Dear Warren
Confirming our conversation in which I informed you that I believe that illegal copying of software is occurring at Auburn & Homebush
B Austin
104 There is no dispute that there was no response by Mr Lee to this email which I will return to deal with more fully later in this judgment.
105 The applicant's evidence was that in about late October 2001 he again attempted to raise the issue of the illegal copying of software with Mr Lee and Mr Fraser during a meeting with them. I have already found that no meeting occurred in late October 2001.
106 It was during the end of October 2001 that Mr Austin became aware that the company proposed to introduce a new computer system. I accept the evidence of Mr Fraser that a meeting was instigated by Mr Austin with Mr Lee and Mr Fraser which due to the unavailability of Mr Fraser did not take place until either 8 or 9 November 2001. Both Mr Fraser and Mr Lee, who I accept as reliable witnesses, rejected the applicant's contention that he raised the question of the illegal software during the meeting on 8 or 9 November 2001 or indeed attempted to raise that issue. This meeting was described as affable by those in attendance.
107 The meeting of course occurred at a time when the applicant knew that the illegal software was being used on computers and that Mr Kelly was responsible for its installation.
108 I find that the meeting was instituted by Mr Austin because he was concerned that his employment was going to be terminated some time in the future due to the introduction of a new computer system. This was the matter that was of concern to him at the time although, clearly, a matter of greater concern should have been the use of the illegal software.
109 Mr Austin accepted that there was no impediment to him in raising the subject of the illegal copying of software. After all, Mr Austin described the meeting as affable and it therefore would seem to be unlikely that on two or three occasions that if Mr Austin sought to raise the issue of the illegal software, Mr Lee changed the subject back to the new computer system. I therefore, find that the applicant did not raise or attempt to raise the issue of illegal software during the meeting on 8 or 9 November 2001.
110 When pressed about his attempts to raise the issue of the illegal copying of software at this meeting Mr Austin contended that he had already raised the matter with Mr Lee and he was not used to having to repeat himself. At no time during this meeting did Mr Austin refer to the email allegedly forwarded to Mr Lee on 15 October 2001, nor did he immediately after the meeting forward a copy of this email again to Mr Lee or Mr Fraser.
111 Furthermore, the applicant's evidence is that he attempted to also raise the matter with Mr Fraser at this meeting. Mr Fraser's evidence, which I accept, is that the applicant did not seek to raise the issue with him at this meeting. Of course, the applicant contends that prior to the meeting on 8 or 9 November 2001, he had thought the matter was of such importance that he drove from Auburn to Homebush to raise the matter with Mr Fraser although on his evidence he was "fobbed off". Mr Fraser denied that this occurred and I accept Mr Fraser's evidence on this issue. Once again it would seem to me if this had occurred, the applicant, a skilled computer operator, would have forwarded an email to Mr Fraser.
112 In light of the finding that, on the balance of probabilities, the applicant did not attempt to directly or indirectly raise the issue of illegal copying of software with Mr Lee or Mr Fraser during the meeting on 8 or 9 November 2001, the applicant has, in my view, seriously failed in his duty and responsibility to his employer.
113 The most obvious step for the applicant to take was to report the illegal copying of software to both Mr Lee and Mr Fraser. Instead, the applicant chose to report the use of unlicensed software to the BSAA, depriving the employer of any opportunity to rectify the anomaly. Furthermore, prior to reporting the matter to the BSAA, Mr Austin had satisfied himself by examining a number of PCs that they were using illegal software. In my view, it fell within the scope of Mr Austin's duties and responsibilities to report such use to his employer but he failed to bring it to the attention of his employer.
114 The applicant then went on annual leave and returned on Monday 18 February 2002 when he received an email from Warren Lee dated 15 February 2002.
115 At approximately 12:00 noon on 18 February 2002 Mr Austin forwarded Mr Lee an email. Mr Austin was not able to satisfactorily explain why this email states that "I would also like to place on the record that I had suspected that this type of breach had been occurring (outside the realms of my authority) for some time." It is difficult to reconcile Mr Austin wishing to "place on the record" his suspicions in light of his evidence that he had done this both orally in October 2001 in a discussion with Mr Lee and subsequently confirmed this in an email of 15 October 2001. Mr Austin's email of 18 February 2002 makes no mention of previously raising the matter.
116 Mr Austin's evidence is that during the meeting on 18 February 2002, he stated that he had informed Mr Lee about this problem "back in October 2001".
117 I have already noted that I have accepted the evidence of the NF Importers witnesses who were not shaken despite close cross examination. However, Mr Austin did not fare so well under cross examination and was in difficulty on a number of occasions.
118 I prefer the evidence of Mr Lee and Mr Page who deny that Mr Austin said that he had previously informed Mr Lee about the illegal copying of software at the meeting on 18 February 2002. Had it occurred, there could be no reason why Mr Austin would not have included it in his email of 18 February 2002, forwarded after the meeting.
119 Furthermore, this email does not state that Mr Larry Kelly was responsible for the copying of illegal software, or that an audit had been carried out by Mr Austin in October 2001 or late November 2001 which confirmed the illegal copying of software. This would have been relevant and in my view it was appropriate for Mr Austin to advise his employer, particularly given the specific terms of the email from Mr Lee of 15 February 2002.
120 Mr Lee's evidence was that Mr Austin sought a meeting with him on 21 February 2002 requesting that the company's solicitor also be in attendance.
121 Mr Austin contended that he had told Mr Lee about the illegal copying of software to which Mr Lee had no recollection.
122 Mr Austin then produced three copies of the email dated 15 October 2001. This was the first occasion, according to Mr Lee's evidence that he had ever seen the email and he immediately checked his computer and could find no record of ever having received the email.
123 The evidence of Mr Forsyth, a forensic expert in information technology, was that the email of 15 October 2001 was sent through the server on 19 February 2002.
124 In order for the email to have been forwarded on 19 February 2002, it would have been necessary to change the date and time on Mr Austin's computer.
125 Mr de Meyrick submits that this would have been very cunning. The evidence of Mr Forsyth and indeed of Mr Austin was that it is an easy exercise for a skilled computer operator, which I have found Mr Austin to be, to change the date and time including the configuration on the computer that recognises daylight saving. In my view, having heard and reviewed the evidence in this matter, such an exercise would have been within the skills of Mr Austin.
126 The evidence before me, overwhelmingly, points to the conclusion, on the balance of probabilities, that the email of 15 October 2001 was a fabrication. I find that it was concocted by Mr Austin. I have earlier found that the email was sent on 19 February 2002.
127 It was the applicant's conduct, that is, knowing and allowing the illegal copying of software to take place as the IT Manager, that in my view, and I so find, amounted to a serious breach of Mr Austin's duty, responsibilities and obligations to his employer which justified summary dismissal.
128 Mr de Meyrick submitted that a further unfairness relied upon was the conduct of the respondent in failing to address the deteriorating relationship between Mr Kelly and Mr Austin, submitting that it was part of the factual matrix of the case.
129 Mr Fernon submitted that it was not part of the applicant's case. No amendment was made to the summons to change the nature of the case or the nature of the unfairness that was alleged against the respondent to include a claim that unfairness arose as a result of the respondent failing to address this issue. It was submitted that therefore it should not be taken into account.
130 Mr de Meyrick submitted that Mr Austin was the Manager of the IT Department in name only and that his relationship with Mr Kelly had disintegrated to the extent that neither communicated with each other. The applicant believed that Mr Kelly was undermining his position. However, in my view, this does not explain or excuse the conduct of Mr Austin. He had an obligation to his employer to raise what he regarded as a very serious matter.
131 Mr de Meyrick submitted that during the period September 2001 to February 2002, Mr Austin did not have any meaningful supervisory role or any practical supervisory role over Mr Larry Kelly. It was further submitted that the breakdown in the relationship between Mr Austin and Mr Kelly was mishandled by NF Importers by its complete failure to intervene when appraised of the conflict between the two employees. However, although Mr Austin and Mr Kelly gave evidence of this conflict, the evidence of Mr Fraser and Mr Lee was that they were not aware to any meaningful extent of a breakdown in the relationship.
132 In any event, I fail to see how, even accepting that there may have been a breakdown in the relationship that this in any way excuses the failure of Mr Austin, the Manager of the IT Department to bring to the attention of his employer that illegal software was being utilised. Whatever the reality of the relationship, Mr Austin became aware in September 2001 and should have arguably been aware from at least July 2001 that illegal software was being used throughout the company and he did nothing about it.
133 There were a number of further submissions made by Mr de Meyrick which I will address.
134 It will be recalled that it is the applicant's case that he forwarded an email to Mr Lee on 15 October 2001 raising the issue of the illegal copying of software.
135 Mr de Meyrick further submitted that I could not be satisfied that Mr Austin's computer had not been tampered with. However, the evidence of Mr Lee was that immediately after Mr Austin's termination, a sign was attached to his computer containing the words "Please don't touch this computer without authorisation by me, (sgd) Warren Lee". Mr Page gave evidence that he observed the sign on the computer from time to time. It remained on the computer until it was provided to Mr Fosyth for forensic examination by Mr Page.
136 Furthermore, during the period after Mr Austin's termination, the company was moving to a new system and the computer became obsolete. Although the evidence regarding the security of the computer may be capable of giving rise to doubt, in the criminal context, the evidence in this matter establishes that a systematic investigation was carried out by Mr Forsyth in accordance with the usual forensic protocols which resulted in Mr Forsyth's conclusion that the email of 15 October 2001 went through the server on 19 February 2002.
137 Mr Austin denied sending emails to Mr Manttan and this again raises, at least by implication, that his computer was tampered with.
138 As I have previously stated I find Mr Austin's evidence in this regard implausible and unsatisfactory. On the balance of probabilities, I am satisfied that Mr Austin's computer was not tampered with.
139 In any event, these were matters which were not relied upon by the respondent as a basis for the termination of Mr Austin.
140 The conduct which I have found to warrant termination was that as Manager of the IT Department, Mr Austin detected the use of illegal software and did nothing about it.
141 Mr Austin, no doubt, did not expect that the fabrication of the email would be discovered. It was only as a result of these proceedings that the respondent took the step of having a forensic expert examine Mr Austin's computer. The applicant, it seems, after he sent the email of 18 February 2002, determined that he required more material to justify his failure to take any steps to protect his employer from the use of illegal software. Upon Mr Austin's return from leave, it appears that he realised that his employment may be in jeopardy when he was called upon to explain his failure to detect the use of illegal software. Mr Austin had of course detected such use and reported it to the BSAA but not to his employer.
142 I agree with Mr Fernon's submissions that it is not necessary for the respondent to rely on the concocted email. The conduct of the applicant is sufficiently serious to have justified the termination of his employment. However, the evidence of Mr Forsyth adds an additional dimension to this matter which confirms that the Commission should not intervene. The conduct of Mr Austin went to the heart of the relationship of trust and confidence that exists in each employment contract.
143 In respect of the second important issue, that being whether Mr Austin was given an opportunity to defend himself, Mr Austin was provided with three opportunities to raise his side of the story. Firstly, by the email of 15 February 2002 from Mr Lee. Secondly, in the meeting with Mr Lee and Mr Page on Monday 18 February 2002 and thirdly, at the meeting that he sought with Mr Lee and Mr Lincoln Kelly on 21 February 2002.
144 Mr Austin was called upon to explain if illegal software had been used, how that had occurred and why it had not been detected during routine audits.
145 In my view, Mr Austin was being given an opportunity to explain, as the IT Manager, how the use of illegal software may have occurred. I have already found that he made a deliberately misleading statement in his email of 18 February 2002 when provided with an opportunity to explain.
146 Mr de Meyrick submitted that it was incumbent upon the respondent even if they disbelieved Mr Austin to consider if they were acting fairly and appropriately by providing Mr Austin with an opportunity to put his side of the events and whether he was really the culprit.
147 Mr Austin's defence was to inform his employer that he had told his employer about this problem and it had done nothing about it. Clearly, Mr Lee did not accept that he had been informed by Mr Austin of the use of illegal software. He regarded Mr Austin's failure to raise the matter with him as being a serious breach of his duty and responsibility as IT Manager, as I have found it was.
148 In passing, it should be observed that it was not until 14 March 2002, two days after Mr Austin was terminated, that the solicitor for the BSAA informed Mr Lee that Mr Austin was the informant. The evidence of Mr Lee, Mr Fraser, Mr Page and Mr Lincoln Kelly was that they were not aware of who was responsible for informing the BSAA. Some of these witnesses said they had not turned their mind to this question. Mr Fraser, whose evidence was that he knew little about computers, thought that BSAA may have detected the use of illegal software themselves. I accept that it was not a matter that the employer took into account in determining to bring Mr Austin's contract to an end.
149 It was impermissible, in my opinion, for a person in the applicant's position to fail to raise what was a very serious matter, that is, the use of illegal software, with his employer.
150 The respondent was entitled to expect that the applicant would not only carry out his duties and responsibilities but would lead by example. A manager of an IT Department who is informed by an employee that illegal software is being used and who fails to act upon this information commits a fundamental breach of his duty of fidelity towards his employer. The breach was such that the respondent's reaction cannot be characterised as constituting unfair conduct or as rendering the contract of employment in some way as being unfair.
151 For these reasons, I am unable to characterise the actions of the respondent in terminating the applicant's services summarily as constituting or creating an unfair contract for the purposes of s 106.
152 I reach this conclusion notwithstanding an allegation that the respondent failed to follow appropriate processes during the investigative and determinative aspects of the respondent's process. Viewed objectively, the termination of the applicant's employment by reason of his conduct did not, in all the circumstances, constitute relevant unfairness. The alleged failure to follow these provisions, even if established, could have no effect on this conclusion.
153 As Hill J said in Mason v Electricity Commission of New South Wales t/a Pacific Power (1995) 62 IR 436 at 442 (which was endorsed by Walton J, Vice-President, in Gow v Cronulla Sutherland Leagues Club Ltd (2002) 119 IR 122 at 204):