Simon Richard Lane v The Commonwealth Bank of Australia

Industrial Relations Commission (NSW)|2000-07-31|Before: Schmidt J

The applicant's reply 93 In reply it was submitted that an employer has no right to summarily dismiss when the dismissal is based on a fundamentally flawed process; particularly where competing factors need to be taken into account, but are not examined properly or put before the decisionmaker and the decision is made without properly taking into account the evidence favourable to the employee. Here this conclusion was inescapable, because the employer had not even followed its own procedures for dealing with allegations of misconduct. 94 Furthermore, the Bank's failure to call Mr Murray in these proceedings had denied the applicant the opportunity to explore with him how these deficiencies would have affected his decision to dismiss Mr Lane, had they been known to him. It also denied the applicant the opportunity to put his explanations to the decisionmaker in the witness box. The Bank ought not to be able to benefit from its decision not to call Mr Murray. It was not open to conclude that these matters would not have influenced Mr Murray's decision to dismiss summarily, had they been known to him. 95 It was also wrong to submit that the Bank's decision to summarily dismiss had a proper foundation. This would require assumptions to be made as to how Mr Murray would have viewed competing material. Both the evidence and the submissions advanced demonstrated that the respondent was indifferent to the truth throughout its investigation. Many of the matters it was concerned about were issues capable of explanation or resolution through mediation. The omissions in the material brought to Mr Murray's attention, fundamentally flawed the process. In particular, if the Bank had taken the view that a conflict of interest existed, it had not given Mr Lane the opportunity to elect to remove himself from the conflict which he had not himself perceived. Had he done so, a decision to dismiss may not have been made. 96 It was submitted that the Court would not overlook, in this case, that each of those Bank officers involved in the investigation had failed in their responsibilities, with serious consequences for Mr Lane. There was nothing bizarre in expecting that substantive and procedural fairness would be afforded Mr Lane in the course of a serious investigation and decisionmaking process. 97 The respondent's reliance on Byrne was misplaced, because it concerned an employer who had observed actual misconduct, 'which allowed no innocent explanation' (at p430). Here Mr Lane's explanations plainly required consideration. Questions of conflict of interest are rarely simple and involve assessments of perceptions and their factual basis. The approach in Byrne was further distinguishable, because there the issue was not whether fair conduct ought to be a term of the contract of employment, the issue here raised under s106. 98 The proposition that misconduct, whether wilful or not, removes an employer's duty to render substantive and procedural fairness to an employee, would be rejected. In Antonakopoulos v State Bank of New South Wales (1999) 91 IR 385, the assessment of whether an employer has followed its own processes was considered a matter of public interest. 99 Here there was no evidence of intentional misconduct. Rather, various competing factors required consideration in determining what action should be taken and how the competing factors should be resolved, for instance by way of mediation. Mediation would not preclude summary dismissal. 100 Even if it were accepted that disciplinary action was warranted, summary dismissal was not the only option. Relevant to this was the fact that only the day before the decision to dismiss was made, the Bank's lawyers had written to Mr Lane's lawyers, indicating that mediation was not appropriate because things were still at a premature stage. 101 The limited construction of s106 advanced by the Bank would be rejected. The jurisdiction was designed to allow the Court to intervene in contracts in order to achieve justice in the circumstances of a particular case, namely to achieve what should have been. It was not designed simply to adjudicate rights. 102 This was not a disguised breach of contract case, but rather a claim seeking the sorts of contract variations typically within the Court's jurisdiction. Here the relief was sought before the dismissal. The proceedings were the very type for which the section was enacted. 103 As to the suggestion that mediation would have achieved no more than 14 days delay, the implication was that anything which the applicant put forward could not have influenced the respondent and ignored the terms of the contractual proven itself, which had to be widely interpreted, in accordance with the approach discussed in Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160 and the discussion of the Full Court in Metrocall Inc v Electronic Tracking Systems Pty Ltd [2000] NSWIRComm 136. It followed that the Bank was not prepared to focus on its obligations to provide procedural fairness, was prepared to shut its eyes to what the applicant put forward and was not prepared to contemplate anything other than summary dismissal. 104 As to summary dismissal, an essential element is that misconduct relied on must be wilful or intentional. There was no evidence that the Bank had considered this issue. 105 Mr Lane was a creditworthy witness. The Bank's Statement of Professional Practice required directorships to be disclosed and that employees not place themselves in positions where they stood to benefit from transactions between the Bank and another party. The statement also expressly permitted Bank employees to take outside employment, provided their Bank duties were not adversely affected. The Bank's case was that Mr Lane was evasive about his chairmanship of Offsite and his shareholding in it. 106 In his evidence, Mr Lane was adamant that he had not received any financial benefit from the operation of Offsite or that he provided support to his wife at the Bank's expense. The obligation to make disclosures about his involvement with Offsite depended upon the likelihood of Mr Lane benefiting from his involvement in it. He perceived neither a conflict nor a likelihood of benefit. At most, there was a possibility of indirect benefit from the increased prospect that he would receive a dividend from his shareholding. 107 That Mr Lane was not being paid for his involvement with Offsite was not considered by Mr Murray. Nevertheless, the evidence was that he focussed on the question of pecuniary benefit as a very important matter in his approach. 108 On the evidence Mr Lane did not turn his mind to the potential conflict of Offsite selling Bank products for the Source and the one off recruitment contract organised by Ms Collins. These, however, were not summary dismissal offences. There was no basis in the evidence that Mr Lane had intentionally misled Mr Scrimshaw as to his and his wife's business plans. Nor was the inference that Mr Lane was intentionally disregarding his duties to the defendant. 109 Mr Carroll never understood the significance of Mr Lane's teleworking. His evidence was that he sent documents to his home computer and others to his work computer. Mr Carroll did not appreciate that the quantity of the Offsite material on Mr Lane's computer reflected this telecommuting. Nor did he understand that this volume of documents did not indicate that Mr Lane was ignoring his duties to the Bank. The evidence was that Mr Lane worked hard and for long hours for the Bank. He also spent time giving advice and support to his wife, as he was entitled to do.

The law and its application to this claim 110 It is helpful, at this stage, to make some observations about ss105 and 106 of the Act. They provide: 105 Definitions In this Part: "contract" means any contract or arrangement, or any related condition or collateral arrangement, but does not include an industrial instrument. "unfair contract" means a contract: (a) that is unfair, harsh or unconscionable, or (b) that is against the public interest, or (c) that provides a total remuneration that is less than a person performing the work would receive as an employee performing the work, or (d) that is designed to, or does, avoid the provisions of an industrial instrument.

Power of the Commission to declare contracts void or varied (1) The Commission may make an order declaring wholly or partly void, or varying, any contract whereby a person performs work in any industry if the Commission finds that the contract is an unfair contract.

(2) The Commission may find that it was an unfair contract at the time it was entered into or that it subsequently became an unfair contract because of any conduct of the parties, any variation of the contract or any other reason.

(3) A contract may be declared wholly or partly void, or varied, either from the commencement of the contract or from some other time.

(4) In considering whether a contract is unfair because it is against the public interest, the matters to which the Commission is to have regard must include the effect that the contract, or a series of such contracts, has had, or may have, on any system of apprenticeship and other methods of providing a sufficient and trained labour force.

(5) In making an order under this section, the Commission may make such order as to the payment of money in connection with any contract declared wholly or partly void, or varied, as the Commission considers just in the circumstances of the case.

111 The complaint here advanced concerns the applicant's contract of employment and its alleged unfairness, as well as the respondent's conduct in terminating that contract, which was also alleged to have been unfair. 112 The respondent's conduct, particularly in relation to the alleged breach of the employment contract, arises for consideration in these proceedings, given the provisions of s106(2) of the Act. In this respect, my own views as to the proper construction of s106 of the Act are set out in the minority judgment in Reich, particularly at para 176: 'It follows that the relief which s106(5) contemplates, is relief flowing from the contract found unfair on the evidence and not merely any unfair conduct, which may or may not demonstrate the unfairness of the contract under review.'

113 Contrary to that view, the approach which must be followed to the construction of s106 is that discussed by the majority of the Court in Reich at paragraph 27: 'It logically follows, in our view, that Mr Fernon's submission, as earlier quoted, that "unfairness in a contract is demonstrated by unfair conduct that is consistent with the contract" is only partly correct but to which should be added "unfair conduct that is inconsistent with the contract". We accept Mr Murphy's approach to this aspect, namely, as he said, "conduct by an employer which is unfair and which breaches the employment contract, even though not permitted by the terms of that contract … would nevertheless render such contract unfair and amenable to relief. Such approach is entirely consistent with the language of s 106(2)". We would only add the comment that to us it seems an utterly arid exercise in semantics to find conduct as part of the operation of a contract to be unfair but not thereby to find also the contract to be unfair because such unfair conduct was not permitted by the otherwise fair contract - we think it should be stated as plainly as it may be, and as we think the authorities and s 106(2) do, that a contract may be found to be unfair because of any conduct of the parties.' 114 It follows that it is unnecessary, in proceedings under s106, to identify what, if any, provisions of the contract in question are unfair. It is sufficient, in order for the jurisdiction to be enlivened, for any unfair conduct, including a breach of fair contractual terms, to be established on the evidence. 115 It follows that many of the arguments advanced, for the respondent, as to the way in which the discretion vested in the Court should be exercised in this case, must be rejected as being inconsistent with the provisions of s106, as they have been construed. 116 Be that as it may, in my view the submissions advanced for the respondent, that the discretion vested in the Court under s106 of the Act should be exercised within the compass of the principles established at common law in relation to implied terms of a contract, and that any variation should be limited to one which the parties themselves would have agreed, must be rejected. 117 In my view that approach is inconsistent with the statutory scheme. If it were correct, it is difficult to see what work the section was given to do. The relief would already have been available at common law. In my view, the section is not concerned with what parties to the contract in question themselves would have agreed. It is rather concerned with the question of whether the contract, as it in fact was agreed, is an unfair one, as defined in s105. 118 As cases frequently brought to the Court reveal what the parties to a particular contract have agreed as between themselves was unfair - either at the time the agreement was reached, or because intervening events have made the agreement unfair. This may flow from what the contract expressly provides for or what it otherwise permits, even by way of omission. The conduct of the parties to the contract must also be considered consistently with s106(2), in the manner earlier referred to, namely on the basis discussed by the majority in Reich. 119 Obvious enough examples of such unfairness can flow from termination of employment. A short period of notice agreed when a contract of employment is first made, without any recompense for circumstances of redundancy may prove to be unfair, when exercised many years later. In such a case the evidence may not permit the conclusion that the parties would have agreed on a reasonable notice provision or appropriate redundancy payments, suitable to the circumstances when the employment was in fact terminated. Indeed, the very fact of the claim advanced under the section, evidences the parties' failure to so agree. That position would not, however, preclude relief being granted under the section. 120 Similarly, it may well be the case that the parties have agreed to terms, which they are content with, but which the Court finds on the evidence to be unfair or contrary to the public interest and thus require variation. Such a case may, after all, be brought to the Court by someone other than the parties to the contract in question. (See s108(c), (d) and (e) ). Others, such as the Minister or the President of the Anti-Discrimination Board, might be heard in such a case. (See s167.) 121 It is, however, pertinent to observe that any relief which the Court crafts as a matter of discretion, must be designed to redress the unfairness identified in the particular case. Such relief would, of course, not be designed to visit unfairness on the party who had resisted the claim brought. For example, a variation in a case such as this, which brought about the result that the Bank no longer had the right to examine and make judgments as to whether an employee had engaged in misconduct warranting dismissal, would not be granted. Such a variation would, after all, itself be patently unfair. 122 That does not mean however that a case where the complaint advanced was in relation to how an employer conducted an investigation into allegations of misconduct, would not be considered by the Court. A variation of a contract which required that where serious allegations of misconduct were being investigated, which had the potential for an employee to be summarily dismissed, that the allegations be fairly investigated could not visit any unfairness on the employer. Steps such as giving the employee a fair opportunity to understand the allegations being made, the basis upon which they were being advanced and an opportunity to respond to that material, before a decision to dismiss was made, would not interfere with the employer's right either to investigate such allegations or to act upon them if satisfied that they had been made out. 123 Also relevant to the issues which here arise for determination are the observations of the majority in Abboud v The State of New South Wales (Department of School Education) (1999) 92 IR 32 as to claims advanced under s106 in relation to procedural fairness, by which I am of course also bound. At p51 it was there observed: 'Findings as to procedural fairness

Her Honour concluded that the "litigation before the Industrial Relations Commission in Court Session afforded Mr Abboud with an opportunity to address issues that caused him concern. He has been given his hearing" (at 29). We consider that this conclusion represents an error of law. There is authority for the proposition that a hearing before a tribunal empowered to review the merits of an administrative decision, and to substitute its own judgment, may cure any denial of procedural fairness: see Preston v Carmody (1993) 53 IR 206 at 220-222. Similarly, prohibition may not be granted in respect of a denial of procedural fairness in proceedings at first instance where there is a full right of appeal on fact and law: see R v Marks; Ex parte Australian Building Construction Employees and Builders Labourers' Federation (1981) 147 CLR 471 at 484. These principles are not applicable, however, with respect of an application under s106 of the Act. The jurisdiction of the Court is to determine whether "the contract is an unfair contract" and to exercise its discretion as to the appropriate remedy. An application under s106 does not involve an appeal from the decision of the respondent. If the contract permits the respondent to terminate the contract in a manner which is unfair, that contract may be unfair notwithstanding the right of an applicant to bring a claim before this Court alleging the contract is unfair. The finding that this unfairness may have been ameliorated or cured by the fact of the hearing before the Court involves a misapprehension of the function of the Court in determining whether or not the contract was unfair.'

Consideration 124 This case, despite its complexity, was concerned with essentially two issues. The first related to the failure of the applicant's employment contract to ensure the applicant a fair investigation and consideration of the allegations made against him. The second whether the evidence demonstrated a proper basis for the summary dismissal of the applicant's employment. 125 While the applicant denied that there had been such misconduct, on his case, the defects in the investigation process were such that significant orders of money compensation would be made in his favour, even if such misconduct was found. The respondent, for its part, took the approach that these proceedings could not be conducted as if they concerned an unfair dismissal. Having in mind the applicant's own conduct, any defects in the procedures which the Bank had pursued in investigating the allegations were not such as to lead the Court to exercise any discretion in the applicant's favour. 126 As will become apparent from what follows, I take the view that there was strength in both cases. There were in my view, serious deficiencies in the investigation conducted by the applicant, which highlighted a relevant unfairness in the contract in question. The evidence however, also demonstrated that misconduct warranting the applicant's summary dismissal had taken place. These conclusions have led to a real difficulty in the determination of what, if any, relief should flow to the applicant as a matter of discretion. I will return to this later. 127 As the respondent submitted, these are not unfair dismissal proceedings. In the first instance the Court is concerned with whether the applicant's contract of employment was unfair. It plainly was. 128 This conclusion is inescapable, when it is appreciated that this contract provided for termination of employment upon the giving of four weeks' notice and six months' pay, except in cases of misconduct. 129 It follows that were Mr Lane to be dismissed under his contract for misconduct, the financial penalty would be significant. The consequences for any employee of dismissal for misconduct may, of course, be serious. In the case of a senior executive such as Mr Lane, it can readily be appreciated that the effective result may be the end of a career, otherwise successful prior to the termination. 130 In those circumstances, that fairness would require that an employer would conduct a thorough investigation of allegations of misconduct, giving an opportunity to the employee to understand the allegations and what they are based on, to respond and to then have the response take into account in any decision, can also readily be appreciated. 131 In this case, such an emphasis on fair procedures was in fact a feature of the Bank's own attitude to allegations of misconduct. The Bank had entered into an agreement with the Union which represented the bulk of its employees, as to the processes which it would pursue in investigating allegations of misconduct. Those processes were designed to achieve the type of fair investigation process I have described. The Bank also took care to assure its executives, who were not directly covered by this agreement, that they would be similarly treated. Were senior employees to be treated differently to award covered employees in relation to such matters, findings of unfairness would obviously be likely to flow, if a challenge were brought under s106. 132 It is undoubted that the Bank's senior officers were aware of these policies. Both Mr Scrimshaw and Mr Murray asked Mr Cupper if he was satisfied that the correct procedures had been followed and were assured that they had. On the evidence that assurance was not well founded and, indeed, it was wrong. 133 It is pertinent to observe at this point, that the Bank resisted addressing the applicant's complaints about the unfairness of the investigation it was conducting as it was proceeding. Mr Lane unsuccessfully sought to meet with Mr Cupper, Mr Scrimshaw did not return his later calls and the Bank refused his request for mediation. Had it not done so, it is difficult to imagine the deficiencies in the investigation would not have come to light. There would then have been an opportunity to address them, the misconduct would have been revealed for what it was and, in reality, no complaint left to be made. 134 The Bank, however, resisted giving any consideration to its procedures or even discussing the applicant's concerns about the investigation as it was proceeding. That attitude eventually led to the deficiencies in question being brought to light in these proceedings. 135 That Mr Lane's misconduct was also revealed for what it was in these proceedings, does not override the conclusion that there was relevant unfairness in the contract. The misconduct demonstrated is, however, relevant to the relief which must be crafted. I will return to that consideration below, after I have explained why it must be concluded that the contract in question was unfair and why it must be concluded that the applicant's misconduct has been established.

The procedural deficiencies 136 The way in which the Bank conducted itself in all of the circumstances was rather curious. Mr Lane, who had been employed to bring about various changes at TOP, was the subject of a number of anonymous allegations. Mr Scrimshaw seemed to accept that these changes had given rise to a level of conflict amongst affected staff. He tried without success to dissuade TOP staff from making anonymous allegations, while reassuring them about the changes taking place. When he did so, he was aware of the problems being pursued with Ms Keenan by Ms Collins and saw no need to intervene. 137 Mr Carroll later interviewed Ms Keenan who was still disgruntled by the changes taking place in TOP HR, and the counselling in relation to her work performance still being pursued by Ms Collins. Within days of Mr Carroll interviewing Ms Keenan and other former TOP HR employees, another anonymous complaint was generated. 138 That the Bank would, nevertheless, wish to investigate anonymous allegations raising serious issues is entirely understandable. That it would wish to do so in a way which would isolate the investigation from those involved in TOP HR, for whom Mr Lane was responsible, is also understandable, after all, the allegations might again have come to nothing. That the investigation conducted ignored that approach is not. 139 The other more senior officers of the Bank who were involved seem not to have been aware of how Mr Carroll was conducting the investigation in this and a number of other respects. Had they taken care to understand what Mr Carroll was in fact doing, some of the unfair aspects of the investigation might have been avoided. 140 A number of findings inevitably flow from the evidence. Firstly, Mr Carroll and Mr Eddington conducted the investigation into the anonymous allegations made against Mr Lane contrary to the arrangement between Mr Cupper and Mr Scrimshaw - namely without the involvement of TOP HR personnel, including Group Investigations. This departure from the arrangement which the Bank itself regarded as appropriate makes the investigation process, and the contract which permitted it to so proceed, unfair. On all of the evidence it is difficult to see that Mr Carroll did not appreciate the problem with involving TOP HR personnel, particularly Mr Pellegrini. 141 It is relevant to this conclusion that the investigation and Mr Pellegrini's involvement in it became known to other TOP staff during the investigation, because he informed them that Mr Lane was at home dealing with issues which had arisen and that they should speak to him first before speaking to Mr Lane. This later led to another anonymous letter of complaint, this time concerning the inappropriateness of Mr Pellegrini's involvement in the investigation and his conduct. Mr Carroll suggested to Mr Cupper on 25 May that this complaint should be dealt with by he discussing the matter with Mr Pellegrini. It seemingly formed no part of the Bank's consideration of Mr Lane's complaints about the investigation it was conducting. 142 The investigation was unfair in a number of other respects. Despite Mr Lane's requests, he was not given any fair appreciation of the allegations raised against him in the anonymous letters which the Bank had received, nor those which had been raised by Ms Keenan and which later became a part of the conclusions reached that he had no answer to all of the allegations made against him. That Mr Lane asked for this information was not surprising, given that he had been given some 90 minutes notice of a meeting to discuss anonymous allegations made against him. 143 At that point the Bank's investigation had been ongoing for a considerable period. It had interviewed various employees and had obtained many documents which Mr Carroll had taken some days to consider. Mr Carroll fobbed off Mr Lane's questions about the complaints which had been made and rather presented him with the documents he was concerned about, in an interview during which Mr Lane was questioned for one and a half hours. Mr Lane had been given no warning about this, and was, on Mr Eddington's evidence, so shocked by what had been put to him, that it was agreed that he should take a few days sick leave. The answers which Mr Lane gave at this session however, eventually formed the basis of Mr Scrimshaw's view that he should be dismissed. 144 While it was submitted for the Bank that Mr Lane was not forced to participate in this interview and as a senior executive knew what he was doing, Mr Lane was also entitled to assume that the Bank was proceeding in its investigations on a basis which was fair to him. After all, the Bank had assured its executives it would do so. 145 The interview concluded with Mr Lane being assured that answers he had given would require further investigation by the Bank. To the contrary however, a letter of allegations of misconduct was immediately drawn up and later in the day he was told to go home to answer the allegations, even before they had been given to him. Mr Lane was then denied access to his secretary, or to information which he required in order to respond, until he approached Mr Eddington, who intervened on his behalf in relation to steps being taken by Mr Pellegrini in relation to other TOP staff. 146 This situation alone was a sufficient basis for Mr Lane's concern that the investigation was not being conducted fairly. His request to meet Mr Cupper was then not acceded to. When he spoke to Mr Scrimshaw, he was reassured that Mr Scrimshaw would be involved in the process. Unbeknownst to Mr Lane, that assurance was not met however, because Mr Scrimshaw was not provided with any real report of what the investigators were doing and he was not provided with most of the information which was gathered. Mr Scrimshaw's request that he be kept informed was not met. 147 Indeed, in reality Mr Carroll was the only person who was aware of what that information was. He kept some of the information entirely to himself and later in his report misrepresented other aspects of the information he had gathered. It follows that the expectation of Mr Scrimshaw and Mr Eddington, that Mr Lane's side of the story would be sought in relation to the matters revealed in the Bank's investigation was not met. 148 While Mr Carroll conducted interviews of other employees who supported what Mr Lane had said in response to some of the allegations made against him, Mr Lane was not told of the interviews and the records of those interviews were not made available to him. Nor were they drawn to the attention of Mr Cupper, Mr Scrimshaw or Mr Murray or referred to in Mr Carroll's report, as other than supporting the case against Mr Lane. 149 Mr Carroll's report can only be read as not providing a fair or complete representation of the information gathered in the investigation. It was seriously deficient and unfair in a number of respects, also reflecting the fact that it was based, in part, on material gathered by Mr Carroll, which was never put to Mr Lane, so that he had no opportunity to respond to it. The Bank's submission that Mr Carroll had to exercise 'discretion and judgment' in the presentation of the material in his report, rather than arguing Mr Lane's case for him, was undoubtedly correct. Unfortunately, such discretion and judgment was not fairly exercised. 150 The report reflected the view which Mr Carroll had taken of Mr Lane's responses to the allegations made against him, consistent with the view he had earlier expressed to Mr Keen at the outset of the investigation. Mr Carroll took no account and indeed made no reference to evidence which he had gathered, which supported Mr Lane's refutation of the allegations. Nor was real reference made to what Mr Lane had advanced in his own defence. 151 Further difficulties flowed from statements made by Mr Carroll to Mr Lane, which were inaccurate. He had told Mr Lane at the interview that his responses required further investigation. One matter which plainly arose was Mr Scrimshaw's knowledge of various matters Mr Lane had raised. In cross examination, Mr Carroll agreed that he had not discussed any of these matters with Mr Scrimshaw. His evidence was that these were matters which Mr Eddington was to discuss with Mr Scrimshaw. Even if that were the case, neither Mr Carroll nor Mr Eddington discussed such a step being taken and it was not. 152 Mr Eddington did not discuss these matters with Mr Scrimshaw and on his evidence did not understand that he should have done so. It was Mr Carroll who was the investigator. It follows that there was simply no consideration or response to what Mr Lane had said in this regard. 153 That what Mr Scrimshaw had to say was relevant to the investigation was demonstrated by the evidence he gave in cross examination. Mr Scrimshaw agreed, for example, that there were a number of statements made by Mr Lane at the interview which he regarded as having validity, for instance in relation to Austrainer. Other matters concerned Mr Scrimshaw greatly. That the Bank would act without understanding how Mr Scrimshaw viewed these matters was odd to say the least. It is difficult to see how this omission was consistent with the Bank's policy. 154 It was also unfair that the Bank, in reality, gave no consideration to what other employees, such as Mr Keen and Ms Collins, had to say, which at least put into context what Mr Lane was saying in his own defence, for example, that he had not directed Mr Keen to do Offsite work in Bank time. Mr Keen told Mr Carroll he had discussed the matter with his supervisor, Ms Keleher, a person also mentioned by Mr Lane. An investigation of Ms Keleher's knowledge of these matters would have assisted in understanding whether Mr Lane had, in fact, directed Mr Keen to perform Offsite work in Bank hours or not. Mr Carroll did not to follow this up and did not provide anyone with a copy of what Mr Keen, in fact, had said. 155 One matter which Mr Carroll did follow up after the interview with Mr Lane was Ms Collin's knowledge of various matters. Again, her interview was not shown to Mr Lane and when later asked about further investigations, Mr Carroll told Mr Lane that the investigation had halted after the interview with him. While this was consistent with Mr Eddington's understanding, (who was also present at this meeting with Mr Lane), the statement was plainly false. 156 While there can be no criticism directed to the writer of a report such as that prepared by Mr Carroll, who provides a summary of what an investigation has revealed, fairness requires that such a summary take account of what the person being investigated puts in their own defence. The report was singularly deficient in this regard. 157 The proper conclusion from the report and from the evidence of Mr Carroll's conduct, was that early in the investigation, before he interviewed Mr Lane, he had come to the view that Mr Lane was to be dismissed. His report was written to that end. It was not the even handed report of an investigator seeking to uncover all of the evidence relevant to the allegations which were being investigated, drawing attention to what material supported the allegations and what did not. Rather, the report was swayed to support the recommendation of dismissal. Relevant evidence was not presented to the decisionmaker, indeed it was hidden from him. 158 Had Mr Carroll's report and the material on which it was based been made available to Mr Lane before it was presented to Mr Murray, many of these deficiencies would have come to light. Given that the Bank did not elect to take such a course, it led inevitably to the situation where relevant information was not put before Mr Murray, who considered the report on its face, within a very short timeframe and made a decision based on what was presented to him by Mr Cupper. What was, in fact, before Mr Murray on that day was unclear on the evidence. The report itself, however, makes apparent that not all of the relevant material was there and of course, the report itself did not present a fair or accurate summary of the information gathered. 159 This is particularly important in a procedure which called for the decision to dismiss being made by Mr Murray, upon the recommendation of those who report to him. In this case, Mr Cupper presented the report. Mr Scrimshaw was overseas. He had not seen Mr Carroll's report. He had relied upon the views which Mr Cupper and Mr Eddington had formed. Mr Scrimshaw had delegated his authority in that respect to Mr Eddington. 160 The evidence does not permit the comfortable view to be formed that either Mr Cupper or Mr Eddington had considered the material on which the report was based, so as to come to their own independent views that what was recommended was appropriate. How could they have, some of the material was not there. The report referred to other material which had never even been put to Mr Lane. In cross examination, Mr Cupper accepted that there were difficulties with the report - for example, the suggestion that what Ms Collins had said did not support Mr Lane's explanations. A comparison demonstrated that to be wrong in relation to some matters. It was obvious that whatever consideration Mr Cupper gave to the report, it was not sufficiently detailed to enquire into such inconsistencies, or the whereabouts of documents referred to in the report, but not provided with it. 161 It was submitted, for the Bank, that there was no obligation on the Bank's other officers to analyse 'de novo' the material on which Mr Carroll's report was based and to form an independent view thereon. That is a submission which cannot be accepted, either having regard to the Bank's own policies or as a matter of fairness. The Bank did not purport to delegate to Mr Carroll the decision in relation to Mr Lane's conduct and future with the Bank, nor should it have, given his position in the Bank's hierarchy. It was precisely because of the size of this organisation and the way in which it was structured, that an appropriately senior Bank officer should have formed an independent view on the material gathered, as to whether there had been misconduct warranting dismissal. 162 It was submitted that the practical upshot of the approach adopted by the Bank, was that inconsistent with its policy, the decision to dismiss was effectively made by Mr Carroll, a person two levels Mr Lane's junior, rather than the relevant heads of the business units involved, Mr Scrimshaw and Mr Cupper or by Mr Murray. Given all of the problems I have referred to, it is a submission which is difficult to resist. The inescapable conclusion is that the Bank's investigation was inconsistent with its own policies and unfair from a number of perspectives. The contract which permitted this approach was also unfair. 163 This unfairness was continued by the Bank in the approach which it adopted to the question of mediation. Mr Lane's contract provided for mediation at the Bank's expense. Mr Lane plainly had a dispute with the Bank as to the procedures it was adopting in relation to the investigation of the allegations of misconduct, made against him, as its own correspondence acknowledged, prior to his dismissal. There is nothing in the contract which properly left available the view that such a dispute was not to be mediated in accordance with the agreed terms. The basis upon which the Bank's view of its contractual obligation to mediate rested was entirely unclear and, in my view, was not open. The submission that a right to mediate in relation to complaints about how an investigation into allegations of misconduct was being conducted, could not co-exist with a right to dismiss summarily for misconduct, must be rejected. The submission does not distinguish at all between the investigation process and the decision made about what the investigation reveals. While one leads to the other, they are distinct processes, as the Bank's own approach here demonstrated. Fairness in relation to the first will not preclude the exercise of the second, but can only ensure that no errors are made in that exercise. 164 While it is strictly unnecessary to resort to a consideration of authorities such as Francis Travel as to the proper construction of a contract such as that under consideration here, the views expressed at pp165-166 by Gleeson CJ (as he then was), with whom Meagher and Sheller JJA concurred, support the conclusion as to construction which I have here reached. 165 That there might have been a different conclusion available, if the dispute in question had concerned whether or not Mr Lane should have been dismissed for misconduct once the investigation had been completed and the material gathered considered, merely goes to demonstrate that a dispute about how the investigation was being conducted should have been the subject of the mediation processes agreed. As to this, I note that it was not contended for the applicant that there was any right to mediate under the contract, after its termination for misconduct. 166 The Bank's conduct in relation to Mr Lane's requests for mediation prior to his dismissal was plainly another unfair aspect of its approach to the investigation. Indeed, it was a breach of the contractual provision. It is pertinent to note that the rejection of mediation arose at a time when the Bank was evidently concerned about the initiation of these proceedings. The correspondence makes plain that before the question of Mr Lane's conduct was raised with Mr Murray, the Bank had moved from giving Mr Lane an opportunity to add to his defence, to an opportunity to address it on why he should not be dismissed. This was at the same time as Mr Lane was pursuing his efforts to have the Bank address his complaints about its investigation procedures, through mediation. Mr Lane's complaints and his request for mediation was apparently never raised with Mr Murray. 167 On the approach of the majority in Reich, this breach of Mr Lane's contract in relation to mediation is also a matter which thus arises for consideration in relation to remedy, even though the contractual right to mediation cannot on any view, itself be regarded as an unfair feature of this contract.

Misconduct 168 The applicant's case was that the deficiencies in the investigation process and the report inevitably led to the conclusion that the decision to dismiss which was based upon those documents was affected thereby and itself became unfair. That is a conclusion which is not open, without consideration also being given to the conduct which founded the allegations of misconduct. This flows from a number of authorities, including Byrne, Antonakopoulos and Abboud. 169 The first two cases, of course, concerned unfair dismissal claims, claims which arose under a different statutory regime and which provide for different remedies to those available in these proceedings. In unfair dismissal cases, where an employer has summarily dismissed an employee for misconduct, one consideration which arises is that the existence of the misconduct upon which that right was exercised, must be demonstrated by the employer. (See the judgment of Hungerford J in Pastrycooks Employees, Biscuit Makers Employees & Flour and Sugar Goods Workers Union (NSW) v Gartrell White (No 3) (1990) 35 IR 70.) A similar approach must be adopted here. 170 Abboud on the other hand was a case which arose under s106. There, the majority were concerned about an absence of procedural fairness and proceeded to grant relief under s106 of the Act on the basis that the trial judge had erred in the conclusion reached that there had been relevant misconduct warranting termination of the contract. The approach of Hungerford J in Pastrycooks was followed. 171 None of these cases however, is authority for the proposition that unfair investigation procedures, of themselves, will lead to the conclusion that dismissal was unfair or that the contract was unfair, with relief being granted on that basis alone. Each of these authorities contemplates that a failure to follow fair procedures may deny an employee the opportunity to advance an innocent explanation for the conduct called into question, or some other reason upon which the proper conclusion that dismissal for misconduct would not be warranted could rest. Whether such an explanation or reason exists, must therefore be considered. 172 It was also submitted for the respondent that this application, as advanced, was in reality nothing but a disguised claim in respect of an alleged unfair dismissal. Such a claim is precluded by s109A of the Act. (See Beahan v Bush Boake Allen Australia Limited (1999) 93 IR 1.) That submission must be rejected, having regard to the complaints here advanced for the applicant and the relief sought. The Full Court in Bush Boake discussed, at pp40-42, the type of claims which were excluded from s106 by operation of s109A, making particular reference to claims as to the alleged inadequacy of payments made on termination of employment, which it viewed as remaining to be pursued under s106. Here, relief was sought in relation to the inadequacy of payments made on termination, as well as the complaints advanced in relation to unfair procedures. The money claim was also advanced on the basis that such compensation would be just in this case, even if the conclusion was reached that there had been misconduct warranting dismissal. 173 The test for misconduct has long been established. No reason for departure from it was established in this case. It was discussed by Cook J in an oft cited passage in Dispute; Re Dismissal of Union Delegates at Homebush Abattoir [1996] AR (NSW) 371 at p374: '…the question of whether the conduct of an employee amounts to misconduct justifying instant dismissal would generally depend upon whether or not the act complained of can properly be regarded as deliberate or wilful or of such a nature as to strike at an essential element in the contract of service, namely, obedience to the lawful commands of the employer and the right of the employer to enforce discipline.'

174 Six allegations were put to Mr Lane by the Bank. Mr Carroll's report suggested that he was guilty of all of them. Mr Scrimshaw and Mr Murray were particularly concerned about some of these matters - those relating to Offsite. In these proceedings, there was a detailed examination of the various allegations, the evidence which the Bank had gathered in relation to them and in addition, an examination of material it had not gathered or considered. This included Mr Scrimshaw's evidence as to his views about various matters in which he had been involved, material which had been kept from Mr Lane in the investigation, Mr Lane's evidence in chief and in cross examination about these matters and some material produced by the parties during the preparation of the case for hearing, which they tendered in their respective cases. 175 From this material, it was easy to appreciate why the Bank was concerned about Mr Lane's involvement in Offsite and his apparent conflict of interest, in breach of the Bank's Professional Practice policy. That policy applied to other Bank employees apart from Mr Lane. It was not the subject of any complaint in the proceedings and must be regarded as an appropriate regulation of the conduct of the Bank's employees in the banking industry in which it and they were together engaged. That the Bank would expect a highly paid senior executive, such as Mr Lane, to adhere to the policy is understandable and indeed, it was not a part of Mr Lane's case to argue to the contrary. 176 The evidence demonstrated that Mr Lane's conduct in relation to Offsite was in breach of the policy, gave rise to a conflict of interest and amounted to misconduct warranting dismissal. The type of conclusion reached by Wilcox CJ, (as he then was), in Gooley v Westpac Banking Corp (1995) 129 ALR 628, that Mr Lane had merely made an error of judgment not amounting to misconduct, is not properly available here on the evidence. 177 There were, however, some aspects of the allegations which were not made out on the evidence. I shall deal with those matters at the outset. 178 One of the allegations made against Mr Lane concerned his use of Bank time and equipment to perform work for Offsite. Mr Lane's evidence was that he had various Offsite documents on his computer, because either he or his wife had emailed them to him. He equated the documents to having been kept in an electronic 'bottom draw'. Some were documents relating to a partial sale of Offsite, there were power point presentations and other internal Offsite documents. 179 Mr Lane's attitude to this use of the Bank's equipment was that as a senior executive of the Bank, he had no fixed working hours. He worked long hours, including at home and emailed work documents to his home computer and personal documents to his work computer and saw no breach of his obligations to the Bank in either respect. He successfully performed all of his work for the Bank, had been commended for his work performance and did not permit his interest in Offsite to interfere with his work for the Bank. 180 Seemingly the Bank had no specific policy precluding its employees from using the Bank's equipment or employees' personal computers in this way. Mr Carroll's statement to Mr Keen at his interview, earlier quoted, is consistent with this. The Professional Practice policy governed these matters. Teleworking was also encouraged at the Bank. It was not really challenged that Mr Lane, as a senior employee in TOP was in the vanguard of such work arrangements. What was at issue was how his work for Offsite intruded into his work for the Bank, in conflict with his obligations under the Professional Practice policy. 181 That the Bank might adopt a flexible attitude to the work of its senior executives, provided its Professional Practice policy was adhered to, is understandable, given the evidence of the working patterns of senior executives like Mr Lane. Mr Scrimshaw's attendance to this investigation during his leave in Italy, itself provided an illustration of such an approach to work obligations. One can readily appreciate why an employer who expects its senior employees to produce particular results by working long hours, including at nights and on weekends at home or while on leave, would have no complaint about such employees attending to their personal affairs from time to time during what were ordinary working hours for other employees. For their part, such employees are highly remunerated for such an approach to their work obligations, as Mr Lane's remuneration package itself demonstrated. 182 It follows that the volume of non-Bank material retrieved from the Bank's computer system, of itself, may not have evidenced a breach of any obligation which Mr Lane had to the Bank. 183 The Bank's concern about this material was the conflict which it evidenced between Mr Lane's role as a shareholder and director of Offsite and his employment with the Bank, as well as his involvement of Mr Keen and perhaps others, in that work. Mr Cupper's evidence was that Mr Murray was concerned that 'Simon requested Bank staff to undertake work for his company using Bank equipment'. 184 Mr Carroll's report referred to six allegations which constituted misconduct which had been put to Mr Lane, including 'work he requested Bank staff to undertake for Offsite HR using Bank equipment and resources (both within normal business hours and outside normal business hours).' 185 The background document attached to Mr Carroll's report included a chronology of information received, which included that: · Karen Dunwoodie (resigned 23/4/99) was using business cards (with her name) for Offsite Human Resources prior to her resignation. · Raphael Keene had expressed concerns about the work he was required to do for Offsite HR to his Manager, Megan Keleher, who in turn referred it to Elizabeth Collins. · Individuals who questioned what was happening in TOP HR were moved out of the area eg Lynda Cannon, Shonagh Mahoney and Scott Martin. Others resigned out of frustration.

186 Under the heading of comments, Mr Carroll reported that 'Simon Lane was working on/having work done by his staff, for Offsite HR during Bank time, using Bank equipment and resources.' In his summary, Mr Carroll summarised Mr Lane's response to the misconduct alleged in relation to use of Bank staff and equipment as : '… already indicated above I did not instruct Raphael Keene to up-load the Offsite Human Resources Pty Limited website onto the Bank system during Banking hours in conflict with his duties to the Bank. To the contrary I instructed him to do any work for Offsite Human Resources Pty Limited when he was off-duty.'

187 Mr Carroll's conclusion was that it was difficult to accept the denials put forward by Mr Lane as to this matter, having regard to the first hand evidence put forward at the interview of Mr Keen and Ms Collins. On the balance of probabilities, it followed in Mr Carroll's view that Mr Lane should be found guilty of this allegation. 188 On the material there was a proper basis for concern about Mr Lane's involvement in Offsite, and there was room for suspicion that contrary to Mr Lane's protestations, he had, in fact, asked Mr Keen to perform Offsite work during Bank time and using Bank equipment. After all, Mr Lane was Mr Keen's supervisor at the Bank, he had recruited Mr Keen for Offsite, was himself using the Bank's equipment to do work for Offsite during what was ordinary working time at the Bank, he was sending Mr Keen emails at work about Offsite, using the Bank's computer equipment himself and speaking to him at work about Offsite, while Mr Keen should have been performing his Bank work. 189 What was not clear from Mr Carroll's report was that Ms Collins supported Mr Lane's denial of this allegation, although in cross examination he agreed that this was the case. Ms Collins on 19 May informed Mr Carroll that she had become aware, from rumours among TOP staff some four weeks previously, that Mr Keen was performing work for Offsite during Bank hours on Bank equipment. She had immediately raised the matter with Mr Lane, who then dealt with it. Mr Keen's manager, Ms Megan Keleher had also discussed the matter with her later. Mr Carroll did not ask Ms Collins what they had discussed, but debated with her whether she should have raised the matter with someone other than Mr Lane. Ms Collin's view was that she had raised it with him because he was her manager and he had dealt with it, so she had not needed to take it further. 190 Mr Carroll did not enquire either from Mr Keen, Ms Collins or Ms Keleher, what had actually been discussed by them, so far as Mr Keen working during Bank time for Offsite was concerned. While initially denying performing Offsite work during Bank time, Mr Keen informed Mr Carroll that he had performed about 15 to 20 hours of such work, but had stopped doing so. He did not tell Mr Carroll that Mr Lane had asked him to perform work in Bank time, nor did anyone else. Mr Lane on the other hand, told Mr Carroll that while he had spoken to Mr Keen while they were both at the Bank and had sent him emails there, he had never asked Mr Keen to perform work for Offsite during Bank time, that Mr Keen had done so himself, without his knowledge and contrary to the arrangement between them. When this had been drawn to his attention he had addressed the matter immediately with Mr Keen and his two managers directly. Mr Lane agreed that he had asked Mr Keen to do some particular work for Offsite while they were both at the Bank, but Mr Keen had been paid for work done for Offsite on his home equipment outside of Bank hours. In Mr Lane's view, Mr Keen had made a mistake in performing some of the work during Bank time, which had been addressed as soon as it came to Mr Lane's attention. 191 All of this evidence needs to be understood in the context of the Bank's Professional Practice policy, which did not preclude employees having secondary employment, so long as it gave rise to no conflict. It was never suggested that there was any conflict in Mr Keen, an IT specialist, working for Offsite to help it establish a website and other computer related work. The difficulty always rose from Mr Lane's connection with Offsite and the suspicion that he had arranged for Mr Keen to perform this work when Mr Keen should have been attending to his duties for the Bank. 192 The evidence which Mr Carroll gathered, plainly indicated why a suspicion arose as to Mr Lane, but did not provide any proper basis for the conclusion that it was Mr Lane who had directed Mr Keen to perform work for Offsite during Bank time or using Bank equipment. It might not have been very wise on Mr Lane's part to engage Mr Keen to work for Offsite, particularly given his own obvious conflict in relation to his involvement in Offsite. Nor should he have been discussing Offsite work with Mr Keen while he should have been working for the Bank. It would also no doubt have been better for him to have terminated the arrangement with Mr Keen once he had learnt that he had been performing work for Offsite during Bank time, rather than excusing him on the basis that he had made a mistake. Nevertheless this evidence did not provide a proper basis for a finding of misconduct based on the conclusion that Mr Lane had directed Mr Keen to perform Offsite work during Bank time. It is also relevant that after all, Mr Carroll seems to have taken a similar view in relation to Mr Keen as Mr Lane had, as the transcript of Mr Keen's interview made plain, namely that he had made a mistake which warranted no action being taken against him. 193 Mr Carroll's report also suggested that Bank employees apart from Mr Keen had worked for Offsite. There was no evidence of that and it was a matter never explored by Mr Carroll with Mr Lane. Similarly the comments made by Mr Carroll in relation to other employees leaving TOP, seem to have emanated from Ms Keenan, but were never explored with Mr Lane. In cross examination Mr Carroll agreed that various employees had left TOP when they were promoted, contrary to the suggestion made in his report that they had left because they had questioned what was happening in TOP. There was no other evidence to support Mr Carroll's conclusions about these matters. Nor indeed, were his conclusions about harassment and victimisation supported by the evidence which was gathered. Mr Carroll's conclusions seemed to accept entirely what Ms Keenan had raised, without it having been put to Mr Lane and discounting entirely what Ms Collins said about this matter. 194 Mr Murray was also concerned about Mr Lane's failure to comply with the Bank's Statement of Professional Practice and his failure not to place himself in a position of conflict with the Bank in relation to Offsite. Mr Murray was concerned that Mr Lane had put himself in a position to make personal gains in circumstances where his private interests conflicted with those of the Bank. Mr Carroll's report indicated that Mr Lane was a director and a 50% shareholder in Offsite. 195 Mr Carroll noted in his report that Mr Lane contended that his contract did not require him to declare his shareholdings to the Bank and that his shareholding caused him no such conflict. Mr Carroll also observed that it was Mr Lane's view that he could perform work for other commercial organisations during Bank paid time. 196 It is the evidence as to Mr Lane's interest in Offsite, his misrepresentation of that interest to the Bank and how he conducted himself in relation to that interest, which he concealed from the Bank, which leads to the conclusion that Mr Lane had been involved in misconduct warranting his dismissal. The evidence led in these proceedings confirmed that conclusion, rather than calling it into any doubt. That evidence included Mr Lane's evidence in cross examination and documents which he produced, tendered by the Bank. 197 While Mr Lane persisted in his view that he had not placed himself into any position of conflict, because he had personally derived no financial benefit from his interest in Offsite and had always adhered to his obligations to the Bank, that evidence was implausible, when Mr Lane's actual conduct is considered. 198 As I have already noted, the Statement of Professional Practice generally applies employees of the Bank. Given the contents of the policy and the business of the Bank, the reason for that situation is obvious. There was no complaint advanced in these proceedings about the policy. It provides, relevantly: 'Banking is a profession founded on very high standards of personal integrity and conduct which requires absolute honesty. These guidelines, which are complementary to the Bank's instruction manuals, should be understood and observed by all employees of he Commonwealth Bank and/or its subsidiaries as appropriate (including those employed on an individual contract of employment). In performing your duties you should keep uppermost in your mind the need to sue commonsense. If you always act honestly, exercise commonsense and are never afraid to ask for help if you are unsure of how to act, you will not encounter any problems in observing the principle contained in this statement.' · You should protect and develop the business of the Bank, through prompt and efficient service to customers and prospective customers. Business of the Bank · You should know your job and the Bank's instructions applying to it, follow directions, exercise and not exceed the authorities and discretions delegated to you and act in a manner which will enhance the reputation of the Bank. · You should comply with the law in all your activities. · You should actively support the Bank's policies regardless of personal views. Dealing with Customers and avoiding Conflict of Interest · You should avoid placing yourself in a position where you may stand to benefit, even indirectly, from a transaction between the Bank and another party. Where there is any likelihood of such conflict arising, you should make full disclosure to the Bank.

· You should ensure that your personal relationships with customers do not influence or prejudice your obligations to the Bank. In particular, you should not accept commissions, and should use commonsense regarding gifts or hospitality from customers. Equal Employment Opportunity · Discrimination and sexual harassment in the workplace are illegal. You should know, adhere to, and actively support he Bank's EEO policy and programmes, regardless of your personal views. Confidentiality · You should treat all the affairs of the Bank its customers and fellow employees with absolute secrecy. This obligation continues should you leave the Bank. Honesty · You should be absolutely honest in all your professional activities. Stealing, borrowing, misappropriating money or property to private use, unauthorised access to information and fraudulent acts generally, are criminal offences. · You should be absolutely honest in all your professional activities. Stealing, borrowing, misappropriating money or property to private use unauthorised access to information and fraudulent acts generally, are criminal offences · You should report any knowledge of fraud error, breach of law or concealed practice which may be detrimental to the interests of the Bank. · You should be aware that the Bank is often a target of attempted fraud, and be altered to ensure that the Bank's position is protected and that it does not inadvertently participate in any illegal activity. Personal Standards and Finances · You should adopt personal standards consistent with the high reputation of the Bank and endeavour at all times to enhance the standing of the Bank. · You should manage your personal finances in a prudent manner and take care not to overcommit yourself. · If you are experiencing any personal or financial difficulties, you should never hesitate to discuss them with our manager. You should inform the Bank if any bankruptcy or insolvency action is taken against you.

Outside Employment and Appointments · You may obtain supplementary employment or occupations outside the Bank, or hold honorary positions in clubs, charitable organisations etc, providing the performance of your Bank duties is not affected adversely, such employment or occupation odes not in any way reflect adversely on the Bank and does not conflict with our duties to the Bank. · Any outside directorships of commercial organisations should be disclosed to the Bank and should only behold where there is no possibility of conflict or adverse effect on your duties to the Bank. Please approach the Bank for advice if you wish to stand for any political office.

199 Mr Lane's position, as put to the Bank in his written response was that: 'Conflict of Interest

Under the Statement of Professional Practice the Bank expressly permits me and other senior executives to take on outside directorships of commercial organisations. I am required to disclose such directorships to the Bank and to ensure that there is no possibility of conflict or adverse effect on my duties to the Bank.

Quite clearly the issue is the impact on my duties to the Bank. Also when there is no actual conflict of interest, the Bank is not (sic) risk and I will not have breached my contract.

Directorships are to be disclosed. Shareholdings are not required to be disclosed.

There is no specific provision in relation to the timing of the disclosure of outside directorships. The obligation is clearly to do so within a reasonable time.'

200 Mr Lane also put: 'What is critical is that I do not intermingle the interests of the Bank and any other corporation of which I am a director, in this instance, Offsite Human Resources Pty Limited. I must exercise judgment to ensure that I form a clear mental separation between the two sets of interests. I am not obliged to separate physical time periods into normal business hours for the Bank and other hours for other affairs.'

201 The evidence demonstrated that Offsite was incorporated in February 1998. It was to be the business operated by Mr Lane's wife, also a human resources professional, after she had been made redundant from her former employment. On 16 February, twelve shares in Offsite were acquired by Mr Lane's wife; Mr Lane became a director and the chairman of Offsite and the minutes record that six shares were then transferred to him. Mr Lane signed the minutes of the director's meeting recording this transfer. At that point, Mr Lane had an obligation to inform the Bank of his directorship and chairmanship of Offsite. He did not do so. 202 He gave evidence about the work he performed for Offsite as Chairman. He said: 'Chairman (sic) of boards generally have positions in corporations where they are full time executives. Those executives spend time during business hours both on working in the corporation in which they are employed and their work as chairman of any corporation for which they are the chairman.'

203 Mr Lane's evidence also was that he worked to 'position' his wife's business. These matters are relevant to a consideration of the steps then taken by Mr Lane as an employee of the Bank in connection with Offsite. 204 This evidence must be considered in the context of Mr Lane's later written agreement with Offsite, which provided that he was to be its Chairman, noted that he would be undertaking full-time employment for another employer, that he was not to perform paid duties for Offsite, but that he would act as an unpaid consultant in the areas of product design, business planning and financial planning. The agreement also provided a regime for the transfer to Offsite of the title in any products in which he was involved in the creation, distribution or sale and in return for which he would receive 1/3 of any revenue which Offsite generated. 205 In February 1998, Mr Lane was in negotiation with the Source for the Bank, as to it providing the Bank with various services in relation to Bank training products. The Source had been introduced to Mr Lane by Mr Scrimshaw's predecessor. At the same time, Offsite also began negotiating an arrangement with the Source to market the Bank's products. While Mr Lane suggested that he was not involved in these negotiations and that they were conducted by his wife, that evidence sat most uncomfortably with his own description of his approach to his duties as Chairman of Offsite. Mr Lane was not only plainly aware of the negotiations between Offsite and the Source, the evidence demonstrated that he was actively working to support the arrangement. 206 On 9 March, a draft service agreement between the Source and Offsite was prepared. On Mr Lane's evidence on 10 March he sent a memo to Mr Scrimshaw regarding Offsite. Mr Scrimshaw had no recollection of receiving such a document. In any event, it was in inaccurate and misleading terms, as Mr Lane partially conceded in cross examination. It provided:

'Russell, As I mentioned to you yesterday, Sharyn has taken a redundancy package from Optus and over the last couple of weeks been discussing with me the setting up her own HR Company. I will probably also be a director but not in any working capacity. It is still speculative as she has an offer from Lucent Technologies to consider and this will be decided on Friday. She has asked me if she can ring you to act as a referee this week if that is o.k. with you. If this doesn't work out she'll probably register her company in the next month sometime. She hasn't decided on a name yet but I'll let you know what it is when she makes up her mind. If you want to contact her, her number is still 0412 207 821. Regards'

207 Mr Lane acknowledged in cross examination that at this point contrary to his written advice to Mr Scrimshaw, Offsite had, in fact, been established and registered; he was both a director and the Chairman; the name had been decided and contrary to his assertion that the business was not trading, Offsite was in active negotiations with the Source to enable Offsite to market the Bank's training products to the public. All of those steps were taken without any disclosure by Mr Lane to the Bank. They raise the clearest conflict of interest under the Bank's policy. Mr Lane's explanations, that he was not benefiting financially because he received no remuneration from Offsite and that he never acted contrary to his obligations to the Bank or its interests, were simply not credible. If that were the case, there would have been no need to conceal from the Bank the steps which were being taken and to mislead Mr Scrimshaw as to the real position in relation to Offsite. 208 The further explanation that the Bank had no right to be informed of Mr Lane's shareholding in Offsite, because such disclosure was not required by its policy, is a misreading of the policy by a senior human resources practitioner, which is also not credible. Mr Lane insisted that he had no reason to, or to want to, disclose his financial position regarding shareholdings to the Bank. While Mr Lane might not have received payment for his work as a director, that he would not understand the financial benefit which could flow to him as a shareholder of Offsite, once it had acquired the right to market the Bank's training products to the public defies belief. The policy expressly stated "you should avoid placing yourself in a position where you may stand to benefit, even indirectly from a transaction between the Bank and another party". 209 That Mr Lane also did not perceive that there could be a question as to the arms length nature of any negotiations between the Source and Offsite as to the marketing of the Bank's products, when he was the officer of the Bank who represented the Bank in its negotiations with the Source as to its rights to market those same products, also defies belief. Again, if he had truly been acting in accordance with his obligations to the Bank, there would have been no reason to mislead Mr Scrimshaw as to what Offsite was doing. 210 That the Bank would have an interest in knowing which entities might be involved in marketing its products to the public is obvious. Mr Lane insisted that this was a matter in respect of which the Bank had no interest. In his view the Source was free to subcontract with anyone it chose, in relation to the marketing of the Bank's products. It is unnecessary to consider whether that view was correct. It is sufficient to observe at this point, that if it were correct, it could only be as the result of the terms negotiated with the Source by Mr Lane on behalf of the Bank, at a time when the Source was also negotiating with Offsite. As Mr Lane described it, he was in the front line of the arrangement between the Bank and the Source to market Bank products throughout the country. As a result, an obvious commercial advantage flowed to Offsite, unbeknownst to the Bank. Again, the conflict of interest was abundantly plain and was further exacerbated by Mr Lane's involvement in what the Source was doing. As he put it: 'I'm saying that the Bank had negotiated a distribution agreement with the Source and the Source had its right to distribute that range in which ever fashion it saw fit. I gave them assistance, of course, but that was the case.'

211 Further evidence of Mr Lane's misconduct in relation to Offsite was provided by the evidence which came to light during these proceedings of Mr Lane's failure to appreciate the need to properly document the arrangements being made as between the Bank and the Source and through it, with Offsite, as to the marketing of the Bank's products outside the Bank. While the Bank had entered into an arrangement with the Source to provide it with certain services in relation to the delivery of its training products, there had been no agreement reached in relation to the external marketing of those products. 212 Mr Scrimshaw's evidence as to this must be accepted, rather than that of Mr Lane, particularly given the documentary evidence which supports his understanding of the correct position. Mr Scrimshaw had executed an agreement with the Source in relation to the administration of the Bank's products. Contrary to Mr Lane's evidence, Mr Scrimshaw had not executed any agreement in relation to the external distribution of those products by the Source. The external marketing of the Bank's training products was a proposal that Mr Scrimshaw was due to discuss further with Mr Lane on his return from overseas in May 1999, but it had not been approved by either he or the Bank's legal department, as was first required. 213 The evidence as to these matters was that while steps had earlier been taken by Mr Lane and Ms Collins to raise the concept they were pursuing in relation to such marketing with Mr Scrimshaw and the Bank's legal department, Mr Lane was moving in advance of his authority, so far as the Source and Offsite was concerned. Had he not done so, he might have come to a better appreciation of his conflict of interest in relation to Offsite. 214 There cannot be any doubt that the Bank had an interest in who might be marketing its training products outside the Bank, so as to generate a revenue base to be used to fund the further utilisation of those programmes within the Bank. That it would also wish to ensure that its products were not sold to its competitors was appreciated by Mr Lane. Indeed, his evidence was that this was part of his arrangement with the Source. No agreement to protect the Bank's interests in this respect seems to have been entered or otherwise documented. Mr Lane's enthusiasm for these developments had Mr Scrimshaw's support in principle. He was due to discuss this matter further with Mr Scrimshaw on his return from leave in May 1999. Mr Lane's enthusiasm seems, however, to have outrun his caution. He had plainly not obtained the necessary approvals to take all of the steps on which he had already embarked and had failed to inform Mr Scrimshaw that Offsite was then already long involved in marketing the Bank's products externally. 215 On 25 March 1998, the applicant had published a Marketing Outline for the Source, which provided: · "For the purpose of this overview, Offsite Human Resources Pty Ltd will be deemed to be a product of the Source International. The audiences for these products remain remarkably consistent. In most instances it will be Senior Line Management of Senior Human Resources Managers (except for Offsite as it will be a threat to them). Entry points will more than likely be those people in tandem with other HR managers and Training managers within that company, and in the cases of the technology products, the IT Line managers will also serve as entry points. These will dictate to a large extent the medium chosen to advertise the product, and the marketing angle attached" (page 2); · "This primary (Umbrella) document will cover in overview format all of the Source's products, including an overview on the Source upfront…" (page 2); · "The Offsite folder should be produced in exactly the same manner as the TSI documents except that it should be in a different colour scheme but similar appearance, with Offsite products upfront instead of at the back as with the other document" (page 2-3); · "The goal would be (in the short term) to attract ourselves to the High Impact-Low Cost scenarios until cash flow straightens up …"(page 8)."

216 In cross examination, Mr Lane explained that this was a joint marketing strategy which he had prepared for the Source and Offsite. 217 On 31 March, a News update was prepared by Mr Lane which provided: · "The umbrella document that you saw in rough draft at our last meeting is almost complete as will the supporting documents for the entire range of products including Offsite Human Resources Pty Ltd"; · "The completed umbrella document … and the Internet site will be demonstrated to you on the 18th of April when we meet to go through the doing Business workshop…"; · "The will allow Chip and myself to finalise our cost models for all the range and provide you all with a leads and commission sheet by no later than the 18th so you will know how long it will take you to get rich (rough calculations on getting rich put this time at approximately 3 weeks)"; · "We can announce the Source International and the Commonwealth bank have come to an arrangement on the exclusive distribution of the Compass and Frontline products. Both businesses will enjoy a substantial gain from the relationship"; · "I will be in contact with you soon to gather two pieces of input from you. The first is our need to complete a biographical on you for our marketing information. The other is to get your view on leads, commissions and facilitations that you believe you will be able to achieve in the next financial year (&/or calendar year 1998)."

218 In cross examination, Mr Lane agreed that he had never informed anyone at the Bank that steps were bring taken by the Source and Offsite to market the Bank's products on a joint basis. Despite this, he explained that he had prepared this document in his role for the Bank. It had been prepared for the Source, because, in Mr Lane's view, it needed guidance on how to be successful. 219 On 1 May 1998, also unbeknownst to the Bank, the Source and Offsite had signed their agreement and Offsite began offering Bank products for sale on the internet. Offsite then pursued an arrangement with another of the Bank's suppliers, which eventually came to nothing. On 19 November 1998, for the first time, Mr Lane disclosed his directorship in Offsite to Mr Scrimshaw. This was confirmed in a written memo on the next day, earlier quoted, again in misleading terms. It did not, however, disclose that Offsite was already marketing Bank products to the public or that Mr Lane was a shareholder of the company. Instead, it provided: "[I have] … an interest in a registered company called "Offsite Human Resources Pty Limited". The company is owned by my wife Sharyn Chisholm and I am a director of this business. The company is registered in Australia and the United Kingdom and trades in the field of Human Resource Services. They do not do any work on behalf of the Commonwealth Bank. It is my intention to deliberately exclude Offsite Human Resources from any opportunities available in TOP so no conflict of interest can arise. As a Director I do not serve in any employment or management capacity in Offsite Human Resources Pty Ltd. Additionally, I have recently signed my Bank employment contract which include a clause on intellectual property which I also intend to abide by."

220 In March 1999, Offsite and its shareholders commenced negotiations with a Mr Solomon, regarding the acquisition of a share of the business. The agreement between the parties disclosed Mr Lane as a seller of part of his shareholding. On 31 March, the agreement earlier referred to was entered by Mr Lane, under which he would receive no payment from Offsite for his work for it. On 1 April, Mr Lane transferred three of his shares to Mr Solomon. 221 In cross examination, Mr Lane's belief was that he had not become a shareholder of Offsite until March 1999 and that prior thereto his wife had owned all the shares. Mr Lane also believed he had no contractual obligation to disclose his shareholdings to the Bank, as I have already noted. His evidence and the records of the Offsite share register show that the position of ownership of the shares was confused and steps had to be taken when the sale was in progress to reflect the correct position, which was that Mr Lane had been a shareholder since February 1998, as minutes of a meeting which he had himself then signed revealed. I was left in some doubt that his evidence was given candidly about this issue, particularly given that in his interview with Mr Carroll he agreed that he had been a 50% shareholder in Offsite and in his written response to the Bank he never denied having a shareholding in Offsite prior to March 1999. Whatever Mr Lane's actual recollection might have been, he, nevertheless, still failed to make any disclosure as to his shareholding in Offsite to the Bank, at any time prior to the allegations of misconduct being raised with him by the Bank. 222 Mr Lane had disclosed his directorship of Offsite to Mr Scrimshaw in November 1998 as earlier noted and had undertaken to ensure that no conflict arose. When responding to the Bank's allegations, his view was that there had been no conflict, his involvement with Offsite had had no adverse impact upon his duties to the Bank and even if the view were taken that there had been a conflict, the Bank would take into account that it had suffered no loss as a result. 223 At that time, the position was that Offsite had been involved with the Bank in two ways. I have already dealt with the first. The second was that Ms Collins had engaged Offsite to fill a position available at TOP. She did so because Mr Solomon was known to her and she was dissatisfied with the work done for the Bank by the agency she had previously used. 224 Both Ms Collins and Mr Lane explained to Mr Carroll how this circumstance had arisen. He, however, made no reference to this explanation in his report and like in relation to the question of Mr Keen's work for Offsite, implied that what Ms Collins had told him did not support Mr Lane's versions of events. 225 What Ms Collins said was that she had invited Mr Solomon to conduct the recruitment activity because she had not been comfortable with the recruitment agencies she had been using, she had known Mr Solomon professionally for some time, had heard good things about him, was not precluded from using other agencies because the Bank had no preferred vendor and had decided to give him a go. 226 Ms Collins said she had discussed using Offsite with Mr Lane, who had told her that he had declared his interest to Mr Scrimshaw and that as he was not going to make any personal gain from the matter, that there would be no problem. Mr Lane explained that because the decision to use Offsite was made by Ms Collins, that he did not expect any personal gain from it and that he believed that the Bank would benefit from the use of Mr Solomon's expertise, because they had been struggling to fill the vacancy, he took the view that there was no problem with Ms Collins going ahead. 227 Mr Lane later accepted in his written response to the Bank that a perception of conflict might have arisen and offered to have Offsite drop its fee for this work. Offsite did not however do so and that account was later paid by the Bank. 228 It is difficult to conclude from this matter that dismissal summarily for misconduct would have been warranted from it alone. Mr Lane's approach to TOP using Offsite was plainly inconsistent with his November 1998 undertaking to Mr Scrimshaw. Mr Lane's representation of his disclosure concerning Offsite to Ms Collins was also inconsistent with the actual position. Were this the only problem which arose for consideration in respect of Mr Lane, a different view as to misconduct in relation to Offsite on his part might have been available. 229 When Mr Lane approved the use of Offsite, he had, however on the evidence, plainly lost sight of his obligations to the Bank so far as Offsite was concerned. This was but another illustration of the problem. The Bank's Professional Practice policy and his undertaking to Mr Scrimshaw required that this use of Offsite would have been raised with him by Mr Lane. It was not. Mr Lane had long taken the view that he had no obligation to inform the Bank of his real involvement in Offsite and indeed had misrepresented the real position in the disclosures which were made. Mr Lane regarded himself as the best judge of how to manage his work for the Bank and his work for Offsite. His judgment failed him. The evidence makes plain that his responsibilities to the Bank and his advancement of Offsite had become improperly blurred. Mr Lane's discussions and emails to Mr Keen about Offsite work, while Mr Keen should have been performing his Bank work, was but another illustration of this difficulty. That Mr Lane made no direct financial benefit as a result, does not provide any real defence to the misconduct revealed on all of this evidence. 230 It is in this context that the volume of Offsite material on the Bank's computer system and Mr Lane's work at the Bank on Offsite matters during ordinary Bank work hours arises for proper consideration. It was evident that the position which Mr Lane adopted to Offsite was such that his involvement in it became a matter of discussion and eventual complaint amongst Mr Lane's staff at TOP. That the Bank had proper cause to investigate the matter as a result is undoubted. The extent of Mr Lane's involvement with Offsite, as revealed in these proceedings, also explains why these complaints were generated. Even when performing work for the Bank, seemingly in connection with its relationship with the Source, Mr Lane was publishing material which advanced the interests of Offsite, which he had made known was his wife's business. Mr Lane felt himself at liberty to pursue his interests in Offsite while he was at work for the Bank, in reality, at any time he chose and in whatever connection he elected. This was, as he explained it, because he took care to ensure that the Bank got its 'moneys worth' from him and because he took care to ensure that he formed ' a clear mental separation between the two sets of interests'. In his view, he had no obligation to separate physical time periods into normal business hours for the Bank and other hours for his other affairs. 231 Mr Lane's attitude about these matters inescapably took him far beyond any fair approach available to a senior employee of the Bank in relation to attending to his personal affairs during ordinary working hours. The difficulties were exacerbated by the fact that Mr Lane was helping Offsite to write marketing material for the distribution of Bank products. Mr Lane's 'clear mental separation' of the interests of Offsite and those of the Bank was simply not apparent. 232 The difficulties were further illustrated by the approach which he took to the preparation of documents and policies written for Offsite. He acknowledged that some of these documents drew heavily from Bank documents, for example, the Bank's Code of Professional Practice. Mr Lane took the view that the Bank had no copyright in these documents and if it had, no damage had flowed from his use of it as a source for Offsite. 233 That an impression of his conflict of interest might have arisen amongst his staff as a result, who were, after all, also each bound by the Bank's Professional Practice Policy, is readily understandable, as is the Bank's investigation of the complaints which Mr Lane's attitude gave rise to. Mr Lane's advancement of the interests of Offsite in this respect also evidence the untenable position of conflict in which he had placed himself. 234 The conclusion that the evidence here demonstrated that a sound basis existed for the dismissal of Mr Lane for misconduct, was inescapable. The submission in the light of all of the evidence that Mr Lane had not wilfully disregarded his obligations to the Bank, but had rather 'failed to deliberate' on the potential for a conflict, or that he had not understood that potential, was not tenable. Other assertions, such as that Mr Lane was at all times protecting the Bank's interests, rather than promoting Offsite's, were equally untenable.

Relief 235 As I have earlier found, the proper conclusion from all of the evidence was that the Bank's investigation of the allegations against Mr Lane were unfair and the contract which so permitted it was likewise unfair, as that word is to be understood in accordance with s105 of the Act. The Bank's refusal to mediate in relation to Mr Lane's complaints as to the procedure being adopted was also unfair. Had such a mediation occurred, the Bank would have had an opportunity to rectify those procedural deficiencies. It would then have had an opportunity to consider all of the circumstances of alleged misconduct in their proper light. 236 Nevertheless, the position which has been demonstrated is that despite the deficiencies in the Bank's investigation procedure, there was a proper basis for the exercise of the right to dismiss for misconduct. 237 On the approach urged for the applicant, if this view were reached I would nevertheless award Mr Lane the substantial money compensation which he seeks, because, despite his misconduct and as a result of the Bank's procedural failures, he was deprived of the opportunity to put before Mr Murray his view, that he should not have been dismissed. This view was pressed on the basis that even if Mr Lane had a conflict, because of his past record of service for the Bank and the fact that he had not derived any financial benefit from his misconduct, something less than summary dismissal should have flowed. 238 That approach was rejected by the Bank, which argued that in circumstances where conduct warranting summary dismissal was established, so that the failure to follow procedurally fair investigation processes had not in fact deprived the applicant of an opportunity to advance an innocent explanation for what had occurred, then no relief would be granted under s106. 239 The approach urged for Mr Lane, in this respect, must be rejected. Given the evidence of misconduct, there is no reason to suppose that if a fair investigation had been followed, Mr Lane's employment would have continued. That Mr Murray was not called to give evidence in these proceedings does not detract from that conclusion. 240 Both the fairness of the procedures pursued by the Bank, the contract which permitted them and whether Mr Lane had engaged in conduct which warranted his dismissal for misconduct fell to the Court to determine in these proceedings, in the light of all of the evidence. Speculation as to what Mr Murray might have done, had the Bank taken a different course, cannot determine any of the issues which arise here. They all fall to be decided by the Court upon the evidence and submissions which the parties have advanced. 241 In my view, in considering the two positions advanced however, it cannot be overlooked that it was not merely monetary relief which was here claimed, but a number of variations to the contract, designed to ensure that a fair investigation process would be followed when allegations of misconduct were being investigated. I turn now to those matters. 242 Mr Lane's contract provided for four weeks' notice and six months' pay, in cases of dismissal other than for misconduct. It was claimed such a period was inadequate, particularly where the termination took place other than amicably. That proposition must be considered in the context of whether an 'amicable' termination, actuated by the Bank under this provision, would have been fair. 243 Of itself, I take the view that a contract for a senior human resources executive of a Bank, headhunted for a position by the Bank, who on the evidence negotiated a favourable remuneration package and agreed to a termination provision of four weeks' notice and six months pay, cannot in such circumstances alone be regarded as unfair. Something more would have to be demonstrated, if unfairness were to be established. 244 It is difficult to see in that context, why the period should become unfair, simply because the termination was not 'amicable', by which I understood that it was a termination desired by the Bank and not by Mr Lane. A different conclusion might be available if there had, for example, been many years of service and a redundancy on the sale or merger of the Bank. It is, however, unnecessary and indeed unhelpful to speculate further about such possibilities. 245 In the case of misconduct on the other hand, the contract provided for summary dismissal. In my view there is nothing conceptually unfair about such a provision. It is a feature of many employment situations - including no doubt that of most of the Bank's other employees, as the agreement between the Bank and the Commonwealth Bank Officer's Association, which the applicant relied upon, suggests. 246 The circumstances of this case in my view do not lend themselves, as a matter of fairness, to a variation of the contract requiring that dismissal only flow from 'serious and wilful' misconduct. That expression has a well understood meaning in the jurisprudence of this Commission, particularly in another statutory context - the Long Service Leave Act 1955, s4(2)(a)(ii). It is a particular subcategory of misconduct which would warrant summary dismissal. (See for example the discussion in Mills New South Wales Industrial Laws at para[891].) I find that there is nothing unfair in misconduct under this contract being regarded as misconduct of the kind discussed by Cook J in Homebush Abattoirs earlier quoted. The evidence provided an ample basis for the conclusion that such misconduct had here occurred. 247 What does arise here for consideration however, is the conduct of the Bank in summarily terminating the contract in circumstances where its investigation process was unfair and where it refused to mediate, in accordance with the express terms of the contract. As I have already observed, if it had, it is likely that the true position as to the applicant's misconduct would have been revealed to the Bank, leaving no room for any complaint as to unfair procedures. 248 The variations to the contract sought by Mr Lane were detailed as to a timetable and included, amongst other things, that a decision to terminate only be made once, 'a good faith attempt to resolve all matters put against the employee has been made'. Despite the views which I have formed as to the variation to the contract necessary to remedy the unfairness I have found, I cannot conclude that the precise variations sought are either necessary or would do justice between the parties. 249 A fair investigation of misconduct does not, in my view, require an employer to attempt to 'resolve all matters put against the employee', before a decision is made. Nor is the timetable proposed necessarily appropriate. In the case of an investigation into conduct warranting summary dismissal, what is required is a fair investigation including a consideration of what the employee advances in defence of the allegations, that such misconduct had occurred. I cannot see that fairness also requires an employer to endeavour to 'resolve' such misconduct by the employee, before deciding whether to dismiss or not. 250 This contract also contemplated mediation in relation to disputes arising out of the contract. Here there was such a dispute. Had the contract been abided by, if the parties had not settled their dispute in relation to Mr Lane's complaints about the Bank's unfair procedures within a period of two weeks, then a mediation should have been pursued at the Bank's expense. If the dispute was not then resolved in a further period of four weeks, the parties were free to take whatever steps were available to them. I can find nothing unfair in the mediation provision of the contract, indeed the applicant relied upon it and complained that the Bank had failed to adhere to it. 251 It was certainly unfair that the Bank did not adhere to its contract with Mr Lane. Similarly it was unfair that Mr Lane did not adhere to his obligations under the contract. These are matters which are appropriate to take into account in the monetary orders to be made. They do not, however, require any variation to the contract. 252 It was submitted, for the Bank, that no payment of any kind was warranted in this case, given Mr Lane's misconduct as revealed on the evidence; that he had not suffered any compensable loss and that no contract of employment promised freedom from distress on termination. I have, however, concluded that certain money orders are just in the circumstances revealed here. In coming to that conclusion, I have had regard to the nature of the obligations which employers and employees have to each other under employment contracts, as discussed by Hungerford J in Day v Lumley Life (1999) 90 IR 70. That approach does not, however, permit the Court to overlook the applicant's misconduct, nor the respondent's failures. Each must be given its appropriate weight. 253 Various money orders were pursued, as well as an order for reinstatement. I find that no money order is appropriate in respect of any period of notice, having regard to the fact that a proper basis for summary dismissal of Mr Lane in fact existed, given Mr Lane's conduct. Nor was an order for reinstatement warranted. A proper approach to an assessment of the monetary compensation just in the circumstances of this case, is an order for a payment calculated at the applicant's salary package for a further period of 6 weeks from the date of the termination of employment, together with other entitlements which would have flowed to the applicant had his employment continued for that period. This period has regard to the mediation provisions of the contract. 254 As I have already noted, the evidence demonstrated that the Bank took the view that the initiation of the s106 proceedings was another reason for refusing to mediate. Indeed, it told Mr Lane in correspondence to his solicitor that its views about mediation might be reviewed, if these proceedings were withdrawn. 255 It is also in that context that the applicant's claim for the payment of his costs in the interlocutory proceedings before Sams DP in the victimisation case under s213 of the Act, as a part of the money orders to be made in these proceedings, must be considered. Such claims, of course, do not ordinarily involve the making of any costs orders by the Commission in such proceedings. This order is sought in these proceedings, as an order just in the circumstances revealed in this case. 256 I have found this to be a difficult aspect of the claim. Sams DP found that both parties had an arguable case in respect of the victimisation claim, but that the balance of convenience did not lie with the applicant. On that basis he refused the interlocutory relief claimed. It is undoubted that the claim flowed from the Bank's refusal to abide by the contractual obligation to mediate and the correspondence which was exchanged between the Bank and Mr Lane's legal advisers in relation to the impact which the s106 application had on that matter. 257 In that context, the Bank's view that the decision to commence the s106 proceedings in connection with Mr Lane's complaints about the Bank's treatment of him, also militated against any mediation was difficult to understand. That the Bank would suggest that it might take some different view if the s106 case was withdrawn, was also curious, to say the least. 258 I have concluded that it would be just in the circumstances of this case, to require the Bank to pay the costs incurred by Mr Lane in connection with the initiation of the s213 proceedings and their pursuit to the point where Sams DP gave his interlocutory judgement. This, after all, was but the last step taken by Mr Lane in his pursuit of his right to mediation under the contract, in relation to the Bank's flawed investigation. The Bank was obliged to pay for such mediation, but denied its obligation to engage therein, for reasons which, as I have earlier noted, in reality remain unclear. Why Mr Cupper and the Bank's legal department took the view that complaints about procedural deficiencies in an investigation into misconduct were not required to be the subject of mediation, when Mr Lane's contract contained no such reservation, was not explained. That view was simply unavailable, given the clear terms of the contract. 259 Mr Lane also relied upon the approach in Malik at 26, for other monetary relief claimed. This included medical expenses, as well as damages for the trauma caused by the investigation and decision making process adopted by the Bank. The Bank argued that no contract of employment could guarantee a trauma free termination. That is undoubtedly so. Any employee faced with allegations of misconduct warranting summary dismissal may well find the experience traumatic, even if fair processes are followed. This is even more likely where, as here, the alleged misconduct is hotly contested, because the employee takes a view quite at odds with what a proper view of the obligations which flow from the contract requires. 260 While relief of the kind sought may be available as matter of jurisdiction under s106(5) of the Act, as reflecting what might be just in the circumstances of a particular case, I do not regard the facts of this case as making an order of that type properly available, in addition to the money order which I would otherwise make for the reasons which I have already given. In Malik, the conclusion was reached that the employees concerned had not been involved in any wrongdoing. That conclusion is not available here. 261 I also note that Marks J has recently taken a somewhat different approach in King v State Bank of New South Wales [2000] NSWIRComm 229. The orders there made were advanced in rather different circumstances and depended on a view taken by his Honour as to certain medical evidence there led. I do not find that approach of assistance here. 262 I have taken that view in the light of the conclusions which I have reached as to the evidence of Mr Lane's misconduct. While I take the view that the Bank's failures in relation to its investigations and the approach which it adopted in relation to mediation cannot be ignored, nor do I accept that Mr Lane's misconduct in relation to the Professional Practice policy which binds all employees of the Bank can be ignored. At the end of the day it was these failures which warranted the termination of this contract. The reliance placed by the applicant upon various decisions made by other tribunals in relation to claims brought in respect of unfair dismissals under the statutory regimes established in other States, cannot detract from the conclusion I have here reached as to what variations are required to this contract. They included decisions such as Twohig v Ashford Community Hospital Incorporated (1998) 85 IR 421; Bi-Lo Pty Ltd v Hooper (1992) 53 IR 224 and Liddell v Lembke (1994) 56 IR 447. 263 The claims, so advanced, also give rise to a question as to whether such a 'damages' order, does not in truth offend s109A of the Act. It is difficult to see why such damages are not akin to compensation provided for in s89(5), in relation to claims for unfair dismissal, in the event that reinstatement is not ordered. It is, however, unnecessary to consider this further, given the view I have otherwise reached. 264 My conclusions have regard to the conduct of both parties, as required by s106(2) and the monetary relief which is just in respect of the circumstances established. The evidence in these proceedings, including that given by Mr Lane himself in cross examination made these conclusions inescapable. 265 A claim in respect of the basis upon which Mr Lane was paid outstanding annual leave was also advanced. While it was submitted for the Bank that this claim should have been pursued in another forum, it has been the longstanding approach of the Court in proceedings such as these to make money orders just in all of the circumstances of the case brought before it. In this case there seems no reason to depart from that approach. 266 The evidence was that like many employees, Mr Lane took advantage of a right to take part of his total salary package in ways other than cash, (his 'Gross Remuneration'). On termination, the Bank however calculated his outstanding annual leave entitlement on only the cash component of his package. I am satisfied that in the circumstances of this employment, it is appropriate to order the payment on termination of the difference between annual leave paid on the cash component of his package and that calculated on the whole of his package value. Had he taken the leave, Mr Lane would, after all, have received the benefit of the non-cash elements of his package. 267 The orders which I make involve no variation of the contract in relation to mediation, that already being a feature of this contract and one which was, in reality, not challenged by the applicant as being unfair, other than by way of its breach. 268 Mr Lane is also entitled to an order for interest on the money sum ordered, from the date of termination of his employment until judgment. As to costs, if the parties are unable to agree on that matter, they have liberty to approach.

Orders 269 For all of these reasons, I make the following orders:

I declare that the contract of employment between the parties was an unfair contract, within the meaning of s105 of the Act.

2 I vary the contract of employment ab initio, to require the Bank: (i) in investigating any allegations of misconduct made against Mr Lane, to give him a fair opportunity to understand the allegations and what they are based on; to respond to them and to have his response and other relevant information gathered by the Bank in its investigation taken into account in any decision which is made in relation to those allegations; and

(ii) in determining what step to take in relation to the continuation or termination of his employment, to consider what Mr Lane advances on his own behalf in respect of that matter.

I order the Bank to pay Mr Lane a sum calculated as: (i) six weeks' pay reflecting the total value of his salary package and a money sum reflecting any other benefits accruing during that period, had the employment continued, plus

(ii) the outstanding amount of his annual leave entitlement, calculated on the total value of his salary package, plus

(iii) interest on the amounts in (i) and (ii) from the date of the termination of his employment to the date of judgment, at Supreme Court rates, plus

(iv) costs, as agreed or assessed, in the s213 proceedings up to the giving of the decision by Sams DP in that matter in August 1999, plus

(v) interest on the amount in (iv) from the date of payment of those costs, to the date of judgment, at Supreme Court rates. ------------------------

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

CITATION : Simon Richard Lane v The Commonwealth Bank of Australia [2000] NSWIRComm 274 APPLICANT: Simon Richard Lane PARTIES : RESPONDENT: The Commonwealth Bank of Australia (ACN 123 123 124) FILE NUMBER: 2392 of 1999 CORAM: Schmidt J CATCHWORDS : Unfair contract - summary dismissal - anonymous allegations - breach of policy - conflict of interest - misconduct - breach of contractual provision - refusal to mediation request - discrimination - procedural deficiencies Annual Holidays Act 1944 LEGISLATION CITED : Industrial Relations Act 1996 Long Service Leave Act 1955 Abboud v The State of New South Wales (Department of School Education) (1999) 92 IR 32 Antonakopoulos v State Bank of New South Wales (1999) 91 IR 385 Beahan v Bush Boake Allen Australia Limited (1999) 93 IR 1 Bi-Lo Pty Ltd v Hooper (1992) 53 IR 224 Byrne v Australian Airlines Ltd (1995) 185 CLR 410 Day v Lumley Life (1999) 90 IR 70 Dispute, Re Dismissal of Union Delegates at Homebush Abattoir [1996] AR (NSW) 371 at p374: Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd, (1996) 39 NSWLR 160 CASES CITED : Gooley v Westpac Banking Corp (1995) 129 ALR 628 Hawkins v Clayton (1988) 164 CLR 539 at 573 King v State Bank of New South Wales [2000] NSWIRComm 229 Liddell v Lembke (1994) 56 IR 447. Mahmud and Malik v Bank Credit and Commerce International SA [1998] AC 20 at 26, Metrocall Inc v Electronic Tracking Systems Pty Ltd [2000] NSWIRComm 136 Pastrycooks Employees, Biscuit Makers Employees & Flour and Sugar Goods Workers Union (NSW) v Gartrell White (No 3) (1990) 35 IR 70 Reich v Client Server Professionals of Australia Pty Ltd (Administrator Appointed) [2000] NSWIRComm 143 Stevenson v Barham (1976) 136 CLR 190 at 192 Twohig v Ashford Community Hospital Incorporated (1998) 85 IR 421 HEARING DATES: 07/31/2000; 08/01/2000; 08/02/2000; 08/03/2000; 08/04/2000; 11/23/2000 DATE OF JUDGMENT: 12/15/2000

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