of his employment within the RAAF and Defence Mr X held significant and responsible positions. His performance reviews recorded superior or outstanding performance. Mr X was highly regarded by his superiors in the area in which he worked and had received a number of performance-based awards and commendations.

[8] Mr X was, at times, responsible for up to 30 personnel. At the time of the termination of his employment, Mr X worked in a unit with 15 other Defence and RAAF personnel. He was directly responsible for two of these personnel.

[9] There is no dispute that Mr X participated in a number of annual and other training programs which confirmed that Defence did not permit the sharing or e-mailing of pornographic or inappropriate material. The extent and the effect of these training programs is however, disputed.

[10] Mr X acknowledges that a warning appears on his computer screen relative to inappropriate use of the computer system. Again, the significance of this warning is not agreed.

[11] On 1 November 2012 Mr X forwarded an e-mail which he had received from an outside source to his 15 work colleagues, including his supervisor. I have considered the nature of that e-mail later in this decision. Mr X’s supervisor immediately advised him that the e-mail was inappropriate and should be recalled. Mr X recalled the e-mail and spoke with his colleagues. His evidence was that no one advised that they were offended by the e-mail.

[12] Mr X’s supervisor, Mr Y reported the incident which was then the subject of a "Quick Assessment" consistent with Defence procedures. That Quick Assessment was undertaken by a RAAF officer from another work area. The Quick Assessment involved interviews with personnel to whom the e-mail was sent. It assessed that Mr X’s conduct on 1 November 2013 contravened Defence information technology use instructions, that the e-mail may be a form of unacceptable behaviour constituting sexual harassment, but that it was not a notifiable incident constituting a matter which was serious, sensitive or urgent. The report concluded that Mr X should be counselled and monitored regarding the appropriate use of computing resources, and that the incident should be reported to the appropriate unit within Defence as it could involve a breach of the APS Code of Conduct.

[13] Mr X was counselled and continued to undertake his normal duties. In April 2013 Mr X was formally advised that his conduct was to be the subject of a more formal investigation. Detailed allegations of misconduct, together with supporting documentation was provided to him around 21 May 2013. These allegations went to further inappropriate e-mails, the use of a Defence e-mail address for private purposes, exceeding his computer storage limit, including the storage of inappropriate material and the use of Defence e-mails as a means of communicating regularly about non-work-related matters. This Notification of Suspended Misconduct and Intent to Sanction recommended termination as the appropriate sanction for breaches of the Australian Public Service (APS) Code of Conduct. Mr X was invited to respond to these allegations.

[14] Mr X responded to the allegations on or around 6 June 2013. He admitted and explained his conduct and proposed factors in mitigation. He apologised and committed to no further inappropriate use of his computer. He provided testimonials about his long period of productive service and value to Defence and the RAAF from his supervisor and more senior RAAF personnel.

[15] Mr X continued to work normally whilst the investigation continued. He was advised of the termination of his employment on 17 July 2013 and was provided with written confirmation as of that date.

The Evidence

[16] A substantial amount of evidence was provided to me in this matter. I have considered all of the material put to me. I have only briefly summarised the witness evidence.

[17] Mr X’s evidence went to his employment history and the circumstances relating to his storage and e-mailing of the material in question. His evidence addressed his understanding of the Defence policies and requirements and his participation in training which covered these issues. Mr X’s evidence also went to his work environment and culture. Mr X’s evidence covered his behaviour subject to the allegations put to him.

[18] Mr Y was Mr X’s supervisor. His evidence went to the actions he took on receipt of the 1 November 2012 e-mail and his subsequent contact with Mr X. Mr Y confirmed the character reference he had provided in support of Mr X after the formal allegations were put to him, and the extent to which he understood that the allegations related to Mr X’s behaviour on 1 November 2012, such that he considered the termination of Mr X’s employment to be harsh given the nature of his conduct, and the remorse he had shown. In the hearing, Mr Y was advised of further breaches alleged against Mr X. His evidence was that he would need to reconsider the support he had earlier documented for Mr X.

[19] Mr Z is the senior RAAF officer with overall responsibility for the functions undertaken by the unit within which Mr X worked. Mr Z also provided a character reference which was included in Mr X’s response to the disciplinary allegations. In this advice Mr Z advised of his opinion that termination of employment was not appropriate in Mr X’s circumstances. Mr Z’s evidence went to his counselling of Mr X and his conclusion that reinstatement was a viable option notwithstanding that he accepted that Mr X’s behaviour breached the IT policy and the APS Code. Mr Z’s evidence went to his understanding of the behaviours of Mr X which were subject to investigation and the knowledge he had when he provided that character reference.

[20] Mr T is the Deputy Director of the RAAF Adaptive Culture team. His evidence was admitted without contest and went to the Review into the Treatment of Women in the Australian Defence Force Academy and Pathways for Women into ADF leadership Phase 2 Report undertaken by the Australian Human Rights Commission in 2012. Further, his evidence detailed the Pathway to Change programme initiated by Defence and the information provided to Defence employees in support of this cultural change programme. Mr T’s evidence also detailed the New Horizons program directed at cultural change within Defence. These initiatives were directed at achieving Defence workplaces that are fair, respectful and free from bullying, discrimination, bias and inappropriate behaviour. 1 The programs were endorsed by the Defence Minister and have been applied throughout Defence. Mr T’s evidence went to how these initiatives were explained and discussed with Mr X and employees from his work group in August 2012 through interactive workshops and that they were the subject of a directive issued by the Chief of Air Force on 24 October 2012 which stressed the importance of a change in values and culture.

[21] Mr R is a member of the RAAF and is the Staff Officer Experimentation, Air Force Headquarters, Directorate of Strategic Design. He was, up to the end of 2012, the Commander with responsibility for the unit within which Mr X worked. His evidence was not challenged. This evidence went to the Equity in Diversity training provided to staff, including Mr X, annually from 2005 to 2012 and the extent to which it was "made abundantly clear" 2 that e-mails of the kind that Mr X sent, were totally inappropriate. Mr R’s evidence also went to confirm that, in logging onto his computer, Mr X was reminded of the Defence Instructions regarding appropriate and inappropriate use of information and communications resources. Mr R’s evidence went to the culture in that work area and the extent to which, prior to 1 November 2012, he had not found an instance of anyone misusing the information technology system in a comparable manner to that of Mr X. Mr R’s evidence was that when Mr Y reported the 1 November 2012 e-mail to him, he reported the matter to Mr Z and initiated the required Quick Assessment. Mr R was transferred to his present function after the Quick Assessment but before the APS investigation into Mr X was completed.

[22] Mr S is the Assistant Director Conduct, Performance and Probation, Values, Behaviours and Resolutions Branch, Defence People Group. This function involves the investigation of suspected breaches of the APS Code of Conduct. His evidence went to the obligations established under this Code and obligations associated with working with the RAAF. Mr S is one of the Delegates of the Secretary of the Department of Defence who makes decisions in relation to Code of Conduct matters. Mr S’s evidence went to the process for investigating alleged breaches of the Code of Conduct, the management of incidents of unacceptable behaviour in Defence and instructions relative to the use of e-mail and other IT resources. His evidence was that when he was advised of the 1 November 2012 incident and the Quick Assessment he initiated an investigation which included consideration of data retained on Mr X’s computer. There were a number of delays in accessing this information but it was received on 26 March 2013. On 10 April 2013 Mr S advised Mr X that an investigation into his alleged breach of the APS Code of Conduct had been commenced. Mr S received an initial investigation summary on 6 May 2013 and recommended that a formal Notification of Suspected Misconduct and Intent to Sanction be initiated and advised to Mr X. Mr S's evidence went to the offer of an oral hearing extended to Mr X, his consideration of the evidence relative to Mr X’s conduct and the matters he took into account in reaching his conclusion that Mr X’s employment be terminated.

The Submissions

[23] Mr X’s position is that, in the context of the advice provided to him as a Defence employee, his actions in storing and sending certain e-mails were inappropriate but that the sanction of dismissal was disproportionate to the degree of misconduct. Mr X asserts that the e-mails were not in the worst category of inappropriate materials, were distributed to relatively few people and were quickly recalled. Further material stored on Mr X's computer was not distributed and Mr X expressed contrition, remorse and committed to appropriate use of Defence IT resources in the future. Further, that his previously unblemished record and exceptional service made the termination of employment decision harsh.

[24] The Defence position is that Mr X was in a position of seniority, that he had been extensively trained and was aware of Defence’s values and expectations which have been the subject of substantial public scrutiny and have been clearly articulated to employees. Defence assert that there was a valid reason for the termination of Mr X's employment and that the process followed was fair and equitable.

The Authorities

[25] Both parties referred me to a number of authorities in support of their respective positions. I have considered each of these authorities in the context of Mr X's situation. These authorities go to the general proposition set out perhaps most clearly in Queensland Rail v Wake. 3

[26] Whilst that decision was determined under the Workplace Relations Act 1996 it continues to be referenced by later decisions 4 and clearly remains relevant. In Queensland Rail the Full Bench said:

“2 At all relevant times the appellant had a policy directed at ensuring that employees did not use its electronic communications system to store or transmit images containing material that is sexually-related, pornographic or violent. The appellant terminated the employee's employment for breaches of its policy.

3 The appeal is brought pursuant to s 120 of the Act. Pursuant to s 120(2) a Full Bench shall grant leave to appeal if, in its opinion, the matter is of such importance that, in the public interest, leave should be granted. It cannot be doubted that electronic traffic in sexually-related, pornographic and violent images is of legitimate and growing concern to employers. Such images, apart from being offensive to many, can undermine acceptable standards of behaviour in the workplace and create an environment conducive to harassment and discrimination. It is possible, even likely, that an employer which does not take active steps to eliminate traffic of this kind on its email and other electronic communication systems may incur legal liability, under anti-discrimination legislation for example. It is reasonable and, arguably, necessary that employers take what steps they can to eradicate traffic in such images. Although this case raises issues about the control of traffic in sexually-related, pornographic and violent images, similar issues may arise in relation to images of other kinds, such as images related to ethnicity or gender identity. For these reasons we have formed the view that the matter is of such importance that, in the public interest, leave should be granted to appeal. We grant leave.

....

17 As we indicated earlier, control of email traffic in inappropriate material is a matter of legitimate concern to employers. The Commissioner's approach might well be interpreted to mean that employees with long service ought to be immune from termination of employment unless guilty of breaches of the policy involving large amounts of "hard core" pornography. We think that an employer is entitled to take a firmer line than that. In this case the appellant went to great lengths to alert employees to the policy and to warn them that breaches would lead to dismissal. Despite this the employee breached the policy on a number of occasions in a substantial way.

....

20 The relevant facts have been set out already. In determining whether a termination of employment is harsh, unjust or unreasonable the Commission is to have regard to a number of matters specified in s 652(3) of the Act. The Commissioner found that there was a valid reason for the termination of the employee's employment: s 652(3)(a). We agree. It is accepted that he was notified of the reason and asked to respond, which he did. The response was in writing and comprehensive. The Commissioner was mildly critical of the appellant for not dealing with the employee's response in a similarly comprehensive way but nevertheless expressed his satisfaction that the appellant had given the employee a relevant opportunity to respond: ss 652(3)(b) and (c).5 The termination was not based on unsatisfactory performance and accordingly the question of whether a warning was given does not arise: s 652(3)(d). The size of the appellant's undertaking would not be likely to impact adversely on the procedures followed in effecting the termination: s 652(3)(e) and the appellant has dedicated human resource management specialists: s 652(3)(f).

21 For a number of years the appellant has had a firm and well-publicised policy prohibiting the use of its electronic communication system to store or transmit material which is sexually-related, pornographic or violent. Obviously each case is to be decided on its merits, but in general it is in the public interest that, subject always to considerations of fairness, the Commission's decisions should support employers who are striving to stop inappropriate email traffic. It has not been suggested, subject to a qualification to which we shall return, that the appellant's policy is unreasonable. Furthermore the policy is supported by the relevant unions and has been reinforced by appropriate training and education. We have set out earlier in a summary way the steps the appellant took to warn employees that breach of the policy would result in termination of employment. In the case of this particular employee these warnings went unheeded. Although an employee of 27 years without any history of being disciplined, he breached the policy in a serious way in 2003 and on a number of occasions in late 2005 and early 2006. Although we have not set out the contents of the 2003 files, it seems to have been common ground that they were caught by the policy. The employee conceded as much in his evidence before the Commissioner. Having seen the material it is apparent to us that it contains material that the policy was directed at. While we have dealt with two of them ourselves above, details of the 2005/6 images are set out in the Commissioner's decision.6 It is apparent that the breaches were not minor or few in number. Looked at objectively there is evidence of flagrant and repeated breaches.

22 While the employee's representative put all that could reasonably be put on his behalf, it has not been established that the termination of his employment was harsh, unjust or unreasonable. The use of company electronic communications systems for storage and transmission of images containing sexually-related, pornographic and violent material is a serious and socially important issue. The appellant, rightly in our view, made sustained efforts over a number of years to make employees aware of its policy and the consequences of breaching the policy. Despite those efforts and repeated warnings the employee breached the policy in a substantial way and on a number of occasions. While appreciating that loss of employment is a bitter blow, we see no proper basis on which the Commission might properly intervene to reverse the employer's decision in this case.

23 There is one additional issue requiring comment. The appellant's policy states that any deliberate breach involving pornographic or sexually-related material will result in termination of employment. Although in this case we have decided not to interfere with the application of that policy, it ought not be assumed that the Commission would uphold the employer's right to apply the sanction of termination in all cases of deliberate breach regardless of the circumstances. As s 652 of the Act makes clear, in determining whether a termination of employment is harsh, unjust or unreasonable the Commission is required to take a range of matters into account. In addition the statutory provisions are intended to ensure a "fair go all round": s 635(2). In the proper exercise of its functions the Commission must exercise its own judgment. Whatever sanction the employer's policy prescribes, the Commission must decide whether the termination is harsh, unjust or unreasonable.”

[27] I have considered, Mr X's situation on its own merits and on the basis that there is no one universal test relating to the storing or distribution of inappropriate material.

The conduct in question 5

[28] The e-mail which Mr X sent to each of the 15 personnel in his work unit and to his supervisor on 1 November 2012 consisted of a slideshow which was titled "Quality Oak Wine Barrels" (referred to as the "wine barrels slideshow"). It consisted of an opening paragraph which stated that the wine barrels were made from French oak, costed in excess of $20,000 each and were made by only three companies and specifically by 12 people in the world. It stated that these people earned in excess of $250,000 per annum and that one of these people was a woman. There followed a series of pictures showing a young woman adjacent to wine casks. The images progressively showed this woman to be naked and then engaged in various poses with wineglasses, bottles and then pouring wine over her body. The images are sexually explicit. The slideshow concludes with audible laughter and the words "Wasting good wine, she should be spanked". 6

[29] The slideshow must be taken as lewd, pornographic and demeaning of women. In terms of the Defence policies, which I address later, it is clearly inappropriate. This is more so given the title is deliberately misleading and the laughter and words on the final slide are particularly derogatory.

[30] The review of Mr X's computer file showed that on 25 May 2012 he had e-mailed to 4 other, more junior RAAF personnel, a picture entitled "On Yer Bike". This showed naked men, riding a bike in front of spectators. I have taken this to be a photograph from a Mardi Gras event. Mr X obtained this photograph from an external source and drew a line from a man's penis to a woman bystander and inserted the words "Dear Lord send me one of those!!" 7

[31] The picture is demeaning but I consider that it is unlikely to be dramatically offensive. It is, however, clear, that Mr X's actions, in modifying the picture, storing it and e-mailing to others, represents a breach of the Defence policies addressed later.

[32] The same review also identified that, on 25 May 2012 Mr X sent another e-mail to 3, more junior RAAF personnel enclosing a series of photographs of naked men and women, partially covered with body paint and riding bikes as part of a Mardi Gras event. The e-mails are titled "Never buy a Used Bike in the Sydney Mardi Gras". I have concluded that these images are generally distasteful but I do not regard them as seriously pornographic. Nevertheless, the storing and promulgation of the e-mails breached the Defence policies.

[33] The review of Mr X's computer records disclosed a Microsoft PowerPoint presentation which depicts a naked woman fishing, then engaging in various sexually explicit poses before being shown with male genitalia. Later in this decision I refer to this PowerPoint display as the "naked woman" images.

[34] The naked woman images are clearly inappropriate in terms of the Defence policies. There is no evidence that Mr X distributed these images within Defence. However, on 19 November 2012, and after he had been formally counselled and advised that his conduct of November 2012 would be reported to the appropriate authorities in Defence, Mr X e-mailed the naked woman images to one of his own personal e-mail accounts. That action was also clearly inconsistent with Defence policies.

[35] Finally, the review into Mr X's computer records disclosed a video showing two women in underwear purporting to demonstrate CPR techniques. The video is suggestive but I do not consider that it is sexually explicit. I have concluded that the storing of this video breaches the Defence policies but that it cannot be regarded as pornographic. By and large, it simply reflects smutty poor taste.

The Defence Policy Position 8

[36] Mr X's employment as a Public Sector employee is subject to the Australian Public Service Code. This is clear from his Notice of Engagement. 9 The Public Service Act 1999 establishes the Australian Public Service (APS) Values:

[37] The APS Code of Conduct as it applied at that time was set out in section 13 in the following terms:

“The APS Code of Conduct

(1) An APS employee must behave honestly and with integrity in the course of APS employment.

(2) An APS employee must act with care and diligence in the course of APS employment.

(3) An APS employee, when acting in the course of APS employment, must treat everyone with respect and courtesy, and without harassment.

(4) An APS employee, when acting in the course of APS employment, must comply with all applicable Australian laws. For this purpose, Australian law means:

(a) any Act (including this Act), or any instrument made under an Act; or

(b) any law of a State or Territory, including any instrument made under such a law.

(5) An APS employee must comply with any lawful and reasonable direction given by someone in the employee’s Agency who has authority to give the direction.

(6) An APS employee must maintain appropriate confidentiality about dealings that the employee has with any Minister or Minister’s member of staff.

(7) An APS employee must disclose, and take reasonable steps to avoid, any conflict of interest (real or apparent) in connection with APS employment.

(8) An APS employee must use Commonwealth resources in a proper manner.

(9) An APS employee must not provide false or misleading information in response to a request for information that is made for official purposes in connection with the employee’s APS employment.

(10) An APS employee must not make improper use of:

(a) inside information; or

(b) the employee’s duties, status, power or authority;

in order to gain, or seek to gain, a benefit or advantage for the employee or for any other person.

(11) An APS employee must at all times behave in a way that upholds the APS Values and the integrity and good reputation of the APS.

(12) An APS employee on duty overseas must at all times behave in a way that upholds the good reputation of Australia.

(13) An APS employee must comply with any other conduct requirement that is prescribed by the regulations.”

[38] The Public Service Act establishes penalties and non-compliance with this Code. Defence has established policies 10 for the investigation of breaches of that Code.

[39] Defence also has instructions 11 relating to the use of e-mail and other information technology (IT) resources. These instructions are extremely comprehensive. They establish roles, rights and responsibilities and training obligations relative to unacceptable behaviour. Unacceptable behaviour is defined in these policies in terms of six categories, consisting of:

• harassment
• workplace bullying
• sexual harassment
• discrimination
• abuse of power, and
• inappropriate workplace relationships and conflict-of-interest.

[40] The policy further defines each of these categories. In terms of harassment the relevant definition is: "Harassment may be as a result of a person's attitude some real or perceived attribute or difference such as sexual orientation or gender" 12

[41] The policy provides examples, such as offensive pictures.

[42] The policy defines bullying so as to include humiliating behaviour. It defines sexual harassment such that it includes sexually offensive jokes.

[43] The policy also provides a non-exhaustive list of inappropriate behaviour. This list references the APS Code of Conduct and behaviours which could damage the Defence or the Australian Government's reputation.

[44] To this extent, Defence has clearly defined what is appropriate and what is inappropriate. Hence, to the extent that B, C & D v Australian Postal Corporation T/A Australia Post 13 addressed doubts about how the material was defined, this is not at issue here. It remains, of course, to balance Mr X’s conduct against other factors.

[45] Additionally, the “pop-up advice” each Defence employee sees on logging onto his or her computer reminds them of the Defence policy relative to appropriate and inappropriate use of Information and Communications Technology. To the extent that the observations in B, C & D v Australia Post 14could be read as discounting the significance of a daily reminder, I respectfully disagree and note that the intensive training and the "pop-up advice" were explicit and Mr X did not argue that he was unaware of the policy.

[46] Mr X completed the annual Security Awareness training each year since 2005. This training included interactive opportunities and reference to a clear summary of the IT policy including advice that Defence monitored internet access and would not tolerate offensive material access or storage. 15

[47] The IT policy provides that personnel who breach the policy may be subject to a range of penalties, sanctions or administrative actions. It lists sanctions, including demotion, fines or termination of employment.

[48] Whilst there is no direct definition of what Defence means by reference to "no tolerance" with respect to the misuse of IT resources it is clear that this refers to the investigation of complaints and possible imposition of the range of sanctions and penalties which might apply. In these respects, Mr X's evidence was that:

“I am committed to the Zero Tolerance policy of Defence with respect to e-mails which however innocent, might be construed as otherwise by the recipients. If reinstated I will comply with this policy and ensure that all e-mails disseminated by me within Defence will be completely work-related. Where I recognise that an incoming e-mail might contain inappropriate content, I will immediately delete the e-mail without reading it. If I read an e-mail which contains inappropriate content, I will immediately delete it. I will report the receipt of all inappropriate e-mails to management.” 16

[49] Further, Mr X's evidence was that:

“PN278

And you say also, "I was aware that there were regulations that state that inappropriate material is not to be emailed by way of the Defence Department computer system"?---Sure.

PN279

By that, you're referring to the IT policy?---Correct.

PN280

That's the policy that's referred to in the acknowledgment?---Correct.

PN281

And you say, "Whenever a staff member logs onto a computer, the screen displays a general warning about inappropriate use of the computer." Do you see that?

---Correct.” 17

[50] Mr X further stated:

“PN299

You knew with respect to breaches that if Defence personnel were found to have failed to comply with this instruction they may be subject to a range of penalties, sanctions or administrative actions, which included, you can see, termination of employment?---Correct.

PN300

This is something that you knew during the course of your employment?---Yes.

PN301

And it as something that you knew prior to sending the emails in May 2012?

---Yes.

PN302

With respect to inappropriate content, you'll see that it's defined in the policy at page 194 in clause 20(h), so down the bottom of the page under the title Use Defence ICT resources in relation to inappropriate content. Do you see that?---I do.

PN303

**** MR X XXN MS RAPER

Do you see that examples include, "Involved in viewing, contributing to, exposing others to, downloading, uploading or storing on any other mediums, still or moving pictures or audio that may be considered by a reasonable person to be offensive, pornographic, sexually suggestive, such as nude imagery or photography." Do you see that?---I do.

PN304

You accept, don't you, that from your commencement of your employment in 2009 that you understood that inappropriate content for the purposes of what you couldn’t send by email or store included those things?---In general terms, yes.

PN305

And you accept, don't you, that it's also a breach of the Australian Public Service Code of Conduct, isn't it, to offend the IT policy because it involves an improper use of Commonwealth resources, doesn’t it?---Sorry, could you say that again?

PN306

You also were aware, weren't you, during the course of your employment, so this is from 2009, that inappropriate use of the IT system was a breach of the APS Code because it was in effect improper use of Commonwealth resources?---Yes.

PN307

You accept, don't you, that if your subordinates were passing around emails with nudity in them or sexual imagery that they'd be breaching the Code and breaching the IT policy?---Certainly.” 18

[51] The 2012 Workplace Behaviour training 19 in which Mr X participated made absolutely clear the requirement for behaviours to be consistent with APS values. It clearly established the concept of unacceptable behaviour in terms of both Defence employees and Defence’s reputation. It confirmed employee rights, responsibilities and the consequences of unacceptable behaviour.

[52] Mr Z convened a briefing in September 2012 which Mr X attended as part of a Defence and RAAF wide initiative. This involved viewing a video in which the Chief of the Air Force announced updated Air Force values through the New Horizons program. Amongst other values, this briefing emphasised the need for respect to others and the obligations on each and every Defence employee in this regard. The briefing clearly stated that unacceptable behaviour had no place in Defence in the future.

[53] I have concluded that Defence has taken substantial steps to detail its expectations of changed employee behaviour and culture consistent with its policies. It has explained the reason for these policies and the extent to which employees are obligated to comply with them.

[54] I note that evidence of comparable enforcement practices has not been made available.

Potential damage to the Defence reputation 20

[55] The circumstances under which the Review into the Treatment of Women in the Australian Defence Force Academy and the Australian Defence Force Phase 1 Report 21 was commissioned and the sometimes substantial adverse publicity attributed to Defence with respect to its employment fairness and equity record are matters of public record. It is clear that the New Horizons strategy and values represent a further step along a continuum designed to improve Defence’s reputation with existing employees, potential employees and the Australian public.

[56] Behaviours of the nature that Mr X displayed are directly opposite to the values proposed by Defence and may cause it substantial embarrassment.

[57] In simple terms, I am satisfied that Defence was entitled, and in fact, obligated to act to support its espoused values and policies. The extent to which the action taken with respect to Mr X was fair in all the circumstances is considered later in this decision.

Culture 22

[58] Mr X's evidence was that:

“Throughout my time in the Department of Defence there has been a culture of exchange of e-mails on a daily basis that are all in some form or another ranging from mildly humorous through to the more sexually explicit. The Defence Department obviously does not condone this behaviour.

....

Within my section work group of which there are approximately some 12 - 15 members, I both received and sent emails to all those in the group on a reasonably regular basis. These emails were often of a humorous nature and again were just part of the daily email traffic that occurs every day probably around the world and certainly within the Department of Defence. We certainly exchanged social invitations, logged footy tips into the Unit Footy Tipping Competition, and other similar purposes.” 23

[59] The evidence of Mr Y was that:

“PN1106

Yes?---And that was my opinion. So I mean, if you would like my full opinion, I think it's a culture thing that (Mr X) has not come to terms with, perhaps, and it's a culture thing that is changing through the ADF, thus the zero tolerance program.

**** BRETT Y XXN MS RAPER

PN1107

And you need it, don't you?---Do I personally need it or

PN1108

Defence needs it. It has to have no tolerance?---Well, that's not up to me to decide. I personally believe that, but Defence has got their own policies.

PN1109

Well, you accept, don't you, that your opinion is at odds in saying that there's been an overreaction, by saying that you personally believe there has to be a no tolerance policy? Do you accept that it's inconsistent?---No, it's not inconsistent. You asked for my opinion. My opinion for (Mr X) in regards to this is still that termination, not knowing - maybe looking at other forms of disciplinary action, whether or not they could be investigated for (Mr X) - or the member to be administrated to. You know, I'm not too sure whether - fines, demotion, whatever the APS delegate has in his repertoire.” 24

[60] The evidence of Mr Z was that:

PN1243

So it's possible, isn't it, that they may have been offended by it but because the person who was asking them whether they were offended was the senior person who undertook the action, you can't have confidence, can you, about whether they were offended or not?---Look, I don't believe in this case with the sort of people that we're talking about that is a risk. I am not aware, until I stepped in to this point, my understanding was that Mr Y had done the asking. The sorts of - as far as I'm aware, Mr X is the only APS member in that area. The sorts of people that are in that area are very - they're military people; they have served on ships, they have served out in fairly tough sort of areas. I really don't think that they would - if they said that they didn't take offence, I don't think they would be influenced because of Mr X's standing

PN1244

Well, it's possible that they may have been, though, isn't it?---They may have been. I don't believe it to be the case.

PN1245

Part of the reason in terms of you disputing the termination is because your view is that they constituted jokes. You say that, don't you?---I believe the material was sent around in the form of jokes. Now, I do not step away from the fact that it's completely unacceptable but I believe the reason they were sent around was in the form of a joke and no matter how distasteful and unacceptable.” 25

[61] There was no dispute that Mr X forwarded the Bike Mardi Gras images in May 2012. Apart from his admitted behaviour and his assertions there is no evidence of actions or practices within that work unit which represented unacceptable behaviour or which condoned or sanctioned such behaviour.

[62] I have concluded that Mr Z and Mr Y’s concerns that Mr X's behaviour should not lead to the termination of his employment 26 cannot be taken as condemnation of his behaviour.

Mr X's work history 27

[63] Mr X was engaged by the RAAF and then by Defence for a total of some 29 years. He has held, including his last position, senior appointments with substantial authority.

[64] Mr X's work history is clearly a factor to be considered in terms of the extent to which the termination of his employment was an appropriate penalty for such a long serving employee. Running contrary to this is the extent to which, on his own evidence, he was aware of the Defence policies and values and simply did not apply them 28 Mr X's evidence was that:

“PN243

You say in your statement that you knew at the time that you were employed, so from 2009, that Defence did not condone employees sending emails that were mildly humorous through to more sexually explicit?---Correct.

PN244

That's correct. And by this, you would have understood since 2009 that it's against Defence Force's policies that employees send emails to one another that contain nudity or sexual content?---Sorry, could you repeat that?

PN245

And by this you mean that you've known, during the time that you've been employed by Defence since 2009, that it's against Defence Force policies to send emails that contain nudity or sexual content?---Yeah, I think that's deemed inappropriate, yes.

**** MR X XXN MS RAPER

PN246

Indeed, you've known since 2009 that there is a zero tolerance policy with respect to sending and storing material involving nudity and sexual content?---The words "zero tolerance policy", to my memory, came in later and were associated, again, to my recollection, to the new horizons and directions culture.” 29

[65] Mr X was a Team Leader and had direct supervisory responsibilities. I have concluded that his actions represented breaches of the Defence policies and were a direct challenge or affront to these policies, in that as a manager, he displayed disregard for them.

Fairness issues 30

[66] The Quick Assessment conclusion was that Mr X's behaviour on 1 November 2012 (regarding the wine barrels slideshow) was not a notifiable incident that could bring Defence into disrepute, attract media or Parliamentary attention or adversely affect the efficiency of Defence. 31 The Quick Assessment concluded that the e-mail may be a form of unacceptable behaviour under the category of sexual harassment and that it contravened the IT Policy. The Quick Assessment made the following recommendations:

“The member should be councelled and monitored IAW DI(G) CIS 6-1-001 regarding the appropriate use of Defence ICT Resources.

If deemed to be an incident of unacceptable behaviour, it is to be managed and resolved IAW DI(G) PERS 35-3. Regardless of the decision, the incident is to be reported on IAW Annex F of DI(G) PERS 35-3.

The parties involved are to be instructed to delete the email from their inbox and deleted items if they haven’t already done so to ensure it is not further promulgated on the DRN.” 32

[67] On 19 November 2012 Mr X was advised of the outcome of that Quick Assessment and was advised that it had been forwarded on to the Directorate of Conduct Performance and Probation for investigation as to whether the incident was a breach of the APS Code of Conduct. The advice provided to him 33 is difficult to fully reconcile with the actual Quick Assessment outcome.

[68] The advice provided to Mr X on 19 November 2012, at the conclusion of the Quick Assessment was that:

“The purpose of this interview is to inform you of my determinations in relation to the Quick Assessment that was completed 5 Nov into unacceptable behaviour regarding your distribution of an email containing sexually explicit material.

It is my determination that the email is in contravention to DI(G) CIS 6-1-001 Appropriate and inappropriate use of ICT resources. As this occurred in a SCIF, anXP188 will be raised by the Unit Security Officer.

I have determined that although inappropriate, this incident is not considered to be sexual harassment as the email was sent to a group, not an individual, and the complaint was management initiated rather than raised by an individual. Furthermore, all parties in receipt of the email have stated that they were not personally offended by the content of the email.

I have forwarded the QA onto the Directorate of Conduct Performance and Probation for investigation as to whether this incident is considered to be a breach of the APS Code of Conduct. You will be advised of the outcome of that investigation once complete.” 34

[69] In contrast, Mr S’s Reasons for the Sanction to be applied to Mr X concluded:

“I find that your actions in this matter are a breach of the following elements of the APS Code of Conduct:

a. 13(2) - An APS employee must act with care and diligence in the course of the APS employment;

b. 13(3) - When acting in the course of APS employment, an APS employee must treat everyone with respect and courtesy, and without harassment;

c. 13(8) - An APS employee must use Commonwealth resources in a proper manner; and

d. 13(11) - An APS employee must at all times behave in a way that upholds the APS Values and the integrity and good reputation of the APS. Specifically the following Value:

i. the APD has the highest ethical standards - section 10(1)(d).” 35

[70] These findings represent an unexplained tension and inconsistency in the Defence termination of employment reasoning and the information given to Mr X. If Mr X’s behaviour was not sexual harassment, the extent to which the conclusion about 13(3) above is substantiated remains unclear.

[71] Apart from being counselled, the next advice Mr X received was nearly 5 months later when the formal detailed allegations about his inappropriate storing and e-mailing of material were detailed to him. He was then given an opportunity to respond to those very serious allegations but continued to work pending that response and the final Defence position. That continued work was permitted, particularly after the 10 April 2013 allegations were put to him, with the possibility of termination of employment, is difficult to reconcile with the Defence conclusion that he was to be dismissed with one day’s notice. 36

[72] The final report into Mr X's behaviour provided to Mr S for his action, concluded with the following recommendation:

“The evidence gathered during this investigation indicates that Mr X has utilised the DRN for personal and inappropriate purposes. I am of the opinion that by his actions, Mr X has breached the Code [elements 13(2), 13(3), 13(8) and 13(11)]. Mr X has asked for a reconsideration of the Delegate’s intention to terminate his employment. If we are to declare war on unacceptable behaviour and the degradation of women through these types of messages, termination of employment appears to be the most appropriate sanction.”

[73] Whilst I consider this recommendation relative to the most appropriate sanction reflects a substantial degree of subjectivity, the final termination of employment decision was made by Mr S as the Delegate. Mr S's evidence was that:

“In my view, Mr X had been indulging in not only forwarding pornographic material, but had also stored similar material for some time. It was quite apparent that the guidance and direction regarding the use of Information and Communications Resources that is provided to all Department of Defence personnel does not incorporate forwarding and storing material of the kind used by Mr X.

Amongst other things, I took into account Mr X’s level of experience and degree of knowledge regarding Defence policies as well as deterrence and consistency in sanction when determining that termination of employment was the appropriate outcome. I considered Mr X’s Response and the character references attached thereto. However, I didn’t see the correlation between the description of Mr X as a key resource for junior and senior personnel and the misconduct he repeatedly engaged in. Mr X’s misconduct was wholly inconsistent with the requirements of the APS Code of Conduct and being an APS employee in Defence.

In cases like this where Defence loses trust and confidence in the employee the employee cannot be returned to the workplace. The consequences of further offending conduct would be severe given the public nature of work performed by Defence and the need to maintain public confidence in the organisation. Defence must be seen to act in accordance with its core values, including zero tolerance of the conduct engaged in by Mr X.

After the decision was made to terminate Mr X’s employment, further inappropriate content was discovered on Mr X’s Email account. An email with attachments containing the images of a naked female with a penis was sent from Mr X’s Defence email account on 19 November 2012. The attachments were titled beaubb.pps and were sent to ‘[email protected]’. The email and attachments are annexed hereto and marked “Y”.

(Note: email address altered)

Reputation harm

I am of the opinion that the material stored and distributed had the potential to harm and damage the reputation of Defence if it was to be made public. The public places its trust in the Department to have a good and strong governance in its use of Commonwealth resources; Mr X’s use of the Defence computer system does not mirror this requirement. It could also be viewed that the Department may condone behaviour of this type by allowing material to be stored and sent via the Network. This would seriously undermine the efforts that Defence has gone to in recent years to instil cultural change with respect of this kind of behaviour.” 37

[74] I am satisfied that the allegations of personal email use and exceeding his computer storage were not factors in the ultimate termination of employment decision.

[75] Advice confirming the termination of Mr X's employment with effect from 18 July 2013 was provided to him on 17 July 2013. Mr X was paid four weeks pay in lieu of notice.

[76] I have concluded that the Defence position with respect to the 1 November 2012 incident was inconsistent in terms of the findings made in the Quick Assessment and subsequent findings. Further, that the reasons for the delay were not explained to Mr X. Further, that the seriousness of the allegations ultimately put to Mr X were inconsistent with his being allowed to continue his normal duties.

Section 387

[77] This section states:

“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.”

[78] I have considered each of these factors individually and collectively.

Valid Reason

[79] B, C & D v Australia Post considered the concept of a valid reason in the context of the history of unfair dismissal legislation. In adopting this approach, to the extent that the observations of Northrop J in Selvechandron v Petersen Plastics Pty Ltd 38 assist in defining the principles to be applied in considering if there is a valid reason, I have adopted the position that:

“In its context in s.170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s.170DE(1). At the same time the reasons must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must “be applied in a practical, commonsense way to ensure that the employer and employee are treated fairly.”

[80] The Defence policies with respect to Information Technology use are clearly set out. Mr X has been extensively trained in terms of those policies. He was, or should have been aware that the storing or e-mailing of inappropriate material would be investigated and could result in disciplinary action including possible termination of employment.

[81] Further, the values adopted by Defence and explained through the Chief of the Air Force’ video as part of a briefing in October 2012 made Defence’s expectations of its employees with respect to the application of consistent values absolutely clear. This video clearly sets out the sustainable basis for Defence’s position on these issues and is consistent with the extensive and recent training provided to Mr X.

[82] Mr X's behaviour in e-mailing the wine casks slideshow on 1 November 2012 represented a valid reason for the termination of his employment in that it breached the policy and values expected of him. The fact that this material was sent to more junior staff, and the fact that Mr X held a senior position underscore the extent to which Defence had a valid reason to dismiss Mr X.

[83] In B, C & D v Australia Post the Full Bench stated:

“[36] A failure to comply with a lawful and reasonable policy is a breach of the fundamental term of the contract of employment that obliges employees to comply with the lawful and reasonable directions of the employer. In this way, a substantial and wilful breach of a policy will often, if not usually, constitute a “valid reason” for dismissal.

[37] A prohibition on using an employer’s IT system to access, send or receive and store pornography or other unacceptable material is a lawful, rational and reasonable policy for an employer to implement for a number of reasons that are not related to any moral offence at pornography. The main reasons are:

Limiting legal liability to other employees, clients, customers or other third parties, especially in relation to harassment. A reasonable employer will take steps to suppress conduct that it knows may cause offence to others.

The employer is entitled to ensure that its resources, including its IT resources, are devoted solely to work purposes (and such reasonable personal use as it chooses to permit as owner or legal controller of its IT infrastructure). An employer can be legitimately concerned to prevent the diversion of its resources and the costs associated with such activity. Of course, the monetary and time cost involved in sending an email is very small. However, the wasting of work time by an employer accessing (‘surfing’) such material may be significant.

Preventing reputational damage to the employer being identified to third parties or the public as tolerating such material or such misconduct.

[38] It is the first of these reasons that arguably is the most important. In Queensland Rail the Full Bench observed:

“[3] ... It cannot be doubted that electronic traffic in sexually-related, pornographic and violent images is of legitimate and growing concern to employers. Such images, apart from being offensive to many, can undermine acceptable standards of behaviour in the workplace and create an environment conducive to harassment and discrimination. It is possible, even likely, that an employer which does not take active steps to eliminate traffic of this kind on its email and other electronic communication systems may incur legal liability, under anti-discrimination legislation for example. It is reasonable and, arguably, necessary that employers take what steps they can to eradicate traffic in such images. Although this case raises issues about the control of traffic in sexually-related, pornographic and violent images, similar issues may arise in relation to images of other kinds, such as images related to ethnicity or gender identity.”

[39] The Full Bench in Queensland Rail noted that “[t]he use of company electronic communications systems for storage and transmission of images containing sexually-related, pornographic and violent material is a serious and socially important issue.” (para [22]) A policy against such material supports the employer’s duty of care owed to all its employees and the concomitant duty to provide employees with a safe working environment free from discrimination and harassment, including sexual discrimination and harassment. Pornography accidentally seen by another employee can cause offence and distress. Deliberately sending or showing pornography to another employee uninvited is a well recognised form of sexual harassment. Policies prohibiting the sending or receipt and storage of pornography rationally and reasonably assist in the discharge of those duties and in limiting potential legal liability in relation to employees but also clients, customers or other third parties.

[40] Thus, the accessing, sending or receipt and storage of pornography will typically contravene an employer policy and, adopting the approach set out above, that contravention will usually constitute a “valid reason” for termination (that matter being determined from the perspective of the employer).

[84] Mr X's behaviour relative to the sequence of "On Yer Bike" e-mails of May 2012 and his storage of the CPR video are not of themselves valid reasons for the termination of his employment. In terms of the "On Yer Bike" images, I have noted that Mr X modified one of these images before he forwarded this to more junior staff. Notwithstanding this, the potential for offence is obvious. These actions were a clear breach of the Defence policies and had the potential to embarrass Defence.

[85] Mr X's behaviour in storing the "naked girl" slideshow also represents a valid reason for the termination of his employment in the context of the Defence policies and the training provided to him.

[86] Finally, after the decision to terminate Mr X's employment was made, Defence became aware of Mr X's behaviour in e-mailing the "naked girl" slideshow to an e-mail address which he held in a private capacity. I consider that behaviour also represent a valid reason for termination of employment. That Mr X took this action after he was counselled is a clear indication that he did not accept the Defence policy requirements or values. Mr X's explanation of his actions based on a desire to remove the "naked girl" from his computer is simply not credible. An additional effect of on-forwarding the "naked girl" was to enable identification of Defence as the source of that material and hence in-build the capacity for embarrassment.

[87] In overall terms, Defence had numerous valid reasons for terminating Mr X's employment. I have later balanced these reasons against fairness considerations.

Notification of the Reason

[88] Mr X was notified of the reason for the termination of his employment on 17 July 2013. That written advice was comprehensive and specific in nature.

Opportunity to Respond

[89] Mr X was given an extensive opportunity to respond to the detailed allegations put to him in writing on 10 April 2013. The time allowed for his response was extended, and an opportunity for an oral response was offered to him, but rejected. Mr X's written response was detailed and was supported by two character references.

Unreasonable refusal to allow a support person

[90] There was no refusal by Defence to allow Mr X to access to a support person or persons.

Warnings relative to unsatisfactory performance

[91] Mr X's work performance was not unsatisfactory and no warnings were given to him in this respect. The termination of his employment was not related in any way to his actual work performance.

Impact of Defence’s size on procedures

[92] Defence is obviously a very large organisation. It has comprehensive policies and procedures which were applied in Mr X's situation.

Absence of dedicated human resource management expertise

[93] Defence has dedicated human resource management expertise which was involved in this matter.

Other matters considered relevant

[94] In B, C & D v Australia Post the Full Bench stated:

“[41] Nevertheless, it remains a bedrock principle in unfair dismissal jurisprudence of the Commission that a dismissal may be “harsh, unjust or unreasonable” notwithstanding the existence of a “valid reason” for the dismissal”: Australian Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1; J Boag & Son Brewing Pty Ltd v John Button [2010] FWAFB 4022; Windsor Smith v Liu [1998] Print Q3462; Caspanello v Telstra Corporation Limited [2002] AIRC 1171; King v Freshmore (Vic) Pty Ltd [2000] Print S4213; Dahlstrom v Wagstaff Cranbourne Pty Ltd [2000] Print T1001; Erskine v Chalmers Industries Pty Ltd [2001] PR902746 citing Allied Express Transport Pty Ltd (1998) 81 IR 410 at 413; Qantas Airways Limited v Cornwall (1998) 82 IR 102 at 109; ALH Group Pty Ltd T/A the Royal Exchange Hotel v Mulhall [2002] PR919205. That principle reflects the approach of the High Court in Victoria v Commonwealth and is consequence of the reality that in any given case there may be “relevant matters” that do not bear upon whether there was a “valid reason” for the dismissal but do bear upon whether the dismissal was “harsh, unjust or unreasonable”.”

[95] This is consistent with the conclusion in Queensland Rail 39 to which I have already referred.

[96] I have concluded that Mr X's behaviour was inappropriate and represented a valid reason for the termination of his employment. The material which he stored and forwarded to other people was not, however, of a character which was obscenely offensive. Nevertheless it was demeaning women, sexuality and gender. It contravened the Defence’s values and policies and had the capacity to embarrass Defence.

[97] Had the material stored and on-sent by Mr X, been of a more graphic or offensive pornographic nature, the weight which would be attached to his actual behaviour as distinct from other factors might logically further increase.

[98] In the context of the type of material stored and e-mailed I have considered a number of other matters which are relevant to the concept of a "fair go all-round" and the weighted decision-making process referred to in both Queensland Rail v Wake and B, C & D v Australia Post.

[99] Mr X was a Team Leader and held a position of authority and influence. Accordingly, his conduct as a supervisor undermined the Defence values and the New Horizons initiative. His conduct was not simply a breach of the Defence policies but constituted active undermining of those policies in terms of the message conveyed to other, more junior employees.

[100] Mr X had a long and distinguished record of service with the RAAF and Defence over some 30 years and has expressed remorse for his actions. Whilst I acknowledge that Mr S took this into account in determining the sanction of termination of employment, it is a factor which favours other alternative sanctions.

[101] Mr X is aged 62 and I am satisfied that his evidence establishes that the termination of his employment has had a profound effect on him and his lifestyle.

[102] I am unable to fully reconcile the Quick Assessment conclusion, the advice provided to Mr X about the Quick Assessment outcome and the final conclusions. It appears that Mr X was told in November 2012 that his actions did not constitute sexual harassment but this conclusion was reversed in July 2013. This difference may be explained by the more extensive review but the long delay in reaching that alternative conclusion is more problematic.

[103] The fact that no advice about the investigation into Mr X was provided between 19 November 2012 and 10 April 2013 represents an unfairness in that I consider that Mr X was entitled to reasonably assume that the issue had been resolved or that it was not a fundamental threat to his employment.

[104] I consider that Defence’s retention of Mr X in his Team Leader function after 10 April 2013, when it was clearly aware of the material stored and e-mailed, the allegations against him and its possible sanctions, is inconsistent with the ultimate termination of employment decision.

[105] I have noted that the support for Mr X's continuing employment expressed by Mr Z and Mr Y before the termination of his employment, and for his reinstatement, has subsequently been somewhat qualified by the disclosure to those officers of the entirety of Mr X's conduct.

[106] Finally, I note that there is no evidence that Mr X was treated differentially within Defence. 40 To the extent that previous behaviour of this type has occurred, I am not persuaded that it was condoned and, in any event, the New Horizons initiative made clear Defence’s expectations of staff for the future.

Conclusion - Harsh, Unjust or Unreasonable

[107] The e-mails Mr X sent on 1 November 2012, his storage of the "naked girl" images and his behaviour in sending that to an external e-mail address each represent a valid reason for the termination of his employment, notwithstanding that those behaviours were not of a character which compels a finding that this termination was neither harsh unjust nor unreasonable.

[108] Mr X's other inappropriate behaviour, including the "On Yer Bike" images and the CPR video are not so inappropriate that they represent a valid reason for employment termination, but I have taken them into account in considering the overall circumstances.

[109] Additionally, I have taken into account Mr X's role as a Team Leader which I consider makes his behaviour more serious.

[110] Other factors which go against a harsh, unjust or unreasonable finding include the extensive training provided to Mr X, his knowledge that his behaviour was not acceptable, and the absence of evidence about a culture of acquiescence to this type of material.

[111] Factors which favour a harsh, unjust or unreasonable finding include Mr X's work history and performance, his expressed remorse, and inconsistencies in the Defence investigation process. Significant in this respect, are the delays in the investigation process or information to Mr X about that process and the extent to which Defence left Mr X in his Team Leader position when it was aware of his behaviour.

[112] Absent all of these mitigating factors I would have concluded that the totality of Mr X's behaviour meant that his application must be dismissed. However, taking these mitigating factors into account, I consider that the termination of Mr X's employment was unjust in terms of deficiencies in the process followed by Defence. I have concluded that Mr X’s dismissal was not harsh because of the extent of the training and instruction given to him and because of his actions in emailing the naked woman pictures to a private address even after his counselling. It was not unreasonable given the actions taken by Defence to confirm its expectations of employees. It follows that, for the purposes of s.385, Mr X was unfairly dismissed.

Remedy

[113] Section 390 states:

“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.”

[114] Mr X seeks reinstatement. I have considered his expressed remorse, his undertakings not to repeat his inappropriate behaviour and his acknowledgement that no claim should be made for payment between the date of employment termination and the date of reinstatement.

[115] I have also considered the extent to which Mr X held a Team Leader position of influence and seniority. His behaviour was entirely inconsistent with Defence’s values and policies and reinstatement has the potential to make the promulgation of those policies more difficult. Additionally, Mr X's behaviour in e-mailing the "naked girl" images to a private e-mail address after he was formally counselled is difficult to reconcile with a real commitment to comply with the Defence expectations .

[116] Section 391(1) states:

“391 Remedy—reinstatement etc.

Reinstatement

(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:

(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or

(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

(1A) If:

(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and

(b) that position, or an equivalent position, is a position with an associated entity of the employer;

the order under subsection (1) may be an order to the associated entity to:

(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.”

[117] Mr X is classified at a level which incorporates the capacity for the Team Leader function that he previously undertook. I consider that his behaviour means that it would be inappropriate that he be reinstated to that level or to resume supervisory functions. There is no capacity for reinstatement to a lower level position. I am not satisfied that reinstatement to another position on terms and conditions no less favourable than those he was previously on is sustainable or appropriate. His behaviour as a supervisor means that he has forfeited the capacity to be considered for reinstatement to such a function. Section 391(1A) does not apply in this circumstance.

[118] Accordingly, I do not consider reinstatement to be appropriate in these circumstances.

Compensation

[119] I am satisfied that, pursuant to s.390(3)(b) an amount of compensation is appropriate in these circumstances.

[120] Section 391 sets out the matters which must be considered in deciding an amount of compensation. I have considered all of these factors.

[121] I am satisfied that the amount being contemplated will not affect the viability of Defence. Mr X had a very long period of service with the RAAF and with Defence. In this regard I acknowledge that, on leaving the RAAF, his service was concluded and that appropriate retirement benefits were paid to him.

[122] Had Mr X not been dismissed I consider that he would have either been demoted and/or received some form of final warning. His age, long service and performance records indicate that he would have remained as a Defence employee for at least another three years. His behaviour in forwarding the "naked girl" e-mail to a private e-mail address after being counselled makes that estimate somewhat uncertain. Nevertheless, I have adopted the position that Mr X would have most likely remained a Defence employee for three years had he not been dismissed.

[123] Mr X has indicated that he has sought alternative employment. I am not persuaded that his efforts in this respect have been particularly substantial but I acknowledge that his age, degree of specialisation and the circumstances of his dismissal make this difficult.

[124] Apart from the four weeks pay in lieu of notice, Mr X has earned a minimum amount since the termination of his employment and I do not consider that it is likely that he will earn any significant income from the date of the hearing to the date of this decision.

[125] I do not consider other matters to be relevant with respect to the determination of the amount of compensation.

[126] On the approach applied in Sprigg v Paul’s Licensed Festival Supermarkets 41, I consider that Mr X is entitled to 6 months pay. However, s.392(3) states:

“392 Remedy—compensation

Compensation

....

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.”

[127] Mr X's misconduct was the reason for the termination of his employment. Accordingly, I have reduced that amount by 50%.

[128] An Order (PR544803) will be issued providing for payment of compensation of 12 weeks pay at the pay rate applicable at the time of the termination of Mr X's employment.

Appearances:

T Bourne counsel for the Applicant.

E Raper counsel for the Respondent.

Hearing details:

2013.

Adelaide:

October 24 and 25.

1 Exhibit D2, Attachment E

2 Exhibit D5, para 14

3 156 IR 393

4 See B, C & D v Australian Postal Corporation T/A Australia Post[2013] FWCFB 6191 - subject to judicial review and Australian Postal Corporation T/A Rushiti [2012] FWAFB 7423

5 See Queensland Rail v Wake 156 IR 393, para 18

6 Exhibit D5, Attachment I

7 Exhibit D6, Attachment M

8 See Queensland Rail v Wake, 156 IR 393, paras 21-22; B, C & D v Australian Postal Corporation T/A Australia Post [2013] FWCFB 6191, paras 6-40, 73, 105-107, Australian Postal Corporation T/A Australia Post v Rushiti[2012] FWAFB 7423

9 Exhibit D6, Attachment B

10 Exhibit D6, Attachments F and G

11 Exhibit D6, Attachment H

12 Exhibit D6, Attachment H

13 [2013] FWCFB 6191, para 64

14 [2013] FWCFB 6191, para 63

15 Exhibit D5, Attachment F

16 Exhibit N2, para 77

17 Transcript, 24 October, 2013

18 Transcript, 24 October, 2013

19 Exhibit D5, Attachment F

20 See Australia Post v Rushiti, [2012] FWAFB 7423, para 20

21 Exhibit D2, Attachment A

22 See B, C & D v Australia Post, [2013] FWCFB 6191, paras 67 and 100

23 Exhibit N2, paras 61 and 65

24 Transcript, 24 October, 2013

25 Transcript, 24 October, 2013

26 Exhibits N4 and N5

27 See B, C & D v Australia Post, [2013] FWCFB 6191, para 70

28 Exhibit N2, paras 61 and 64

29 Transcript, 24 October, 2013

30 See B, C & D v Australia Post, [2013] FWCFB 6191, para 110, McMahon v Snowy Hydro Limited[2012] FWA 8762, paras 109 and 110

31 Exhibit D5, Attachment J

32 Exhibit D5, Attachment J, paras 24-26

33 Exhibit D5, Attachment J, page 196

34 Exhibit D5, Attachment J, page 196

35 Exhibit D6, Attachment X, page 304, para 9

36 Exhibit D6, Attachment X

37 Exhibit D6, paras 27-31

38 (1995) 62 IR 371 at 373

39 156 IR 393

40 See Australia Post v Rushiti, [2012] FWAFB 7423, paras 42-45

41 AIRC, Print R0235, (24 December 1998)

Printed by authority of the Commonwealth Government Printer