Budlong v NCR Australia Pty Limited [2006] NSWIRComm 288 | Case summary

Budlong v NCR Australia Pty Limited [2006] NSWIRComm 288 | Case summary | Zoe

Appeal - Leave to appeal - Unfair dismissal - Employee dismissed for having pornographic material on his laptop computer at work - Held at first instance dismissal was not harsh, unreasonable or unjust - Observations regarding approach to be taken in cases involving dismissal where pornography involved - Whether Commissioner at first instance erred in relying on what the respondent claimed to be a zero tolerance policy in respect of pornographic material being on its infrastructure systems, there being no such policy in existence - Whether Commissioner failed to take into account the similar conduct of other employees and the respondent's failure to take any or similar disciplinary action against them, or even investigate their conduct - Whether Commissioner erred in failing to take into account the culture in which the appellant worked over many years which permitted and encouraged the appellant to view pornography in the workplace - Dismissal found to have been harsh, unreasonable and unjust - Held summary dismissal not justified - Reinstatement held not to be impracticable - Reinstatement ordered on conditions CATCHWORDS: Unfair dismissal - Appeal - Leave to appeal - Employee dismissed for having pornographic material on his laptop computer at work - Held at first instance dismissal was not harsh, unreasonable or unjust - Observations regarding approach to be taken in cases involving dismissal where pornography involved - Whether Commissioner at first instance erred in relying on what the respondent claimed to be a zero tolerance policy in respect of pornographic material being on its infrastructure systems, there being no such policy in existence - Whether Commissioner failed to take into account the similar conduct of other employees and the respondent's failure to take any or similar disciplinary action against them, or even investigate their conduct - Whether Commissioner erred in failing to take into account the culture in which the appellant worked over many years which permitted and encouraged the appellant to view pornography in the workplace - Dismissal found to have been harsh, unreasonable and unjust - Held summary dismissal not justified - Reinstatement held not to be impracticable - Reinstatement ordered on conditions

[12]

3 Mr Budlong was employed as an accounts receivable manager. At the time he was summarily terminated on 7 June 2005, he had been employed with NCR for over 31 years. The reason for the termination of the appellant's employment was that the respondent found pornographic material on his laptop computer including images, movies and power point presentations. 4 The appellant conceded at first instance and on appeal, that he received 125 emails of a pornographic nature over a five year period; that he stored the emails in a so-called "amusements" folder that he created on his computer; that he accessed the material stored in the amusements folder on 91 occasions over the same five-year period; and, that the emails were obscene and likely to offend. 5 The letter terminating the appellant's employment made reference to and purported to apply a "zero tolerance policy" in relation to pornographic material, which the respondent asserted was in place within NCR at the time and which was said to have been known to the appellant. The letter was expressed in the following terms: 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 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.

[57]

12 The appellant was summarily dismissed by letter in which the stated reason for the summary dismissal was that he engaged in serious and wilful misconduct for his failure "to utilize the company's IT infrastructure resources in a responsible, ethical and lawful manner." In its termination letter, the respondent referred the appellant to the respondent's policy, of which the respondent said the appellant was aware, that was contained in a Code of Conduct prohibiting access to pornographic web sites and that the email system should not be used, amongst other things, "to create or exchange offensive, harassing, obscene or threatening messages". The letter further recited that the appellant had also certified that he would not breach the Code of Conduct. Notwithstanding his knowledge and understanding of these prohibitions, the appellant disregarded the respondent's directions and engaged in conduct that breached the Code. This conduct involved accessing pornographic web sites and receiving and storing emails that had attached to them pornographic images and other pornographic material that was obscene and that many people would, undoubtedly, find offensive. 13 There was extensive argument before us as to whether the summary dismissal was justified at law. We do not consider it is necessary to our determination of this appeal to resolve this issue, however, in deference to counsels' arguments we will address it later in this decision. 14 The critical question in this matter is whether the appellant's dismissal was harsh, unreasonable or unjust as it arises from the appellant's claim of unfair dismissal under s 84 of the Industrial Relations Act 1996 ("Act"). The authorities on s 84 make clear that our consideration is directed towards whether the Commissioner erred in finding that the appellant's dismissal was not harsh, unreasonable or unjust: see National Union of Workers, New South Wales Branch (on behalf of Khan) v Cuno Pacific Pty Ltd (2005) 146 IR 441. 15 Moreover, given the statutory basis of the appellant's claim, even if the respondent could demonstrate that the summary dismissal was lawful, in an application such as is the case here, there is nevertheless the opportunity for the appellant to show that, in all the circumstances, the dismissal was harsh, unreasonable or unjust: Pastrycooks Employees, Biscuit Makers Employees & Flour and Sugar Goods Workers Union v Gartrell White (No 3) (1990) 35 IR 70 at 83-84; Bigg and Another v New South Wales Police Service (1998) 80 IR 434 at 455. Indeed, the power of the Commission to order reinstatement or other remedies in the case of an unfair dismissal is exercised regardless of the legal right of an employer to dismiss an employee: see Beahan v Bush Boake Allen Australia Ltd (1999) 47 NSWLR 648 at 676; Re Loty v Holloway and Australian Workers' Union [1971] AR (NSW) 95 at 99. 16 In approaching this aspect of the appellant's appeal, we refer to the comments of Watson J in Metropolitan Meat Industry Board v Australian Meat Industry Employees' Union, New South Wales Branch [1973] 73 AR (NSW) 231 at 233: As was succinctly put by Sheppard J in Coccia's case, "the question …comes down to this: was the termination… so unfair as to warrant interference by the Commission?" I fail to see why in applying this test to determine whether or not he should intervene, and having in mind the consideration referred to by Sheldon J, in Loty's Case, the commissioner (or the Commission on appeal) is precluded from considering whether or not termination was too severe a penalty in all the circumstances - even if the dismissal was legally justified or even if, as Mr McDevitt put it, the point had been reached where at the particular time the employer's representative was faced with a situation which had developed to a stage where he had no other alternative (our emphasis). 17 There was some discussion at first instance as to whether the Code of Conduct constituted part of the employment contract between the appellant and the respondent. The Commissioner made no express finding in this regard. We intend to proceed on the basis, without deciding the question (as it is strictly unnecessary to do so), that as part of his contract of employment with the respondent the appellant was required to read the Code of Conduct, undertake training in respect of its application and agree to abide by the provisions of the Code, failure to do so leading to disciplinary sanctions. 18 At the outset, we wish to emphasise that in considering whether the appellant's dismissal was harsh, unreasonable or unjust, the inquiry is not directed towards assessing the degree of obscenity or offensiveness of the pornographic material in question or making a judgment about the appellant's morality in receiving, storing and viewing the material from time to time on his computer. Although, the more obscene the material, the more likely that a fellow employee who is subjected to viewing it, accidentally or otherwise, will be offended by it thereby increasing the risk to the employer of having claims made against it, such as for harassment or discrimination in the workplace. 19 Whilst we consider it is grossly inappropriate and wholly inconsistent with modern workplace practice and values for employees to engage in accessing, sending, receiving and storing pornographic material on their employers' computer and email systems, the more substantive consideration in determining whether the dismissal was unfair involves a consideration of the nature and quality of his disregard for, or disobedience of, the employer's prohibition against using its infrastructure systems to access pornographic web sites and against the sending, receipt and storage of pornographic material using the respondent's email system and whether in such circumstances the dismissal was unfair. It also involves consideration of the appellant's deliberate breach of his undertaking to abide by the employer's Code of Conduct. 20 In this context, it is appropriate to consider the consequences. We have already touched upon one of those and that is the affront likely to be caused to other employees if they were to see the pornographic material and the implications of that for the employer. There is also the time and attention taken up by the appellant in sending, receiving, storing and viewing the pornographic material and the inconsistency that arises between that conduct and the employee's common law duty of fidelity and good faith. The essence of this duty is perhaps best captured in the observations of Dixon and McTiernan JJ in Blyth Chemicals Limited v Bushnell (1933) 49 CLR 66 at 81-82: Conduct which in respect of important matters is incompatible with the fulfilment of an employee's duty, or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee, is a ground of dismissal ( Boston Deep Sea Fishing and Ice Co. v. Ansell (1888) 39 Ch. D. 339, at pp. 357-8 and 362-4; English and Australian Copper Co. v. Johnson (1911) 13 CLR 490 ; Shepherd v. Felt and Textiles of Australia Ltd (1931) 45 CLR 359). But the conduct of the employee must itself involve the incompatibility, conflict, or impediment, or be destructive of confidence. An actual repugnance between his acts and his relationship must be found. It is not enough that ground for uneasiness as to its future conduct arises. 21 Nevertheless, the critical question is whether, in all the circumstances, the dismissal was harsh, unreasonable or unjust.

[67]

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 previous 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. 28 We do not consider that these statements by the Commissioner indicate with any clarity his view regarding zero tolerance. Was the Commissioner accepting the respondent's submission that it had a zero tolerance policy or was the reference to "policy" merely a reference to statements in the Code of Conduct to the effect that pornographic web sites "should not be accessed" and that email should not be used, amongst other things, "to create or exchange offensive, harassing obscene or threatening messages"? 29 The Commissioner again referred to the respondent's policy when he addressed the issue of Ms Portelli and her dismissal for sending pornographic material over the NCR email system. In March 2001, the respondent issued a warning to Ms Portelli in respect of her conduct. However, it appears that Ms Portelli continued to send pornographic material by email and was dismissed in April 2003 for "misconduct arising from ongoing and material breaches of the NCR Internet and Email policy." At [206] the Commissioner stated: 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 [sic] 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. 30 It is difficult to be sure what the Commissioner meant by the respondent being "prepared to invoke its policy." On one view of it the Commissioner was saying at [206] that whilst the respondent was prepared to forgive Ms Portelli in respect of an incident that occurred some years previous, and in circumstances about which there was little evidence, in the case of Mr Budlong the respondent was prepared to invoke its policy of zero tolerance because what happened to Ms Portelli should have served as a warning. On the other hand, the Commissioner may simply have been referring to a policy that breach of the Code may lead to dismissal. 31 On balance, given the Commissioner understood the appellant seriously challenged the existence of a zero tolerance policy, given that there is no express reliance by him on a zero tolerance policy and given that it cannot reasonably be inferred from the decision read as a whole that the Commissioner relied on such a policy, we consider Murphy C did not proceed on the basis that the respondent's policy was one of zero tolerance. Rather, he relied simply on a policy that he regarded as prohibiting the use of the respondent's infrastructure systems for pornographic purposes, that the appellant knew of this policy and knowingly breached it. 32 It must be concluded, therefore, that the Commissioner did not err by proceeding on the basis of the existence of a zero tolerance policy although, that does not alter the fact that such a purported policy constituted a significant element in the respondent's decision to summarily dismiss the appellant.

[73]

(5) Mr Budlong was aware that Ms Portelli had been dismissed and the reasons for it. 36 There was clearly an inequality in the treatment of Mr Budlong vis a vis Ms Portelli. It was apparent on the evidence that the policy applicable to Ms Portelli in relation to receiving, transmitting and storing pornographic images was, in fact, the same policy that applied to the appellant. The respondent had sought to contend that there existed a zero tolerance policy that applied to Mr Budlong but, as we have found, that was not the case. It was also apparent that no distinction could be made between the two cases on the basis of different degrees of obscenity or vulgarity or offensiveness such that the material found on Ms Portelli's computer only warranted, initially, a warning but the material found on Mr Budlong's computer justified summary dismissal. All of it was pornographic and potentially likely to cause offence. Its presence on the respondent's systems in both cases was inconsistent with the Code of Conduct. 37 The question then arises as to whether it can reasonably be accepted, as the Commissioner apparently did, that Mr Budlong, having been aware of Ms Portelli's dismissal, was on notice as to the consequences of his actions but, nonetheless, continued in breach of the Code of Conduct thereby negating any unfairness that might be said to have arisen from his unequal treatment. 38 It would appear that the appellant continued to act in breach because other persons, including senior managers, also continued to do so. Moreover, whilst the appellant had signed acknowledgements that he was aware of the Code of Conduct and would abide by it, there was, as Murphy C found, "an air of automaticity" about doing so. Further, whilst the appellant knew that his conduct was in breach of the Code he did not believe his employment would be terminated but rather that he was likely to receive a final warning and counselling. 39 In relation to his belief about the consequences of his misconduct (final warning and counselling), there was no direct evidence about whether the appellant knew that Ms Portelli had been initially warned regarding her misconduct. However, it appears to us on the evidence that the appellant was reasonably familiar with the circumstances involving Ms Portelli (including that she had taken the matter to the Industrial Relations Commission) and it is more likely than not he was aware Ms Portelli had initially received a warning. Most likely, in our opinion, this was the source of the appellant's belief his employment would not be terminated but that he would receive a final warning and counselling. 40 Notwithstanding the fact that Ms Portelli was summarily dismissed in April 2003, the flow of pornographic emails to Mr Budlong continued unabated. For example, Mr Shane Ryan was NCR's Director, Billing Operations Centre, Asia Pacific & Japan and between the time Ms Portelli's employment was terminated in April 2003 and when Mr Ryan was made redundant in September 2004, he sent Mr Budlong 34 emails containing pornographic material. Other recipients of Mr Ryan's emails during 2003 and 2004 included the General Manager, Accounts Receivable, Asia Pacific and Japan; Billing Analysts; BOC Team Leader, Australia and New Zealand; and Director, Assets & Revenue Management Accounting. Managers other than Mr Ryan also sent emails attaching pornographic material during the relevant period. It may be noted that Mr Budlong only sent one email of a pornographic nature and that was to Mr Ryan. 41 Thus, the position was that Ms Portelli's dismissal had no effect on the traffic of pornographic material amongst a number of the respondent's employees. There was no evidence presented that, following the dismissal of Ms Portelli, the respondent issued a general warning to other employees about the consequences of having pornographic material on their computers. One would reasonably expect that information regarding such a warning would have been put into evidence by the respondent if it existed as it would have proven that the appellant had been clearly warned and would have assisted the respondent in discharging the onus upon it to prove that there were proper grounds for summary dismissal. But there was no such evidence and no explanation was given for its absence. We consider an inference may be drawn adversely to the respondent that no general warning was issued following the dismissal of Ms Portelli. 42 It may also be presumed that following Ms Portelli's dismissal, the respondent took no steps to investigate whether any other employees were abusing its email system. If those investigations had been undertaken it would have revealed the misconduct of Mr Budlong, his fellow employees and managers. There was also no evidence to suggest that the respondent sought to install a firewall type system to block pornographic traffic. Indeed, the evidence showed that the respondent did not have such a system in place at the time of the appellant's dismissal. 43 In relation to the Commissioner's findings at paragraph [206] regarding Ms Portelli, it may be concluded, therefore, that:

[78]

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. 46 As to the Commissioner's conclusion that there was "no proper evidence" that the respondent knew other employees were engaged in pornography trafficking over the email system until Mr Budlong's affidavit was served, that conclusion was wrong. By early April 2005 the respondent had extracted material from the appellant's computer without him knowing it that showed who had sent him the pornographic emails between 27 July 2000 and 30 March 2005. 47 Many of the respondent's employees who were engaged in receiving and transmitting pornographic material had been made redundant or had left the company by the time the appellant came to be investigated in March 2005 and so, obviously, no action was able to be taken by the respondent against those individuals. There were a number, however - perhaps six, who remained in employment (or on contract) with the respondent, including one who was promoted to the parent company in the USA. 48 Significantly, Ms Homer, the respondent's human resources manager, conceded in cross-examination that because these remaining employees/contractors who had either received or sent pornographic emails were not investigated, they were treated differently to the appellant. 49 Thus, in respect of the inequality of treatment issue it is clear that the appellant was treated less favourably than Ms Portelli as well as other employees who had engaged in transmitting and receiving pornographic material but who were not investigated. We find that Murphy C erred in disregarding these as factors in favour of finding that the appellant's dismissal was harsh, unreasonable or unfair. For the reasons we will shortly outline, these issues are relevant to a finding that the appellant's dismissal was, in the circumstances, harsh, unjust and unreasonable.

[79]

50 It is apparent from the evidence that there was a group of the respondent's employees - referred to in the proceedings at first instance as the "unofficial group", who from about 1997 engaged in transmitting and receiving pornographic material via the company's email system. The employees consisted of directors, managers, billing analysts and others. The initial email in 1997 that appears to have sparked off the practice, came from Mr Cannon, who was the appellant's immediate superior in accounts receivable. Mr Jack Bal, who gave evidence in the proceedings was also involved. He was national credit manager for Australia and New Zealand and the appellant also reported to him. 51 The respondent's policies emphasised the importance of the role of managers and those who supervised others. For example, the Code of Conduct required managers and supervisors to take steps to ensure that unethical conduct within their areas of responsibility was detected, addressed and reported. Ms Homer conceded in her evidence that those managers that had sent Mr Budlong pornographic emails had failed in their responsibilities to the respondent and had not set the appellant a good example. Of course, not only had they failed in their duty to the appellant but they were also personally culpable. 52 It is apparent that the appellant was caught up in this culture of pornography exchange that existed within his sphere of work. It appears, however, that the appellant was not an initiator of pornographic emails (except for a single instance) but received emails from others, collected the emails in a special folder titled "amusements" and, from time to time, viewed the pornographic attachments that he found "erotic". 53 Murphy C found that the majority of the unofficial group had left the employ of the respondent some 14 months prior to March 2005 and the appellant should not, therefore, have continued to be part of a broad ranging disregard of the respondent's policy. Accordingly, the Commissioner was not prepared to accept that the culture was to blame. 54 We consider that the Commissioner erred in finding that most of the unofficial group had left the employ of the respondent some 14 months prior to March 2005 and, on that basis, in concluding that following that time the appellant should not have continued to flout the respondent's policy in the manner in which he did. The employees who sent the appellant pornographic emails were made redundant in April, May and July 2004, being some 11, 10 and 8 months respectively prior to the incident in March 2005 giving rise to the investigation into the computer files of the appellant. Others were made redundant as late as October 2004, being only some 5 months prior to this incident. Nevertheless, as already mentioned six employees remained in the employment of the respondent, including one who had been promoted to the respondent's parent company in the United States. 55 Given that the appellant had, for many years, received regular pornographic communications from managers and others; that he, and no doubt his fellow employees, signed acknowledgements of the Code in an air of automaticity; that no warning had been given to employees about dealing with pornography following the dismissal of Mr Portelli only two years previously about the respondent's intention to adopt a more stringent approach; and, that the appellant continued to receive pornographic emails right up to the time of his dismissal, some weight should have been given to the fact that the appellant was engaged in receiving and storing pornographic emails in an environment where senior managers not only condoned the practice but actively encouraged the appellant's participation by sending him the material. 56 We note also that after the main sender of the pornographic emails to the appellant had left the respondent's employ in September 2004 (that is, Mr Ryan), except for one internal email from a purchasing officer, the appellant only continued to receive pornographic emails sent externally from Mr Ryan. It was somewhat unrealistic of the Commissioner to find that after many years of working in an environment where the appellant was regularly sent pornographic emails by Mr Ryan that he would suddenly realise the gravity of his misconduct upon Mr Ryan leaving and refuse to accept any further emails from him. Further, given that it was essentially from Mr Ryan that the appellant continued to receive emails after Mr Ryan left the respondent (and sent none of his own) it could hardly be said that the appellant "continued to have been part of such a broad ranging disregard of policy …". 57 This is not to say that the environment or culture in which the appellant found himself excused his conduct entirely. But some weight was required to be given to this factor by the Commissioner in balancing all of the competing considerations in deciding whether the dismissal was harsh, unreasonable or unjust. Instead, the Commissioner gave no weight at all to the culture issue. 58 The respondent sought to downplay the significance of the culture issue to the extent, almost, that it was not a relevant consideration. We note the decision by Watson SDP of the Australian Industrial Relations Commission in P Micallef v Holden Ltd, PR900664, 25 January 2001. At [5] his Honour stated: I find that there was a valid reason for the termination. Utilising the respondent's e-mail system, the applicant received, maintained on his work computer, and transmitted e-mails, attaching pornographic material. He did so in the context of a clear policy against such conduct, which set out consequences of such conduct. He did so in the knowledge that other employees, for whom he was responsible, had access to his computer and its contents. He concedes the receipt and sending of the material with respect to particular persons - friends of his - outside of the company. I find that it is more probable than not that he was responsible for most, if not all, other inappropriate material attached to the e-mails within his system. No attempt was made by the applicant to dissuade his regular correspondents from sending him material in breach of company policy. I find that this conduct constitutes a valid reason for termination related to his conduct, and the operational requirements of the respondent's company, having regard to its statutory obligations and its broader obligations to its workforce. 59 The circumstances in that case were clearly quite different from those in the present proceedings. Nevertheless, the respondent sought to rely on what Watson SDP said at [11]: I have had regard to what the applicant described as the `culture' of acceptance of sexually explicit materials within the respondent company, or parts of its operation. 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. 60 The existence of a culture or environment involving exchanges of emails containing pornographic material may not necessarily diminish the inappropriateness of an individual's conduct where the individual is participating in that exchange. That is one consideration. A separate consideration, however, is the context in which the individual is involved and where the individual is essentially a receiver of pornographic emails sent to him from senior managers and which he retains for his own private use. Appropriate weight needs to be given to that fact in assessing the individual's culpability for the purpose of determining whether summary dismissal was justified. 61 The respondent also referred to the decision of Whelan C of the Australian Industrial Relations Commission in Williams v Centrelink, PR942762, 15 January 2004. In that case the applicant had sent "inappropriate emails including pornographic or otherwise sexually explicit images on his employer's email system both to other Centrelink employees and to external recipients." The Commissioner upheld the employer's decision to terminate the appellant, finding the dismissal was not harsh, unjust or unreasonable. In her decision Whelan C stated: 65] Mr Williams, both in his exchanges with Mr Mill and his evidence before this Commission has shown absolutely no insight into his behaviour. He has tried to blame his employer for failing to properly sheet home to him the guidelines applicable to him and the risk of termination he was running. He has tried to blame Mr Cameron for somehow implying that what he was doing was acceptable although he knew that Mr Cameron would not directly condone his activities. He even tried to blame the Centrelink IT department for not blocking the transmission of offensive material. Last, Mr Williams has blamed the workplace culture for creating an environment where he was allowed to behave in the way he did. [66] I accept that the culture in a workplace may be a relevant factor in considering whether termination of employment, in a particular circumstance, was harsh, unjust or unreasonable. Centrelink as an organisation clearly did not condone the circulation of offensive emails and had acted to alert its employees to the relevant policies. There clearly was a situation where a minority of employees at Ballarat, including the office manager, did participate in circulating off-colour jokes and images. [67] It appears to me however that the nature of the material being circulated by Mr Williams went further than this. Mr Cameron says he was not aware of the nature of that material although Ms J says she alerted him to her concerns about it in February 2003. A reasonable person would be aware that there is a distinction between poor taste jokes such as the "Tourette's" email and sexually explicit and degrading material. Even Mr Williams thought some of the material went too far. I am not satisfied that the general atmosphere of the office was one which condoned the circulation of pornography. [68] In any event Mr Williams should have been of sufficient maturity to take responsibility for his actions. He was not the office junior. He held positions of responsibility. The fact that other people are exceeding the speed limit does not prevent you from facing the consequences if you are driving at 120 kph in a 100-kph zone.

[80]

[75] Further as I have previously commented, unlike some others the report on Mr Williams, the material he submitted himself, and his behaviour in the witness box and courtroom indicate that he has no insight in to the reasons why his behaviour was inappropriate. Mr Williams is only sorry that he got caught. He still does not accept, although he agrees that it is contrary to the rules, that there is anything inherently wrong in using your employer's email to send pornographic material to other people provided no one complains about it. 62 It is apparent that the Commissioner was particularly concerned that the applicant, who had been designated as the harassment contact officer for the Ballarat office of Centrelink, sought to blame everybody but himself for his misconduct and failed to understand and accept the inappropriateness of his behaviour. This may be contrasted with the attitude of the appellant. 63 The respondent relied particularly on the Commissioner's observation that "The fact that other people are exceeding the speed limit does not prevent you from facing the consequences if you are driving at 120 kph in a 100-kph zone". Of course, in the context of these proceedings we are not concerned with traffic offences. And we do not consider the analogy is apt if it is to be taken to mean that regardless of the conduct of other employees, including senior managers, or other relevant factors, the singular consideration is the particular conduct of the employee in question. 64 More recently, the Full Bench of the Australian Industrial Relations Commission considered an appeal involving the dismissal of an employee for breaching his employer's policy prohibiting the use of its electronic communications system for the purpose of storing and transmitting sexually related, pornographic or violent images: Queensland Rail v Wake, PR974391, 19 October 2006. The Full Bench in that case upheld the appeal by the employer from the decision at first instance where the Commissioner found the dismissal was harsh. 65 It is apparent from the decision in Queensland Rail that the employer was far more diligent in seeking to eliminate use of its computer system by employees for storing and transmitting pornographic material than NCR was in this case and that the respondent employee continued to ignore numerous directions and warnings. Moreover, there was an explicit warning that: [A]n employee's employment with QR would be terminated if it was found after investigation that they deliberately created, copied, accessed, stored, downloaded or forwarded pornographic or sexually explicit material using QR's electronic communication systems. 66 As the Full Bench observed at [17]: In this case the appellant went to great lengths to alert employees to the policy and to warn them that breaches would lead to dismissal. Despite this the employee breached the policy on a number of occasions in a substantial way. 67 Queensland Rail is also distinguishable from the present case by the fact that no question of culture or inequality of treatment was involved and the issue for the Full Bench revolved around no more than that which was summarised at [22]: The appellant, rightly in our view, made sustained efforts over a number of years to make employees aware of its policy and the consequences of breaching the policy. Despite those efforts and repeated warnings the employee breached the policy in a substantial way and on a number of occasions. 68 It may be thought from certain observations by the Full Bench that decisions about whether an employer was entitled to terminate the employment of an employee who transmits and stores pornographic material on the employer's electronic communication system would be determined according to the nature of the pornography involved (eg "hard core"), or how sexually explicit the material was, or the level of violence portrayed: see [17], [18], [22]. We do not believe such an interpretation is open but if that were the basis upon which the Australian Commission were to approach such matters we should indicate we do not, with respect, agree with it. Our approach is summed up at [18]-[21] and [83] of this judgment. As the Full Bench stated in Hollingsworth v Commissioner of Police (No 2) (1999) 88 IR 282 at 344, the former Commission in Court Session was not "a court of morals but one of law". That sentiment applies equally to this Commission. 69 That the Full Bench in Queensland Rail was not setting up a test based on the nature of the pornography involved is supported by the view it expressed that, whilst its decisions should support employers who were striving to stop inappropriate email traffic (see [3] and [21]), it also made it clear its support was "subject always to considerations of fairness". Further, we note what the Full Bench stated at [23]: Although in this case we have decided not to interfere with the application of that policy, it ought not be assumed that the Commission would uphold the employer's right to apply the sanction of termination in all cases of deliberate breach regardless of the circumstances. As s.652 of the Act makes clear, in determining whether a termination of employment is harsh, unjust or unreasonable the Commission is required to take a range of matters into account. In addition the statutory provisions are intended to ensure a "fair go all round": s.635(2). In the proper exercise of its functions the Commission must exercise its own judgment. Whatever sanction the employer's policy prescribes, the Commission must decide whether the termination is harsh, unjust or unreasonable.

[102]

77 It is a very fine matter of judgment as to whether the dismissal was harsh, unreasonable or unjust, however, we are satisfied that the dismissal was in all the circumstances harsh, unreasonable and unjust. Whilst it was clear that the respondent's requirement to abide by its Code of Conduct was a term of the appellant's employment contract, his breach of this term must be seen in the context of the work environment where senior managers did not comply with the Code; where another employee who had breached the Code in the same respect was first afforded a warning rather than being summarily dismissed; where other employees who, prima facie, had engaged in sending and/or receiving pornographic emails but had not been investigated for doing so; where there was no reinforcement of the need to comply with the Code other than the requirement, annually, to sign a compliance undertaking; where unlike other provisions of the Code the terms relating to pornography did not reflect a zero tolerance policy. In this sense, we consider that the respondent's conduct was unreasonable and unjust. 78 Further, we observe that if the appellant's misconduct was so serious as to justify instant dismissal it seems to us indefensible that he would be allowed to continue to engage in an activity that the respondent found so aberrant and unacceptable while the respondent took three months to investigate the matter. The respondent contended that the appellant's conduct required extensive investigation. However, by early April 2005 the respondent had extracted copies of the pornographic material on the appellant's computer, yet it was not until June 2005 that the respondent acted to summarily dismiss the appellant. We consider that the respondent's actions to summarily dismiss the appellant in these circumstances was unreasonable. 79 Further, we consider that the summary dismissal was harsh in the circumstances where the appellant only generated a single pornographic email; where no other employee saw any of the material on the appellant's laptop (we consider that Mr Findlay, who reported the appellant, only had a suspicion he saw something untoward); where the appellant was immediately remorseful and contrite on being confronted about his misconduct, although in relation to this last matter we accept that faced with the evidence, the appellant had few options. 80 The dismissal was also harsh in the context of the appellant, who was 56 years old at the time of the dismissal, had been employed by the respondent for over 31 years, that is, a very substantial part of his working life, and had an otherwise unqualified employment record. Indeed, evidence was accepted at first instance that he had received 21 performance awards during his 31 years working with the respondent and had been nominated for a further performance award two months before the investigation commenced. In this regard, we refer to the comments of the Full Bench of this Commission (as it was then constituted) in Franklins Limited v Webb (1997) 72 IR 257 at 261: We consider that the significance of decisions by employers to dismiss employees in circumstances such as occurred here cannot be over-emphasised. Mr Webb is a man of advancing years with long service and an unblemished employment record. The consequences for him of the employer's decision to dismiss are considerable - not only pecuniary considerations arise but also issues such as loss of self-esteem and confidence, difficulty in obtaining future employment and loss of social standing; tremendous upset upon the individual concerned and his family, with serious consequences quite unanticipated at the time of dismissal, must also be taken into account. 81 The reasoning of the Full Bench in Franklins is, in our view, directly apposite and the considerations expressed fortify our view that the dismissal of the appellant was, in all the circumstances, harsh. The relevance of these personal and economic considerations was also recently emphasised in Maitland v Royal Blind Society (NSW) (2004) 138 IR 75 at 92. 82 Accordingly, we find that Murphy C erred in finding that the appellant's dismissal was not harsh, unreasonable or unjust. We uphold the appeal and set aside the Commissioner's decision to this extent.

[103]

83 Nevertheless, we wish to stress that we do not intend to convey an impression that dismissal for accessing pornographic images would, in all instances, be harsh, unreasonable or unjust or that we condone, in any way, the appellant's actions. In breach of the employer's policies, the appellant accessed and stored extensive pornographic material on the respondent's IT infrastructure. This is patently unacceptable. However, the circumstances of this case appear somewhat unique: a culmination of issues specific to that workplace and the appellant and the actions of the respondent meant that a finding that the dismissal was harsh, unreasonable and unjust was appropriate. We do not expect that this conclusion would necessarily follow in dismissals for conduct similar to that engaged in by the appellant. 84 Our conclusion leaves open the question as to the appropriate remedy and whether we should remit or decide the matter. In unfair dismissal appeals, it is usual for sufficient material to be placed before the Full Bench to allow it to determine the final orders that should be made on appeal: see Price v Box Valley (1999) 90 IR 480 at 485. The parties encouraged us to determine the final orders and have provided us with all of the necessary material. Accordingly, we are prepared to exercise our discretion to determine the appropriate remedies. 85 However, before turning to a consideration of the appropriate remedy having concluded that the appellant's dismissal was unfair, as already mentioned, we propose to make some comments on the summary dismissal aspect of this appeal given the submissions made by the parties. Was summary dismissal justified? 86 Whilst the onus remained on the appellant to prove the termination of his employment was harsh, unreasonable or unjust (see Western Suburbs District Ambulance Committee v Tipping [1957] AR (NSW) 273 at 279), in circumstances, such as found in this matter, where the employee was summarily dismissed, the burden of proof lies with the employer to show that such summary dismissal was justified: Pastrycooks at 83-84; Bigg at 455; Franklins at 261; North v Television Corporation Ltd (1976) 11 ALR 599 at 603. 87 To put it another way, if the employer is able to show that it was justified in summarily dismissing the employee, the onus falls on the employee to show that, nonetheless, the dismissal was harsh, unreasonable or unjust. If, on the other hand, the employee's conduct did not justify summary dismissal in law that would be "a very compelling consideration for restoring the employment relationship otherwise unlawfully severed": Pastrycooks at 84. 88 The onus, then, of proving that it was justified in summarily dismissing Mr Budlong fell on the respondent. The Commissioner made no express finding in this regard, but it may be readily inferred that was the Commissioner's conclusion. At [199] Murphy C stated: Unlike some cases, there was no question here that the material was pornographic and/or that he [the appellant] deliberately viewed it. But the case law 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.

[104]

And further at [212]: 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. 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 case law, 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. 89 It is apparent from these passages and the Commissioner's ultimate finding that the dismissal was not harsh, unreasonable or unjust that the Commissioner accepted that the respondent was justified in summarily dismissing the appellant in view of his actions, which the respondent termed "serious and wilful misconduct". We observe that the phrase "serious and wilful misconduct" is not a phrase found in the common law authorities on summary dismissal, although it is used in some award provisions on termination without notice. There was no suggestion before Murphy C or during these proceedings that there was such an award provision in the present situation. 90 To satisfy the Commission that it was justified in summarily dismissing the appellant, the respondent must show that the appellant breached a term of his contract of employment and that that breach was such as to indicate a rejection or repudiation of the contract: see North v Television Corp Ltd at 609. In applying the common law principles to the facts of the case in North, Smithers and Evatt JJ cited with approval the following comments of Lord Evershed MR in Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285 at 287 and 289: Since a contract of service is but an example of contracts in general, so that the general law of contract will be applicable, it follows that, if summary dismissal is claimed to be justifiable, the question must be whether the conduct complained of is such as to show the servant to have disregarded the essential conditions of the contract of service … I … think … that one act of disobedience or misconduct can justify dismissal only if it is of a nature which goes to show (in effect) that the servant is repudiating the contract, or one of its essential conditions; and … therefore … the disobedience must at least have the quality that it is "wilful"; it does (in other words) connote a deliberate flouting of the essential contractual conditions. 91 There is no fixed rule of law defining the degree of misconduct that will justify summary dismissal: see Clouston & Co v Corry [1906] AC 122 at 129 per Lord James of Hereford and also Rankin v Marine Power International Pty Ltd [2001] VSC 150 at para [240]. Smithers and Evatt JJ in North observed in relation to a clause of an award that permitted the employer to dismiss an employee for "misconduct although not wilful or serious or even of such gravity as would, at common law, justify an employer dismissing an employee": It is of assistance to consider the expression "misconduct" by reference to the subject matter to which it is related and the context in which it appears. The subject matter is the termination by one party against the will of another of a continuing contract of employment on the ground of breach of one of the terms of the contract. And the context is such as to indicate that certain breaches of a non-serious nature, some of which would be within the connotation of misconduct, are not regarded as grounds for termination. In such a situation it is reasonable to interpret the expression "misconduct" as referring to conduct so seriously in breach of the contract that by standards of fairness and justice the employer should not be bound to continue the employment. This situation would arise if there were conduct inconsistent with the fulfilment of the express or implied conditions of service. It is conduct of that kind which will justify dismissal at common law. And it was decided by a Full Bench of this Court in Crosland v John Fairfax and Sons Pty Ltd, supra, that the test of misconduct for the purposes of a clause identical with cl 10(e) was the same as the test of misconduct at common law. No reason has been advanced to challenge the validity of this decision. We respectfully find ourselves in agreement with it. 92 A single act of disobedience or misconduct such as in this case can justify dismissal only if it is of a nature which goes to show (in effect) that the employee is repudiating, or deliberately flouting, the contract or one of its essential conditions: see Lord Evershed MR in Laws as earlier cited. 93 In re Dispute - Dismissal of Union Delegate at Homebush Abattoir [1966] 66 AR (NSW) 371 at 374 Cook J stated: In my view, the question of whether the conduct of an employee amounts to misconduct justifying instant dismissal would generally depend upon whether or not the act complained of can properly be regarded as deliberate or wilful of such a nature as to strike at an essential element in the contract of service namely, obedience to the lawful commands of the employer and the right of the employer to enforce discipline. 94 In Adami v Maison De Luxe Limited (1924) 35 CLR 143 at 155 Gavan Duffy and Starke JJ considered that to justify summary dismissal the disobedience of the employee must be such as to amount to a repudiation, or sufficiently serious to allow discharge of the contract of employment: Was the plaintiff's conduct such as justified the company in determining, and treating as at an end, his contract of service with it? "If there is a distinct refusal by one party to be bound by the terms of a contract in the future, the other party may ... treat the contract as at an end. ... Short of such refusal, ... the true principle to be deduced from all the cases is that you must ascertain whether the conduct of the party who has broken the contract is such that the other party is entitled to conclude that the party breaking the contract no longer intends to be bound by its provisions. This part of the rule was laid down by Lord Blackburn" in Mersey Steel and Iron Co. v. Naylor, Benzon & Co. (1884) 9 App. Cas. 434, at p. 443; 53 L.J. Q.B. 497, at p. 502,"where he says the rule of law is that where there is a contract between two parties, each side having to do something, if you see that the failure to perform one part of it goes ... to the foundation of the whole, it is a good defence to say, I am not going to perform my part of it when that which is the root of the whole and the substantial consideration for my performance is defeated by your misconduct" (Rhymney Railway v. Brecon &c. Railway (1900) 69 L.J. Ch. 813, at pp. 818-819.)

[105]

95 More recently, Kirby J stated in Concut Pty Ltd v Worrell (2000) 75 ALJR 312 at [51]: It is, however, only in exceptional circumstances that an ordinary employer is entitled at common law to dismiss an employee summarily. What the position may be in relation to isolated acts of negligence, incompetence or unsuitability, it cannot be disputed (statute or express contractual provision aside) that acts of dishonesty or similar conduct destructive of the mutual trust between the employer and employee once discovered, ordinarily fall within the class of conduct which, without more, authorises summary dismissal. Exceptions to this general proposition may exist for typical breaches of the express or implied terms of the contract of employment. Other exceptions may arise where the breaches are ancient in time and where they may have been waived in the past, although known to the employer … the establishment of important, relevant instances of misconduct, such as dishonesty on the part of an employee … will normally afford legal justification for summary dismissal. Such a case will be classified as amounting to a relevant repudiation or renunciation by the employee of the employment contract, thus warranting summary dismissal. 96 When considering whether an employee is guilty of misconduct warranting summary dismissal, all circumstances surrounding the dismissal are relevant, including the relevant position or status of the employee: MacLeay Valley Health Service v Jeffree (1994) 58 IR 187. 97 The starting point, as guided by North, is to consider whether the appellant breached a term of his employment contract. As we have already noted, we have proceeded on the basis that the appellant was required to comply with the Code of Conduct as part of his employment contract with the respondent. 98 The next step is to consider whether, by not complying with his undertaking to abide by the respondent's Code of Conduct and in breaching the Code of Conduct by accessing pornographic web sites and sending, receiving and storing emails containing pornographic material, it was correct for the Commissioner to accept, in effect, that the appellant engaged in conduct that was "so seriously in breach of the contract that by standards of fairness and justice the employer should not be bound to continue the employment", or the conduct of the appellant was such that the respondent was entitled to conclude that the appellant no longer intended to be bound by the provisions of his contract of employment, or that the appellant's conduct may properly be regarded as "deliberately flouting one of the essential conditions of the contract". 99 The evidence showed that the appellant engaged in a single act of misconduct, albeit that this misconduct extended over a number of years during which time he accessed, received, stored and viewed at work a large amount of high-level pornography on his computer containing hard, soft and bestiality pornography and accessed pornographic web sites, contrary to a policy that prohibited such practices. 100 Secondly, we have our doubts that the appellant's conduct, in all the circumstances of the case, was such that it went to show (in effect) that the appellant repudiated the contract or one of its essential conditions (see Laws v London Chronicle cited by Smithers and Evatt JJ in North v Television Corp Ltd). This was also expressed by Hungerford J in Pastrycooks in the following terms: Permeating all of those earlier cases on this aspect of the law was the concept that the act of misconduct or of disobedience had to strike at the fundamental aspect of the relationship of employer-employee so as to make it plain that the conduct complained of was such that the non-offending party may properly conclude that the offending party no longer intended to be bound by the provisions of the employment contract. In other words, so it seems to me, the test comes down to the question whether the employee's conduct has been so inconsistent with his duties under the employment contract that it strikes down any reasonable suggestion that the employer-employee relationship can be continued in the future. 101 While the evidence showed that there was a breach of the respondent's Code of Conduct, the breach was not one in which the Code itself specified would result in summary dismissal. Indeed, as already mentioned the Code contained "zero tolerance" references to harassment and workplace violence but did not contain such a reference in the context of pornographic images on the respondent's computer systems. We have already noted that we are satisfied that there did not exist a "zero tolerance" policy on such images contrary to the respondent's contentions and statements in the termination letter. 102 Finally, we consider that there is a reasonable argument that the respondent waived its right to take any action in respect of the appellant's misconduct once it was brought to the respondent's attention. As already mentioned, the allegation against Mr Budlong was first raised in late March 2005 with the relevant images and emails discovered in early April 2005, yet the appellant was not terminated until early June 2005 and, during that time, was not restricted in his use of his computer, including in respect of the images on his computer. Such a delay is, in our view, inconsistent with the respondent's position that it found his conduct so aberrant and unacceptable as to justify summary dismissal. The respondent contended that the appellant's conduct required extensive investigation. However, by early April 2005 the respondent had extracted copies of the pornographic material on the appellant's computer, yet it was not until June 2005 that the respondent acted to summarily dismiss the appellant. We do not accept the respondent's contention that the lapse of time can be explained by its need for an extensive investigation. The comments of this Commission in Burge v NSW BHP Steel Pty Ltd are relevant: We are satisfied the conduct of the [employee] referred to has been condoned by the respondent or that it has waived any right it may have had to dismiss him for serious and wilful misconduct. As Macken J observed in Australasian Transport Officers' Assn v Dept of Motor Transport (1988) 25 IR 235 at 24, 'the doctrine of condonation has always formed a part of the law applied by the NSW Industrial Commission'. 103 For these reasons, we have our doubts, although we do not decide, that there was a proper basis for summary dismissal. When one considers the test applied in North v Television Corporation, namely, that in order to justify summary dismissal, the conduct of the employee must be "so seriously in breach of the contract that by standards of fairness and justice the employer should not be bound to continue the employment", we doubt that the appellant's conduct met that test. We also have our reservations that the conduct was of such nature as to demonstrate the appellant repudiated one of the essential conditions of his contract of employment. REMEDIES

[106]

104 Having concluded that the appellant's dismissal was unfair, the question that now arises for consideration is the appropriate remedy and, in particular, whether an order should be made reinstating the appellant in his employment with the respondent. 105 It is trite law that reinstatement is the primary remedy. It is only where it is impracticable to reinstate an applicant that the other remedies available under s 89 of the Act may be applied: see Little v Commissioner of Police (No 2) (2002) 112 IR 212 at [88]; Riley v Workcover Authority [2006] NSWIRComm 108 at [94]. 106 In Plummer v Stannard Bros Launch Service (2005) 145 IR 111 the Full Bench stated the position as (at 115): Reinstatement is the primary remedy under s 89 of the Act: Burge v NSW BHP Steel Pty Ltd (2001) 105 IR 325 at [34]; Little v Commissioner of Police (No.2) (2002) 112 IR 212 at [88]; Humphries v Cootamundra Ex-Services and Citizens Memorial Club Limited (2003) 128 IR 37 at [125] . Other remedies may only be ordered if reinstatement is considered to be impracticable. That requires the member of the Commission, in all cases where relief is to be ordered, to give active consideration to the practicability of reinstatement. Indeed, we consider s 89(5) requires a finding that it would be impracticable to reinstate the appellant prior to making an order for compensation and in the process of making that finding to give reasons: Entertainment Distributors Company Pty Limited and Anor v Burnard and Ors (1993) 49 IR 446 at 453. 107 The Full Bench in Little (No 2) considered the test to be applied as to the practicability of reinstatement of re-employment. At paragraph [91] the Full Bench stated: 91 It is in this light that we turn to consider the question of the practicability of reinstatement of re-employment. In this respect, we propose to apply the test in Perkins v Grace Worldwide (Aust) Pty Limited (1997) 72 IR 186 at 191-192 (which was adopted in Hollingsworth v Commissioner of Police at 341-342). 108 The focus in Perkins was on the issue of whether a loss of trust and confidence was a relevant consideration in determining whether reinstatement was impracticable and it is worth repeating what the Full Bench of the Federal Court had to say: Trust and confidence is a necessary ingredient in any employment relationship. That is why the law imports into employment contracts an implied promise by the employer not to damage or destroy the relationship of trust and confidence between the parties, without reasonable cause: see Burazin v Blacktown City Guardian Pty Limited (Wilcox CJ, von Doussa and Marshall JJ, 13 December 1996, not yet reported). The implication is not confined to employers, it extends to employees: see for example Blyth Chemicals Ltd v Bushell (1933) 49 CLR 66 at 81-2 and North v Television Corporation Ltd (1976) 11 ALR 599 at 609. So we accept that the question whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is impracticable, provided that such loss of trust and confidence is soundly and rationally based. At the same time, it must be recognised that, where an employer, or a senior officer of an employer, accuses an employee of wrongdoing justifying the summary termination of the employee's employment, the accuser will often be reluctant to shift from the view that such wrongdoing has occurred, irrespective of the Court's finding on that question in the resolution of an application under Division 3 of Part VIA of the Act. If the Court were to adopt a general attitude that such a reluctance destroyed the relationship of trust and confidence between employer and employee, and so made reinstatement impracticable, an employee who was terminated after an accusation of wrongdoing but later succeeded in an application under the Division would be denied access to the primary remedy provided by the legislation. Compensation, which is subject to a statutory limit, would be the only available remedy. Consequently, it is important that the Court carefully scrutinise any claim by an employer that reinstatement is impracticable because of a loss of confidence in the employee. Each case must be decided on its own merits. There may be cases where any ripple on the surface of the employment relationship will destroy its viability. For example the life of the employer, or some other person or persons, might depend on the reliability of the terminated employee, and the employer has a reasonable doubt about that reliability. There may be a case where there is a question about the discretion of an employee who is required to handle highly confidential information. But those are relatively uncommon situations. In most cases, the employment relationship is capable of withstanding some friction and doubts. Trust and confidence are concepts of degree. It is rare for any human being to have total trust in another. What is important in the employment relationship is that there be sufficient trust to make the relationship viable and productive. Whether that standard is reached in any particular case must depend upon the circumstances of the particular case. And in assessing that question, it is appropriate to consider the rationality of any attitude taken by a party. It may be difficult or embarrassing for an employer to be required to re-employ a person the employer believed to have been guilty of wrongdoing. The requirement may cause inconvenience to the employer. But if there is such a requirement, it will be because the employee's employment was earlier terminated without a valid reason or without extending procedural fairness to the employee. The problems will be of the employer's own making. If the employer is of even average fair-mindedness, they are likely to prove short-lived. Problems such as this do not necessarily indicate such a loss of confidence as to make the restoration of the employment relationship impracticable. 109 This approach was also accepted in Hollingsworth v Commissioner of Police (No 2) (1999) 88 IR 282. 110 As to the approach to be taken in assessing the practicability of reinstatement, the comments of Cahill VP in NSW Public Service Professional Officers Association v Forestry Commission (NSW) [1990] 39 IR 46 at 50 are relevant: In this regard industrial tribunals should examine with some rigour, and should not too readily accept, claims made on behalf of an employer who has been found to have treated an employee unfairly in the matter of termination of employment that there would be "practical uselessness" in attempting to re-establish the previous employment relationship. My views in this regard accord with those of McClelland J in Hardie Ferodo Pty Ltd v New South Wales Nurses' Association (unreported, 28 Nov 1978), as cited with approval by Hungerford J in Pastrycooks Employees, Biscuit Makers Employees & Flour and Sugar Goods Workers Union v Gartrell White (No 3) (1990) 35 IR 70 at 99. In the Hardie Ferodo case McClelland J said this: "This is, of course, a consideration to be taken into account in every reinstatement case but it must be treated with considerable caution. These cases come before the Commission by way of s 25A proceedings and the fact that such a case proceeds to arbitration after conciliation has failed provides in itself obvious evidence that the employer does not want the employee back. If that consideration had been allowed to outweigh all others the Commission would never have reinstated anybody." 111 The respondent submitted that reinstatement should not be ordered because the relationship of trust, confidence and good faith between the appellant and respondent was damaged beyond repair; the misconduct was serious; the appellant's reinstatement would have a detrimental effect on the safety and welfare of other employees; the pornography found was of a graphic and sordid nature and the appellant considered the pornographic material to be erotic. 112 The reasons why we are satisfied that reinstatement would not be impracticable are as follows:

Budlong v NCR Australia Pty Limited

At a glance

Court

Decision date

Before

Source

Judgment (117 paragraphs)

Parties

Cases Cited (27)

Cited By (46)