E. Analysis of the misconduct
85As I have found that Mr Mitchell-Innes was intoxicated during the conference session, which was his workplace at the time, I find that misconduct is proved. Intoxication in the workplace is sufficient to establish misconduct by reason of clause 26.2 of the Code of Work and clause 4.5 of the Disciplinary Counselling Policy.
86Whether misconduct is sufficiently gross to manifest an intention not to be bound by the contract of employment, or is fairly to be categorized as serious misconduct in serious circumstances, depends on the level of intoxication, the behaviour resulting from it, the circumstances surrounding the intoxication, whether it is a manifestation of a longstanding issue or a solitary example of misconduct, and other relevant matters mentioned earlier.
87The misconduct occurred in the workplace. This increases the seriousness of the conduct. However, intoxication constitutes misconduct only when it is intoxication at work or at a work-related function. Willis conceded that intoxication not work-related is not sufficient to constitute misconduct.
88By the time Mr Mitchell-Innes and Ms Usher left the Irish Times, Mr Mitchell-Innes was intoxicated. In this regard, I accept Mr Mitchell-Innes' concession, notwithstanding the contrary evidence of Mr Parashar. Willis submitted that drinks at the Irish Times were a work-related function. Willis met the cost of the alcohol consumed at the Irish Times (although some of this cost was apparently recovered from Ms Usher). However, I doubt whether Mr Mitchell-Innes and Ms Usher, remaining behind at the Irish Times until the early hours of the morning, and becoming intoxicated, can properly be regarded as becoming intoxicated at a work-related function. Whether that should have impacted upon reimbursement of the alcohol expenditure is a matter I do not need to decide. The drinking with Ms Usher was related to a work-related function in that it followed one earlier in the night. I do not think this suffices to constitute misconduct. Nor do I think the circumstances of privately getting intoxicated with a colleague after hours can fairly be described as serious misconduct.
89The conference was not merely work-related, but work. Mr Mitchell-Innes attended the conference, his place of work on that day, initially in a state of low-level intoxication. He was the New South Wales State Manager, a position of some significance. The example he set was important to other junior staff. The seniority of his position is a matter that militates in favour of the misconduct being serious.
90Willis also relied upon a warning given by Mr Wilkinson to the senior management team in the fortnight prior to the Melbourne conference. Mr Wilkinson said:
"I expect the senior management team to be disciplined and I work on a 3 strike policy. For the first offence I give a warning. For the second offence I give a second and final warning. For the third offence you are out".
This comment was confirmed by Mr Leibbrandt and Mr Lehmann.
91But this statement does not assist Willis because it reiterates the procedure of multiple warnings and also because, in any event, there is no evidence that it is directed to intoxication.
92Mr Mitchell-Innes' role was as an observer, a level of participation much less than a presenter or a "coach". But he did involve himself in the program for a short time.
93There was no evidence from junior staff in relation to their observations of Mr Mitchell-Innes, or its effects on them. Indeed, no one gave evidence of the effect on other staff. In that event, I am unable to conclude that there was any adverse effect on other staff, staff morale or staff behaviour or discipline as a result of Mr Mitchell-Innes' low-level intoxication at the conference.
94There was no evidence of any aggression, violence, offensiveness, swearing, physicality, or unsafe behaviour engaged in by Mr Mitchell-Innes. The observation of his intoxication made at the rear of the room by the other State Managers - also apparently "observers" at the conference - was that Mr Mitchell-Innes smelt of alcohol, and for a short period when he involved himself in the table discussion, he spoke loudly, and lacked seriousness. This seems minimal in terms of the effect on others, especially in view of the lack of evidence from other junior staff or the presenters. There was, in my mind, little in the mode of behaviour of Mr Mitchell-Innes that added seriousness to his intoxication. He is said to have thrown a lolly. As I said, there was evidence that this was not an unknown method of engagement by Willis of participants in exercises. Although this may not have been the purpose behind Mr Mitchell-Innes' conduct, the event passed without comment by the recipient, or target, of the lolly. The reference to animal noises seems to be something said by Mr Mitchell-Innes to Mr Leibbrandt at the rear of the room as a means of conveying information about a recent safari undertaken by Mr Mitchell-Innes. I do not think it adds to the seriousness of the conduct, especially because it only involved one person of equally senior level to Mr Mitchell-Innes.
95The only evidence with respect to reputational damage was given by Mr Stratas, the RACV Manager, who testified that no damage to Willis' reputation had occurred.
96The approach of Willis to alcohol consumption is relevant to the seriousness that should be attributed to intoxication. As is mentioned above, Willis submitted that attendance at the Irish Times (undoubtedly for the consumption of alcohol) was a work-related function. The cost of the alcohol so consumed was routinely, and was on this occasion, met or reimbursed by Willis, irrespective of the quantity of alcohol consumed or the ultimate level of intoxication of the participants. Standing alone, these matters do not enhance the seriousness of the intoxication, or suggest that it involved a significant departure from common company standards.
97I referred earlier to the unchallenged evidence that Mr Wilkinson as the Willis Chief Executive Officer advocated a policy that its brokers "follow the client" in respect of alcohol consumption. I infer that this approach involved not only that the broker was expected to consume alcohol if the client did, but also that the quantity of alcohol consumption was, at least to some extent, dictated by the client's behaviour.
98This instance involving Mr Mitchell-Innes did not involve entertaining a client, so there is limited application of the policy in present circumstances. But, in my view, the "follow the client" approach, the practice of Willis routinely meeting the cost of alcohol consumed at employee gatherings irrespective of its quantity, and the circumstance that a group of Willis staff from interstate drinking until the early hours of the morning constituted a "work-related function" are matters that inform whether excessive consumption of alcohol on one occasion, or the arrival at work later that morning hungover or in a state of low level intoxication is sufficient to constitute gross misconduct warranting termination.
99On the morning when Mr Mitchell-Innes attended the seminar, Ms Usher did not. She, unlike him, did not attend work intoxicated. She presumably was unable to attend work because of her condition. She was not summarily dismissed. Mr Mitchell-Innes attended, was seen to be intoxicated, caused minimal disturbance, and was ultimately required to leave, perhaps at a time when he was no longer intoxicated. Given the minimal involvement of Mr Mitchell-Innes in the seminar, and the other work he was able to do on budgets with Ms Culvenor, compared to the absence of Ms Usher, it is difficult to identify in what respect the conduct of one was gross misconduct and the other not so. On the other hand, perhaps the conduct of Ms Usher was regarded by Willis as gross misconduct, but any power to summarily terminate her employment was not exercised.
100Mr Mitchell-Innes had not previously been disciplined for attending work intoxicated. Nor was there evidence that this behaviour had ever occurred before. His conversation with Mr Lindhout about long lunches involving the consumption of alcohol was not any form of warning, and did not concern being intoxicated at work.
101On the contrary, as mentioned previously, the evidence from Mr French was that several times Mr Mitchell-Innes had consumed a lot of alcohol the previous evening or early morning after "kicking on", but was able to turn up the next morning with a "great ability to...contribute", presumably unaffected by alcohol.
102Thus, the circumstance of this intoxication at work was properly to be regarded as a solitary, one-off event in a period of almost nine years employment with Willis, from February 2004 until October 2012, and which did not involve any client relations as no client was present. These are matters that militate against a conclusion of serious misconduct in serious circumstances.
103The provision of the Code of Work, that in respect of "alcohol and drugs" if "an employee acknowledges the existence of a problem and seeks professional help to resolve the problem, the Company will support the employee" is not consistent with summary termination, at least when it is the first occasion and the preconditions for the Company's support outlined in the Code are established: Mr Mitchell-Innes before and during the interview where he was summarily terminated acknowledged the problem, gave some reasons of explanation, and disclosed he was obtaining professional help.
104A proper reading of the contract of employment, including the Willis policies, read in the context of Willis practices in relation to alcohol, indicates that intoxication at work, of itself, is not sufficient to warrant summary dismissal for gross misconduct. Something more is required, some aggravating conduct such as repetition of the intoxication, a severe level of intoxication, adverse impact on employee or client safety, violence, offensive conduct or offensive language, a serious impact on reputation or significant financial loss. But none of these features or other aggravating features existed in this case. Here there was a manifestation of low-level intoxication, without other consequences or behaviour of significance. Mr Mitchell-Innes spent most of the time at the back of the room, by himself working on his iPad. In my view, this behaviour, Mr Mitchell-Innes' condition at the conference, does not constitute a repudiation of the agreement, or other sufficiently serious misconduct enlivening a power of summary termination. It was not serious misconduct in serious circumstances.
105Willis relied on other breaches of the agreement that it submitted were sufficiently serious to justify summary termination. Willis, however, conceded that the other asserted breaches ranked lower in level of seriousness than the charge of intoxication at work.
106It was said that Mr Mitchell-Innes was guilty of "excessive ordering" of alcohol. This phrase is derived from clause 12 of the Code of Work.
107There are three difficulties with this argument. First, it is unclear whether "excessive ordering...of alcohol" is sufficient of itself to constitute misconduct or whether the clause requires the ordering of alcohol to be coupled with a "refusal to comply with any lawful order", or with "intoxicated behaviour" or both.
108Secondly, and perhaps more significantly, there is no suggestion that "excessive ordering" under clause 12, if misconduct, amounts to gross misconduct. Ordering alcohol in excess is not identified in the contract letter or the policies as a type of misconduct that may warrant summary dismissal.
109Thirdly, I am not satisfied that Mr Mitchell-Innes ordered an excessive amount of alcohol. The evidence did not establish who ordered any particular drink. The same can be said of "excessive...distribution of alcohol". If "order" is constituted by allowing one's corporate credit card to be used to pay for drinks purchased, which I do not accept, then Ms Usher ordered most of the drinks. And Mr Leibbrandt ordered a greater amount of drinks at the dinner. There was evidence of $3,500 worth of food and alcohol being consumed by Willis staff at the conference the next night, apparently without any issue of excessive ordering arising. The circumstance that Willis met the expenses of alcohol on Mr Mitchell-Innes' credit card weakens any argument that the ordering of alcohol was excessive.
110Another breach alleged by Willis is that Mr Mitchell-Innes was intoxicated in a public place, namely in the hotel lounge area and (perhaps) at the Irish Times. But Mr Mitchell-Innes did not manifest in the hotel lounge area any intoxicated behaviour: he was asleep on the bench. Even if it may be correct to describe a sleeping person as intoxicated, his behaviour could not amount to serious misconduct, as no additional behaviour reflecting intoxication occurred. The behaviour was not visibly different to being merely asleep outside his room, in this case because of a lost key. This was not suggested to be gross misconduct, or even misconduct.
111Intoxication in a public place is not listed in the policies and procedures as a form of misconduct. In any event, the internal corridors of a hotel where one is staying is not properly to be described as a public place. It is privately owned by the hotel, although guests, perhaps only certain guests, have a licence to use it. A hotel room might be similarly described.
112Mr Mitchell-Innes conceded that he was intoxicated by the time he left the Irish Times. At that time he was in the company of Ms Usher only, and as she has no memory of what happened after 2pm, I could not find that she recognised that he was intoxicated. Mr Parashar did not. There was, at this stage, no work related function. Nobody gave evidence of observing that Mr Mitchell-Innes was intoxicated at the Irish Times. I do not think the intoxication at the conclusion of his visit to the Irish Times could constitute serious misconduct, or add to the seriousness (or otherwise) of what occurred at the conference.
113Finally, Willis alleged that Mr Mitchell-Innes behaved unprofessionally in throwing the lolly. I have already considered this issue in the context of intoxication. By itself I doubt that it is properly to be described as misconduct, at least without further evidence about its impact on the recipient or object. It cannot constitute gross misconduct warranting summary dismissal.
114Nor am I persuaded that all the conduct, taken together constitutes serious misconduct in serious circumstances. In my view, none of the other breaches alleged by Willis add to the seriousness of the misconduct of Mr Mitchell-Innes being intoxicated at work.
115For these reasons, I am not satisfied that Mr Mitchell-Innes engaged in gross misconduct, or in "serious misconduct in serious circumstances" enlivening in Willis a power summarily to dismiss Mr Mitchell-Innes. It follows that the conduct of Willis in dismissing Mr Mitchell-Innes is in breach of his agreement, and he is entitled to damages.
116Mr Mitchell-Innes maintained other claims for breach of contract. Subsequent to the hearing, a claim for breach of an implied term of mutual trust and confidence was abandoned by Mr Mitchell-Innes as a result of the recent decision of the High Court of Australia in Commonwealth Bank of Australia v Barker [2014] HCA 32.
117Mr Mitchell-Innes submitted that the investigation in October and November 2012, in respect of his conduct was not thorough or in accordance with the contract. I do not need to resolve this issue since I have found that on a proper examination of his conduct, it did not warrant summary termination.
118Mr Mitchell-Innes also submitted that if the conduct justified summary termination, that any power to terminate needed to be exercised honestly, not arbitrarily or capriciously, but in conformity with the contract in accordance with see Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357 at [5], [6]. Whether the plaintiff could establish that Mr Wilkinson was dishonest, capricious or arbitrary in dismissing Mr Mitchell-Innes in circumstances where he was nevertheless entitled to dismiss him, would necessarily depend upon those circumstances. They do not exist here for I have found that Willis did not have an entitlement to summarily dismiss Mr Mitchell-Innes. Accordingly, I need make no finding about this submission or other claims of breach made by Mr Mitchell-Innes.