Fair Work Act 2009
s.739 - Application to deal with a dispute

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
Ausgrid Management Pty Ltd
(C2021/1485)

Dispute settlement procedure - dispute about disciplinary action taken against certain employees - agreed question for determination - review of employer’s decision to take disciplinary action - determination made that disciplinary action of employer was not reasonable or justifiable - question answered in support of application.

[1] This Decision is made in respect of an application that was taken under s. 739 of the Fair Work Act 2009 (the Act) for the Fair Work Commission (the Commission) to deal with a dispute in accordance with a Dispute Settlement Procedure (DSP). The application was lodged at Sydney on 17 March 2021, and it was made by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (the CEPU). The application was taken against Ausgrid Management Pty Ltd ABN: 83 615 449 548 (Ausgrid or the employer).

[2] The application was advanced pursuant to a DSP which can be found at clause 42 of the Ausgrid Enterprise Agreement 2018 (the EA). In accordance with the provisions of clause 42 of the EA, the Commission conducted conciliation proceedings on 12, 14 and 23 April 2021. During Mention and Directions proceedings that were held on 13 May 2021, the Commission granted permission pursuant to s. 596 of the Act, for the Parties to be represented by lawyers or paid agents.

[3] The conciliation proceedings did not provide for any resolution of the dispute and the matter has subsequently advanced to arbitration proceedings which involved six days of Hearing conducted in Sydney on 22, 23, 24, 25, 26 November 2021, and 4 February 2022. Prior to the Hearing, the Parties provided an agreed question for determination, and they filed evidence and submissions in accordance with a timetable established by the Directions of the Commission.

[4] At the Hearing, the CEPU was represented by Mr R Reitano, barrister, instructed by Mr A Jacka from the CEPU, and Ausgrid was represented by Mr J Darams, barrister, instructed by Ms L Cooper solicitor, from the firm Clayton Utz. Mr Reitano introduced evidence by way of witness statements and reply statements from eleven individuals, with only one of those individuals, Mr Miller, not being required to be called as a witness for cross-examination. The ten individuals who gave evidence as witnesses in support of the application were all employees of Ausgrid who had been subject to disciplinary processes, and for convenience, these ten individuals can be collectively referred to as “the disciplined employees”. Mr Darams adduced evidence on behalf of Ausgrid from three witnesses, each of whom were cross-examined by Mr Reitano. Mr Darams also provided evidence by way of a statement of Ms Tricerri who was not required for cross-examination.

[5] Mr Reitano and Mr Darams both made oral submissions in elaboration of documentary material that each had filed on behalf of the respective Parties.

Summary of Relevant Factual Background

[6] There was little factual contest between the Parties about the circumstances which gave rise to the dispute in this matter. The dispute arose from a series of decisions taken by Ausgrid to initiate disciplinary action against the disciplined employees. There were apparently eleven employees who were the subject of related disciplinary action and one of those individuals subsequently resigned from employment with Ausgrid.

[7] The CEPU challenged the disciplinary action taken against the disciplined employees and the terms of the DSP were invoked. Importantly, the status quo provisions of the DSP were pressed by the CEPU, and the disciplinary processes taken against the disciplined employees were suspended in accordance with the relevant provisions of the DSP which state:

“42.1.1

(g) Where the subject matter of a dispute notified in accordance with sub-clause (e) is an action proposed by Ausgrid that directly affects an employee or employees and if taken, would materially disadvantage the employee or employees, or prejudices the ultimate resolution of the dispute. Ausgrid will not implement that action while the applicable dispute procedure is being followed by the party who notified the dispute. This obligation to maintain the "status quo" does not prevent Ausgrid from taking other steps which may relate to the matter in dispute but which do not themselves materially disadvantage the employee or employees concerned.

(h) Ausgrid, the unions and nominated representatives may apply to the Fair Work Commission to revoke, suspend or enforce the status quo obligation in sub-clause (g) where there are reasonable grounds for doing so.

The Fair Work Commission is authorised to determine any such application unless the Fair Work Commission decides that there are compelling reasons not to.”

[8] Ausgrid is a major electrical supply company with a distribution network that is made up of substations, powerlines, underground cables, and power poles, spanning 22,275 square kilometres throughout Sydney, the Central Coast and the Hunter Valley. Ausgrid has in excess of 3,500 employees relevantly including individuals who work in positions called District Operators (DOs) and Operating District Supervisors (ODSs). There are more than 150 DOs and ODSs working for Ausgrid, and the cohort of the disciplined employees comprised 8 DOs and 2 ODSs.

[9] DOs are highly experienced, qualified, and capable electricians. They perform work associated with both unplanned and planned events that involve power outages and associated network incidents. They de-energise and re-energise sections of the electricity network to permit planned work to occur safely, and they have a safety critical, first responder role in emergency situations where electrical power supply may have been lost or infrastructure damaged causing potential for electrocution.

[10] The work of DOs involves significant responsibility for safety critical events and generally they work autonomously and utilise an Ausgrid supplied, light commercial vehicle to travel to various sites where work is undertaken, primarily de-energising and re-energising sections of the electricity network. Work performed by DOs is usually allocated within one of various geographical regions within the Ausgrid network area. There are a varying number of Ausgrid depots located within the various geographical regions and individual DOs are assigned to a specified depot.

[11] ODSs supervise the work of DOs. ODSs perform a combination of work of DOs, together with supervisory and job allocation/planning work. In summary, ODSs are akin to the DOs leading hands, and the next supervisory level above ODSs is the Field Manager position.

[12] DOs and ODSs work as “24/7” continuous shift workers. Their work is arranged on rotating shift rosters of day, afternoon, and night shifts, each of 8 hours duration. Shift working times are usually fixed between 6am to 2pm or 7am to 3pm for day shifts, 2pm to 10pm or 3pm to 11pm for afternoon shifts, and 10pm to 6am or 11pm to 7am for night shifts. Planned work is performed on day and afternoon shifts but is not ordinarily scheduled on night shifts. Unplanned work which usually involves an urgent and/or emergency situation can arise at any time, and ordinarily, as there is no planned work for night shifts, only unplanned work would be performed during any night shift.

[13] Ausgrid operates the Sydney Control Room located in the suburb of Silverwater. The Control Room monitors the electricity supply across the Ausgrid network on a “24/7” basis. The Control Room also provides the shift by shift organisation and communication of the work undertaken by DOs and ODSs when performing DOs work. Control Room Operators arrange and coordinate the particular tasks or jobs that DOs (and ODSs performing DO work) undertake during any shift.

[14] DOs (and ODSs performing DO work) would ordinarily be advised by email of the planned work at some time prior to the commencement of the relevant shift. At the start of each shift, DOs (and ODSs performing DO work), make a phone call to a Control Room Operator and essentially “sign on” for that shift. The Control Room Operator will either confirm the previously advised planned task or job to be first performed on that shift, or they will advise of any change to the tasks required which may involve an alteration to the planned work or a requirement to undertake unplanned work, perhaps involving an urgent and/or emergency event.

[15] During a shift, DOs (and ODSs performing DO work) will make phone contact with the Control Room to advise when a particular job or task has been completed. The Control Room Operator may direct the DOs (and ODSs performing DO work) to undertake another job or task, either planned or unplanned, or they may advise the DOs (and ODSs performing DO work) to await the assignment of any further job or task during that shift. In respect to night shifts, when there is usually no planned work, the DOs (and ODSs performing DO work) make the call to the Control Room to “sign on” and if there is no unplanned work to be undertaken, the DOs (and ODSs performing DO work) will be advised to await the assignment of any job or task during that shift.

[16] DOs (and ODSs performing DO work) have historically taken their Ausgrid supplied, light commercial vehicles home, and they have travelled in these vehicles from their homes to their assigned depot and to the various job sites. At 8:10pm on 4 August 2015, the then Field Operating Manager, Mr Steve Longhurst, sent an email to inter alia, all DOs and ODSs which attached a memorandum dated 10 July 2015 (the 2015 memorandum). The 2015 memorandum became a central aspect of the disciplinary action taken against the disciplined employees and it relevantly stated:

“Start & Finish times and location

The following is applicable to all shifts, including night shifts;

•  DOps/DOTs must be in attendance at their rostered depot or at the first job in their depot area, at the time of commencement of their rostered shift.

•  DOps/DOTs must be in attendance at their rostered depot or at the last job in their depot area, at the time of conclusion of their rostered shift.”

[17] In June 2020, an anonymous whistleblower report was received through Ausgrid’s whistleblower support service. The report concerned allegations of serious misconduct against persons described as “Ausgrid “Operating Depot Supervisors””. The whistleblower report identified a list of “Ausgrid Operating Depot Supervisors” who were allegedly “accumulating excessive amounts of overtime hours and other misconduct via inappropriate ways that do not align with Ausgrid’s current policies.”

[18] Further, the whistleblower report stated that:

“The Listed Operating Depot Supervisors have also been identified to start their allocating and scheduling days late and leave early making them unavailable to assist with planned work enquiries. This issue is not being policed and controlled suitably, putting extra pressure on planning teams within the regions.”

[19] The whistleblower report also included the following:

“The listed group (being shift workers) starts a working shift and remains at ones primary place of residence (home) well into the hours of the shift. – The listed group return to one’s primary place of residence (home) during a shift for an excessive amount of time. - It has become evident that the listed group starts their nightshifts (being shift workers) at home and even stay home whilst expected to be available. Some Operating Depot Supervisors even living outside the Ausgrid geographic boundaries continue this activity without being controlled by their respective managers.”

[20] The Head of Internal Audit at Ausgrid initiated a preliminary investigation into the matters contained in the whistleblower report. Subsequently, Ausgrid management including members within its Legal, Risk and Compliance Group, conducted an extensive investigation which, in broad terms, gathered and analysed data from the In Vehicle Monitoring System (IVMS) installed in the vehicles used by inter alia, DOs and ODSs, and the MyTime (time/attendance recordings) records of approximately 150 employees. The substantive investigation essentially involved the random selection of a calendar month from July 2019 to December 2019, which was then used to examine each of the employees’ time and attendance records which were compared against their vehicle monitoring data for each shift worked during the particular month that had been selected for each individual.

[21] In January and February 2021, each of the disciplined employees received letters entitled “Allegations of Potential Serious Misconduct”. These letters provided advice that an investigation had been conducted into allegations that had been raised by the whistleblower complaint, and that as a consequence, each of the disciplined employees was alleged to have engaged in serious misconduct. The serious misconduct was alleged to have occurred in circumstances that were said to have represented fraud arising in instances that the individual employee had claimed and received wages payments that they were not entitled to. Particular instances were cited, and details provided which were used to support the various allegations that each of the disciplined employees had either, in ordinary time or overtime, started a shift late, finished shift early, remained at home for an entire shift, or went home for part of the shift.

[22] At the time of receiving the letters of allegation of potential serious misconduct each of the disciplined employees was stood down on pay and provided opportunity to respond in writing to the allegations. During February 2021, each of the disciplined employees provided written responses to the letters of allegation of potential serious misconduct. Subsequently, the disciplined employees were, with two exceptions, issued with Notice to Show Cause Letters requiring responses as to why their employment should not be terminated. Subsequently, during March 2021, each of these employees provided responses to the Notice to Show Cause letters.

[23] Further to the filing of the application in this matter, the disciplinary processes taken by Ausgrid against the disciplined employees were suspended in accordance with the status quo provisions in the DSP. However, particular agreed arrangements have provided for some of the disciplined employees to return to work having received a formal warning of one form or another. This subgroup of the disciplined employees has maintained their challenge to the formal warnings, and they seek to have these warnings expunged. The remainder of the disciplined employees challenge the disciplinary processes generally and seek to have an outcome which would circumvent any further disciplinary action being taken against them in respect to the allegations arising from the whistleblower report.

The Case for the CEPU

[24] Mr Reitano, who appeared for the CEPU, made oral submissions in amplification of written outline of submission documents respectively dated 18 June, 23 July 2021, and 31 January 2022. The submissions made on behalf of the CEPU referred to the agreed question for determination which was in the following terms:

“Have any of the employees named in the Application to the Commission to deal with a dispute engaged in conduct that would justify Ausgrid taking disciplinary action against any of them?

[25] Mr Reitano submitted that the question posed for determination required an examination of the disciplinary processes that Ausgrid had taken against the disciplined employees in order to establish whether the actions of Ausgrid were based on rational and sound reasons which would provide justification for taking disciplinary action against those individuals. In this regard, it was submitted that the absence of sound factual foundations coupled with other factors, meant that the disciplinary action taken by Ausgrid against the disciplined employees was not justified because it should be found to have been unreasonable. Consequently, Mr Reitano urged that the Commission provided the answer to the agreed question as “No”. Mr Reitano said that the disciplined employees had not engaged in any conduct that provided justification for Ausgrid to take disciplinary action against them.

[26] The final oral submissions made by Mr Reitano were formulated into seven topics which he said supported a finding that Ausgrid was not justified in taking disciplinary action against the disciplined employees because that action did not proceed upon a sound factual foundation, and it was unreasonable and irrational. In overview, Mr Reitano said that the disciplinary action taken by Ausgrid could not be justified because it did not consider the full picture surrounding the alleged misconduct but instead it had arisen from a focus upon the data that had been gathered in the investigation without any broader investigation and consideration of “the full story”.

[27] The first topic that Mr Reitano referred to was described as the truth of the matter. In this regard, Mr Reitano said that the witness evidence provided by the disciplined employees disclosed that they were all truthful, genuine, long serving employees not one of whom had any history of wrongdoing or misconduct. Mr Reitano urged the Commission to accept the truthfulness of the evidence provided by the disciplined employees particularly as it related to their understanding of the historical arrangements applicable to their work engagements, and the tasks and duties that they performed at different times and locations including when at their homes.

[28] Mr Reitano mentioned particular terms contained in the EA as the second topic which he raised in challenge to Ausgrid’s actions taken against the disciplined employees. According to the submissions made by Mr Reitano, there were particular terms in the EA which provided for minimum periods of overtime payments and in circumstances where one of the disciplined employees had completed the particular tasks or duties that had been required before the minimum period of the overtime had completed, they would be entitled to payment for the remainder of the minimum period. Mr Reitano also referred to the hours of work clause in the EA and he contrasted those provisions with the specifics that Ausgrid relied upon from the 2015 memorandum. Mr Reitano also referred to the terms of the DSP clause in the EA as part of his rebuttal to the proposition that Ausgrid was entitled to exercise its managerial prerogative to take disciplinary action against the disciplined employees.

[29] The third topic that was mentioned by Mr. Reitano involved the whistleblower complaint or report. Mr Reitano made criticism that Ausgrid had not provided an unredacted copy of the whistleblower complaint or report, and he said the highly redacted document was unsatisfactory and deficient in important respects. Mr Reitano submitted that the Commission had not been provided with any evidence to link the investigation to the whistleblower complaint. Consequently, according to the submissions of Mr Reitano, there was no proper basis to establish that the reason for the investigation into inter alia, the disciplined employees, was the whistleblower complaint.

[30] Mr Reitano described the fourth topic of his challenge to Ausgrid’s disciplinary action against the disciplined employees as “the work of District Operators”. Mr Reitano made submissions which traversed the evidence about the way in which DOs (and ODSs performing DO work) have historically undertaken their work. These submissions noted that both planned and unplanned work would frequently occupy only part of the total time of the shift that the employee was engaged. Mr Reitano stressed that engagement on a night shift would ordinarily only involve unplanned work which the individual might be directed to perform when they made their “sign on” call to the control room, or be subsequently directed to perform during the night shift when contacted by the control room.

[31] Consequently, Mr Reitano submitted that it was well understood that the engagement of DOs (and ODSs performing DO work) involved periods of time during a shift where they were waiting to be allocated particular work to perform, either planned or unplanned. Mr Reitano submitted that DOs (and ODSs performing DO work) were entitled to payment even though they were awaiting the assignment of actual work. In addition, Mr Reitano submitted that it was common knowledge that DOs (and ODSs performing DO work) would frequently be at their home when they were awaiting the assignment of work and at these times, they may have been performing other ancillary or secondary tasks. Mr Reitano mentioned that during the recent periods of the COVID-19 restrictions, the arrangements for DOs (and ODSs performing DO work) to work from home did not produce any additional cost, inefficiency, safety concern, or other issue which could justify criticism of such work arrangements.

[32] The fifth topic introduced by Mr Reitano levelled significant criticisms at the investigation that led to the disciplinary action taken against the disciplined employees. Mr Reitano said that it was a “dodgy investigation”. Mr Reitano criticised what he said was the limited scope of the investigation which did not extend to inquiries of the Field Managers to establish the level of knowledge that they had of the working arrangements of the DOs (and ODSs performing DO work). Further, Mr Reitano submitted that the investigation had failed to obtain and review phone records between the DOs (and ODSs performing DO work) and the Control Room operators which would have revealed the extent to which the working arrangements were well understood and widespread.

[33] Mr Reitano described his sixth topic with the heading “Policies”. This topic included submissions about a number of Ausgrid’s policies including its Managing Unacceptable Conduct policy, the In Vehicle Monitoring System (IVMS) policy, and the Fleet Motor Vehicle Allocation policy (FMVA). Mr Reitano made submissions which, in summary, asserted that the IVMS policy did not permit the use of data gathered from the IVMS to be used in the way that it had been in the investigation that led to the disciplinary action that was taken against the disciplined employees. Mr Reitano said that the investigation involved “a disgraceful use of the IVMS data” and that Ausgrid had no right at all to intrude upon the privacy of its employees.

[34] Mr Reitano also made criticism that at least one of the management representatives who was involved in the investigation and subsequent action taken against the disciplined employees, had a conflict of interest because that person was one of the managers who had responsibility for the area of operations involving the work of DOs (and ODSs performing DO work) during at least part of the time under examination in the investigation. Mr Reitano submitted that this person had an investment in saying that the outcome of the investigation was not something that was systemic because that would have reflected badly upon him as one of the relevant managers.

[35] In further submissions relating to Ausgrid’s policies, Mr Reitano referred to the Fair and Just Culture policy. Mr Reitano submitted that the disciplinary action taken against the disciplined employees contravened Ausgrid’s Fair and Just Culture policy because the evidence established that something like 140 employees were found to have been involved in the same or similar conduct, but only 10 were subject to any disciplinary action. Further, Mr Reitano submitted that the absence of any action taken against any of the managers who supervised the work of DOs (and ODSs performing DO work), further reinforced that the disciplinary action taken against the disciplined employees had breached the Fair and Just Culture policy.

[36] The final policy to which Mr Reitano referred was the Fleet Motor Vehicle Allocation policy (FMVA). Mr Reitano submitted that the FMVA policy included a statement which specifically exempted the collection of any vehicle monitoring data such as the IVMS data, within a 1 kilometre radius of the relevant driver’s residential address. Mr Reitano made submissions which rejected the proposition that had been advanced by Ausgrid that the 1 kilometre block out provision of the FMVA had been removed because there had been consultation with employees and their representatives. Mr Reitano referred to evidence that the 1 kilometre block out provisions still remained in the FMVA policy, and therefore the IVMS data, particularly that which was obtained within a 1 kilometre radius of the employee’s home, could not be used as it had been in the investigation which underpinned the disciplinary action taken against the disciplined employees.

[37] The seventh and last topic that Mr Reitano spoke of involved the specific circumstances of one of the disciplined employees, Mr Galea. The disciplinary action taken against Mr Galea focused upon a particular aspect of his conduct during two of the meetings that were held as part of the allegation and show cause processes that were engaged in by Ausgrid. Mr Reitano made submissions which acknowledged that Mr Galea had provided dishonest answers to Ausgrid managers when he was asked to hand over his Ausgrid supplied mobile phone. Mr Reitano submitted that there were particular circumstances surrounding the dishonesty of Mr Galea including his subsequent admissions of his dishonesty, which meant that it would be unreasonable for his admitted dishonesty to provide basis for any disciplinary action to be taken against him.

[38] In summary, Mr Reitano reiterated his primary submission that Ausgrid was not justified in taking the disciplinary action against any of the disciplined employees. Mr Reitano submitted that the disciplinary action was not justified because, (a) the conduct of the disciplined employees was a long-standing established practice, (b) the 2015 memorandum was not widely known nor enforced, (c) management had either expressly or tacitly approved of the relevant conduct, (d) the use of the data that was relied upon in the investigation breached Ausgrid’s policies, (e) the investigation was incomplete, cursory and unsound, (f) other employees who had engaged in the same or similar conduct avoided any disciplinary action of any kind, and (g) the particular circumstances of Mr Galea meant that it would be unreasonable for Ausgrid to take action against him. Consequently, Mr Reitano said that the question for determination should be answered “No”.

The Employer’s Case

[39] Mr Darams appeared for Ausgrid, and he made oral submissions in amplification of the written submissions dated 16 July and 23 December 2021, which had been filed on behalf of the employer.

[40] The submissions made by Mr Darams asserted that the question for determination should be answered as “yes”. Mr Darams submitted that the evidence supported findings that Ausgrid was justified in taking disciplinary action against the disciplined employees. Mr Darams submitted that the Commission should be satisfied that Ausgrid had not acted unreasonably or unfairly when it investigated inter alia, the disciplined employees as an appropriate response to the anonymous whistleblower complaint. Further, Mr Darams submitted that the subsequent disciplinary action that followed from the investigation was a fair and reasonable process that the Commission would be reluctant to disturb.

[41] The first issue that Mr Darams identified in support of the case for Ausgrid involved the issue of managerial prerogative. Mr Darams indicated that managerial prerogative was not raised as a barrier to the challenge that had been taken against Ausgrid in respect to the disciplinary action that it had initiated against the disciplined employees. Instead, according to the submissions made by Mr Darams, there was clear established authority that had shown that the Commission did not readily intervene in decisions taken by an employer which involved the subject matter in this instance, namely, the investigation that was initiated by the whistleblower complaint and the disciplinary action that followed.

[42] Mr Darams referred to a number of authorities which he said established relevant principles upon which consideration of whether the decisions taken by management were reasonable and the relevant consideration involved a range of factors. Further, Mr Darams submitted that one of the relevant factors involved the assessment of decisions which were within the ordinary discretion of management, and that in order to succeed with any successful challenge to such decisions, the Commission needed to be satisfied that the decisions of management were plainly unreasonable. Mr Darams submitted that it was ultimately a question of whether there was satisfaction that the relevant state of affairs or matter was irrational, illogical or otherwise disclosing clear fault, such that a conclusion could be made in order to provide for the characterisation of the decision to be unjust, arbitrary or capricious.

[43] The submissions made by Mr Darams stressed that any proper determination of whether the decisions that were made were unreasonable, should be assessed having regard for what material Ausgrid had before it at the time that it came to make the decisions, and not, for example, if sometime later, other explanation or relevant material was disclosed. In this regard, Mr Darams submitted that the ordinary approach to consideration in unfair dismissal matters was different to the circumstances under examination in this case, when the Commission was considering a challenge to an employer’s decision based on alleged unreasonableness.

[44] Mr Darams made submissions in respect to the second issue that he raised which concerned Ausgrid’s Managing Unacceptable Conduct policy. Mr Darams referred to particular aspects of the Managing Unacceptable Conduct policy and he submitted that the policy was centrally relevant to consideration of the question for arbitration. Mr Darams submitted that in answering the question that the Parties had posed, the Commission should not approach its consideration in some unconstrained manner and any assessment of the disciplinary action initiated by Ausgrid should be considered having cognisance of the terms contained in the Managing Unacceptable Conduct policy.

[45] Mr Darams made further submissions which stressed that the arbitration in this instance should not be viewed as an unfair dismissal case but as a challenge to the reasonableness of the decisions that have been made by Ausgrid, and which were made in accordance with the Managing Unacceptable Conduct policy. In this regard, Mr Darams said that there was an evident, intelligent basis for Ausgrid being satisfied that one or more of the disciplined employees had engaged in unacceptable conduct. That satisfaction, according to the submissions made by Mr Darams, established proper basis for Ausgrid to then impose a range of disciplinary actions in accordance with the Managing Unacceptable Conduct policy.

[46] The third topic raised in the oral submissions made by Mr Darams dealt with what he described as the depot attendance policy. Mr Darams referred to the 2015 memorandum and he accepted that although it was not a promulgated policy of Ausgrid, it nevertheless represented a clear direction to employees which fell within that part of the Management of Unacceptable Conduct policy which established clear expectations and obligations of employees. Mr Darams made submissions which rejected any suggestion that the 2015 memorandum had not been properly communicated or understood, and as a clear direction given by a senior manager, any employee who ignored or failed to comply with the direction, did so at their peril.

[47] The submissions made by Mr Darams also rejected criticisms about alleged inefficiency that may be associated with compliance with the 2015 memorandum. Mr Darams said that ultimately it was a matter for Ausgrid as to whether or not it wanted to have its employees start at a particular point or finish at a particular point. Mr Darams asserted that the 2015 memorandum represented a clear direction given to employees and which Ausgrid was entitled to expect that they would follow.

[48] Mr Darams further submitted that when the employees provided their responses in the investigation, they did not raise issue with any identified deficiency with the communication of the 2015 memorandum or challenge to it. Further, Mr Darams said that there was no evidence that any of the disciplined employees challenged the content of the 2015 memorandum at the relevant time to say “Well, hang on, we have all been working this way for this period of time and now you’re doing something different.”

[49] In his further submissions, Mr Darams also rejected that the 2015 memorandum was in any way abandoned by Ausgrid or that it wasn’t enforced. Mr Darams referred to evidence that compliance with the 2015 memorandum was reinforced in November 2019. Mr Darams further submitted that because of the particular nature and role of DOs, who had a lot of responsibility and operated autonomously, Ausgrid placed a lot of trust in them to do the right thing. Mr Darams submitted that it was entirely reasonable for Ausgrid to expect that senior trusted employees, in addition to reading the 2015 memorandum, would comply with that directive without the need for monitoring their precise movements on any particular day.

[50] The fourth topic that Mr Darams covered in his submissions dealt with the In Vehicle Monitoring System (IVMS) policy and Fleet Motor Vehicle Allocation (FMVA) policy. Mr Darams submitted that the 1 kilometre blackout provision in the FMVA policy had, in fact, been removed, and that the only thing that hadn’t happened was that the FMVA policy document had not been updated to reflect that removal. Consequently, according to the submissions made by Mr Darams, there was no restriction or other impediment on Ausgrid to use the data obtained from the IVMS within a 1 kilometre radius of the employees’ homes in the investigation and the subsequent disciplinary action.

[51] Mr Darams made further submissions about the IVMS policy and in particular that aspect of the policy which stated that data obtained from the IVMS would not be used as the primary reason to initiate an investigation of an employee for disciplinary action. The submissions made by Mr Darams asserted that the evidence had established that it was the whistleblower complaint that gave rise to the investigation and the reason why the investigation was undertaken. Mr Darams stressed that it was not the IVMS data that was the primary reason to initiate the investigation, instead it was the whistleblower complaint and further, Mr Darams noted that the policy document stated, “Through investigation, IVMS data may be obtained which must relate specifically to an allegation and may subsequently be used for disciplinary purposes.”

[52] The fifth and sixth topics addressed in the submissions made by Mr Darams dealt with what he described as the temporal aspect of any challenge to the decisions of Ausgrid on the basis that they were unreasonable or irrational. Mr Darams said that in order to determine the question of any unreasonableness, it was necessary to consider what information was available to Ausgrid at the time that the relevant decisions were taken. In this regard, Mr Darams said it was important to focus upon when the allegations were put, and what was contained in the responses that were provided by the employees. On this particular point, Mr Darams said that if an employee has or hasn’t said something in the investigation or up to the point in time when the decision is being made, but later on in the proceedings an explanation emerges, a later explanation cannot be taken into account in determining the reasonableness of the decision that had been made.

[53] The next topic that Mr Darams referred to involved a reiteration that the determination of the question for arbitration should not be approached like an unfair dismissal case. Mr Darams submitted that the assessment of the reasonableness of the disciplinary action taken by Ausgrid had to be considered having regard to the information that it had available to it at the time that the relevant decisions were taken. Further, Mr Darams submitted that it was a relevant consideration that those decisions had been taken in the context of the Managing Unacceptable Conduct policy. In addition, Mr Darams mentioned that the disciplinary action that had been taken involved six of the disciplined employees being issued with warning letters, and that was something that was open to Ausgrid on the information that was available to it.

[54] In support of his submissions as to the reasonableness of the disciplinary action taken by Ausgrid, Mr Darams stressed that following an opportunity for explanation, the disciplined employees provided their respective responses, and having regard for the information that Ausgrid had before it, it was reasonable for Ausgrid to have not accepted either partially or completely, the explanations that the various individuals had provided. Mr Darams submitted that there was a level of varying acceptance of the explanations provided by the individuals, but it was entirely reasonable for Ausgrid to have come to the various disciplinary decisions that it made in respect to each of the individuals.

[55] Finally, Mr Darams made submissions in respect to the individual circumstances of Mr Galea. Mr Darams submitted that in respect to Mr Galea, the question ultimately would be whether there was a genuine lack of trust and confidence between the employer and the employee as a consequence of his particular actions. According to the submissions made by Mr Darams, in the case of Mr Galea, there was clearly a basis upon which Ausgrid could take disciplinary action.

[56] In summary, Mr Darams submitted that having regard to the totality of the circumstances, the Commission could not be satisfied that the decisions made by Ausgrid in respect to the disciplinary action taken against the disciplined employees, were unreasonable. Mr Darams submitted that there was no evidence that the disciplinary action was taken without justification when consideration was provided for the evidence that Ausgrid had before it at the time of making those decisions. Consequently, Mr Darams urged that the question for determination be answered “yes”, and the dispute concluded on that basis.

Consideration

[57] The dispute in this instance has arisen from the decisions taken by Ausgrid to take disciplinary action against the disciplined employees. The Parties agreed upon the following question for arbitration:

“Have any of the Employees named in the Application to the Commission to deal with a dispute engaged in conduct that would justify Ausgrid taking disciplinary action against any of them?”

[58] In order to answer the agreed question for determination the Commission has been required to undertake a detailed review of the actions and decisions taken by Ausgrid which culminated in the disciplinary action taken against the disciplined employees. This detailed review has ultimately provided the foundation for a determination of whether or not the decisions taken by Ausgrid were reasonable and thus provided justification for the disciplinary action.

[59] The reasonableness or otherwise of the decisions of Ausgrid has been considered having regard for the circumstances and material that was before Ausgrid at the time at which the relevant decisions were taken. In reaching any determination as to the reasonableness or otherwise of the decisions of Ausgrid, the Commission has guarded against imposing upon Ausgrid any unrealistic contemplation for information, circumstances, evidence, or any other material, that has been revealed after the relevant decisions were made.

[60] The disciplinary action taken against the disciplined employees was the outcome that emerged from a series of actions and decisions of Ausgrid that commenced with the response to the anonymous whistleblower report that was made at some time in June 2020. The Ausgrid response was initially handled by its Whistleblower Investigations Officer, Mr Peter Moloney, who is also the Head of Internal Audit at Ausgrid. Mr Moloney conducted a preliminary investigation into what he described as the allegations of serious misconduct. The preliminary investigation then led to a substantive investigation. Following the substantive investigation the disciplinary action against the disciplined employees commenced with each of them receiving letters that alleged potential serious misconduct, and following their responses, show cause letters were issued to all but two of the disciplined employees.

[61] Consequently, the Commission’s review has involved analysis of the relevant actions and decisions taken by Ausgrid which commenced with actions associated with both the investigation phases, preliminary and substantive, and it has subsequently traversed the activities undertaken and decisions made by Ausgrid during the disciplinary processes that followed the investigation phases. This analysis has resulted in the identification of a number of major issues of concern. Consideration has been provided in respect to these major issues of concern, the first of which is described as Policies and Privacy.

Policies and Privacy

[62] At all times during both the investigation and disciplinary phases there were two particular policies which would potentially impact upon any investigation that involved the examination of data emanating from the electronic tracking devices installed in Ausgrid motor vehicles, such as those installed in the vehicles provided to DOs and ODSs. These two relevant policies were the In Vehicle Monitoring System (IVMS) and the Fleet Motor Vehicle Allocation (FMVA) policies, and the relevant provisions are firstly, extracted from the IVMS policy and which state as follows:

“Access to data within the IVMS will only be provided to those with an operational or investigative requirement to:

•  Improve driver safety behaviours through reporting and emergency (duress) response

•  Provide factual data in relation to incidents such as accidents and third-party claims

•  Assist a worker to defend allegations made against them

•  Enhance operational efficiency

•  Respond to a major incident

•  Improve Fleet utilisation and reporting

•  comply with requests from external agencies such as for NHVR compliance and criminal investigations.

Data obtained from the IVMS may not be used:

•  as a primary reason to initiate an investigation of an employee for disciplinary action

•  when conducting individual performance assessments

Any employee who tampers, damages or intentionally disables components of the IVMS will be managed under the organisation’s disciplinary policy.

…

4 Disciplinary action and performance – IVMS data is not to be used as a primary reason to initiate an investigation of an employee for disciplinary action.

Through investigation IVMS data may be obtained which must relate specifically to an allegation and may subsequently be used for disciplinary purposes.”

[63] Secondly, the relevant provisions extracted from the FMVA policy state as follows:

“4.3 Telematics

Telematics are devices that monitor a vehicles general usage, so the business can access accurate reporting on use to allow the organisation to provide the most efficient fleet operating model. The devices will also be used for accident/incident investigations, manage speeding/dangerous driving and support on-call safety initiatives.

…

The telematics device fitted to organisation vehicles will continuously track and report the location of the vehicle at regular intervals. This information is recorded and stored so that the vehicle movements and use can be reported. This includes information similar to what would be recorded in a logbook such as start time, start location, end time, end location, distance travelled. It also records some aspects of the vehicle operation, such as engine idle time.

Information identical to that obtained from pool and depot vehicles will be stored for take home use vehicles with the exception being that data is not collected within a one kilometre radius of the approved driver’s residential address.”

[64] There is an identifiable tension between specific terms in the IVMS policy and the FMVA policy relating to the examination of any electronic tracking data for investigatory and potentially disciplinary purposes. The IVMS policy relevantly states: IVMS data is not to be used as a primary reason to initiate an investigation of an employee for disciplinary action, and Ausgrid has strongly maintained that the primary reason for initiating the preliminary and substantive investigations was the whistleblower report as opposed to the IVMS data. However, the FMVA policy includes an exception which states that electronic tracking data obtained from take home use vehicles will not be collected within a one kilometre radius of the driver’s home. This exception was referred to as the one kilometre blackout.

[65] If both the IVMS and FMVA policies are read in conjunction with one another it would appear that the IVMS policy would have allowed both the preliminary and substantive investigations to examine any electronic tracking data involving potential disciplinary action, because the primary reason that initiated these investigations was the whistleblower report and not the IVMS data itself. However, if the stated FMVA policy had been followed, there should have been no electronic tracking data collected within the one kilometre blackout zone surrounding each of the DOs and ODSs homes.

[66] Unfortunately, Mr Moloney who initiated the preliminary investigation, was not called as a witness, and there was no evidence as to whether he turned his mind to the question of the prospect that the collection of any electronic tracking data within the one kilometre blackout zone meant that Ausgrid had breached the FMVA policy. Mr Donaldson, Ausgrid’s Transformation Director for Network Incident Response, was called as a witness who was involved in the substantive investigation, and he confirmed that electronic tracking data collected within the one kilometre blackout zone had been collected and examined during the investigation.

[67] Mr Donaldson was questioned about the issue regarding the collection and examination of electronic tracking data from within the one kilometre blackout zone and it is relevant to reproduce a number of extracts from transcript of the answers that he provided. Firstly, during cross-examination, Mr Donaldson provided the following evidence when he was taken to the FMVA one kilometre blackout zone policy:

“That’s a promise by Ausgrid that it won’t use data that is collected within a one kilometre radius of an approved driver’s residential address, correct? --- Yes.

That promise was broken in respect of this investigation, wasn’t it? --- My understanding is it was consulted to change the policy. 1

…

And it represented a promise to employees that information identical to that obtained from pool and depot vehicles will be stored for take home use vehicles with the exception being that data is not collected within a one kilometre radius of the approved driver’s residential address. Do you see that? --- I see that written down here.

Yes. And that was the policy that was in place at the time? --- That was the one published at the time, yes. 2

…

And when you did your investigation, you acted - when you were involved in the investigation, you knew the investigation was acting completely contrary to that. Correct? --- Yes.

And my question to you, forget about consultation and whatever. What I am suggesting to you is that if Ausgrid had represented to its employees that it would not use information of that kind, and was using information of that kind, Ausgrid was being untruthful with its employees? --- Yes. 3

[68] Mr Donaldson provided the following further evidence regarding the one kilometre blackout in response to questions from the Commission:

“All right. And when you were involved in discussions with others that were engaged in this, Maloney, Tricerri, Baker, was there any discussion about the one kilometre policy - when I say the one - you know the policy I’m referring to? --- Yes.

So was there any discussion along the lines of one of the foundations of this investigation is using data which we’re prohibited from using because of the 1 kilometre policy, a discussion along that line? --- I don’t recall who or when but I did ask the question and was told that it had been consulted with the union and employee representatives to remove that requirement.

So in other words, ‘Don’t worry about that’, that’s your understanding or that’s what you’re left with, isn’t it? ‘Don’t worry about the 1 kilometre policy, we’ll move ahead with - you don’t need to trouble yourself’? --- Yes, I was told that in the investigation, yes.” 4

[69] The evidence provided by Mr Donaldson confirmed that the investigation “team” had discussed the prospect that it was examining electronic tracking data that, according to the stated IVMS policy, should not have been collected at all. Apparently, the investigation “team” or perhaps Mr Moloney himself, who was in charge of the investigation “team”, accepted advice that despite the stated IVMS policy, some process of consultation meant that it was not applicable.

[70] Ausgrid provided evidence about the consultation process that occurred in May 2018 which it said supported its assertion that the one kilometre blackout provisions of the IVMS policy had simply not been updated to reflect that the consultation process had resulted in the removal of the one kilometre blackout. The relevant documentary materials are found at tabs 48 and 49 of Exhibit 3. Tab 49 is a copy of an “Ausgrid Weekly Broadcast” dated 28 May 2018, and the third topic mentioned in the document is titled “Upgrading our Ausgrid vehicles” wherein the following relevant text is reproduced:

“Following a successful trial, as featured in the March Safety Scoop, starting from June, Ausgrid vehicles will be upgraded with the In-Vehicle Monitoring Systems (IVMS).

The new units have far greater capabilities and safety features, and will enable future integration into our operational systems. These units will promote safer driving, help us better utilise both staff and fleet, assist with managing compliance, and provide a reduction in paperwork, particularly for heavy vehicle drivers. Some of the key features include:

•  Reversing Cameras

•  Bluetooth Connectivity

•  Emergency Duress System

•  Lane Departure & Proximity Warnings - through use of dash cam

•  Heavy Vehicle Log Books & Chain of Responsibility compliance

•  Individual driver behaviour reporting

All company fleet will be fitted with new devices and cameras which have tracking capabilities and are subject to continuous and ongoing monitoring. The dash cams will be configured to record when the vehicle is started with the audio turned off.

More details of the units along with questions and answers raised through consultation can be found on The Wire. Thank you everyone who provided feedback in the trial and throughout consultation. If you would like to know more have questions about this initiative please email ivms@Ausgrid.com.au.” 5

[71] The questions and answers that are referred to in the Weekly Broadcast of 28 May 2018, were included as part of the Mobile Workforce Consultation slide pack which became tab 48 of Exhibit 3. This consultation slide pack provided evidence that confirmed Ausgrid’s proposal to remove the one kilometre blackout, and it also showed that privacy concerns relating to its removal was the first issue of concern identified. 6 There are a number of other aspects of the text contained in the consultation slide pack which are relevantly reproduced as follows:

“To ensure clear understanding of how IVMS is to be used in Ausgrid, a new Company Policy will be released addressing issues covered in consultation. This will include items raised such as;

•  Safety Reporting

•  System Operation

•  Data Access

•  Discipline.

The following will be updated in accordance with our proposal;

…

•  Fleet Motor Vehicle Allocation & Use Policy” 7

[72] This extract from the consultation slide pack clearly refers to updating the FMVA policy which, according to the position advanced by Ausgrid, was something that was mistakenly overlooked. However, there are other parts of the text in the consultation slide pack which can be interpreted to support a proposition whereby the outcome of the introduction of the IVMS policy did not require the removal of the text in the FMVA which maintained the prohibition on the collection of data within the one kilometre blackout area because, in a practical sense, the changes involving the introduction of the IVMS would not provide for any retention of that particular data and, in any event, it could not be used for any disciplinary purposes.

[73] The consultation slide pack included the following text under the heading “Responding to Main Issues - Updated:

“Privacy concerns relating to 1km Blackout being removed.

The telematics will only be tracking vehicle. To ensure we can respond to duress calls, we need to have telematics data for the entire operation of the vehicle.

It is proposed that the dash cam will only turn on when the ignition is turned on in the vehicle. The primary reason for installing a dash cam is for the safety features such as lane detection and proximity warnings. The data will only be stored within the vehicle (not sent to a remote server) and will be overwritten on the hard drive once full. This data would be only for incident investigation and treated as historical data (see data access slide). 8”

[74] Although this part of the text of the consultation slide pack stated that, “This data would be only for incident investigation and treated as historical data, the data access slide stated, “Historic data will be used for investigations as well as identification of driving behaviours”. Further, the data access slide stated that, “HR/IR/Audit/Safety would have access to historic data only [to] assist with investigations into allegations of wrongful conduct, misconduct or disclosure type matters”.

[75] These documented responses to the privacy concerns regarding the removal of the one kilometre blackout firstly indicated that removal of the one kilometre blackout was needed to enable responses to duress calls. Secondly, a distinction emerged whereby certain data was described as “historic” or “historical” and it was not clear whether data obtained within the one kilometre blackout area would be treated as historic or historical data, or if it would be data only stored in the vehicle and not sent to a remote server. If the removal of the one kilometre blackout was only to enable responses to duress calls, then presumably data obtained within the one kilometre blackout area would not be historic or historical data and there would be no practical purpose served in changing the wording in the FMVA policy.

[76] It is also important to consider whether the removal of the one kilometre blackout, essentially only to enable duress responses, would have no consequential impact in respect to disciplinary action. If the removal of the one kilometre blackout had a very confined purpose (duress responses) and did not provide for any data that could be gathered in the one kilometre blackout area to be retained as historic or historical data, then such data would simply not be available for investigations that might lead to disciplinary action. This issue of any link between the removal of the one kilometre blackout and use of data that could subsequently be gathered, was traversed in a series of questions and answers that were included in the consultation slide pack material.

[77] The following questions and answers from the consultation slide pack provide further support for the prospect that there was a very confined operation attached to the removal of the one kilometre blackout:

“Question - Previously there was a 1km blackout of data recorded around an employee’s home address. Will this still be the case?
Response - Our current proposal is to remove this black out, as we are only monitoring our Ausgrid assets. Our proposal has been updated based on employees concerns of privacy to enable them stop [sic] recording with the dash cam on approach to their private residence to alleviate employee concerns regarding privacy. 9

Question - Why can’t we still maintain the 1kM Blackout?
Response - In order to ensure the emergency duress functionality and safety of our employees we need to remove this blackout. We also need to have better visibility of our vehicles for the purpose of vehicle maintenance which means we need accurate logbooks. 10

Question - Will you put in writing it’s not for discipline?
Response - Yes - the IVMS system is to help improve safety and fleet optimisation. Existing policies also cover how the data can be used in incident investigations.” 11

[78] Consequently, upon examination and evaluation of all of the available material, including in particular, the consultation slide pack, the IVMS policy, when read in conjunction with the FMVA policy, does not permit the collection of electronic tracking data within a one kilometre radius of the driver’s residential address.

[79] That part of the IVMS policy which states:

Data obtained from the IVMS may not be used:

•  as a primary reason to initiate an investigation of an employee for disciplinary action

is restricted by the operation of the exemption contained in the FMVA policy which states:

Information identical to that obtained from pool and depot vehicles will be stored for take home use vehicles with the exception being that data is not collected within a one kilometre radius of the approved driver’s residential address.

[80] The evidence has not supported the assertion made by Ausgrid that the FMVA policy was mistakenly or inadvertently not updated. The removal of the one kilometre blackout was confined in its operation to permit electronic vehicle tracking for duress response purposes and other limited vehicle logbook recordings, and it did not extend to the collection, storage, and subsequent examination of data for investigation of an employee for disciplinary action. It follows that Mr Moloney, and his investigation “team” were not entitled to access the IVMS data within a one kilometre radius of any of the disciplined employees’ residential addresses as that data should not have been collected in accordance with the exception stipulated in the FMVA policy.

The Whistleblower Report

[81] The second major issue of concern further impugns the investigation phases that were undertaken by Mr Moloney and his “team”. As previously mentioned, Mr Moloney, who was apparently in charge of the investigations, was not called to provide evidence as a witness. A statutory declaration made by Mr Moloney was introduced into evidence as tab 9 of Exhibit 2, and paragraphs numbered 5 and 6 of the statutory declaration referred to the whistleblower report and included the following:

“5. the Report concerned allegations of serious misconduct against certain Ausgrid Operating Depot Supervisors and other groups of employees, including breaches of Ausgrid’s Time and Attendance Policy (the “Disclosure”);

6. in response to the Disclosure, I initiated a preliminary investigation in relation to the matter with the support of Ausgrid’s internal audit function, which subsequently identified other employees may also have engaged in the alleged serious misconduct;” 12

[82] An extensively redacted document which apparently represented a record of the whistleblower report became Exhibit 14. Exhibit 14 was introduced into evidence from the bar table at a very late stage of the Hearing, and over the objections raised by Mr Reitano. There was no means by which clarification of the nature, origin, and authenticity of the document could be established. The unredacted portions of Exhibit 14 include the following text:

“It has become evident that the below list of Ausgrid “Operating Depot Supervisors” have continually for a long period of time been engaged in unethical activity. The activity is a complete breach of current Ausgrid Policies - Code of Conduct, Fair and Just and Time and Attendance.

On close review it has become evident that this list of Ausgrid Operating Depot Supervisors are accumulating excessive amounts of overtime hours and other misconduct via inappropriate ways that do not align with Ausgrid’s current policies.

…

The Listed Operating Depot Supervisors have also been identified to start their allocating and scheduling days late and leave early making them unavailable to assist with planned work enquiries. This issue is not being policed and controlled suitably, putting extra pressure on planning teams within the regions.

The listed group (being shift workers) starts a work shift and remains at one’s primary place of residence (home) well into the hours of the shift.

The listed group return to one’s primary place of residence (home) during a shift for excessive amount of time.

It has become evident that the listed group starts their nightshifts (being shift workers) at home and even stay home whilst expected to be available. Some Operating Depot Supervisors even living outside the Ausgrid geographic boundaries continue this activity without being controlled by their respective managers.” 13

[83] It is immediately apparent from this content of Exhibit 14, that the whistleblower report raised allegations against a list of named individuals referred to as either “The Listed Operating Depot Supervisors” or “The listed group”. The allegations raised in the whistleblower report were confined to the individuals that it named in “The listed group” and it may, by inference, have extended to “their respective managers.” Despite the whistleblower report raising allegations against a confined group of identified individuals, Mr Moloney’s preliminary investigation identified other employees, and the substantive investigation involved an examination of IVMS data and time/attendance records of approximately 150 employees.

[84] There was no evidence provided which could explain how the allegations made in the whistleblower complaint against the list of individuals that it contained, were expanded to encompass examination of inter alia, IVMS data in respect of approximately 150 employees. In the absence of any explanation, the investigations which extended to individuals other than those named in the whistleblower report, contravened that part of the IVMS policy which states: “Through investigation IVMS data may be obtained which must relate specifically to an allegation and may subsequently be used for disciplinary purposes.”

[85] Presumably, if the whistleblower report had named any of the disciplined employees, the names of those individuals would not have been redacted from Exhibit 14. Similarly, if the whistleblower report had indicated that the conduct that was complained about was also allegedly engaged in more generally by other employees, such information would not have been redacted from the document. The logical conclusion therefore is that none of the disciplined employees were specifically or by way of more general inference, the subject of the allegations raised in the whistleblower report. The corollary of this is that, somewhat ironically, it appeared that those individuals actually named in the whistleblower complaint escaped any disciplinary action.

Common Practice and Cultural Norm

[86] The third major issue of concern that has arisen from the analysis of Ausgrid’s decisions and conduct associated with the disciplinary action initiated against the disciplined employees has involved their alleged misconduct. The gravamen of the misconduct alleged against the disciplined employees (other than Mr Galea), concerned breaches of the 2015 memorandum involving what can be described as alleged timesheet fraud.

[87] The alleged timesheet fraud broadly encompassed three categories of conduct identified by analysis of the IVMS data which showed the location of the individual’s vehicle at a time when time and attendance records showed that employee to be on paid ordinary time or overtime. The first broad category of conduct identified that the employee’s vehicle was located at his (all of the disciplined employees are males) residential address at the time at which he commenced a rostered shift. The second broad category of conduct involved circumstances where the employee’s vehicle leaves a location then travels to the employee’s residential address either before the scheduled end of the shift or it reaches the residential address after the scheduled end of the shift, and the employee has claimed overtime that encompassed and/or extended beyond the time of the return to the residential address. The third broad category of conduct specifically related to night shifts when the employee’s vehicle was shown to be at his residential address for significant periods of time including, in some instances, for the entire night shift.

[88] The 2015 memorandum did not permit the circumstances identified in the three broad categories of conduct which, in essence, disclosed a practice whereby a DO (and ODSs performing DO work) would start and finish their shift from home including night shifts when, in the absence of any unplanned work, they would await any assignment of work at their home. Instead, the 2015 memorandum directed that DOs (and ODSs performing DO work) either start and finish all shifts at their assigned depot, or be in attendance “at the first job in their depot area” or “at the last job in their depot area” at the respective start and finish times.

[89] Although some of the disciplined employees claimed that being at either the first or last job in their depot area included their home in circumstances when they undertook preparatory work at home before they travelled to the site of any planned work, and when they performed other work-related tasks once they had reached home, they all strongly maintained that the working from home arrangements were a common practice of long-standing, observed generally, and either openly or implicitly, sanctioned by their relevant managers. Consequently, when responding to the allegations of potential serious misconduct and answering to the show cause letters, the disciplined employees defended their actions by inter alia, informing Ausgrid that the alleged misconduct was common practice and part of the cultural norm which relevant managers knew about.

[90] Importantly, the disciplined employees provided Ausgrid with their common practice and cultural norm defences during the initial stages of the disciplinary processes, and well before their evidence was produced for these proceedings. As examples, the following extracts have been taken from the written responses to the allegations of potential serious misconduct that were provided by some of the disciplined employees:

“It has been that way since day 1 in the section, I was told to buy a fax machine and the control room would fax the work to my home. … It was common knowledge by district operations management. Joshua Johnson our current manager knew well and followed the same rules when he was on the road in the position.” 14

“The rules that we were all trained in and comply with for the last 20 odd years are, sign on at the start of every shift with the control room, be in the area phone on ready to respond to any emergency as required… You could start and finish in the depot or on the job in the field.” 15

“I admit that I have always signed on from my home or on the way to work at rostered start times.”

Management are aware of DOP’s starting from home…. This is how I have worked since about 2013.” 16

I have been starting & finishing from home instead of the Cronulla depot since I moved from the Sefton depot in approximately Sept 2018 as live in my depot region. Most of the Operators in the Operating Branch all over Sydney & the Central Coast start & finish from home if they live in their depot region.

When I first began working as an Operator at the Sefton Depot most Operators that worked there & lived in the area started & finished from home. It was the common norm….

Working from home was not officially or formally authorized but there were at least 6 Managers & Supervisors I know that have been aware of this practice occurring by myself & others - …” 17

“I have been starting & finishing my shifts as an Operator from home, as do the majority of Operators in the Sydney & Central Coast areas. I have never tried to hide this fact & I’ve always believed that I was doing the right thing. Our Managers & Supervisors knew this was the case & so did the staff in the Control Room. I wasn’t doing anything different at home to what I would be doing the depot.” 18

“In the letter of allegations given to me on Friday, 22 January, it refers to a ‘Fair & Just Culture Policy. I have never been given a copy or seen a copy of this policy. I have now downloaded a copy for myself from the ‘The Wire’.

On page 1 it states in 2.3 that ‘everyone deserves to fully understand what is expected of them;”. I believe that I was acting within what was expected of me when doing my job as an Operator & starting & finishing from home. It is now obvious that the expectations were not made clearly to myself & my co-workers, as the ‘Fair & Just Culture Policy’ states should happen.

Also stated in the same Policy on page 2, a Fair and Just Culture also requires that behaviours inconsistent with our values are always addressed ….. This recognises that: sometimes the behaviour is the product of cultural norms or poor systems.” Since I commenced in the Operating Branch it is clear that I have been working within the ‘cultural norm’ (as defined on page 2 of Ausgrid’s Fair and Just Culture Policy) of the section that has been openly discussed in verbal consultation with Managers of our branch. I have never hidden the fact where I start and finish my shifts from home.” 19

[91] The common practice and cultural norm defences provided by the disciplined employees would not have come as a surprise to the Ausgrid managers who were involved in the substantive investigation and subsequent disciplinary processes. The substantive investigation had revealed that there were widespread breaches of the 2015 memorandum such that the alleged timesheet fraud had been committed, to varying degrees, by somewhere between 50 to 100 20 of the 150 individuals who were the subject of the investigation.

[92] Despite the widespread occurrence of the alleged misconduct (described as timesheet fraud) and its asserted condonation by numerous managers, Ausgrid took the conscious decision not to make any inquiries with the relevant managers and/or control room staff. Mr Donaldson was questioned about the absence of any inquiries with relevant managers and/or control room staff and he provided the following quite extraordinary evidence:

“And one of the things you could have done, and I’ll go back to some people that we’ve already spoken about for present purposes, is gone to Josh Johnson and said, ‘Did you condone these people working in defiance of the 2015 memo’, correct? It’s one of the things you could have done. I’m not suggesting you did do it?--- I couldn’t because I was not allowed to.

You were not allowed to? Who prohibited you?--- I was instructed by an internal audit.

So you are instructed by internal audit not to have this matter investigated properly?---Yes.” 21

[93] The evidence further established that Ausgrid did not conduct any investigation in respect of the managers that Mr Donaldson was not permitted to talk to 22, and there has been no disciplinary action of any form initiated against any employees, including managers, other than the 10 disciplined employees. In circumstances where Ausgrid management realised that the investigation had not been properly conducted, it nevertheless proceeded to implement disciplinary action against 10 individuals that it assessed to have engaged in the most serious incidents which breached the 2015 memorandum.

[94] The disciplinary action that was implemented against the 10 disciplined employees proceeded upon the foundation of an investigation that Ausgrid management recognised as being fundamentally deficient because it consciously ignored the common practice and cultural norm defences of the disciplined employees. Ausgrid management made the decision to proceed with the disciplinary action at a time when it had full knowledge of the common practice and cultural norm defences. Consequently, the disciplinary action taken against the disciplined employees failed to even contemplate any question of compliance with the Fair and Just Culture policy.

[95] Ausgrid breached its Fair and Just Culture policy when it decided to ignore the common practice and cultural norm defences of the disciplined employees. Any properly functioning organisation would not need a Fair and Just Culture policy document in order to recognise that to take disciplinary action against only some of a larger group of employees who all engaged in alleged misconduct, which was condoned by their managers, would be fundamentally unreasonable and unjustifiable. Regrettably, the resultant culture of the organisation is one where management protects itself by finding scapegoats to appease complaint or criticism.

The Selection Lottery

[96] A fourth major issue of concern with the approach that was adopted by Ausgrid when it decided to initiate disciplinary action against the disciplined employees was the selection methodology that it utilised to choose the 10 individuals that it assessed to have engaged in the most serious breaches of the 2015 memorandum.

[97] The substantive investigation included data analysis which was conducted on a single, randomly selected month between June and December 2019, for each of the 150 individuals. The location of each individual’s Ausgrid vehicle during times that that individual was recorded as being on paid ordinary or overtime during the randomly selected month was identified, and when the location of the vehicle was not at an Ausgrid depot or at a jobsite, it was determined to be “exception hours”. For example, on any occasion when an employee was rostered on and paid for a night shift whilst his vehicle was tracked to have been located at his home for part or all of that night shift, the time that it was at his home was categorised as “exception hours”.

[98] Ausgrid considered the identified “exception hours” as being times when the individual was receiving payment to which they were not entitled particularly if the location of the vehicle was identified to be at that person’s home or outside of the boundaries of the area in which that employee ordinarily worked. Some weighting was applied to the particular circumstances of the identified “exception hours”, and then all of the “exception hours” for each individual were aggregated in order to produce a ranking table which showed the individual with highest number of “exception hours” through to the individual with the lowest total number of “exception hours”.

[99] The methodology that was used to identify and then rank the individuals’ total “exception hours” and produce a ranking table from which “the top 10” were selected to become the disciplined employees, has inter alia, three particularly troubling defects.

[100] Firstly, it would have been a matter of luck as to which month was selected for each individual’s analysis. There was every prospect that a particular month that had not been selected for a particular individual could have identified a far greater number of “exception hours” than those that were calculated for any of the disciplined employees (a.k.a. “the top 10”). Similarly, an individual who ordinarily worked from home, and would have produced “exception hours” greater than those of any in “the top 10”, may have had a month selected for his data analysis which, luckily, coincided with a period when he was for some reason or another, unable to work from home. So, by chance, this individual’s selected month showed data that was in no way reflective of his unusual incidents of what was considered to be timesheet fraud.

[101] Secondly, the identification of “exception hours” was predicated on an assumption that unless the individual’s vehicle was tracked to have been located at an Ausgrid depot or a jobsite within the area that they ordinarily worked, that individual was not performing work for which they were entitled to be paid. The substantive investigation data analysis also disclosed periods of time before or after paid shift times when the vehicle was not located at the individual’s home, and, in fairness, Ausgrid subtracted many of these periods of time from the “exception hours” because it was assumed that the individual was undertaking work tasks outside of his paid work time.

[102] The evidence that was provided by the disciplined employees confirmed that they regularly performed work tasks at times outside of their paid shifts. For example, details of planned work were sent by email (or in earlier times, by fax), to individual DOs before the commencement of the shift which involved the scheduled performance of that work. Having received this email, an individual DO would frequently undertake preparatory work in unpaid time or after signing on with the Control Room but before travelling from home to the jobsite. Consequently, the assumption that because the vehicle was located at the individual’s home, he was not performing any work tasks, was a false assumption. In fairness, the assumption may have had validity in respect to a technical breach of the 2015 memorandum, but it nevertheless represented a fundamental flaw upon which the “exception hours” were established to represent timesheet fraud.

[103] Thirdly, the decision to select “the top 10” as opposed to “the top 5” or “the top 15” was in large part, determined on the basis of operational need, that is, Ausgrid selected the number of individuals to be disciplined so that it could retain a sufficient number of DOs in active engagement to meet operational requirements. This line drawn at “the top 10” meant that the individuals ranked number 11 and beyond escaped any scrutiny whatsoever. Particularly when the misconduct in question was described as timesheet fraud, the prospect that some quantitatively lower incidence of fraud would result in there being no disciplinary action at all, manifests as a plain injustice for “the top 10”.

Mr Galea

[104] Mr Galea was one of the disciplined employees, however there were different circumstances surrounding the misconduct that was alleged against him. The significance of the misconduct alleged against Mr Galea arose from his actions during meetings that were held as part of the disciplinary process that followed the substantive investigation.

[105] In summary, the misconduct alleged against Mr Galea firstly occurred when he was asked to hand over his work phone to an Ausgrid manager and he untruthfully told the manager that he did not have his work phone in his possession at the time. Subsequently, when further inquiries were made about the apparent location of his work phone at the time that he said he did not have it in his possession, Mr Galea provided a second untruthful answer to the relevant Ausgrid manager. Ausgrid considered that the dishonest responses provided by Mr Galea constituted serious misconduct.

[106] In the evidence that was provided by Mr Galea in these proceedings, he repeatedly admitted his dishonesty and he demonstrated sincere contrition for his actions. Further, he provided evidence that after his initial dishonesty he had made admissions to Ausgrid managers whereupon he stated, “I did the wrong thing by not admitting that I had the phone there. I am sorry about that.” 23 Mr Galea also indicated that the context for his dishonesty was relevant as it arose in circumstances where he had attended the meeting on the understanding that it was not to be disciplinary in nature, and his dishonest answer was in part a reaction to what he felt was an ambush.

[107] Honesty between individuals is important in any relationship including employment, and employers and employees should be honest with one another. Mr Galea was dishonest with his responses to his employer on two occasions. In the context of any assessment of misconduct, the dishonesty of Mr Galea should be considered having regard for two mitigating factors.

[108] Firstly, Mr Galea was dishonest with his employer, but his employer had been deceitful with him. Ausgrid had told Mr Galea that the meeting that he was to attend was to finalise the disciplinary processes in respect to his circumstances, and not the subject of any further inquiry such as a directive to hand over his phone. In simplistic terms, Mr Galea’s lie was a response to Ausgrid’s lie.

[109] Secondly, the directive for Mr Galea to hand over his phone was unreasonable. Employees are frequently provided with work related equipment by their employers. It is commonplace for work related devices such as mobile phones, iPads, and laptop computers, to be provided and ordinarily some personal use of these devices would be understood and permitted, subject to reasonable and realistic constraints. It is unreasonable for an employer to require an employee to immediately return equipment like a phone without adequate prior notice which would enable the employee to remove any personal material from the phone. In the pre-digital age, no fair-minded employer would have demanded the return of a brief case without first giving the employee adequate opportunity to remove their personal possessions from the case.

[110] Consequently the dishonest conduct of Mr Galea must be properly assessed against the conduct of Ausgrid. Mr Galea’s dishonestly arose from the deception of Ausgrid, and as an understandable response to the plainly unreasonable directive to immediately hand over the phone. In this context, and when coupled with his admissions and contrition, the dishonesty of Mr Galea cannot be established to represent misconduct for which any disciplinary action could be justified.

Two More Significant Incidents

[111] In fairness, mention must be made of the evidence of some of the more significant incidents which the substantive investigation revealed. Interestingly, two particular incidents would have been discovered even if the substantive investigation had been conducted in compliance with the one kilometre blackout. Two of the disciplined employees were outside of their area of operation when they were on a paid shift. One individual had signed on when travelling towards his operational area at the commencement of a shift, and the other had travelled outside his operational area on Christmas day.

[112] The common practice, as broadly recognised by the disciplined employees, did not allow for circumstances where a DO (or ODS performing DO work) would be outside of their relevant operational area whilst signed on with the Control Room. Although an individual may validly assert that despite being outside of their operational area, they could still quickly respond to any work requirement, they nevertheless acted contrary to the established practice. If a more sensible approach to the investigations and disciplinary action had been taken, these two particular circumstances, involving breaches of the common practice whereby DOs (and ODSs performing DO work) were to be within their operational area whilst on paid time, should have probably justified some reprimand.

Conclusion

[113] In this case the Commission has been required to determine a question regarding the reasonableness or otherwise of the conduct of Ausgrid which started with investigations that were undertaken in response to an anonymous whistleblower complaint and progressed to disciplinary action taken against 10 employees. Specifically, the Parties have proposed the question for determination as:

“Have any of the Employees named in the Application to the Commission to deal with a dispute engaged in conduct that would justify Ausgrid taking disciplinary action against any of them?”

[114] In order to answer this question, the Commission has carefully examined all of the evidence of the actions and decisions taken by Ausgrid which culminated in the disciplinary action taken against the disciplined employees. The examination undertaken by the Commission has necessarily included scrutiny of the conduct of the disciplined employees, which Ausgrid determined to be either misconduct or serious misconduct. This detailed review has ultimately provided the foundation for a determination of whether or not the actions and decisions that were taken by Ausgrid were reasonable and thus provided justification for the disciplinary action.

[115] The Commission has identified a number of major issues of concern regarding the actions and decisions of Ausgrid which occurred in respect to both the investigations and subsequent disciplinary action phases of the disciplinary processes. In summary, the examination and consideration of the major issues of concern has established that Ausgrid’s actions and decisions, which culminated in the disciplinary action taken against the disciplined employees were, (a) contrary to its Policies including those related to the privacy and discipline of its employees, (b) failed to recognise the common practice and cultural norm of the conduct under consideration, (c) included the deliberate exclusion of inquiries and information which were vital to a proper determination of the conduct under consideration, (d) involved an arbitrary and unjust selection methodology, and (e) specifically, in respect to Mr Galea, failed to recognise and balance its own deceitful and unreasonable actions.

[116] The deficiencies and errors that were revealed in the actions and decisions of Ausgrid as identified through examination of the major issues of concern, were very regrettable. Unfortunately, the circumstances in this case have revealed an approach where Ausgrid management was motivated to provide a perception that it took stringent action in response to a whistleblower complaint, irrespective of the validly of the complaint, and in a way which protected Ausgrid management from any scrutiny, and instead, sought to have some Ausgrid employees disciplined as scapegoats to appease any complaint or criticism.

[117] The disciplinary action taken by Ausgrid against the disciplined employees was unreasonable and unjustifiable. Therefore, the question for determination must be answered, No.

[118] Consequently, the dispute has been determined broadly in accordance with the position advanced by the CEPU on behalf of the disciplined employees. The application is concluded accordingly.

COMMISSIONER

Appearances:

Mr R Reitano, Counsel with Mr A Jacka appeared for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.

Mr J Darams, Counsel, with Ms L Cooper, solicitor from Clayton Utz appeared for the employer.

Hearing details:

2021.
Sydney:
November, 22, 23, 24, 25 & 26.

2022.
Sydney:
February, 4.

Printed by authority of the Commonwealth Government Printer

<PR740839>

 1   Transcript @ PN3814-PN3815.

 2   Transcript @ PN3822-PN3823.

 3   Transcript @ PN3839-PN3840.

 4   Transcript @ PN4551-PN4553.

 5   Exhibit 3 - pages 392-393.

 6   Exhibit 3 - page 362.

 7   Exhibit 3 - page 365.

 8   Exhibit 3 - page 366.

 9   Exhibit 3 - page 376.

 10   Exhibit 3 - page 377.

 11   Exhibit 3 - page 378.

 12   Exhibit 3 - page 366.

 13   Exhibit 14.

 14   Exhibit 2 – tab 23 page 298.

 15   Exhibit 2 – tab 23 page 305.

 16   Exhibit 2 – tab 24 page 306.

 17   Exhibit 2 – tab 25 page 311.

 18   Exhibit 2 – tab 25 page 313.

 19   Exhibit 2 – tab 25 page 315.

 20   Transcript @ PN4394.

 21   Transcript @ PN3707-PN3709.

 22   Transcript @ PN4550.

 23   Exhibit 1 – tab 4 page 32.