Budlong and NCR Australia Pty Limited [2006] NSWIRComm 1075

LEGISLATION CITED: Industrial Relations Act 1996

Elcom Vs Electrical Trades Union of Australia (1983) 5IR 267 North Vs Television Corporations Limited (1976) 11ALR 599 Federated Municipal and Shire Council Employees Union of Australia, NSW Division Vs Liverpool City Council (1988) 25 IR 246 at 249 Glynn J Pastrycooks, Employees, Biscuit Makers Employees and Flour and Sugar Goods Workers Union, NSW Vs Gartrell White (No. 1) (1990) 35 IR 51 at 98 per Hungerford J Burrows Vs Commissioner for Police (2001) NSW IR Comm. 333 at 188 per Boland J Saric Vs Pacific Access (AIRC 9th January, 2003 REF PR 926488 Byrne and Frew Vs Australian Airlines Ltd (1995) 185 CLR 410 at 465 CASES CITED: Wells Vs Commissioner of Police 2000 (100 IR 106 at 119 Brookes Vs Watling (1995) 61 IR 163 IGA Distribution Pty Ltd Vs Moses (No.2) (2002) 114 IR 30 Orr Vs University of Tasmania (1956) TAS S.R 155 P Micallef Vs Holden Limited (No. 32791) 2001 (AIRC) Michael Harrington Vs Phillip Morris Limited AIRC PR915206 13/3/02 Williams Vs Centre Link AIRC 15.1.2004 PR924762 Agnew and Others Vs Nationwide News Limited (AIRC 11.2.03 Ref. PR 927597)

HEARING DATES: 27/10/05, 28/10/05, 23/11/05.

APPLICANT Mr E Young of Counsel briefed by Turner Freeman, Lawyers LEGAL REPRESENTATIVES: RESPONDENT Mr Brown, Solicitor of Baker and McKenzie

• 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

RICHARD EDWARD BUDLONG AND NCR AUSTRALIA PTY LIMITED

Application by Richard Edward Budlong re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996

1 The applicant began his employment with the respondent in September, 1974, which continued until his dismissal on 7th June, 2005. 2 The letter of dismissal read as follows: "Ed, Subject: ETHICS AND COMPLIANCE BREACH As discussed in our meeting yesterday, pornographic material was found on your lap top and presented to you after a search was conducted. This search was conducted by NCR's Ethics and Compliance Department in response to the issue to being raised by Grant Findlay to myself in Human Resources after he witnessed you opening this material at your desk. The material was found in a file titled "amusements". As you are aware, NCR has a zero tolerance policy towards pornographic material on its infrastructure systems. As stated in the Code of Conduct, "it is the responsibility of each individual to utilize the company's IT infrastructure resources in a responsible, ethical, and lawful manner."

The Ethics and Compliance area send out regular email correspondence on the importance of adhering to NCR's Code of Conduct and its stance around breaches. You completed your Ethics and Compliance Certification in March of this year, indicating your awareness of the code and its importance. We met again today to consider any further response from you around the matter. We have taken into account your responses. In the circumstances, NCR believes you have engaged in serious and wilful misconduct and accordingly your services will be terminated effective 7th June. You are directed to return any NCR equipment, including documents, keys, calling cards, Diners Card etc. You will be paid any amounts due to you as of 7th June 2005. You will also be paid any statutory entitlements with regard to Annual Leave and Long Service Leave. Sincerely, Dipa Homer Human Resources Manager - South Pacific Area" 3 The applicant filed a S84 application.

4 On the 12th and 27th July, 2005, the Commission attempted to conciliate the matter, without success and the matter proceeded to hearing over three days, beginning on 27th and 28th October, followed by a further day on 23rd November, 2005, after which the matter was adjourned with a program put in place for written final submissions to be reserved for decision. 5 Mr Budlong was represented by Turner Freeman, Lawyers, briefing Mr E Young of Counsel, whilst Mr P Brown, Solicitor of Baker and McKenzie represented the respondent.

The Evidence 6 The applicant gave evidence as to his lengthy thirty-one years service with the respondent, during which he received some twenty-one recognition awards for good performance. 7 He gave evidence that he first began receiving inappropriate materials from the accounts receivable manager in 1997 by the name of John Cannon. Those e-mails contained jokes which may offend some people. Mr Cannon left in December, 1998. 8 On or around August, 2000 he began receiving e-mails with sexual content from Shane Ryan, who occupied the position of director of the Building Operations Centre (BOC) for the Asia Pacific Region of NCR. From thence, he was the main person forwarding inappropriate e-mails to the applicant. Numerous persons, named by the applicant, as follows, became involved in what he described as, in effect, an unofficial group of recipients, and who he claimed as not finding the contents offensive. These included the following: Phil Cook Regional Team Leader for the BOC Ceased duty July, 1904 Robert VanDam Australian Team Leader for BOC Ceased duty May, 2004 Dean Crawford Building Analyst Ceased duty April, 2004 Brad Roberts Building Analyst Ceased duty April, 2004 George Dvorszky Building Analyst Ceased duty April, 2004 Peter Rowe Building Analyst Ceased duty January, 2003 9 Also, amongst the list of recipients and members of the unofficial group was someone the applicant described as amongst the general managers, which included Guy Guerzoni, who ceased duty in October, 2004, and also sometimes included another person called Mike Hancock and the applicant's own team leader by the name of Jack Bal (who gave evidence in these proceedings). 10 Various e-mails were sent to him from Shane Ryan, already mentioned, Dean Crawford, a person outside the NCR by the name Rick Down, and the already mentioned Guy Guerzoni. The majority of e-mails were from Shane Ryan, who was made redundant in June, 2004, but continued to send him e-mails after that date. 11 It was the applicant's crucial evidence that he was not overly concerned about the nature and content of the e-mails because he contended the senders were other senior managers and employees of NCR. He went on to testify that NCR had a workplace culture which tolerated the distribution of such material. 12 He gave evidence also of an organisational restructure which took place in February, 2004 to February, 2005, leading to retrenchment packages being widely offered. The applicant himself was offered a redundancy, which he estimated to the value of $105,000. Whilst his team leader, Mr Jack Bal (who gave evidence for the applicant) and Patti Dawkins, also mentioned in evidence, were made redundant in March, 2004. Others at later dates during 2004. 13 The applicant also gave evidence as to the location and positioning of his new work station in relation to Mr Grant Findlay, who gave important evidence against the applicant, and who occupied a workstation some distance from the applicant, but nonetheless, observed what he believed to be inappropriate material on the applicant's screen, leading to the applicant's dismissal. 14 The applicant gave evidence acknowledging that he had read and understood the NCR Code of Conduct in March, 2005 and also completed the Ethics and Compliance Course on line, both of which covered a range of issues. And whilst he was genuinely aware of the ethics policies referred to in the Code of Conduct and the company's "shared values", he maintained they did not form part of his contract. 15 He accepted that wilfully exposing inappropriate material to individuals, who found such material offensive, would be contrary to the Code and NCR's shared values, and also that he never intended anyone to see anything on his computer screen of that nature. 16 In this vein, the applicant, in cross-examination, was required to acknowledge his disregard for the Code of Conduct and made admissions as to various matters covered later in this decision. 17 As to the events leading to his termination, he was approached on the 6th June by Mr Grant Findlay, who appeared at the entrance to his work area and asked him to see him for a few moments, and to accompany him to the office of Ms Dipa Homer, the Human Resources contact for his particular division. He was informed by Mr Findlay that he had observed the applicant opening an obscenely graphic image on his PC and that a decision had been made to report him to NCR's Ethnics and Compliance Department in Dayton, Ohio, which had authorised NCR's ID Department to do a search of his PC drive, where they found a large quantity of material of a pornographic nature in a file "amusements". 18 He acknowledged being informed by Ms Homer that his actions had constituted a breach of NCR's shared values and the IT Code of Conduct, and reminded him that he had recently completed the Ethics and Compliance Course. He was then shown two to three pages containing modelled images which the IT Department had retrieved from his computer, which he recognised as being images that he had been sent via internal e-mail. 19 The applicant fully admitted he had received the e-mails and had saved them, and also admitted it was the wrong thing to do; offering to delete all offending materials from his PC immediately. The applicant was suspended from work on full pay for the rest of that day, being informed that the respondent wished to go away and consider his conduct. He was invited to attend the next day at 11am, and also to be accompanied by a witness. He was told of the company's zero tolerance for that conduct and that termination would be a serious option. He was asked to hand over his security pass and escorted from the building. 20 On the 7th June he rang the United Services Union and arranged for Mr Chris Gill, an organiser, to accompany him. The union, according to him, informed the respondent that they should take account of the fact that he had not forwarded e-mails to other parties. 21 The applicant testified that he admitted receiving and storing of e-mails and he had co-operated in the investigation. He apologised to Mr Findlay for inadvertently exposing him to the offending material. He maintained a controversial aspect of his evidence, that he had informed Ms Homer and Mr Findlay that some e-mails had been received from an external source, but the source was largely ex-NCR management. After an adjournment of some ten minutes, he was informed by Ms Homer, that he would be terminated as of the 7th June. He received his dismissal letter the next day in the mail. 22 In his rebuttal statement, filed on the 26th October, the applicant gave evidence amongst other things, of the fact that in the attachment to his statements were details of employees that had received or sent e-mails that were contained in Exhibit DH1 tendered by the respondents through Ms Homer. To the best of his knowledge and belief, they were still employed by NCR after the termination of his employment. The names included the following: Chris Chin (Regional IT Director) Michael Martin (IT Infrastructure) Paul Roberts (Accounts Receivable Analyst) Habib Wehby (Dispatch) Anthony Robidashvilly (details not provided) Mark Williams (details not provided) 23 He gave evidence that to the best of his knowledge, those persons had not had a forensic investigation performed on their PCs. 24 In that statement, the applicant also gave evidence that Mr Paul Roberts had since been promoted within NCR. 25 The applicant also gave evidence in that rebuttal statement of the seating arrangements to refute the allegations of the respondent that female officers might easily have seen the material on his computer.' 26 He gave evidence of being particularly discreet in respect of one, Patti Dawkins, who he knew to be religious. He also gave evidence that there was never any complaint about him from anyone. 27 In that rebuttal statement he also went back to the meeting of the 7th June, with Mr Findlay and Ms Homer, and claimed to have said, "a lot of people at NCR send around material like this. It's a bit like doing 80 kilometres in a 60 kilometres zone. A lot of people at NCR do it. I understand it is not right. I am sorry that I have done this." He also claimed to have given a defence at that meeting as being, with the words, "I am a collector", meaning that he had a collecting and systematically organising things generally in his life, and claimed again to have said, "I apologise for my actions. All of these e-mails came to me from NCR senior managers". 28 In cross-examination the applicant was taken to several items of the pornography in order for him to acknowledge that he considered that it was x-rated and apart from disclaiming knowledge of a few of those put to him, generally agreed they would be x-rated. 29 He acknowledged that on one hundred and seventy-five occasions he moved images across to his "amusement" file and agreed that he intended them for retrieval, to look at those images on other occasions and acknowledged doing so at work. He agreed with Ms Homer's tally of images in his "amusement" file exceeded three hundred. 30 Mr Jack Bal, Mr Budlong's immediate supervisor, with NCR's credit department, gave evidence of the extent of the pornographic material transmitted around the workplace, but supported the applicant's defence of a long term culture among a number of male managers and other employees which he also described as "an Aussie bloke culture". Like the applicant, he was taken to various parts of this material and asked whether or not he recalled seeing that material, and as to whether or not he found it offensive, but agreed that others would likely find most of it offensive. 31 The evidence of Ms Dipa Homer, as the central witness for the respondent, was given as Human Resource Manager, South Pacific Area at NCR Australia and central to the procedure used to terminate the applicant's services. 32 Annexed to her statement was a large document marked DH1 to DH9 and attaching examples of the inappropriate pornographic photos shown to the applicant. Amongst those documents was a copy of the Code of Conduct beginning at page 4, which is crucial to the respondent's case. The relevant sections relating to pornographic material are dealt with and quoted later in the treatment of the final submissions of Mr Brown and therefore not repeated here. Under the Infrastructure Technology Resources, there is an explanation for the reasons for the particular policy, and emphasising the responsibility of each individual of the company, mentioning also that internet material that conflicts with NCR's shared values and not compatible with productive work environment should not be accessed, and also speaks of potential legal liabilities upon NCR. 33 At page 8, at the top of that page, is particular reference to pornography under the heading Extreme or Obscene Material. 34 At page 39 of Annexure DH1, under the heading of Harassment and your Responsibilities, there was an entry: · Do not display sexually suggestive objects or pictures at work. 35 At DH4 of the Annexure to Ms Homer's statement was the Certificate Statement for the completion of the Code of Conduct training and related to that DH5, was a copy of e-mails in that respect dated the 9th May, 2005, as part of the investigative process. Ms Homer received an e-mail from one Brigid Gibson, stating, "Budlong certified his compliance with the codes". 36 Also in that attachment was the certification by Mr Budlong of his understanding of the Code of Conduct and his understanding that a violation of the Code would subject him to appropriate sanctions, "such as dismissal". That was dated the 25th October, 2004. 37 At DH6, were more policy documents beginning with the NCR shared values. 38 At DH8 of Exhibit 9 is a copy of the first report received by the employer. DH9 was a copy of the bundle of the pornographic images supplied to Ms Homer as part of the first report, which contained forty-two pages of colour photographic images, some of the company e-mail. Also, at that area of her affidavit, Exhibit 9, Ms Homer quoted the applicant as acknowledging the material belonged to himself, and where the applicant said at the meeting, that he did not believe, that was a big issue. Ms Homer confirmed the applicant's statement, "it's a bit like driving in a 60 kph zone and driving 80 - everyone does it. They just hope they won't get caught". 39 At DH12 was a copy of the Guidry Group report dated the 5th July, 2005, containing details of the precise items transmitted and including those received by Mr Budlong at 2.2 of the report and those sent by Mr Budlong at 2.3 on the 28th May, 2003 to Mr Shane Ryan, and received from Mr Guy Guerzoni. Also at 2.4 were pornographic websites visited by the applicant, with details of the files accessed. At 2.5 was details of pornographic movies played in windows media player, with the report that Mr Budlong also viewed the movies from the pornographic e-mails and providing a copy of the movies played by Mr Budlong. 40 Mr Grand Findlay's evidence was filed with the Commission in the form of Exhibit 18 and 19. The most significant part of his evidence was recounting that in or around late March, at approximately 5.30pm, he was at a distance of two or three metres from the applicant's laptop. He observed the applicant viewing an image, which appeared to be of a pornographic nature. He said, "although I am was not certain, the image appeared to be a naked woman kneeling with her back to the camera". The evidence of Mr Findlay proceeds by giving a detailed description of the reporting of that incident to, firstly to Ms Homer and other senior officers of the organisation being involved and also recounting his recollection of the interviews he attended on the 6th and 7th June, when the applicant was dismissed. Submissions for the Applicant 41 Mr Young began his submissions by exhorting the Commission to apply an objective application of the law to the facts as opposed to an emotional response evoked by some of the evidence. He asked that the Commission not merely be guided by the content of the e-mails, as graphic as they may be, but to take into account the conduct of NCR in relation, not only to Mr Budlong, but also others. 42 He suggested that the situation was more the fault of NCR, and that Mr Budlong was merely one of NCR's employees who received such e-mails. 43 The onus was upon NCR to prove the serious misconduct and his summary dismissal could only be justified on the basis of conduct amounting to repudiation of the contract (Elcom Vs Electrical Trades Union of Australia (1983 5IR 267). Separately, he propounded that the conduct must be so serious as to "strike at the route of the contract" (North Vs Television Corporations Ltd (1976) 11 ALR 599). 44 The Code of Conduct referred to by the respondent did not constitute the terms of the contract between the applicant and NCR as finally acknowledged by Ms Homer's evidence. Even if a breach of NCR's Code of Conduct was a breach of contract, the fact was that NCR was content to keep the contact on foot for a significant period after becoming aware of the breaches, which makes it clear that they did not consider it a breach or abbreviation of the essential terms of contract. 45 Mr Young postulated that NCR's dismissal of Mr Budlong was in fact unlawful and was itself a breach of contract, and that fact alone establishes that his dismissal was harsh, unjust and unreasonable. Additional matters also established the unfairness of his dismissal.

46 The question for the Commission is whether, what Mr Budlong did, constituted serious misconduct to warrant summarily dismissal, which NCR must prove. 47 The respondent relied upon a Zero Tolerance Policy towards pornographic material on it's IT infrastructure systems and the letter of the 7th June, 2005 dismissing him quoted from the section of NCR's Code of Conduct entitled (Infrastructure Technology Resources).

48 Mr Budlong was always open and honest about having being sent pornographic material by e-mail, primarily from NCR management, which he stored on his computer in a file. He admitted and apologised for this being the case. 49 Mr Young pointed out that the NCR's managers who had sent Mr Budlong pornographic e-mails, did not consider the sending or receipt of such material as serious misconduct. 50 Mr Young pursued a theme repeated throughout his submissions and submissions in reply that, despite becoming aware from March, 2005 and confirmed by NCR in an internal investigation in early April, 2005, no action was taken until the 6th June, 2005, when Mr Budlong was suspended and dismissed the following day. In April where the matter was confirmed, NCR had the options of cutting off e-mail access altogether, or at the very least blocking e-mails being sent to him by persons known by NCR to send the material to him. If it was so serious, the respondent should have acted immediately, but did not do so for a significant period of some months, allowing Mr Budlong full access to his computer files, including those which NCR knew contained pornographic material. 51 This fact alone, belies NCR's assertion that Mr Budlong had engaged in serious misconduct. 52 During that crucial period of March to June, 2005, the applicant was sent a further six e-mails with pornographic content from others. 53 If NCR had truly believed that there had been a breach of its IT Infrastructure Policy, it would have conducted an investigation into other individuals working for NCR, and group companies, who both sent and despatched pornographic e-mails to Mr Budlong. 54 Mr Young informed the Commission in submissions that the material upon which it relies, appearing as Exhibit 3 annexure EB1, shows forty-one separate recipients of pornographic e-mails and fourteen separate senders of such e-mails. Those individuals are listed at Exhibit 3. 55 Again, despite knowing those individuals since early April, 2005, NCR did not investigate, let alone discipline or terminate such individuals. One of those individuals worked for NCR's IT Infrastructure Section and remains employed by NCR. One of the forty-one individuals receiving pornographic e-mails is Mr Paul Roberts, who was promoted by NCR Company after Mr Budlong was summarily dismissed. He currently works in Dayton, Ohio for a NCR group company. NCR implicitly condones such conduct and there has been no investigation of those individuals. This goes directly to the issue of unfairness in the dismissal of Mr Budlong. 56 On another front, Mr Young referred in the contrast to the approach by NCR in first issuing a written warning to Ms Portelli some few years ago, although, Ms Portelli was finally dismissed when she was found to have reoffended. 57 NCR's actions and inactions point directly to his conduct not being serious misconduct and did not warrant summarily dismissal. NCR had not discharged its onus of proof that Mr Budlong's conduct was serious misconduct, entitling summarily dismissal. 58 If NCR wished to discipline Mr Budlong for misconduct, it should first have issued a warning. 59 The uncontested evidence is that Mr Budlong was sorry and contrite, even at the first meeting on the 6th June, 2005 where he immediately apologised and offered to rectify the situation by deleting all pornographic e-mails. 60 It was simply not necessary for NCR to dismiss Mr Budlong, as he would have rectified his conduct and still be employed by NCR. Accordingly, that threshold issue is not discharged by the respondent.

61 Mr Young pointed out several aspects which were of little or no dispute between the parties beginning with the fact, already stated, that Mr Budlong apologised for his conduct; that he had some thirty-one years of an unblemished continuous service with the respondent; that he received awards for performance not less than twenty one times; passed up an opportunity to take voluntary redundancy in February, 2004, the value of which was approximately $105,000 but remained with NCR at their request; the applicant had never had a complaint made about him in his thirty-one years of employment. 62 Mr Young next worked through the further grounds upon which he believed the NCR's action was harsh, unjust and unreasonable, some of which were already touched upon. 63 These included what Mr Young described as a long term NCR workplace culture, which permitted and encouraged the viewing of pornographic material; the fact that Mr Budlong had not sent material to others himself (with a single exception and in that instance involving the most prolific sender of such e-mails to the applicant); NCR wrongly applied a Zero Tolerance Policy which did not exist; another high profile employee Tina Portelli was first given a written warning prior to her dismissal; other NCR employees, receiving the same e-mails as the applicant, were not investigated; the dismissal was unnecessary and out of proportion to his conduct; NCR lacked any computer software protection to filter such material and prevent such images being transmitted; the personal and economic impact upon Mr Budlong was out of proportion to his conduct; NCR had predetermined the decision to dismiss him prior to meeting with him. 64 Mr Young had extensive submissions in respect of the claim based upon the NCR workplace culture. 65 He pointed out that the evidence of Mr Bal also supported this submission. Those sending material to Mr Budlong included a director of NCR who sent material to a number of people over a prolong period of time, at least back to 4th August, 2000. (He referred to Table 3 of the Guidry Group dated the 5th July, 2005 Exhibit 9 annexure DH12). 66 Mr Young insisted that there was ample evidence that numerous senior managers of NCR, which included the director of BOC for Asia Pacific regions, Mr Shane Ryan, permitted and encouraged the viewing of pornographic material between themselves and sending it to numerous other employees. 67 He pointed to Exhibits 13 and 14, which showed the large number of highly pornographic material was sent by the female officer, Tina Portelli, earlier referred to, in a different section of NCR to Mr Budlong, between the 8th September, 1997 to the 27th February, 2002. 68 Mr Young returned to the theme that even after Mr Budlong's dismissal, numerous other still current employees of NCR continued to have pornographic e-mails, which they then deleted. Such officers and managers included David Speck, Wayne Goodfellow, Mark Williams, Gary Wong and Paul Cheok (Exhibit 3 paragraph 19). This demonstrates a culture of permissiveness in NCR. 69 NCR's own Code of Conduct and policies emphasised the importance of the role of managers (Exhibit 9 annexure BH3 page 4). He then went on to list those duties of managers as shown in the Code of Conduct, which included ensuring team members understand the shared values; ensuring unethical conduct is detected and reported; ensuring anyone about to be promoted has followed the code; creating an environment promotes compliance etc. 70 Ms Homer had conceded in her evidence that those managers who had sent Mr Budlong pornographic e-mails had failed in those responsibilities to NCR and not set him a good example. 71 That workplace culture did not simply disappear when certain of those individuals were made redundant from NCR some fourteen months earlier to the applicant's dismissal. 72 In developing the argument that NCR uses the Code of Conduct selectively and inconsistently, Mr Young instanced the case of where NCR, knowing Mr Paul Roberts, mentioned earlier, had received three pornographic e-mails, allowed his promotion. Mr Budlong's non adherence to NCR's IT Infrastructure Policy, driven by managers, was a reasonably foreseeable consequence of that culture, according to Mr Young. It was a systematic policy implementation failure over many years. Mr Budlong was a scapegoat. 73 The reference in NCR's letters of the 6th and 7th to the Zero Tolerance Policy in relation to pornographic material on its infrastructure systems was therefore not supported by evidence, and can be sharply contrasted with the zero policy which does apply to workplace violence and harassment.

74 Mr Young next returned to the important theme that the applicant had only been the recipient of e-mails and had not sent them himself, with the exception of a single instance which occurred on the 28th May, 2003, two years prior to his dismissal. That instance had involved him being sent a pornographic e-mail by Mr Shane Ryan, and three persons involved were managers of NCR, namely Ryan, Guerzoni and Crawford. The message sent by the applicant to Mr Ryan "isn't this the same guy?" indicated that Mr Ryan had already seen the same or similar image in respect of that particular person.

75 In respect of the inconsistency of the treatment argument, Mr Young referred the Commission to the decisions in Federated Municipal and Shire Council Employees Union of Australia, NSW Division, Vs Liverpool City Council (1988) 25 IR 246 at 249 Glynn J; Pastrycooks, Employees, Biscuit Makers Employees and Flour and Sugar Goods Workers Union, NSW Vs Gartrell White (No. 1) (1990) 35 IR 51 at 98 per Hungerford J; Burrows Vs Commissioner for Police (2001) NSW IR Comm. 333 at 188 per Boland J. 76 Mr Budlong had been treated differently to other employees as detailed, which was sufficient grounds to find his dismissal harsh, unjust and unreasonable. 77 The next issue raised on behalf of the applicant concerned the argument that the dismissal was out of proportion with his conduct. 78 It was contended that Mr Budlong should first have been the subject to a warning. 79 It was relevant that Mr Budlong took care to ensure that no one else saw the pornographic contents of the e-mails sent to him, and the fact that Mr Findlay did see something, should be looked in the context that his evidence was equivocal as to what he in fact saw. Mr Findlay was expansive in the witness box as compared to his witness statement on what he had seen, when compared with his contemporaneous words reporting to Ms Homer and Mr Baugh in April, 2005. This shows his behaviour as being quite equivocal. His earlier reports suggested that he had seen a pornographic image, but "I'm not one hundred percent certain". Mr Findlay could only have had peripheral vision of the image and must have only seen it for a fraction of a second, and there was no evidence of what the image in fact was. There is no evidence that Mr Budlong had ever allowed anyone to see pornographic material, which may be contrasted to other cases. There was only a single instance over thirty-one years of exemplary employment of sending material on to another officer, and that other officer was shown to be a regular sender of material to the applicant.

80 Mr Young quoted some specific issues traversed in the caselaw, which included Borrows case referred to earlier, whereas His Honour Justice Boland found that numerous police officers had received and disseminated pornographic material which was found to be disgusting and revolting, and even after having received a specific memo on the use of electronic mail, and whilst Mr Borrows was removed from his position, others were not. Finally, on that issue, Mr Borrows was reinstated by Boland J, taking into account his past good conduct and economic and personal circumstances. 81 In another case, Michael Harrington Vs Phillip Morris Ltd (AIRC 13th March, 2002 REF PR 915206) an employee of sixteen years found to have accessed pornographic internet sites in breach of company policy, was reinstated without loss of income. That employee had denied accessing a pornographic site, and it was held that even if the employee had accessed such sites, his dismissal was out of proportion. Again, in that case, it was held that other employees had committed the same misconduct and received a warning, and that this employee's good service ought to be taken into account. 82 In Saric Vs Pacific Access (AIRC 9th January, 2003, REF PR 926488) an employee of five years standing was reinstated and no loss of remuneration was ordered, where the employee did not delete e-mails with pornographic content, and although a warning may have been warranted, dismissal was found to be too harsh. 83 The fact that Mr Budlong had expressed deep and genuine remorse and immediately offered to rectify the situation, it should have been taken into account the fact that his actions appeared to be a manifestation of storing and ordering things, or collecting, but to NCR's attention on 6th June, 2005.

84 Mr Young submitted to the Commission that NCR should have provided adequate software to protect against the receipt of pornography, especially given that the business of NCR is data storage and information technology.

85 The experience of the organisation with Ms Portelli's case in 2003 was a warning to the company, yet no such systems were put in place. Mr Young claimed that Ms Homer's evidence showed that such software exists (transcript 65).

86 On a separate theme, Mr Young submitted that the personal and economic impact of the dismissal upon Mr Budlong was a matter which the Commission was entitled and ought to take into account. He instanced the Byrne and Frew Vs Australian Airlines Ltd (1995) 185 CLR 410 at 465 and the other authority of Wells Vs Commissioner of Police (2000) (100 IR 106 at 119) and also the Borrows case previously referred to as authority for this proposition. He went on to talk of the significant emotional trauma attested to by Mr Budlong and his wife in evidence, along with the enormous financial hardship, all of which was unchallenged by NCR. He pointed to the fact that Mr Budlong was 56 years of age and being with the one employer for thirty-one years, and despite making significant attempts to obtain alternative employment, this was to no avail. 87 Another issue raised by Mr Young was that NCR had predetermined its decision to dismiss Mr Budlong prior to him being given an opportunity to respond to the allegations. 88 Both Ms Homer and Mr Findlay denied this was the case prior to meeting with him on the 7th June. However, the reference to Mr Budlong at the 6th June meeting to the Zero Tolerance Policy, along with the pre-typed letter to Mr Budlong, which already stated "we have taken into account your responses" which was obviously false, showed the matter as being prejudged. Likewise, the fact that there were two draft letters, one which showed him as being dismissed and the other resigning, and that there was no draft letter showing him being warned again showed pre-determination. 89 There were a range of other matters raised in Mr Young's submissions which require the Commission's consideration, the first of which is the contention that Mr Budlong had demonstrated himself to be a person of honesty and integrity, giving direct, frank and thoughtful evidence and making admissions against his own interests.

90 Mr Young asked the Commission to find that this should be contrasted against the evidence of Ms Homer and Mr Findlay, one avoiding giving direct and forthright answers, and Mr Findlay appeared to enhance his evidence when it suited him to do so. 91 This was important when deciding the contradiction between Ms Homer and Mr Findlay's evidence as to whether the applicant's age was discussed at interview. Mr Budlong's evidence can be preferred. 92 Likewise, Mr Budlong's evidence is to be accepted that he had told the company at his dismissal interview, that many NCR people had sent around pornographic e-mails. Both Ms Homer and Mr Findlay asserted that they could not recall this important fact. 93 Mr Budlong's evidence on that score is also inherently more likely given that it was foremost in his mind when defending himself.

94 Next Mr Young dealt with what was called the Guidry Report, which showed Mr Budlong visiting three websites described as pornographic websites. 95 It was submitted that the Commission should take into account in this connection, that NCR did not rely upon that matter to justify dismissing Mr Budlong, despite being aware of it prior to his dismissal. This is different from where information acquired subsequent to dismissal would otherwise allow an employer to rely upon it. 96 Secondly, there was no evidence of what images were depicted on such websites and given that only three websites were visited, this shows that he did not habitually access such websites. His uncontested evidence is that they came up unintentionally on one occasion and there is no evidence as to when he accessed the sites. 97 As to the appropriate remedy, Mr Young submitted firstly, that under section 89 of the Act, it is provided that reinstatement is the primary remedy and the question of any inconvenience need to be weighed against the need to ensure justice is done. He insisted that the onus is on NCR to prove such impracticality of reinstatement and referred to relevant authorities. 98 Mr Young pointed out the twenty-one awards received by Mr Budlong over his service with NCR, the fact that his position still exists, and although filled by another employee, the authority such as IGA Distribution Pty Ltd Vs Moses (No. 2) (2002) 114 IR 30, held that the position need not be vacant. He pointed to the size of the company with over six hundred employees, and referred to the popularity of Mr Budlong. He believed the overwhelming weight of evidence favoured reinstatement. He pointed to the genuine contrition showed by Mr Budlong in his repeated apologies and his honest admissions of what took place, along with the fact that he was allowed to remain at work for several months after the respondent became aware of his conduct.

The Respondent's Submissions 99 Mr Brown's submissions on behalf of the respondent began with the description of the misconduct for which the applicant was terminated by NCR on the 7th June, 2005, as constituting the use of the respondent's computer and internet facilities to access, view, store and send material of a pornographic nature, which included images, movies and power point presentations. 100 The applicant knowingly breached the respondent's policies and procedures regarding internet usage, namely the Code of Conduct. 101 Mr Brown submitted that the applicant was subjected to a fair investigative process, accorded procedural fairness and the only onus to be discharged by the respondent is that the misconduct on balance occurred. 102 The applicant engaged in repeated and flagrant acts of misconduct of the highest category of offence. 103 It is for the applicant to discharge the onus to show that his termination was harsh, unjust and unreasonable. 104 Mr Brown quoted the caselaw in the form of Orr Vs University of Tasmania (1956) TAS S.R 155 in support of the proposition, but whilst there is no fixed rule of law defining the degree of misconduct justifying dismissal, the servant must duly and faithfully carry out his service in a manner not inconsistent with the duties of his office, and that if he misconducts himself he may be summarily dismissed. In the Orr case, the employee was held to have been guilty of misconduct of an immoral nature. 105 In this case, the applicant engaged in repeated and deliberate acts of misconduct of the highest category according to Mr Brown, having regard to the nature and degree of the pornographic material, the content, the multiple breaches involved. 106 It was uncontested the applicant received, stored and sent and viewed in excess of three hundred and fifty items, the earliest of which appeared to be sent by Mr Shane Ryan on the 4th August, 2000. 107 The numerous admissions made by the applicant, included that he wanted to create a library of pornographic images, and in the process set up a folder on his computer as an organisational tool and kept every pornographic image sent to him, which he would drop into the amusements file and did so, on one hundred and twenty-five occasions. He did so for retrieval, to look at it later, and he would look at those images on numerous occasions. 108 Mr Brown next gave details of the extreme nature of the material contained in that "amusements" file which contained some fifteen various descriptions, which is unnecessary to repeat in this decision, given the sordid titles in some instances and the admissions of Mr Budlong of receiving them. Whilst the applicant could not recall on some occasions, he offered no real challenge and did accept that most areas of material described by Mr Brown had an X-rated classification. 109 From the viewing of sections of this material during the hearing, and from the description of items given by Mr Brown, along with the titles of material, he submitted that it cannot be denied that pornographic material located in the applicant's "amusements" file was generally explicit, vulgar, offensive and not appropriate for viewing, storing or accessing in a work environment. 110 In addition, the applicant did not deny that he had visited three pornographic websites. 111 In addition to the above material, the applicant conceded that an employee of the respondent, described in these proceedings as "the South African female" was subjected to her photograph being received and viewed in three images from Mr Shane Ryan in or around January, 2003. Two of those images accentuated the South African female's breasts, although clothed. The applicant was not aware as to whether the South African female had consented to the picture taken. 112 That issue, Mr Brown suggested, went to whether or not it was practical to reinstate the applicant, and Mr Budlong conceded that on the assumption that she had not consented to the photographs being taken, his reinstatement could cause some concern in the workplace. 113 In respect of the breach of the respondent's policies and procedures on information technology, the applicant had worked under a document referred to as the "NCR Code of Conduct" which was a directive from the respondent and its parent company NCR Corporation. The Code of Conduct was issued on an annual basis and contained a section on the appropriate use of computers and internet in the workplace. Ms Homer's evidence was that the Code of Conduct remained substantially the same over the last previous five years, and at the time of the applicant's dismissal, he was working under the 2005 Code of Conduct. 114 Mr Brown quoted directly from the Code that stated that all NCR associates were expected to abide by the provisions of the Code, to read it and conduct themselves in accordance with the guidelines. 115 The applicant conceded that he had read the relevant passage. He also conceded that the sharing of pornographic material was not promoting compliance with the Code. He likewise conceded that he had read the sentence which invited questions from anyone who had concerns about the application of the policy, and that he could have made such enquiries. He agreed that he was aware that the conduct was unethical and never notified his manager as was also provided for under the heading of "Reporting Non Compliance/NCR Alert Line". 116 Under the section titled, Infrastructure Technology Resources, the policy provided specifically in respect of such matters, "it is the responsibility of each individual to use the company's IT Infrastructure resources in a responsible, ethical and lawful manner". That policy went on to provide that whilst the employees could occasionally use the company resources, such as the internet access for personal use, that must be done in accordance with the NCR's information and technology and other policies being followed and that no measurable costs or negative impact on NCR's business or co-workers being distracted should occur. 117 The applicant conceded that his activities on the subject of pornography were not in line with the business of the respondent and that the X-rated pornography material being downloaded, shared and stored in his computer, was unethical conduct. 118 The applicant had made the concession that the presence of his "amusements" file and the regularity which he looked at its contents, would be a distraction to others and that one worker, Ms Patti Dawkins, may be able to see the material. 119 The Code of Conduct under the section titled "Infrastructure Technology Resources" stated: "Internet material that conflicts with NCR's Shared Values and is not compatible with a productive work environment should not be accessed….. Examples of restricted sites include…… pornography (emphasis added) …." 120 The applicant conceded that the accessing of pornographic material was expressly prohibited by the Code or to use the infrastructure technology to store the material and to access it and to send to other persons. 121 The Code of Conduct also contained a section under the heading "Harassment; Your Responsibilities" which stated: " do not display sexually suggestive objects or pictures at work". ( emphasis added).

The applicant conceded that when clicking on pornographic images, it was being "displayed" and further conceded that in viewing the pornographic material at work, there was a risk of it being inappropriately displayed. 122 The evidence of Ms Homer was that from 2004 onwards, employees were required to certify their compliance with the Code of Conduct. The applicant conceded he had completed the appropriate certificate in respect of the 2004 Ethics and Compliance Certificate Statement and that he was aware in 2004 that he could have been dismissed for breach of the Code. He further conceded that he had read and understood the 2005 Code of Conduct, and when he was required to certify compliance with the Code, he knew that he was not complying to the fullest extent. 123 Mr Brown maintained that the applicant had received stored, sent and viewed in excess for three hundred and fifty images involving movie clips, video clips and powerpoint presentations of a pornographic nature and visited pornographic websites, which demonstrated repeated and flagrant breaches of the Code of Conduct. The fact that he had repeatedly and knowingly breached the Code was not disputed. (It should be noted at this stage that the applicant's representative had made the point that only one item, on one occasion, had the applicant actually sent a matter to another officer). 124 Mr Brown next highlighted the numerous submissions made by the applicant in respect of the Code of Conduct, and in particular, that he had knowingly repeatedly and materially breached the internet usage and e-mail policy each time that he had clicked and stored one of the one hundred and twenty e-mails contained in the "amusements" folder; each day that it was left on the computer; each time he accessed the material; every time he went to the pornographic website; and on the occasion that he had sent such e-mail to another party. 125 Mr Brown pointed out that a witness for the applicant, Mr Jack Bal, also conceded that when he viewed pornographic images on his work computer, he knowingly breached the policies and such was not a responsible and ethical use of the respondent's computer system. 126 The applicant's behaviour was not isolated, but was repeated and deliberate in blatant disregard to the policies; inconsistent with the employment relationship and more than sufficient to warrant termination, and on that basis, the respondent discharged its onus in proving the misconduct occurred and the Commission should make such finding. 127 Next Mr Brown moved to deal with specific issues, the first of which was to contend that the termination was not harsh, unjust or unreasonable. He exhorted the Commission to pay heed to recent decisions requiring the Commission to consider each one of those words within Part 6 of the Act to make a positive finding that the decision was neither harsh and a separate finding that it was not unreasonable, and or a separate finding again that it was not unjust. 128 He next dealt with the questions raised by Section 88 of the Industrial Relations Act and in respect of the aspects of procedural fairness in subsections (a) to (f), and contended that there was a thorough investigative process before taking action against the applicant, when two separate occasions he was given adequate opportunity to become apprised of matters relied upon by the respondent. 129 As to whether or not the reasons given to the applicant for his dismissal had a basis in fact as contained in subsection (b) of S.88, Mr Brown submitted that a forensic expert in the Guidry Group had been engaged to investigate and recover any data on the applicant's computer. 130 In that vein, he also highlighted that Mr Grant Findlay had actually viewed a pornographic image on his work station, and the sequence of the investigative process from there had been a series of contacts starting with the Human Resources Manager, Ms Homer, and to various levels within the organisation, involving contact with the corporate security, who received authorisation on the 7th April, 2005 to utilise EnCase Enterprise to investigate. On or around the 2nd May a telephone conference was conducted between Ms Homer, Mr Findlay and the investigator. Both Ms Homer and Mr Findlay met on several occasions in the course of May and June to discuss the applicant's conduct. This was also said to explain the delay in putting matters to the applicant until 6th June. 131 Following the dismissal of the applicant, the respondent had sent the applicant's hard drive to a forensic expert in the Guidry Group to conduct a further investigation. 132 That time line was important in respect of Mr Young's contention that the respondent had been inactive over several months prior to dismissing the applicant from the time in March in discovering the pornographic image on his screen by Mr Findlay. In rejecting that argument, he first pointed out that the respondent afforded the applicant procedural and substantive fairness in ensuring a thorough investigation was executed prior to raising the allegations with him, and to make certain they had "a basis in fact". 133 The fact that the applicant went on annual leave on the 16th May and returned on the 6th June was pointed out by Mr Brown to explain some of that delay. On the 6th June he was provided with a bundle of pornographic images and a copy of the Code of Conduct. The applicant conceded he knew he could be dismissed as a result of the breach of the Code. On the 6th June, the applicant was stood down and dismissed on the 7th June, following a further meeting, and the applicant conceded in cross-examination that he understood the contents of the letter of dismissal, and that it was consistent with the discussion that he had with Ms Homer and Mr Findlay during the meeting. 134 As to another feature of Section 88, Mr Brown submitted that the applicant was given the opportunity to make out a defence and give an explanation, when given an opportunity to address the allegations put to him, and when he responded "I was in traffic, the speed limit was accelerated by the cars in front of me, the cars behind me, I was just following the flow of traffic". He conceded that he was expected to provide an explanation during those meetings, and when given a further opportunity at the 7th June meeting, he sought advice from the trade union official, Mr Chris Gill, and was prepared for the meeting. He conceded that Mr Gill had adequately represented his interests, and in defence of his behaviour, he conceded that he had used the expression "I am a collector". 135 As to the central question as to whether the grounds relied upon by the respondent, were harsh, unjust or unreasonable, Mr Brown turned to the nine grounds upon which Mr Young relied upon in his submissions. The first of which was the conduct of other employees at the workplace and the culture. 136 Under this heading, Mr Brown first commented that the only evidentiary dispute regarding procedural aspects was whether the applicant raised the issue of the conduct of other employees. 137 Mr Brown strongly submitted that the applicant had at no time raised the issue of other employees prior to his termination and the respondent relies on the affidavits of Dipper, Homer and Grant Findlay. In cross-examination, she several times denied that the applicant raised the conduct of others. In his cross-examination, Mr Findlay did not agree with that proposition put to him. 138 Mr Brown submitted that the case now pursued by Mr Young on behalf of the applicant, bears no resemblance to the issues to which the applicant raised prior to, and at the point of termination. He asked the Commission to accept that the respondent's witnesses were at all times consistent and candid, and that the evidence of Ms Homer and Mr Findlay should be believed and their version relied upon by the Commission, that at no time did the applicant raise the conduct of others as he now claims. 139 Should the Commission accept the applicant's evidence that he raised the defence prior to his dismissal, the temporal aspects of the applicant's behaviour become important to demonstrate the inconsistencies in the matters now relied upon. 140 The applicant conceded that the vast majority of the "unofficial group" had left the respondent's organisation before April, 2004. He conceded therefore, that during that period to the termination in June, 2005, of some fourteen months, he had read and signed the Code of Conduct. Furthermore, he agreed that his participation in the unofficial group, proffered as an excuse for breaches of the Code, was not in fact an excuse for what he did. He acknowledged that during that fourteen months period, he had an opportunity to mend his ways following the exit of that unofficial group from the organisation. Therefore, the defence of "following the flow of traffic" is problematic for the applicant, who had every chance to cease and desist. 141 The respondent denies there was a culture permitting the viewing of pornographic material. The Code of Conduct is a clear enunciation of the policies. The applicant was not in any way confused, but simply chose to repeatedly and knowingly breach the policy. 142 In respect of that argument of the culture of pornography, Mr Brown referred the Commission to the authority of P.Micallef Vs Holden Limited where the Commission stated: " I do not accept that the existence of a culture, the manifestations of which the respondent has made clear are not acceptable, diminishes the inappropriateness of the applicant's conduct". 143 On another issue raised by Mr Young, that the applicant had only on one occasion actually sent pornographic material to another, the fact that he had sent such an item does not belie the fact that dismissal was justified in the circumstances. 144 As to the criticisms of Mr Young as to the invocation of the "Zero Tolerance Policy", the Code of Conduct expressly did not permit access to pornographic material, and in receiving, accessing and viewing and storing e-mails of explicit pornography, the applicant engaged in wholly inappropriate behaviour in a work environment. The fact is that the respondent does not tolerate such behaviour as demonstrated by the dismissal some years previously of Ms Tina Portelli. 145 In respect of the treatment of that previous employee, Ms Tina Portelli, Mr Brown submitted that the reliance upon her circumstances bears no resemblance. 146 The applicant conceded that he was aware that Ms Portelli had been summarily terminated and the reasons for her termination related to having pornographic images on her computer. No matters regarding Ms Portelli were put to the respondent's witnesses and the fact that Ms Portelli had received a written warning prior to her dismissal, was not raised by him at the time of his termination. 147 As to whether or not the termination was out of proportion to the applicant's conduct, it is sufficient to establish that this dismissal was not out of proportion to that conduct if the Commission finds that the applicant engaged in wilful and serious misconduct. 148 As to whether or not the applicant should be given an opportunity to mend his ways, the applicant, by his own admission, had an opportunity, but had not done so. 149 On the applicant's claim that he had taken care that no one else saw the pornographic contents of the e-mails sent to him, he had to concede that another employee could have viewed the material, and it was in fact it was Mr Findlay's observance of the offending material, which led to these proceedings. 150 As to the caselaw cited by Mr Young, beginning with Borrows Vs Commissioner of Police, and including Michael Harrington Vs Phillip Morris Limited and Saric Vs Pacific Access referred to earlier, said to be in support of the proposition, that the act of dismissal was excessive, all these cases can be distinguished from Mr Budlong's case. In respect of Saric, the Commission in that case found Ms Saric had attempted to comply with her employer's policies regarding the offending material, but did not utilise the computer procedures properly and the Commission also indicated that it did not regard the material as pornographic. 151 In the matter of Harrington, the Commission accepted the applicant's denials in that case, that the misconduct occurred and therefore there was no basis for the company accepting the allegation. In addition, the Commission distinguished the conduct of the employee from other cases which involved "more than simple access to pornographic images on the internet" and included cases involving "the receipt, storage and transmission by e-mail of a considerable quantity of pornographic material". Clearly Harrington can be distinguished by the case at hand which do involve the receipt, storage and transmission by e-mail of a considerable quantity of pornographic material according to Mr Brown (Note again that Mr Young made some emphasis on the fact that for the applicant's evidence, only one e-mail was actually sent by the applicant of that nature). 152 In the matter of Borrows, which involved the alleged misconduct of police officers misusing the Police Service Electronic Memo System to send pornographic material and receive same, it was noted some four hundred and seventy one officers were detected as receiving and disseminating pornographic material, out of which only three were removed. It was with that background that the Commission found no proper basis for removing Mr Borrows, where others had not been removed from the Service and the Commission had also found that he had not been accorded procedural fairness. 153 Further distinctions to the Borrows case are that the applicant here at no time raised issues of other employees, with anyone prior to his termination, and the unofficial group who'd all had their services terminated some fourteen months prior due to redundancy. The applicant was aware of the former employee, Ms Portelli, being dismissed for such matters. There was no evidence here of the applicant not being afforded procedural fairness. 154 Mr Brown then proceeded to inform the Commission of caselaw which supports the dismissing of employees having pornographic material such as the case referred to earlier, Micallef Vs Holden Ltd, where pornographic materials received, maintained and transmitted and where the employee had done so in breach of the employer's policy, which were clear to the employee involved. The Commission found that there was no issue of the requirement to warn, given that the matter was about misconduct, as opposed to unsatisfactory performance, and in addition, the Commission found that workplace culture did not diminish the inappropriateness of the employee's conduct. In another case of Williams Vs CentreLink AIRC 15th January, 2004, PR924762, where an employee had sent inappropriate e-mails of a pornographic nature in defiance of the APS Code of Conduct, the Commission found against Mr Williams, despite evidence of never having looked at the Code of Conduct, but where he agreed the material was offensive if viewed by others, and tried to blame the employer's information technology department for not blocking the transmission of such material, and also blamed the workplace culture. The Commission held that it was not satisfied that the office had condoned the circulation of the pornography and Mr Williams should have had sufficient maturity to make his own decisions in that department. The observation was made "the fact that other people are exceeding the speed limit, that is not to prevent you from facing the consequences if you are driving at 120 kph in a 100 kph zone". 155 As to the issue relied upon by Mr Young of the employer's failure to introduce sufficient software to prevent the transmission of such material, Mr Brown submitted that it is the responsibility of the employee to act in a responsible, ethical manner and it is not the responsibility of the employer to put mechanisms in place to prevent such wrongdoings. It should not be a defence that the respondent did not put in adequate measures to stop the conduct occurring. 156 As to the personal and economic impact upon Mr Budlong of the dismissal, Mr Brown maintained that it is but one factor that the Commission should take into account, along with the efforts made to procure other employment. 157 On another issue raised by Mr Young, alleging that the respondent had pre-determined its course of action prior to meeting with Mr Budlong, Mr Brown pointed out that the applicant conceded he was prepared for the meeting and both he and Mr Gill from the union had an opportunity to raise any issues. 158 As to the claim for reinstatement, the respondent's submissions were that it was not open to the Commission to make such order as it is impractical to do so, given the loss of trust, confidence and good faith between the parties; the seriousness of the misconduct; and the effect it would have on the safety and welfare of other employees. 159 The reasons given by the applicant for his behaviour, namely that he was a collector, that he was "following the flow of traffic" are not satisfactory explanations for his conduct and do not instil a belief that a relationship can be restored. 160 The seriousness of the misconduct cannot be overstated in the receiving, accessing, storing, reviewing and on sending graphic and offensive material, which Mr Brown described again as the misconduct of the highest degree. 161 As to character references referred to by Mr Young, Mr Brown suggested to the Commission that they should be disregarded for the particular reasons related to each of those providing references, some of whom had no knowledge of the facts and circumstances surrounding his termination. 162 As to the practicality of reinstatement, Mr Brown alluded to the fact that at least one other employee, Ms Patti Dawkins, may have been able to see the material, he referred again to the South African female who if she did not consent to the photo, would mean that his reinstatement could cause some concern in the workplace. 163 The open office environment was an issue to be taken into account, where employees are frequently dropping off expense claims in full view of his computer. 164 The fact that the material was "extreme" and "obscene" by the applicant's own admission, and included such graphic images of sexual behaviour was also against any reinstatement.

Applicant's Submissions in Reply 165 Mr Young commenced his submissions in reply by accusing the respondent of not addressing the threshold problem with its own case, which was that there was no repudiation by the applicant of any fundamental or essential contract term of his employment with NCR. 166 In respect of Mr Brown's contention as to the onus involved in this case, Mr Young submitted that it was not sufficient for the employer to simply demonstrate that the alleged misconduct occurred, otherwise, any misconduct would fall into that test and be unilaterally labelled as serious. 167 The true test as enunciated in North Vs Television Corporation Limited referred to earlier, is that the conduct has to be so serious as to strike at the route of the employment. Orr Vs University of Tasmania case referred to by Mr Brown bears no resemblance to the present circumstances, where Professor Orr's misconduct struck at the route of his contact and his role as Professor and his dealings with young female students in the 1950's. The High Court held that he was simply unfit for office. 168 Mr Young returned to his theme that Mr Budlong had been allowed to carry out his duties unrestricted for some months after Mr Findlay reported what he had seen on Mr Budlong's computer, and such non-compliance by him could not be said to have struck the route of his role at NCR. The claim that his misconduct was of the "highest category" rings especially hollow in the light of that failure by NCR to prevent and continuing such conduct, and where a further six pornographic e-mails had been received by him. 169 The total failure of NCR to either bother investigating others whom it knew from the Guidry Report to have been involved in similar or worse conduct and who remained working with NCR, was a further indication that his conduct could not be regarded as being of the highest category striking at the route of the contract. 170 Mr Young corrected the claim by Mr Brown that Mr Budlong had sent in excess of three hundred and fifty pornographic e-mails when in fact it was only a single e-mail sent by Mr Budlong to a NCR manager, who was also involved in the sending of illicit e-mails.

171 As to the reliance upon the photograph of the "South African lady", these were not of an overtly sexual nature and there was no evidence that the photograph was taken without her consent, the fact that one photograph showed her chin towards the camera is indicative that she was aware of the photograph being taken. NCR did not call the South African lady to give evidence and a Jones and Dunkell inference should arise. In any event, she is no longer an employee of NCR and therefore cannot pose any sort of risk to existing employees as suggested. 172 The heavy reliance by Mr Brown upon the NCR's Code of Conduct, including its IT Infrastructure Policy should be considered on the basis of the wider surrounding circumstances, and other matters he emphasised.

173 Mr Young suggested that NCR had attempted to artificially inflate the magnitude of Mr Budlong's individual breaches, when in fact all of these matters were simply a single course of continuing conduct arising out of a culture of NCR. 174 As to the attempt to bring Mr Budlong's conduct into the harassment section of the Code of Conduct, there is a clear difference between something being on display as appearing somewhere, and being able to be viewed by others, especially when Mr Budlong appeared to ensure no-one saw any of the e-mails. Ms Homer acknowledged the difference with the harassment issue. 175 He also contended that Mr Brown's submissions that Mr Budlong did not challenge procedural aspects of his dismissal were simply wrong as a matter of objective fact, and the early submissions by the respondent talked of the predetermined decision to dismiss Mr Budlong. There was also evidence that Mr Budlong was in a state of shock on the day of his dismissal, having been suspended the day before.

176 The NCR's submissions rely heavily upon the fact that others involved in the informal unofficial group had left NCR fourteen months prior to Mr Budlong himself being dismissed. This submission overlooks some important facts, that firstly he was allowed to continue his behaviour over some two to three months of the fourteen months involved, but secondly, that the culture of NCR which encouraged the sending and viewing of material, had an effect on Mr Budlong to impair his judgements as the effect of NCR's Code of Conduct and its practical implementation by NCR management, regardless of what the policy itself said. Also, the fact that most of the informal group left fourteen months earlier, and some remained at NCR beyond that period, and NCR has chosen not to refer to that fact. Also, it is unrealistic to suggest that after using that culture, he could suddenly self reform upon being sent a standard yearly reminder of a lengthy company policy. There was no practical emphasis for such reform. The reference to the case of Micallef Vs Holden Ltd referred to by NCR, which did not accept the culture in that case diminished the conduct of Mr Micallef, is different than this case, on a number of bases, these include that in this case there were a number of managers, including senior management involved, who did not make clear his conduct was, that his conduct was unacceptable.

177 In the case of Agnew and others Vs Nationwide News Limited (AIRC 11th February, 2003 Ref. PR 927597) the applicants were dismissed for consuming alcohol and the culture of this occurring, and the company not actively banning that culture for years, and the fact that previous infringements had been dealt with, by counselling and warnings. This meant that mixed messages had been given by the company, even though the policy had been strengthened and communicated to employees, the applicants did not think it was a dismissible offence, but thought that a final warning would be issued. The applicants in that case had substantial periods of service and all were reinstated. 178 Despite NCR having known of pornographic e-mails being sent around its organisation since dismissing Tina Portelli, it is clear that they had not been battling pornographic e-mails being distributed within the organisation and to the contrary, NCR managers encouraged e-mails by sending them themselves. 179 Mr Budlong did not consider that he would be dismissed but given a warning, and his reinstatement would not prevent him being given a final written warning. 180 Mr Young suggested that Mr Brown's submissions in respect of the effect evidence regarding Ms Portelli, had been misunderstood by the respondent.

181 Mr Young suggested in response to some of Mr Brown's submissions that each individual case had its own unique set of facts and circumstances and the attempt to distinguish them on the facts alone do not affect the legal considerations and purposes which they were cited. He drew some distinctions in respect of the cases cited by Mr Brown, which have been considered in detail by me.

CONSIDERATION 182 The final submissions by Mr Brown and Mr Young were unusually comprehensive and raised important issues which needed to be individually addressed, along with the case authorities as relevant to the circumstances here.

183 One issue requiring particular attention was the extent to which a persons receipt of pornographic material of itself can be held to be a serious interference with the role the person is employed to perform, as opposed to the transmission of such material to others. What springs to mind in this case, is that by being a member of the "unofficial group" of staff, (many of whom were managers or supervisors), the applicant, as a practical matter, effectively offered encouragement to the members of that group to continue their inappropriate behaviour. This takes in a range of risks, along with the waste of time and resources involved and the increased risk of other employees at least seeing the offensive material, leaving their employer exposed to possible litigation. 184 There is no doubt in this case that, whilst the Commission has avoided providing a list in this decision of the embarrassing material involved, as reiterated by Mr Brown in his submissions, it was at the extreme end of pornography, although I hasten to add, did not involve child pornography. It must therefore reasonably be said to be a greater degree of contravention to the stated policy, known to the applicant. 185 By the same token, I have been happy to take aboard Mr Young's exhortation to me not to take an emotive response to the degree of sordidness, or other like description, to the material involved, but to look at the situation in all of the circumstances relied upon by Mr Young to distinguish what would otherwise seem a justifiable termination on the face of the matter. 186 The applicant's case, briefly stated, included the important defences; that the applicant was caught up in the culture which existed, involving a number of senior employees, along with supervisors and even line managers transmitting the material; the fact, with one exception, he did not send the material on to others; that his conduct cannot be said to strike at the route of the contract; that the conduct could not be so serious given that between two and three months passed between the discovery of his conduct/ investigation, and his dismissal on the 7th June; the co-operative attitude adopted by Mr Budlong apologising and offering to rectify and not being dishonest; the inequality of treatment of Mr Budlong compared to another officer dismissed some years before, Ms Portelli, and the fact that at least one relatively senior officer has been promoted and no investigation was made of those others involved; the invoking of what was called a Zero Tolerance Policy, when it did not exist; the lack of software protection by NCR to prevent the transmission of such material; and finally, that the decision was predetermined. 187 Mr Young relying upon these and other issues also put to the Commission, in claiming that the penalty of dismissal was too harsh, and given Mr Budlong's thirty-one years of service and the economical and personal impact upon him and his wife. 188 The range of issues of credibility of witnesses was unusually limited in this case, and I have had to agree with Mr Young that Mr Budlong conceded matters to his detriment which enhanced his credibility to the Commission. The question of whether those admissions were motivated by a recognition by Mr Budlong that he could not have sustained any challenge to fairly obvious matters, is a relevant ingredient, but he was a good witness. The main issues arising from any conflict of the evidence related to what he did or did not raise at the time of his interviews on either the 6th or 7th June. His major defence that it was part of a culture, involving numerous others was one such issue. 189 Mr Young's proposition that it was more likely that he did raise such an issue given that it was foremost on his mind, I found inconclusive and had to be assessed along with the fact that the applicant did say words to the effect that he was caught in the flow of the traffic, which was an indirect reference to raising the issue of the culture. It appears that at the very least, the applicant did indirectly raise the issue, of numerous others being involved in the transmission of pornographic material. Against any direct reference to the culture being raised, apart from the respondent's evidence of not recalling it, was that curiously no response was recalled by the applicant of what could be expected to have been said by Ms Homer or Mr Findlay in reaction to such an important alleged disclosure. If it was raised, it was likely to be indirectly put and unlikely that any names were ventured, which would have given more substance to the inequality of treatment issue relied upon in evidence. 190 Whether "the culture" was raised at his termination interview has wider implications dealt with later, but the fact is, it is relied upon now in this case, and is therefore an issue to be taken into account by the Commission. I have noted the authority referred to by Mr Young of Agnew and others Vs Nationwide News Limited, where the Australian Commission was influenced apparently by the fact that there was a culture of consuming alcohol before and during working hours in breach of the company policy. Allied to this issue of culture, there was the strong representations from Mr Young that the employer had not investigated the involvement of others in what was called the "unofficial group", particularly noting that one such officer, not made redundant as many of them were some fourteen months earlier, has apparently enjoyed a promotion in Ohio, in the United States. Again, related to that, was the issue of equality of treatment where Mr Young quoted some well known authorities in respect of this issue. That issue was not dealt with to any extent by Mr Brown in response and it falls to the Commission to deal with those group of issues of culture, failure to investigate others, and the closely related question of equality of treatment. 191 At least partly offsetting this defence was the argument by Mr Brown that the applicant, regardless of the so called culture of the organisation, and being "caught in the traffic" so to speak, had some fourteen months to mend his ways, with the departure of nearly all offenders of the unofficial group. Instead of doing so, he continued his habit of receiving and storing material. I found this to be important offset to the prevailing culture argument. 192 The Commission in considering the related aspect of the equality of treatment and the lack of investigation of others, is conscious of the lack of precise evidence of the circumstances related to those others said not to have been investigated. These were not fully canvassed before the Commission, but there was no contradictory evidence bought by the respondent. An instance Mr Younger emphasised was that involving a Mr Roberts, who, despite the evidence of him regularly sending material to the applicant, is currently employed in a senior position within the company's US activities. 193 Despite a precise comparison with those offenders not been presented, it was a feature of this case of some concern for the Commission, but the Commission has been required to look at that issue in the context of the overall situation dealt with below. 194 One of those issues is that, whilst there is an air of automaticity about his signing of the 2004 Code of Conduct, he was nevertheless required to actively acknowledge the Code since 2004, and being an experienced officer of the company, must be held accountable for what he signed. Also, the company should not be held accountable for the fact that someone might not recognise the importance of such signing and the interests of the employer in requiring its signing and observance. 195 In that context, it is especially difficult to accept that, after years of internet usage throughout industry and the wide publicity often given to cases of this type, that reasonable employees would not properly recognise that they took a serious risk in accessing or receiving and storing pornographic material at work on their employer's computer system. 196 Whilst it was commendable that the applicant conceded matters to his detriment and did not put the respondent to further test on many issues, nonetheless, there were a significant number of matters which Mr Brown understandably relied upon on the basis of those concessions. These are outlined in detail in the summary of the submissions prepared earlier in this decision and they need not be repeated in detail again, but did include the obscene nature and extent of the material and that the applicant set out to create a library of pornographic images to be able to refer to at a later stage and that he kept all of such images sent to him on one hundred and twenty-five occasions.

197 Amongst the acknowledgements was the fact that the applicant had visited three pornographic websites in addition to storing the material sent to him, although it must be said that there was no details of dates as pointed out by Mr Young and the applicant qualified as to how he came onto the material, although not entirely convincing or even complete. 198 The applicant also made several concessions in respect of the Code of Conduct, including the fact that he had read the specific crucial passage quoted earlier in the summary of Mr Brown's submissions, and that the sharing of pornographic material was not promoting compliance with the Code. He further conceded that he was aware that he could raise questions as to the Code if in doubt. He also agreed that the conduct was unethical and that when viewing the material, at least one other co-worker, Ms Patti Dawkins, may have been able to see the material, although his evidence was also that he took care not to expose her. 199 As to the submission of Mr Brown that the applicant's conduct had struck at the route of the employment contract, I understand Mr Young's challenge to this and on its face he is correct. However, it can just as easily be said that no offence of receiving and viewing pornographic material could ever be held to be striking at the route of the employment contract, and recognising that in this case only one instance of sending material ever occurred. Mr Budlong's case, on the other hand, had something in common with other serious cases, at least in respect of the quantity and sordidness of the material involved. Unlike some cases, there was no question here that the material was pornographic and/or that he deliberately viewed it. But the caselaw does support dismissal for serious misconduct where seriously sordid pornography has been handled and in such a prolific fashion where there are no extenuating circumstances and where a policy has been put in place and the employee is aware of that policy. 200 Whilst such conduct may not seriously prevent the employer from obtaining satisfactory performance from officers involved in such activity, depending upon the regularity of viewing of course, there is (as earlier mentioned) the issue of the need for the protection of other workers from material which some workers would be particularly offended by. The employer has a responsibility in that department, which goes beyond the cost of employees being distracted and not working during such time. It was not possible for the respondent to bring any evidence, other than that of Mr Findlay, of employees having observed the material being viewed by the applicant in this case, but the principle must be recognised that such a risk is a tangible obligation upon employers to guard against. There is surely a liability and a risk of an employer being sued by a distraught employee. The risk of harassment at work is also a probability arising from numerous employees circulating such offensive material via the company's IT infrastructure. 201 It might even be reasonably argued that the very fact that a culture existed here amongst relatively senior employees, some more senior than others, of NCR, itself offers some urgency to the right of this employer to bring such conduct to heel. Again, whilst Mr Young succeeded in raising serious concern as to the lack of investigation of others who are still employed (particularly Mr Roberts), most of the other offenders had been made redundant during 2004. It is a more powerful argument by Mr Brown, that the applicant had the opportunity to cease being persuaded over the fourteen months since their redundancy, to view material sent to him as part of that alleged culture. It is legitimate to argue that because there was an unofficial group involved, that the applicant should have recognised that the large scale defiance of the Code of Conduct was something which he should not have been part of, if for no other reason than the extent of the breaches of the company's policy. He should not have continued to have been part of such a broad ranging disregard of policy, and contribute to the situation, especially after the bulk of those said to have influenced him had left fourteen months before. 202 In this vein, the Commission has to accept the relevance of the inclusion of pornography within its policy in explicit terms and that the applicant knew that policy and certified as such by signing. 203 On the basis of this more powerful reasoning, the Commission is not prepared to accept the argument that the prevailing culture was to blame and that the organisation's failure to follow up others involved, (particularly in the case of Mr Roberts), is a proper defence for the applicant's actions. In any event, insufficient evidence is before the Commission to properly compare and judge those other cases.

204 In respect of the alleged failure of the respondent to follow through and investigate other officers, there was no proper evidence before the Commission as to whether the respondent actually knew of this practice until Mr Budlong's affidavit was served. Neither is there evidence as to whether the company had pursued the matter of others involvement after the commencement of these proceedings. An investigation of them might even be underway, but not publicised as to prejudice a proper outcome of those enquiries if they exist.

205 Of relevance in this area, was the fact that the company had previously dismissed a senior officer of the organisation some few years before. The applicant conceded that he was aware of Ms Portelli's case. 206 I have not accepted the fact that Ms Portelli received a warning as a significant matter in respect of the argument of equality of treatment. I reject that notion on the basis that her case had proceeded several years earlier, and her dismissal, one would think, should have been a signal to the other members of the unofficial group, along with Mr Budlong. Whilst the employer was ready to be compassionate initially with Mr Portelli, the decision to dismiss followed her re-offending in that area showed it was prepared to invoke its policy. There was insufficient evidence before the Commission in respect of Ms Portelli's case to go beyond that reasoning.

207 As to the failure of the respondent to introduce appropriate software to prevent the transmission or access of the pornographic material, the Commission, as presently constituted, has insufficient expert computer knowledge to accept the viability of software to block access to specific items on the internet or e-mail. Ms Homer's evidence, although not given as an IT expert, showed some of the difficulties of "fire walling" against such information.

208 The failure of the respondent to act quickly in respect of Mr Budlong when it became aware in March, 2005 through Mr Findlay's report, and perhaps more importantly allowed him full access to the computer system over the next two to three months prior to his dismissal, seems a reasonable thing for Mr Young to rely upon. However, the time line offered by Mr Brown makes the inactivity more understandable than posed by Mr Young. 209 Moreover, it would seem that the respondent did not regard it as a frustration of the contract, as such, and almost certainly considered Mr Budlong otherwise, a competent operator. When Mr Brown's defence of this issue is taken into account, which included all steps take, including that the applicant was away on leave for a period in May, and that the respondent needed to properly investigate the matter, the evidence indicates that little of the delay was caused by inactivity. As to Mr Young's contention that they might have cut off his e-mail access altogether, or at the very least, block e-mails sent to him by the persons known to have sent the material and that other more complicated measures might have been formulated, Mr Budlong's conduct was not of the ilk of other situations where it would behove an employer to immediately act as quicker than NCR did in this case. The risk of prejudicing the integrity of the investigation might easily be a factor. The examples of a person stealing cash or sexually harassing other employees come to mind, but realistically in this situation, it would have been evident that Mr Budlong was otherwise a good operator, and was unlikely to do much further damage, except for the fact that he continued on six occasions to receive e-mails during this period of the investigation, which might have been viewed by other employees, who might have been shocked and/or scandalised. Whilst it is regrettable that no action was taken during this relatively long period of investigation, the Commission fails to see it as a substantive issue to the extent urged by Mr Young. 210 As to the allegation that the respondent had predetermined its decision to dismiss Mr Budlong, the Commission has been forced to consider that there was a thorough investigation which had verified the actions, which the applicant conceded. The fact that draft letters were prepared, one which provided for a resignation, is not something which really goes to procedural unfairness in this case. The mere fact that a dismissal letter was prepared prior to such a meeting, does not necessarily indicate that a decision has been taken, but might reflect nothing more than the "show cause" nature of the interview. 211 Whilst Ms Homer admitted that the managers involved in the unofficial group had failed the applicant in their responsibilities to him, there was a lack of precise evidence as to where such persons fitted in the reporting line to properly judge as to what influence they should have had upon the applicant. In any event, he should not be allowed to slide away from his own contribution to the defiance of the Code. The observation in Williams V CentreLink highlighted by Mr Brown earlier as to the inexcusable breaking of the 100 kph speed limit, simply because others are doing so, is also apposite. 212 This was a case which caused some concern for the Commission, particularly where the applicant, who is a man of advancing years - being some fifty six years old, with much lower prospects of re-employment, and obvious dire financial repercussions upon him and his wife. The Commission has been required to look at the matter dispassionately, inasmuch that the applicant clearly participated in the transmission of a very large quantity of pornographic material and involving a number of staff. As commented earlier, his participation, whilst being of a more passive character, inasmuch as that he only once sent on such an image, and only on three occasions apparently visited the pornographic websites, his participation nonetheless was part of a serious problem within the company. Caselaw, considers each of these cases on their own circumstances, and on occasions has found reasons to reinstate persons involved. I have not been persuaded by the arguments of equality of treatment, and the applicant being caught up in a culture, for the reasons stated, which included that the applicant's participation ensured that such conduct continued. The caselaw, which I have traversed carefully, and which embraced those referred to me by Mr Young and Mr Brown, generally makes clear that such conduct is serious and wilful, deserving of dismissal in these particular circumstances, which policy is clear. 213 It is lamentable that such a man with a long record with the company of thirty-one years, and who received twenty-six performance awards, and who very likely regarded his conduct as relatively harmless, and perhaps even therapeutic, missed out on the opportunity of taking redundancy the precious year when invited to stay on with the company. The company policy which is not only indicative of a prohibition upon the personal behaviour of viewing pornography, but is directed, towards the interests of other employees, as well as efficiency, was definitely and knowingly breached in this instance by Mr Budlong. 214 In the circumstances, I believe Mr Budlong's dismissal was not harsh. Neither do I consider the actions of the respondent unreasonable for the reasons above, and nor unjust, again for the reasons espoused above. 215 The penalty of dismissal in this case was therefore not out of proportion to his conduct and accordingly, the application is dismissed.

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