Mejias &Federal Express Australia Pty Ltd [2006] NSWIRComm 1016

LEGISLATION CITED: Industrial Relations Act 1996.

HEARING DATES: 24/10/2005; 25/10/2005; 26/10/2005; 25/11/2005; 01/12/2005

LEGAL REPRESENTATIVES: RESPONDENT Mr. J.Fernan of Counsel SOLICITORS Mr. C. Oliver of Baker &McKenzie

DECISION: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

IN THE MATTER OF: Ric Mejias and Federal Express Australia Pty Ltd

Application by Ric Mejias re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996.

1 Mr. Ric Mejias (the applicant) commenced employment with Federal Express (Australia) Pty Limited (the respondent) on 6 December 1999 and was terminated by the respondent on 14 April 2005. On termination the applicant held the position of Senior Security Specialist, Head of International Security Oceania. He had held this position since 20 May 2002 and reported to Mr. Brian McCreath who was based in the Philippines. 2 On 5 April 2005 the applicant filed a claim for a threatened dismissal but at the time of the first conciliation, his termination had taken place. On 26 April 2005 no successful conciliation took place, therefore a time timetable for the filing and serving of evidence took place. In the intervening period prior to the arbitration taking place, various hearings with respect to Notices of Motion were held with a Statement issued by myself dated 25 May 2005. During my absence on leave Marks J. was required to deal with an urgent Notice of Motion filed by the respondent. 3 The hearing of the unfair dismissal claim was held over six days with the final submissions being held on 22 December 2005. At the completion of the matter I reserved my decision. The Applicant's Case.

4 The applicant gave evidence on his behalf. 5 In his position he was responsible for investigating internal issues and ensuring compliance through management and employees. It was his responsibility to make sure that the respondent was up to scratch with their security needs. 6 On 30 March 2005 the applicant stated that he was required to come to a meeting where a Mr. Brian McCreath and a Mr. Simon Patterson asked him a series of prepared questions. A Ms. Jocelyn Baclor was already in the room. At the end of the meeting the applicant was suspended on full pay and advised to refrain from speaking to employees of Menzies Aviation Group (Australia) Pty Limited(Menzies) or any other supplier or agent. An email sent by the applicant that day after the meeting to various management of the respondent outlined the allegations. 7 In brief they were that the applicant had used improper access to tender for an outside contract (in which he was successful), which resulted in a conflict of interest. The work carried out, by the applicant's private company (CustomOZ) was the installation of three electronic locks and access controls (locks) on the premises of Menzies the respondent's handling agent at Sydney's Kingsford-Smith Airport. The email stated that he did not believe that there had been a conflict of interest. He quoted precedence in case law, advice from a legal officer of the NSW Industrial Relations Commission and his views that he was not in conflict with aspects of the respondent's policies (1-10 Business Conduct: Interest in and Relationships with Suppliers). 8 On 31 March 2005 the applicant sent a further detailed email to the respondent's management outlining his defence. On the same day the respondent sent a letter to the applicant stating that the applicant had deliberately and knowingly breached the respondent's policy which may constitute serious and wilful misconduct. It also stated that contrary to previous requests he had contacted a Mr. Sangha from Menzies and spoke about the issues in question. 9 A further meeting between the applicant and Mr. McCreath and Ms. Baclor took place on 1 April 2005. A document was provided by Mr. McCreath to the applicant and a reply was sought. The applicant advised he would reply in 7 days time. 10 A further meeting took place on 5 April 2005 between the two parties at the offices of Price Waterhouse Coopers (PWC) with officers of PWC having trouble gaining access to the applicant's computer. The applicant waited whilst access was obtained. As it was going to take time for the forensic copy to take place the applicant was asked to wait. The applicant stated that he had someone waiting for him so he sought a cab charge from the respondent. This was not forthcoming so he left. 11 On 8 April 2005 whilst visiting the respondent's offices to serve various summons the applicant was requested to have a meeting. Again he was given documents of which he did not wish to respond to at that time. He later replied to same in writing. 12 On 14 April 2005 the applicant received correspondence from the respondent (Mr. McCreath) terminating his employment without notice. The correspondence stated that the applicant had deliberately and knowingly breached the respondent's policies in relation to : · Conflict of Interest, as detailed in the Code of Business Conduct &Ethics · Business Conduct, as detailed in the People Manual Australasia · Use of Computer Resources, as detailed in the Code of Business Conduct & Ethics and · Personal Conduct, as detailed in the People Manual Australasia. 13 In cross-examination the applicant stated that he had never seen a document called Employee Handbook Fedex Australasia. Whilst he acknowledged that he had signed on commencement an Inter-Office Memorandum Re: Receipt of Employee Handbook, acknowledging that he had been given a copy, he had in fact never received one. 14 The applicant differentiated between the Company he worked for, Federal Express Australia and the Fedex Corporation. Menzies is the landlord and handling agent for the Fedex Corporation Division at the airport. The applicant had no responsibility for Menzies's security at the airport. He would consult on what was required. It was the applicant's view that Menzies was not a supplier to the respondent but to Fedex Corporation. In that Menzies was not a supplier to Federal Express Australia then he could not be in conflict with the policies of the respondent. 15 The applicant agreed in cross examination that when he went to the airport he represented Fedex Corporation International. 16 Mr Fernan asked the following questions concerning the Employee Handbook:

Q. Just let me read one part of that policy, "You are prohibited from working for our competitors or suppliers on any basis." Just stopping there, sir, do you agree with me that Menzies were a supplier of services to Fedex ?

Q. Not to your employer ? So this dichotomy that you tell us between Fedex Corporation International and Fedex Australia you always saw it in the context of your own employment with Fedex Australia ?

Q. I see. Do you tell this Court that when you went out to the airport you weren't representing the interest of Fedex Corporation International ?

A. Security. 17 The Commission then asked the following questions:

Q. Can I ask this question here ? On the basis of how you've just answered Mr. Fernan's questions that would mean that you could take up and do work for Menzies and would not be contrary to that policy ?

A. Exactly right. Well, I guess a further illustration….

Q. So you could work for Menzies carrying out any type of work you wanted to and you would not be contrary to that policy ?

Q. Sir, when you read the people manual for Australasia do you agree with me that if an employee is of the view that there is a conflict that it should be discussed with your manager ?

A. If you're of the view that there's a conflict sure.

Q. So you never thought at any occasion in respect to the work that you carried out for Menzies should be discussed with Mr. McCreath ?

A. No. 18 On 3 November 2003 Mr. McCreath sent a copy by email of the Code of Business and Ethics to a number of employees including the applicant. The email requested all recipients to read it and to communicate with him if they had any questions regarding the contents. The applicant was surprised that a copy of the Fedex Code of Business and Ethics was found by Mr. McCreath on 31 March 2005 on his bookshelf in his office. The applicant denied ever seeing it and therefore was unaware of the policy of Conflict of Interest or the Use of Computer Resources. 19 The applicant stated that in 2004 he initiated the installation of an access control unit for the entry door to Menzies communication room at the Menzies premises. This was to secure a Fedex electrical room that they were leasing off Menzies. The work was carried out by MPS Security. 20 After the installation, the applicant was approached by a Mr. Sangha of Menzies. He wanted to know how much it cost and was told as a general rule each access door cost about $2000. He sought for three locks to be installed. The applicant said he provided Mr. Sangha with the phone numbers of two contractors. When the work was carried out the applicant stated that he was on the Gold Coast at a conference. He organised for the work to be done and later an invoice dated 28 February 2005 was sent to Menzies through his company Customoz for that work. He refuted what Mr. Sangha had expressed in his statement which placed the applicant on site at Menzies whilst the installation was being carried out. The work carried out was for doors into Menzies's payroll office and reception. The work done was located in an area that did not require a security ID card to be worn. 21 The applicant stated that Mr. Sangha was aware that he was dealing with the applicant's private company. He refuted the conversation with Mr. Sangha that he was asked whether CustomOz was his company. 22 The applicant agreed that he had involved himself in Menzies's security system but did not recognise a conflict. The offices involved were not the respondent's but Menzies. 23 The applicant agreed that he was familiar with the policy of Personal Conduct (1-5) and Business Conduct (1-10) both found in the People Manual of Australasia. He did not agree that a conflict of interest existed as a consequence of the work he did for Menzies. 24 Prior to commencing the work for the installation of the locks, the applicant stated that he called the New South Wales Registry and sought clarification with respect to outside work and conflict of interest. He stated that he did not call his manager Mr. McCreath because he avoided calling him where possible including this issue. He did not have any confidence in his decisions. He also admitted not calling the respondent's Legal Department. He did seek authorisation from his employer because he did not believe he was in conflict. He did not believe the policies were relevant. Menzies was not a supplier to his employer. 25 It was the applicant's view that the area at Menzies where the work was carried out was not a security area. When the applicant was there with two technicians carrying out work on 4 and 5 March 2005 he did not obtain a temporary Menzies ID pass as in his view it was not required. A follow up email from the applicant to Mr. Sangha pronounced everything was working well (ex.14 annex. 4). The email did go on to make suggestions as to restrictions in access by employees and an offer of an onsite audit costing $450. The applicant saw nothing wrong with this approach. The total charge of the two invoices amounted to just over $7000. 26 The applicant agreed that a few days later he received a call from Mr. Sangha to state that they were having difficulties accessing parts of the building. He stated he would come out and fix the problem and on this occasion he would not charge for the call. He also offered to install remote access to the unit so that he could work remotely. Also he offered to put in place a maintenance contract to cover everything. The applicant did not see any of this as a conflict. An email from Mr. Sangha dated 15 March 2005 provided additional Menzies's employee names who were given access to each of the doors. The applicant went out to Menzies to carry out further work to allow access of particular employees. A follow up email from the applicant to Mr. Sangha advised what work had been carried out. It also stated that Menzies may be in breach of particular Acts. This could be rectified by carrying out a full review of names and a scale of charges was included in the email. 27 In cross- examination the applicant denied the contents of Mr. McCreath's summary of their meeting of 30 March 2005. He also denied being involved with Menzies in meetings in approximately August 2004 concerning security. 28 The applicant agreed that at the end of his first meeting with Mr. McCreath he was instructed not to contact any of the Menzies employees. Notwithstanding this instruction he contacted Mr. Sangha and stated to him that the work he had done was not a conflict of interest. On 31 March 2005 Mr. McCreath and the applicant exchanged emails with respect to handing back company and personal property, organising a meeting for the following day and contacting Menzies employees. 29 A further meeting took place on 1 April 2005. At that meeting the respondent provided the applicant with further documentation which the applicant did not wish at that point to respond to. A return of particular respondent's property also took place. 30 A further meeting took place on 5 April 2005 located at the offices of Price Waterhouse Coopers. This meeting was for the respondent to gain access to the applicant's computer. This meeting was secretly recorded by the applicant. 31 The applicant agreed he had used the respondent's computer to access the website of CustomOz, and the email address of Ric@customoz.com. He denied using the computer to access pornographic websites. 32 The applicant rejected the general contents of Mr. Napiza's affidavit. He agreed that he had been to a website called RSVP but denied using the respondent's computer to access other sites. With respect to a number of gay sites that were individually named, the applicant did not recall. He may have gone there in carrying out an investigation. 33 In reply to Ms. Baclor's statement the applicant reaffirmed his view that she had selectively wrote down her notes of the 30 March 2005 meeting. 34 The applicant confirmed that he had been looking for alternative employment from six months prior to April 2005. When he had been stood down by the respondent he made phone calls to various employers to discuss employment. The applicant advised he had found new employment with JVH Communications commencing on 16 June 2005 on $80,000 per annum plus a profit share. 35 A further meeting was organised to be held on 8 April 2005 at 2.00pm. The applicant arrived at about 3.30pm. The applicant stated that he had been in Court representing the respondent that day and that all he wished to do was serve summons on the respondent. He again rejected what was allegedly said by Mr. McCreath in that meeting. 36 A further letter dated 8 April 2005 was directed to the applicant from Mr. McCreath detailing what documentation had been previously given to the applicant and what conclusions could be drawn. An opportunity to reply by 5.00pm 13 April 2005 was provided. The applicant provided his response. On 14 April 2005 the respondent sent the applicant a letter terminating his services. 37 In responding to a question from myself the applicant agreed that because of the area that he worked in he had to be "whiter than white" and that was why he went to varying degrees to make sure there was a clear separation. 38 The applicant stated that as part of his work he had in 2004 transferred information from a computer to his computer. Such information contained inappropriate material. 39 In his final submissions the applicant stated that there were two issues. The first had there been a conflict of interest and secondly had he used the respondents network. There was no conflict of interest between himself and Menzies because he had not breached the Business Conduct Standards (incorporated into The People Manual of Australasia). The policy states that :

"Employees are to avoid any relationship with persons, firms or other corporations with whom FedEx Express transacts, or is likely to transact, business that may involve the employee in a conflict of interest."

Menzies had a business relationship with Federal Express Corporation(the US subsidiary) and not Federal Express Australia. Two separate bodies and the applicant worked for Federal Express Australia, therefore that policy was not relevant in this matter. The applicant later clarified his comment to state that he did have to comply with the People Manual of Australasia. It was the applicant's view that the policies were written for all and the applicant did not believe because of his position that a greater standard applied to him. Whilst the applicant did not believe there existed a conflict of interest he made a phone call, prior to the work for Menzies commencing, to the Registry of the IRCNSW for clarification. He stated that reason he did not seek clarification within the respondent, from his manager Mr. McCreath was because he had no confidence in him. Even if the applicant had sought approval and been denied by Mr. McCreath the applicant stated that it would still be within policy as there was no conflict and no relationship. There was no conflict because the respondent did not provide any security services, he was not involved with any contracts and his judgement was not impaired. He also stated that the evidence from Mr. Napiza did not prove that he had misused the respondent's computer to carry out non company work or visit inappropriate web sites. 40 The applicant sought monetary compensation of two months and two weeks. The Respondent's Case.

41 The following persons gave evidence for the respondent: Ms. Jocelyn Baclor Mr. Stuart Key Mr. Norman Napiza Mr. Sat Sangha Mr. Brian McCreath 42 Ms. Baclor worked for the respondent as a Human Resources Services Manager. She commenced with the respondent in the Philippines and transferred to Australia in May 2003. She stated that she attended two meetings, one on 30 March 2005 and the other 1 April 2005 involving the applicant concerning an investigation of the applicant. The first meeting went from 10.15am to 12.30pm. The second from 2.10pm to 2.30pm. She agreed with the record of the 30 March meeting made by Mr. McCready and she herself also took notes of both meetings (ex 12 annex.10 and 12). Ms. Baclor stated that she wrote down the questions and the applicant's answers to all the relevant questions. 43 In cross examination Ms. Baclor stated that in accordance with a document found in the applicant's file, he signed to state that he had received a copy of the Employment Handbook. She also stated that a copy of the Code of Business Conduct and Ethics was widely distributed to employees through their managers. The applicant's manager told Ms. Baclor that he had given a copy to the applicant. She also stated that the applicant had attended a training course in October 2004 with Ms. Baclor which covered the contents of the Code of Business Conduct and Ethics, the Personal Conduct Policy and the Business Conduct Policy. 44 In re examination Ms. Baclor said that as the contents of the Employee Handbook were now found in the People Manual there was no requirement for the respondent to provide a copy of the Handbook to employees. Both the People Manual and the Code of Conduct are located on the intranet. 45 Mr. Key stated that he had been an employee of the respondent since 1994 and at the time of completing his affidavit he held the position of Airport Operations Manager Australia, New Zealand and Pacific Islands. On 22 August 2005 he commenced with Menzies in the position of General Manager for Sydney. As a consequence of Menzies winning the contract, the respondent had to move its offices out of the Qantas building into the Menzies building. Mr. Key stated that the applicant would be on site in the Menzies building 2 to 3 times a week due to alarm and access issues and the installation of cameras. 46 Mr. Key said that he attended meetings with the applicant where the applicant advised Menzies of what would be required from a security point of view to secure the respondent's equipment and access to the respondent's offices. He also accepted that at no stage did the applicant require Menzies to change their security to suit the respondent. 47 In examination in chief Mr. Key was shown the Code of Business Conduct and Ethics (Ex9) and confirmed that it was a working document that one could look up on the intranet to give answers to particular issues. Mr. Key was in attendance at a conference in late 2004 where the Code was the focus of the presentation. 48 In cross examination Mr. Key stated that the contents of the Employee Handbook were now incorporated into the People Manual which was on the intranet. 49 He said that Menzies was contracted in September 2004 to perform the respondent's ground handling duties. He stated that in around February 2005 the applicant approached him and a discussion concerning the applicant setting up his own security company and whether this would be in conflict of interest took place. Mr. Key understood that the applicant wanted to set up a business involving security guards. He denied that any comment was made about setting up the business of CustomOz or that he had or was considering performing work for Menzies Aviation. 50 In or around mid March 2005 Mr. Key was approached by Mr. Sat Sangha IT Support Analyst of Menzies. Mr. Sangha informed Mr. Key that the applicant had installed a security system for Menzies under his company CustomOz. Mr. Key then spoke to Mr. Lee Davies who was the Senior Operations Manager with the respondent. Mr. Davies advised that he would look into it. In answering a question from the Commission as to why he reacted immediately and sought to speak with Mr. Davies, he stated that his attendance at that conference in late 2004 was fresh in his mind. Later Mr. Key spoke with Mr. Sangha, who advised him that when Mr. Sangha had spoken to the applicant, the applicant said "that it was only a matter of time before FedEx found out about CustomOz." 51 Mr. Key stated that all FedEx policies and procedures were available to all employees on the Intranet. 52 Mr. Key also stated that to be allowed to go upstairs past the receptionist in the Menzies's building at the airport you had to have a pass issued by the airport authority or a visitors pass issued by Menzies. He also said that as Menzies was a supplier to the respondent then they had to meet the respondent's security standards. 53 Mr. Norman Napiza is an employee of PricewaterhouseCoopers commencing in December 1997 and holds the position of Manager in the Dispute Analysis and Investigations Department. 54 On 31 March 2005 Mr. Napiza attended the offices of Baker & McKenzie and was handed a laptop computer by a Mr. Brian McCreath. Mr. Napiza could not gain entry to this computer. On 5 April 2005 the applicant and Mr. McCreath attended his office. The applicant then provided a password and Mr. Napiza gained entry. He then set about analysing the contents of the applicant's computer. He found that the applicant's computer was used to view or test the CustomOz webpage, to log into the CustomOz webpage as an administrator, to log into the web email of the email address known as ric@customoz.com and received and read emails from Sat Sangha to the email address of ric@customoz.com. 55 Mr. Napiza then carried out an investigation of the Internet Explorer history. Attributed to the user profile "rm389999" was access to online dating websites and pornography websites. Mr. Napiza later found out that rm389999 was the applicant's ID access number. He also stated that it appeared that the files recording this web browsing activity appear to have been imported from another FedEx PC. He conceded that he was unaware of the age of the computer or the hard drive and that information from the computer could be five years old. 56 His investigations also showed that the word "CustomOz" came up on 1009 occasions, "Menzies" on 13335 occasions and "sanga" on 264 occasions. 57 In accessing the particular web sites, Mr. Napiza said that "rm 389999" used the respondent's computer. He was later advised by a Mr. Hine that "rm 389999" was the applicant's user ID for the respondent's network. 58 Mr Sat Sangha gave evidence that he is the IT Support Analyst of Menzies. His affidavit consisted of a signed statement prepared on or about 1 April 2005. This statement was given to the applicant on 1 April 2205 by Mr. McCreath. 59 Mr. Sangha stated that he first met the applicant in approximately August 2004 during a meeting between the respondent and Menzies regarding security issues arising out of the services contract between the two companies. Subsequent to that meeting he saw the applicant on Menzies property giving instructions to people installing security cameras. Around late August/early September 2004 Mr. Sangha also saw the applicant involved in the installation of an access control unit for the entry door to Menzies communications room on Menzies premises. This room would house the data from the security equipment. 60 In early January 2005 Mr. Sangha had a conversation with the applicant over the arranging for the installation of an access control reader. Mr. Sangha had already received a quote of $4200, which he thought was excessive. He sought from the applicant the contact number of the Company that had installed the FedEx security cameras and access control. The applicant gave Mr. Sangha a telephone number. Mr. Sangha rang the number and a technician advised he would come out and give a quote. He then told the applicant what he had done and the applicant also said he would come out to see what had to be done. A few days later at about 2.00pm the technician arrived and when Mr. Sangha went to the reception the technician was talking to the applicant. When Mr. Sangha introduced himself the technician walked away and Mr. Sangha did not see him again. The applicant then asked Mr. Sangha what had to be done and how much was he quoted. He told the applicant what he wanted to know. Later Mr. Sangha received a quote for $2400. He then passed this quote on to persons within Menzies for approval. The quote was approved. He then contacted the applicant in early February 2005 and later around 23 February they met. The applicant advised that a new lock also had to installed and the applicant organised this. After the lock had been installed, Mr. Sangha contacted the applicant and the access control unit installation (the lock) was organised to be done. 61 On or about 25 February 2005 Mr. Sangha met with the applicant and another person who wore a t-shirt with the initials "MPS" on it. Later that day the work was completed and the applicant said to Mr. Sangha that he would send an invoice. 62 It was Mr. Sangha's assumption that Menzies had engaged MPS to carry out the work and that the applicant was in attendance as a representative of the respondent. 63 On 28 February 2005 he received an invoice via email from CustomOz which included the installation of the new lock. The email was signed off " Best regards, Ric Mejias". 64 A short time later he contacted the applicant and asked if this was his company. The applicant confirmed this and advised it was a hobby. Mr. Sangha replied to the applicant that he thought he had been told "that being an employee and a supplier has some kind of conflict there." Mr. Sangha stated that the applicant replied: "Well it's just a matter of time before someone picks up on it." 65 Later Mr. Sangha rang the applicant and required a further two access controls installed. An email dated 3 March 2005 from the applicant provided a quote. Once he had the quote approved the work was carried out around 4/5 March 2005. On 7 March 2005 an invoice was received from CustomOz to the value of $4,713.35. The document also included payment details with the account name of CustomOz with the name of Ric Mejias with BSB and account numbers at the foot of the page. 66 Mr. Sangha then contacted Mr. Stuart Key and told him that the applicant had his own company, which dealt with security and the installation of access control. Mr. Key was unaware of this information. 67 On about 14 March 2005 Mr. Sangha spoke to the applicant because of difficulties some people were having with accessing parts of the building. The applicant said he would come in the next day and fix the problem without charge. He could install a remote access to the unit so he could work remotely and put in place a maintenance contract to cover everything. The next day Mr. Sangha provided the applicant via email with a list of the additional Menzies people who required access. The work was carried out by the applicant the next day and was confirmed by an email from the applicant. Payment for the outstanding invoices was made around 21 March 2005. 68 On 29 March 2005 Mr. Sangha met with a number of FedEx management and assisted them with their enquires. 69 The following day Mr. Sangha received a phone call from the applicant but did not take the call. The following day he received another call from a private number, it was the applicant. The applicant stated that he was under investigation and that the work he had done for Menzies was not a conflict of interest. Mr. Sangha advised the applicant that he was under instruction, not to speak to him. 70 On 31 March 2005 Mr. Sangha along with other named persons received an email from the applicant briefly stating his case concerning the issue of conflict of interest. 71 It was Mr. Sangha's view was that in order to reach the area to install reader units, the applicant would need to use a SACL (issued by Sydney Airport Corporations Limited) security pass issued to him in his capacity as a security employee of the respondent. Mr. Sangha stated that he checked the access records of Menzies which all employees are required to sign for 28 February, 4 and 5 March 2005 and could find no reference to the applicant signing in or the technician that did the work. The applicant had full control of the security system of Menzies. Mr. Sangha would have to go to the applicant to add or subtract any employee from the system or for any maintenance. 72 In cross examination Mr. Sangha stated that the reason he contacted the applicant at first instance with respect to fitting the access control was because the people who did the similar work for the respondent would have been knowledgeable with the layout of the Menzie's building. 73 After being shown a hotel receipt in favour of the applicant which showed the applicant was at the Gold Coast from 19th to 25th of February 2005, Mr. Sangha conceded that he had his dates wrong but still maintained that he saw the applicant assisting the technician. 74 Mr. Sangha said that when he saw the second invoice his concerns were such that he contacted Mr. Kay of the respondent as he believed a conflict of interest could exist. 75 Mr. Brian McCreath is the Manager, International Security based in the Philippines and whom the applicant reported to. He has held this position for the last seven and one half years. He stated that he received a phone call on 15 March 2005 from Mr. Key to advise that the applicant was conducting a business on the side. Mr. McCreath discussed this with his superior and then travelled to Sydney on 28 March 2005. He held a meeting on the following day with employees of both the respondent and Menzies. He was advised by Mr. Sangha at that meeting of what had occurred when Mr. Sangha had approached the applicant seeking contact numbers for the company that had done similar work for the respondent and the quote he had already been given for the installation of access control(s). 76 On 30 March 2005 Mr. McCreath held a meeting with the applicant and Ms. Baclor. Mr. McCreath sought access to the applicant's computer password which the applicant was not prepared to give but did change it so access could be provided. Unfortunately access was not possible. Mr. McCreath had prepared questions for the applicant to answer, took note of the answers and then read them back to the applicant. The answers and responses were later typed up and a copy was annexed to his affidavit. At the end of the meeting Mr. McCreath suspended the applicant on full pay and requested he not speak to any other employee of the respondent. Later that day Mr. McCreath, (along with other named persons) received an email from the applicant outlining his views on the issue. 77 On the same day Mr. McCreath had a meeting with Mr. Napiza of Pricewaterhouse Coopers. He sought access to the applicant's computer but was unsuccessful. Mr. McCreath sought to contact the applicant and be told his BIOS password. 78 On 31 March 2005, the applicant sent a detailed email to various senior management of the respondent again outlining his views on the issue. 79 On 1 April 2005 another meeting was held between the respondent and the applicant. The applicant was provided with a bundle of documents for him to read and respond. An issue developed between the parties as to the appropriate period of time required by the applicant for such a review. Later that day a further meeting was organised by the respondent for 5 April 2205. That meeting was held at the offices of PricewaterhouseCoopers. The applicant then altered his password and provided the respondent with another new password which then gave him access to the contents of the applicant's company computer. 80 It was the view of Mr. McCreath that the applicant had used the company's computer system to : Access the website for CustomOz Access the email address ric@customoz.com Access to inappropriate websites and Correspond with Mr. Sangha in respect of CustomOz's installation of the door access controls. 81 A further meeting was organised to be held on 8 April 2005 at 2.00pm. The applicant arrived at 3.30pm. Whilst Mr. McCreath sought answers from the applicant to particular questions, the applicant did not respond. It was the applicant's view that he was only on the premises to serve summonses. On the same day Mr. McCreath detailed a letter to the applicant outlining the issues which he had sought to discuss with the applicant on 1 and 8 April 2005. A reply in writing was required by 13 April 2005. Included with the letter was a further bundle of documents that had been removed from the respondent's laptop computer that the applicant had used. 82 A response from the applicant was received on 13 April 2005. Mr. McCreath reviewed the contents. He formed the view, in summary, that the applicant had misused his position, failed to advise Menzies that he personally would receive a benefit from the work done, knowingly placed himself in a position where his personal business interests were in potential or actual conflict with his obligations with the respondent and failed to disclose his personal business activities to the respondent. This was of particular concern as the applicant was obliged to ensure that the installation and operation of the access control reader units at the premises of Menzies were compliant with the respondent's security policy and requirements. He also formed the view that he had breached various policies of the respondent. He now no longer held any trust or confidence in the applicant's ability to do his job. 83 On 14 April 2005 Mr. McCreath wrote to the applicant outlining his reasons and terminated his service without notice. 84 Mr. McCreath stated that he had spoken and exchanged emails with the applicant on a near daily basis concerning various work issues. He stated that he found a copy of the respondent's Code of Business Conduct and Ethics in the offices of the applicant. He said that the applicant attended a conference in the Philippines in August 2004, which discussed the Code of Business Conduct and Ethics. 85 In cross examination Mr.McCreath was asked the following questions :

Q. Mr McCreath, what conflict do you believe would exist in my role as security and that of which I provided three locks to Menzies ?

A. The conflict could exist in you could have given recommendations to Menzies. Menzies may have assumed it's coming from Fedex. You would have known who's got-because it's only installing the locks, it's also programming the systems and so on that come along with those locks. You would have the knowledge of access- who's accessing Menzies facilities at what times and so on. And actually programming those locks to give people access.

Q. If I could ask again what is the conflict ? You're illustrating that, yes, I could install three locks and I could program users. What's the conflict ?

A. The conflict is that you're- there could be a clash between your private interest here which is customised (sic. CustomOz) against your official duties which is with Fedex in that you may through your role as the senior security specialist make certain recommendations to Menzies in the hope that perhaps Menzies is going to act on it and you could gain further business from them.

Q. How do you suggest that clash existed between my personal affairs installing three locks, and I'll use that term generally again ?

A. Because it wasn't - in installing the locks you're also programming the system of Menzies, you're giving access to individuals of Menzies, our customer, and you'd also have knowledge of access, the comings and goings of Menzies and Menzies' management, and I believe you also solicited other business in terms of alarm monitoring for their facility and also in conducting audits and providing security agreements for Menzies' personnel to sign. So it wasn't just installing the locks. We said you were really integrating yourself with the Menzies security set up.

Q. Even though the Menzies, the host company, they initiated the conversation and the action ?

A. Yes, sir, I still believe that's a conflict of interest.

A. Because it changes the dynamic of the relationship. It's if then let's take Mr. Mejias he would be-he would be the customer. All of a sudden now Menzies is a customer. He may defer to them. He may be afraid to make further recommendations. Perhaps he'd become -he could become afraid that they may not give him future business or they may cancel contracts with him so he may defer to them. Fedex Security we should remain completely separate.

A. Yeah, absolutely arms length. 86 It was Mr. McCreath's view that the applicant had violated the limited personal use of the respondent's network by visiting numerous pornographic websites, dating web sites, and the CustomOz website. 87 Mr. McCreath also stated that if there was a conflict in dates between what Mr. Sangha said he saw in February 2005 and the applicant stating he was at the Gold Coast, then this was not relevant to the decision to terminate for Mr. McCreath. 88 Mr. McCreath also stated that he did not see as relevant, the issue of the alleged phone calls from the applicant to Mr. Sangha on 30 March 2005. 89 Mr. McCreath denied that the reason the applicant was terminated was as a consequence of the applicant requesting a salary increase in May 2004 and its rejection at the time, by the respondent. 90 Whilst in cross examination Mr. McCreath was asked a great number of questions covering a number of subjects, he maintained that the reasons for the termination of the applicant was because of the conflict of interest and the inappropriate use of the respondent's computer resources. 91 It was Mr. McCreath's view that what the respondent's agent had retrieved from the applicant's computer showed that the applicant had accessed inappropriate web sites. His initials and employee number of "rm38999" were shown on the history printouts. These print outs had been sent to the applicant at his home address whilst he had been suspended requesting a written response. His written response did not cover the access to the inappropriate web sites. 92 Mr. McCreath stated that whilst he accepted that the applicant worked for Federal Express Australia which was a separate legal entity to Federal Express Corporation, in reality one did not differentiate on a day to day basis. The planes may be owned by the Corporation but their security was the responsibility of the Security Department. 93 Mr. McCreath was asked the following questions by the applicant.

Q. Do you accept that if it were part of the Fed Ex Corporation, the relationship , there could be no conflict. There's no influence into contracts, there's no…..

A. No, there still is a conflict. It would have interfered with your independent judgement and your objectivity.

A. Because you're integrating yourself into the security business of Menzies through suggesting or recommending to do audits, programming the locks, having access to that, determining when people can access Menzies facilities. You would have had full knowledge of the comings and goings of Menzies officers. 94 In re-examination Mr. McCreath stated that when he interviewed the applicant with his prepared questions he would read back to the applicant his summarised answers. 95 Mr. McCreath denied that the reason for termination was financially based as some cost cutting exercise as the respondent was well advanced in replacing the applicant. 96 He also stated that the inappropriate material found on the applicant's computer was extensive and hardcore and of itself would have resulted in the applicant's termination. 97 In final submissions Mr. Fernan for the respondent stated that the conduct of the applicant was wilful and deliberate and was a repudiation of his contract. His conduct was such that it warranted summary dismissal. The applicant through his relationship with Mr. Sangha was able to obtain the quote for the work to be done. Mr. Sangha knew the applicant as the respondent's security representative and believed that it was on that basis that the applicant was helping him. That was deception. 98 Mr Fernan brought to the Commission's attention various cases on repudiation of contract, relationship of employer/employee at common law and company policies. 99 Mr. Fernan stated that the applicant was aware of the respondent's policies and had knowingly breached such policies. At the commencement of employment the applicant signed to say that he had received the respondent's handbook and during his employment he through his work came into contact with the respondent's policies. The policies expressed in 1.4 Personal Conduct and 1.10 Business Conduct are of major importance. That the applicant denied knowledge of Business Conduct was not possible as Mr. McCreath had forwarded a copy of the document in March 2003 to the applicant. That Code of Business policy requires employees to "ask for guidance from your company's legal department before acting". This the applicant did not do. Under the Conflict of Interest heading, it states that " If you believe you may have a conflict of interest, you must immediately disclose this fact to your manager and to your company's legal department." The applicant failed to do this. 100 Mr. Fernan stated that from the evidence it can be seen a business relationship developing between the applicant and Menzies, going further than just the installation of "three locks". An offer of an ongoing service by CustomOz to Menzies is made by the applicant. 101 The claim by the applicant that Mr. Sangha sought secret commissions from the applicant should be dismissed. Such an accusation was never raised by the applicant, even though he had Mr. Sangha's statement on 1 April 2005, until he cross examined Mr. Sangha who denied the claim. 102 The evidence of Mr. Napiza showed that the applicant had used the respondent's equipment to edit, and modify the CustomOz web site. Also the applicant failed to lead any evidence that the ID "rm389999" was any other employee and that was ID that gained access to the inappropriate web sites. 103 At no time did the applicant acknowledge that he placed himself in a position of conflict of interest or show any contrition in respect to his actions. Consideration and Decision.

104 Evidence in this case has clearly shown, and has not been in dispute between the parties, that the applicant quoted and then had organised to have carried out the installation of access control locks for Menzies. 105 What was in conflict between the parties was as to whether such actions by the applicant were in contravention of the respondent's policy(s) ? 106 Evidence came before the Commission that the Employee had signed a document to say that he had received a copy of the respondent's Employee Handbook. The applicant denied that he had ever received it. On the balance of probability I find that the applicant did receive the Employee handbook. Within the Handbook is a section that is entitled "Code of Business Conduct." It states:

FedEx strives to maintain a high standard of business ethics. Our rules of business ethics involve honesty, integrity, and fairness in dealing with customers, suppliers and competitors. These rules require all of us to avoid any activity or interest which might reflect unfavourably upon our integrity or that of FedEx. Any conflict of interest or improper use of inside information will result in disciplinary action. Consult the People Manual or your manager to find out more about your responsibilities in this area.

Every full time employee of FedEx should consider his/her job with FedEx as their primary employment. You are prohibited from working for our competitors or suppliers on any basis. If an individual's circumstances require them to work a second job, such a situation would not be an excuse for poor performance, absenteeism, tardiness or refusal to work overtime. 107 The respondent also produced a booklet entitled "Code of Business Conduct & Ethics". Whilst a copy of this booklet was found in the applicant's office he stated that he had not seen it. Again on the balance of probability I find that the applicant was aware of the booklet and its contents. Within this booklet it states that this code applies to all employees of FedEx Corporation and its subsidiary companies. On the page that details "Conflict of Interest" it states in part:

We expect that you will not knowingly place yourself in a position that could create a conflict of interest, or the perception of a conflict. If you believe you may have a conflict of interest, you must immediately disclose this fact to your manager and to your company's legal department.

108 Within The People Manual Australasia are two relevant policies. They are the 1-5 Personal Conduct and 1-10 Business Conduct. I believe it is appropriate that these policies be reproduced to the extent necessary for this matter.

FedEx Express expects all employees to accept certain responsibilities for adhering to business principles in matters of personal conduct and to exhibit a high degree of personal integrity.

All employees are FedEx Express representatives. This is true whether the employee is or off duty. However, this is particular important for the employee to remember when wearing a FedEx Express badge or uniform. All employees are encouraged to observe the highest standards of professional conduct at all times.

FedEx Express requires a high degree of personal integrity and responsibility of its employees. Conduct considered acceptable involves not only sincere respect for the rights and feelings of others but also the assurance that conduct in both business and personal life avoids any action that might (1) be harmful to the employee, other employees, the Company; or (2) cause any unfavourable reaction from current or potential customers.

Violations of Company or departmental rules may constitute misconduct for which an employee may be immediately suspended with pay, pending a complete investigation. All alleged violations should be thoroughly investigated and documented. The decision should be based on a logical analysis of the evidence. Although the following list is not all-inclusive, these specific violations may result in severe disciplinary action up to and including dismissal. · Conviction of a crime involving job-related conduct · Deliberate falsification of applications or other Company-related documents, including electronic records, wage and or time sheets, clocking on with another employee's time card · Unauthorized possession of fire arms or other dangerous weapons on Company property · Fraudulent activities etc

FedEx Express strives to achieve the highest possible standard and personal ethics.

FedEx Express observes and complies with all laws and regulations of the local government which affect FedEx Express and its employees. In addition, FedEx Express employees are required to avoid any activities that involve or would lead to involvement of FedEx in any unlawful practices and to disclose to the proper FedEx Express authorities any conduct that comes to their attention which violates these rules and principles.

Accordingly, all employees are to acquaint themselves with the legal standards and restrictions that apply to their duties. The services of the legal Department are available through normal channels to all employees, and employees are encouraged to take advantage of them.

FedEx Express also expects all employees to observe the highest standards of business and personal ethics and to be honest and sincere in their dealings with government officials, the public, customers, and fellow employees.

Employees are to avoid any relationship with persons, firms or other corporations with whom FedEx Express transacts, or is likely to transact, business that may involve any employee in a conflict of interest. The absence of a specific policy or regulation does not relieve any employee from the responsibility to exercise the highest standards in those situations.

Interests in and Relationships With Suppliers. FedEx Express does business without favouritism. Purchases of material or services are competitively priced wherever possible.

An employee's personal interest or relationship is not to influence any transaction with a business organization that furnishes property, rights, or services to FedEx Express. Accordingly, no employee may have any direct or indirect interest in, or relationship with, a vendor or agent to FedEx Express or any organization that might affect the objectivity and independence of his judgement or conduct in carry out his duties and responsibilities.

Under unusual circumstances contracts may be entered into with employees or employee-owned companies. When such circumstances do exist, the employee must request approval of the senior president/general counsel, Legal Division. 109 From the evidence before this Commission with respect to emails sent to the applicant from Mr. Mccreath and conferences he attended and the admissions of the applicant with respect to 1-10 Business Conduct policy, it is my finding that the applicant was aware of these policies. 110 Part of the applicant's submission was that no conflict existed as his employer had no business connection with Menzies (see point 16 and 17 of this decision). As a consequence the applicant was not bound by what was expressed in the Employee Handbook. The contract with Menzies was with FedEx Corporation and not with his employer, FedEx Australia. I do not accept this submission. Whilst the contract may have been between FedEx Corporation and Menzies, I accept the comments of Mr. McCreath that on a day to day basis there was no differentiating between Fed Ex Corporation and FedEx Australia. The applicant agreed in cross examination that when he attended the airport he represented FedEx Corporation International. In my view a person employed in Australia by FedEx Australia would have day to day responsibilities to look after the property and business interests of FedEx Corporation. The alternative would be unrealistic, impractical and illogical.

111 The Business Conduct Policy requires employees to avoid any relationship with a firm that the respondent transacts business that may involve the employee in a conflict of interest. Whilst the applicant continued to state throughout the case that no conflict of interest existed he did seek clarification from outside sources prior to the work commencing. One being the Industrial Registry of the IRC NSW. He stated that those outside sources clarified that there was no conflict of interest. By contacting the Industrial Registry of the IRCNSW it is my view that the applicant had doubts as to whether a conflict existed. If doubt existed then the obvious course would have been, in accordance with the respondent's policies to seek clarification and approval from within. The applicant should have called either his immediate boss Mr. McCreath or the Legal Department to seek such approval. No evidence was brought before this Commission that such contact was made. In answering a question from myself as to why he did not contact Mr. McCreath, he replied that he did not have confidence in him. I do not accept such an answer as being a responsible reply from a person in his position. It is my view that the applicant purposely avoided contacting either Mr. McCreath or the Legal Department because the answer(s) would not be to his liking. I do not believe that the situation facing the applicant was one where he could "shop around" to find some outside person who agreed with his views on the subject. Mr. McCreath in his evidence was quite clear as to the possibility of conflict of interest existing. I accept his comments as being appropriate (see point 85 and 93 of this Decision). 112 It is my finding that the applicant by his actions did not follow the Business Conduct Policy. He also did not comply with the Employee Handbook. He did not avoid the relationship with Menzies but once seized with the opportunity for some business for his private company, actively pursued this business opportunity and even sought to engage Menzies in an ongoing business relationship by offering a future service contract for the maintenance of the system he had organised to have installed. The applicant was directly soliciting for further work from Menzies. 113 By his actions the applicant disregarded the respondent's policies yet accepted in evidence that he must be "whiter than white". 114 It is also my finding that the applicant used his position to obtain the quote from Mr. Sangha. By obtaining that quote the applicant took advantage of his position with the respondent and his previous business relationship with Mr. Sangha. By obtaining that quote the applicant took advantage of his position and therefore obtained an unfair financial advantage. I accept the evidence of Mr. Sangha that he believed the applicant was only assisting him in his position as the respondent's security advisor, when he approached him to seek contact numbers for alternative quotes. It was only after some of the work had been completed and the first invoice from CustomOz arrived that he came to realise the applicant's true position. 115 It is clear from the evidence that the applicant was not in Sydney in late February 2005 when Mr. Sangha stated that he saw him at the airport assisting in the installation work. Mr. Sangha with respect to his dates was wrong. 116 There was a dispute as to whether during a conversation between the applicant and Mr. Sangha in late February 2005 when Mr Sangha raised the issue of conflict of interest, the applicant was alleged to have responded : "Well it's just a matter of time before someone picks up on it".

The applicant was provided a copy of Mr. Sangha's statement (dated 1 April 2005) during the investigation but did not specifically deny it. On the balance of probability I find that the applicant did make such a comment.

In cross- examination of Mr. Sangha, the applicant claimed that Mr. Sangha had sought secret commissions from him. This was denied by Mr. Sangha. At no point prior to this cross-examination had the applicant made such an accusation even though he had ample opportunity in his affidavits to raise such a claim. I reject such a claim. 117 Incorporated with the Code of Business Conduct & Ethics booklet was a section on the use of computer resources. It is expressed (in part) in the following fashion:

Our computer resources, including e-mail systems and Internet services, are provided to help you do your work. In using these resources, you are expected to show the utmost respect for FedEx employees, systems and resources. Limited personal use may be acceptable if such use is allowed in your FedEx company and authorized by your manager or Company Contact and does not interfere with your job duties, the business needs of other employees or serving customers. Never use computer resources for illegal purposes, such as downloading or sending copyrighted materials (eg. music and movies). In addition, computer resources (other than certain designated bulletin boards) may be not be used for personal gain, political purposes or solicitation of any kind.

Do not access, send or download any information that could be insulting or offensive to another person, such as graphic, vulgar, violent, racially or sexually offensive materials or any other message that could be viewed as harassment. Also remember that "flooding" FedEx systems with junk mail and trivia hampers the ability of our systems to handle legitimate company business and is not permitted.

You should have no expectation of privacy regarding FedEx computer resources. Unless prohibited by law, we reserve the right to access and disclose all information contained on FedEx computers, at any time for any reason. Use good judgement and do not access, send a message, or store any information that you would not want to be seen or heard by others. 118 The applicant stated that he was unaware of this policy. As I have already found that the applicant was aware of the Code of Business Conduct & Ethics I find that he was aware of the Use of Computer Resources. 119 After considering all the evidence in conjunction with the allegation that the applicant had misused the respondent's computer equipment I am satisfied that the applicant used the respondent's computer to view his private company's web site and to log in as an administrator, to log into his personal email address and to receive and read emails sent from Mr. Sangha. I have considered Anexure 2 of Ex15. It showed that the applicant's computer registered that the word "CustomOz" came up 1009 times, "Sat Sangha" 71 and "Sangha" 264. As per the policy, limited use may be acceptable if the Company allows it and approval is granted by your manager. No evidence came before this Commission that the applicant sought and or was granted approval by Mr. McCreath. Whilst the applicant may well have had sound reasons to communicate with Mr. Sangha, that is for normal business reasons, that can not be the basis for "CustomOz." It is my finding that the applicant used the respondent's computer contrary to the policy. 120 The respondent also claimed that the applicant used the respondent's computer to access inappropriate web sites. This the applicant denied. He stated that as part of his job in investigating employees he would at times transfer material from an employee's computer onto his own. This he did during 2004. Mr. Napiza in his evidence stated that material had been transferred from one FedEx computer to the respondent's computer. In conclusion I can not on the balance of probability conclude that the applicant misused his computer to access inappropriate web sites although he did admit visiting dating services web sites. 121 The applicant claimed that he was not given procedural fairness in his termination. I do not accept this claim. The respondent held a number of meetings with the applicant where the applicant was given ample opportunity to state his case in replying to questions from the respondent. The respondent gave the applicant particular documentation and provided the applicant the opportunity of reply of which he correctly availed himself of. This process was held over two weeks. It is my finding that procedural fairness was provided to the applicant. 122 In summary it is my finding that the applicant misused his position to gain work for his private company without seeking approval from his manager or the Legal Department. The applicant also used the equipment of the respondent to monitor work on behalf of his private company web site without seeking approval from his manager. Both actions were contrary to the respondent's particular policies. Company policies are there to protect both employer and employee. 123 The applicant was the sole security consultant for the respondent for Australia and neighbouring countries. Consequently he operated with a high degree of freedom and trust. Mr. McCreath stated that he no longer had the necessary trust in the applicant. That trust between the respondent and the applicant had now been broken. I accept those views of Mr. McCreath. It would not be possible for Mr. McCreath to work in the circumstances necessary in the security field, with the added difficulty of distance, without having a high degree of trust in the applicant. 124 It is my finding that the actions of the respondent in summarily terminating the applicant were neither harsh, unjust or unreasonable. 125 This application is dismissed and the matter is now concluded.

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