Appeal - leave to appeal - termination of employment - use of employer electronic communication system to store and transmit inappropriate images - breach of employer policy - whether termination harsh - whether error in decision under appeal - Workplace Relations Act 1996 ss.120, 635 and 652.

[1] This is an appeal, for which leave is required, by Queensland Rail, (the appellant) against a decision [1] and order[2] made by Commissioner Bacon on 12�September 2006. The decision was in relation to an application by a Mr Wake ( the employee) pursuant to s.643 of the Workplace Relations Act 1996 (the Act) for a remedy in relation to the appellant's termination of his employment. The Commissioner decided that the termination was harsh. He ordered that the appellant reinstate the employee. The appellant contends that the decision is wrong, that we should quash the order and instead make an order dismissing the employee's application.

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

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

[4] The case involves two separate series of alleged breaches by the employee of the appellant's policies concerning email and internet use. The first series had its origin in late 2003. The second series was in late 2005 and early 2006.

[5] Turning first to the alleged breaches in 2003, there was evidence that the appellant had been attempting to deal with the problem of inappropriate email traffic since 1999. The Commissioner summarised some of the history in his decision. There was evidence of the introduction of an electronic warning about inappropriate use as a condition of logging on to the system as well as multiple general warnings to employees that inappropriate use of the email system would not be tolerated. The appellant sought specific acknowledgement of its requirements as to appropriate use from each employee, including the employee in question, in December 2004. [3]

[6] On 13 November 2003 the employee saved six images on his computer and had a shortcut created from his desktop to the images. These images have been referred to as "the 2003 files" and it is convenient to refer to them in that way. The appellant did not discover the 2003 files on the employee's computer until September 2005. Although the Commissioner made no specific finding about them, the employee accepted in cross-examination that the 2003 files were inappropriate in terms of the policy in force at the time. The Commissioner's decision appears to accept that that is so. For reasons which are set out later the Commissioner did not take the 2003 files into account in deciding whether the termination was harsh, unjust or unreasonable.

[7] The Commissioner's decision was based squarely on the series of images which appeared on the employee's computer in late 2005 and early 2006 and we shall now deal with those. It is important that in 2005 the appellant developed and published an updated policy in relation to use of the email system. Like the earlier policy it is designed to ensure that employees do not use the email system to receive, store or transmit images which are of an "inappropriate" kind. The policy is entitled "Appropriate Use of Electronic Communications System Specification". The policy contains the following:

Employees shall not use QR's electronic communication systems for the purposes of accessing, creating, copying, downloading, displaying, storing or sending material which:

. contains pornographic or sexually-related content

. contains content that may cause offence or intimidation or may amount to harassment or discrimination on any of the grounds listed in the Anti-Discrimination Act (Qld) 1991:

• association with, or relation to, a person identified on the basis of any of the above attributes.

. threatens, bullies or harasses any person or organisation

. is for personal commercial purposes or personal gain

. causes interference with or disruption to any QR electronic communication system, or uses a greater amount of space on the network than is appropriate

. causes a breach of QR's Code of Conduct or any QR board directive, policy, standard, specification or business instruction

[8] In addition there is a Code of Conduct which reinforces, although in different terms, the requirements of the policy. While it may be possible to point to drafting deficiencies in the policy and the code, we have no doubt that their basic thrust is clear.

[9] The appellant took a number of steps to bring the updated policy to the attention of its employees and to warn them that any breaches would lead to termination of employment. The following passage from the Commissioner's decision is a convenient summary of the actions it took:

"[26] In 2005 the "Appropriate Use of Electronic Communication systems Specification" policy was promulgated.

[27] On 18th August 2005 an article was placed in the Weekly Notice reminding employees to use QR's electronic computer systems appropriately. This notice reminded employees that "ongoing auditing and scanning to identify and investigate inappropriate material on QR systems will continue

[28] Also on 18th August 2005 QR's CEO released another update addressed to all employees entitled "QR continues strong stance on appropriate use of electronic communications systems".

• The update reminded employees of the previous CEO Updates on the issue and the two week clean-up period in November 2004.

• The update reiterated the message that "an 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".

• It also noted that "QR Unions fully supported this tough stance and advised their members that they will be fairly limited in the level of support that they can provide for employees who now find themselves in this position".

• It pointed employees to the location of the new specification as well as the website on the Infonet. The update advises employees that the new specification "clearly defines and addresses all types of inappropriate use and material ranging from pornography and sexually explicit material to infringement of copyright through the unauthorised reproduction of work such as music, video, cartoons, games and any other form of unauthorised software".

• The CEO also stated in this update "We will continue with ongoing auditing and scanning of our electronic communication systems to identify and investigate any inappropriate material on our system. It is your responsibility to keep your computer free from inappropriate material at all times. We will not accept any excuses".

[29] On 22nd August 2005 a "News in Detail" article appeared on the QR Intranet site based on the CEO update listed above. The article concludes with the statement: "If you have any questions, please talk to your manager or supervisor or your local HR Adviser. The IT helpdesk (81-5000) can also assist you to clean up your computer".

[30] On 6th September 2005 employee payslips contained a reminder notice to employees that the inappropriate use of QR's electronic communication systems is not acceptable. The notice stated in capitals:

"INAPPROPRIATE USE OF QR'S ELECTRONIC COMMUNICATION SYSTEMS IS NOT ACCEPTABLE AND MAY HAVE SERIOUS CONSEQUENCES. INAPPROPRIATE USE AND MATERIAL RANGES FROM PORNOGRAPHY AND SEXUALLY EXPLICIT MATERIAL TO INFRINGEMENT OF COPYRIGHT THROUGH UNAUTHORISED REPRODUCTION OF MUSIC VIDEOS, CARTOONS, GAMES AND ANY UNAUTHORISED SOFTWARE. MAKE SURE YOU USE QR'S SYSTEMS APPROPRIATELY. IF IN DOUBT, ASK YOUR SUPERVISOR, READ THE NEW INAPPROPRIATE USE OF ELECTRONIC COMMUNICATION SPECIFICATION OR SEE THE INAPPROPRIATE USE WEBSITE: HTTP://QR/CORPORATES/SHAREDSERVICES/INAPPROPRIATEMATERIAL/.""

[10] It is clear that after its publication in 2005 the employee breached the updated policy on a number of occasions by storing or forwarding images which were contrary to it. While it is possible to argue about the severity of the breaches by comparing the nature of the images involved, it is common ground that there were breaches. The Commissioner made findings to that effect. It is convenient to set them out. In doing so we should make it clear that no serious challenge was mounted to those findings in the course of the appeal:

"[95] After considering the material I have reached the conclusion that there was a valid reason for the termination of the applicant's employment. Despite the steps taken by QR (with the support of the QCU and relevant unions) to make it clear to employees that storing or sending sexually explicit or sexually related material on QR communications equipment and the repeated warnings of the consequences of such activities the applicant stored (in that he did not delete the emails) and forwarded by email sexually related (and in one case violent) material. In doing so the applicant opened the door to the possibility of disciplinary action up to and including termination of employment.

[108] There is no doubt that by November 2005 the applicant should have reasonably known that the forwarding to anyone, even to himself at another email address, of inappropriate material using QR's computer network was a breach of the Policy and/or the Code. The applicant by November 2005 knew or could have reasonably been expected to have known that violent or pornographic or sexually related material constitutes inappropriate material. The applicant never the less forwarded such material using the QR system. As a result QR was entitled to take some disciplinary action against the applicant."

[11] On the face of it, a dismissal in the circumstances outlined so far would not be harsh, unjust or unreasonable. The employer's right to exercise control over its own information technology systems is undoubted. If that right is exercised unfairly or unlawfully, however, the employee concerned may have a remedy under the Act. Before considering the appeal it is appropriate to set out the Commissioner's reasons for concluding that in this case the dismissal was harsh.

[12] As we noted earlier the Commissioner excluded the 2003 files from consideration. The appellant had discovered the files on the employee's computer in September 2005 but took no action for five or six months until the later series of images was discovered. The Commissioner reasoned that because its policy indicated that a deliberate breach would lead to dismissal, the appellant should not have delayed for such a long period of time. Because it had not acted in a timely way the appellant could not rely on the 2003 files as justification or part justification for the termination of employment.

[13] Of the email images from the end of 2005 and early in 2006 which the appellant had identified as being contrary to its policy the Commissioner found that only six were so. He took the nature of the material in the six emails into account and weighed that against the employee's 27 years of service free of any disciplinary history. He found five of the email images to be inappropriate because they were sexually-related and one to be inappropriate because it was violent. He then assessed the level of the content of the emails as high in two cases, medium in one, low in two and extremely low in the last. [4] The Commissioner went on to find that, in light of the nature of the material in the images and the length of the employee's service, the termination was harsh. He decided that the employee should be reinstated in employment with effect from 12 September 2006 but that in the circumstances no order should be made requiring the appellant to make payment for remuneration lost in the interim.

[14] The appellant advanced a number of grounds of appeal. It will not be necessary to deal with all of them, only the most significant.

[15] It is convenient to deal with the ground related to the 2003 files first. The appellant contended that the Commissioner ought not have excluded the 2003 files from consideration since their presence on the employee's computer indicated that he had been involved in earlier breaches of policy. It was also submitted that the basis on which the Commissioner excluded the files was wrong. We have some sympathy with the appellant's argument, but there are other relevant matters. It appears that the appellant instigated a two-week clean-up period in November 2004 during which employees were encouraged to remove inappropriate images. The employee's evidence was that at the time he did not realise the 2003 files were still on his computer. This evidence was supported by other evidence that the shortcut to the images had been removed from his computer desktop by technicians during servicing of his computer some time before. The Commissioner did not reject the employee's evidence and nor do we. The inference might be drawn that had the employee known the 2003 files were still on his computer he would have disposed of them during the clean-up period in November 2004. In the absence of any findings adverse to the employee in relation to these matters, did the Commissioner make an error in excluding the 2003 files from consideration? In our view, and with respect, it seems to us that the 2003 files were relevant. The fact that the employee had downloaded the images in 2003, despite his evidence he did not know they were there in 2004 and despite the appellant's delay in acting on them, indicated that he had breached policy in the past. That was a relevant consideration in deciding whether the dismissal was harsh.

[16] The second ground of appeal with which we deal concerns the Commissioner's approach of rating the six 2005/6 images in order to decide whether the termination was harsh. The following passage encapsulates the Commissioner's reasoning:

"[111] To be weighed against these transgressions of the policy is an employee of 27 years service with no disciplinary history. QR submits and I accept that the employee's length of service is not to become some immunity from discipline for breaching the policy. Nor should the employee's employment history be ignored. It is but one of the matters to be taken into account. Lengthy service may not be sufficient to outweigh findings against an employee that emailed or stored large amounts of high level, sexually explicit, "hard core" pornography. That is certainly not the case here. The circumstances of this case place it at the other end of the scale."

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

[18] There is another matter of significance. A number of the images from 2005/6 which the appellant had alleged breached the policy were found by the Commissioner not to do so. In our view in relation to at least two of the images that conclusion was clearly mistaken. In each of the two cases the Commissioner found that, referring to the terms of the policy, the images were not "sexually-related." The first image was a photograph of eleven naked women lying on their stomachs at right angles to the camera view, their buttocks and lower backs clearly exposed, with the question "Why are women more attractive than men?" on the side of the image. The image was one of two images in the one email. The second image is a photograph taken from behind of four overweight men sitting on bar stools with the tops of the men's buttocks exposed between their jeans and shirts. The caption on this image is "Any other questions?" While the two photographs are no doubt intended to be humorous, the conclusion that the first is not "sexually-related" cannot be accepted. The second image in question was a photograph of a naked male toddler with one hand holding a television remote control and one hand covering his genitalia. The caption on this image is "Why do men have two hands?" The Commissioner found that this image was not "pornographic or sexually-related" and did not regard it as contrary to the policy. We do not agree. The image is clearly sexually-related. Failure to take these two images into account in assessing whether the termination was harsh was an error.

[19] In our view the Commissioner's decision was affected by relevant errors and his conclusion that the termination was harsh is for that reason unsafe. The appellant submitted that if we concluded that the Commissioner's decision was affected by error this Bench is in a position to decide the application and should do so. The employee's representative did not advance a different view. While we could remit the matter for hearing by a single member the more practical course, and the more cost-effective one, is to deal with the matter ourselves.

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

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

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

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

[24] For these reasons we uphold the appeal, quash the Commissioner's decision and order and dismiss the application under s.643. Our order is published separately.

JE Murdoch of senior counsel for Queensland Rail.

S Keating with G Smith for the Australian Federated Union of Locomotive Employees.

[3] PR973936, paras [11] to [25].

[5] ibid., paras [97] to [103].

[6] ibid., paras [67] to [87]

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