DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Renato Lusica
v
Linfox Armaguard Pty Ltd
(U2014/5974)

Application for relief from unfair dismissal - alleged serious misconduct - accessing sexually explicit movie whilst on duty.

[1] This decision concerns an application lodged on 26 March 2014 by Mr Lusica pursuant to s.394 of the Fair Work Act 2009 (the Act) in relation to the alleged unfair termination of his employment by Linfox Armaguard Pty Ltd (Armaguard or the Company). The matter was the subject of unsuccessful conciliation by a Fair Work Commission Conciliator on 14 May 2014. The matter was then set down for arbitration before me in Sydney on 21 August 2014. Directions were issued on 26 May 2014 for the filing of written submissions, witness statements and any supporting documents. That process was completed on or about 21 July 2014. Final written submissions were concluded on 12 September 2014. At the hearing Mr Lusica was represented by Mr J Diaz, solicitor of Diaz & Diaz Lawyers and Armaguard by Ms C Brown of Kelly Hazell Quill Lawyers with Ms V McEvoy. Mr Lusica gave sworn evidence on his own behalf. Mr G Cataldo, Mr D Aitchison and Mr A Forster gave sworn evidence for the Company.

Background

[2] Mr Lusica commenced employment with Armaguard (which was then a division of Mayne Nickless Limited) in August 2000. After completing his probationary period, Mr Lusica became a permanent Field Security Officer. He worked at locations in Strathfield NSW, Auburn NSW and other sites.

[3] From 2010 onwards, his duties with Armaguard were mainly those as a Control Room Operator at its Rosehill NSW premises. He was dismissed by Armaguard on 10 March 2014 for alleged serious misconduct arising from him watching a sexually explicit movie entitled ‘Experts Guide’ (the Movie) whilst on duty in the Control Room. Mr Lusica maintains that his actions in watching the Movie did not constitute serious misconduct and his application (form F2) seeks relief by way of reinstatement and compensation for lost wages. This was later changed to a claim for compensation only.

Evidence

Mr Lusica

[4] Mr Lusica gave sworn evidence and submitted a witness statement 1.

[5] Mr Lusica’s witness statement set out in some detail the history of his employment with Armaguard. He stated that his “annual review for this position has always been favourable.”

[6] Mr Lusica further said, in summary, that:

● Prior to coming to Australia, he was an officer in the Philippine National Police. In that role he was trained in security and intelligence work and the handling of firearms.
● “Sometime in 2010, my duty consisted mainly as Control Officer at Rosehill premises. Armaguard implemented strict control measures to eliminate breaches of security. Anyone entering or leaving the premises must pass through the security control area. This is to ensure that no person enters the premises that are not personnel or authorised persons. This means that we must know all personnel.”
● “There is usually only one security officer in the control room.”
● The only persons with access to the control room are other security officers or persons authorised by the Security Manager.
● In mid 2013 Mr Cataldo became the new Security Manager at Rosehill.
● He had been “the subject of ridicule and picked on” by Mr Giannetti (the then Security Manager) and Mr Cataldo.
● He was told by a Mr J Slater, a security officer, and Mr Aitchison that his employment would be terminated due to his age.
● On 28 February 2014, Mr Aitchison showed him an external hard drive containing movies and it was agreed that Mr Lusica could borrow it. He had observed Mr Aitchison watching movies on a number of occasions. “It seems common that control officers watch movies during the lull period of their duty so long as it does not interfere in the performance of their duties. I remember one time, this was brought to the attention of Gabriel Cataldo, and I remember him saying: ‘That is not a problem to me, I can tolerate that’.”
● “I was in the afternoon shift at that time, and towards late afternoon, I switched on the hard drive. Daniel [Aitchison] taught me before he left how to use it through the computer, as I have never done that before. When I saw the movie, I noted that it was a adult film and I became curious. I was switching it on and off while I was not attending to people or during the lull time.”
● On 3 March 2014, he was stood down by Mr Cataldo. “I was ushered to the conference room after taking all my personal possessions and there I was told that I am stood down.”
● “I strongly feel that the incident of 28 February 2014 was a set up by Gabriel Cataldo, Don Giannetti and Daniel Aitchison to find a way to dismiss me from Armaguard Linfox as during the time I was intermittently watching the video, I do not recall nor seen anyone who may have seen or watched what I was doing.”
● “I went for an interview on 10 March 2014. I felt that there was no genuine investigation undertaken, but a mere formality to dismiss me. There were no questions or issues as to the source of the video and how it came about in the control room. I am not aware that Daniel Aitchison was queried about his responsibility or action in relation to any video or previous ones he may have brought and watched in the control room.”
● He had worked for Armaguard for some 14 years and had provided loyal and honest service. He had also been subject to significant risks to his life.
● “The unfair dismissal caused me severe emotional and financial hardship. I am now 68 years old and would be difficult to find another job. Had I been retrenched I would be entitled to redundancy payment consistent with my 14 years of service.”

[7] Attached to Mr Lusica’s witness statement were a number of documents relating to his employment, including bonus payments made to him. I have paid regard to all of that material.

[8] In cross-examination, Mr Lusica:

● Agreed that there is a window in the control room door and windows between the control room and the foyer of the Rosehill facility and into the Rosehill facility itself. 2

● Said that Mr Aitchison was lying when he said in his statement that he did not provide the external hard drive to Mr Lusica.

● Repeated his evidence that Mr Aitchison taught him how to use the external hard drive.

● Was asked: “And most of the movies that were on the hard drive were ordinary movies that you would see at the cinema?” and said: “Yes.” 3

● Described the film he was watching as “Educating a person on how to enhance your sexual relationship with your partner”. 4

●Agreed that the film involved naked persons engaging in sexual activities, including intercourse. 5

●Agreed that he watched the Movie intermittently for about an hour. When not watching it, he minimised the screen. 6

●Agreed that he had been subject to a complaint around 2012 concerning his behaviour towards female staff. 7

●Agreed that at that time he was given a copy of the Company’s policy about behaviour in the workplace and harassment. 8

●Agreed that it was possible that other people could have seen the Movie by looking through the control room windows. 9

● Said that Mr Aitchison put the hard drive into the computer. 10

●Was asked: “And you let people in and out of the facility who are working there or who are visitors to the facility?” and said: “Yes.” 11

●Agreed that there had been a previous incident where Mr Cataldo had spoken to him about him sleeping whilst he was supposed to be monitoring access to the facility. 12

●Repeated his evidence that Mr Cataldo had said that watching movies during work time was acceptable to the Company. 13

●Agreed that Mr Diaz accompanied him to the 10 March 2014 meeting. 14

●Agreed that he was given a chance to put his side of the story. 15

●Agreed that the 10 March 2014 meeting lasted for some 1 hour and 15 minutes. 16

●Agreed that he was asked about the origin of the Movie during the disciplinary interview and had said that it came from Mr Aitchison. 17

●Said that the evidence of Mr Cataldo and Mr Aitchison was untruthful.

●Agreed that he chose to continue watching the Movie when he discovered that it was an adult film. 18

● Repeated his evidence that he was ‘set up’ for dismissal over the watching of the Movie. 19

●Said that he had made some 12 unsuccessful job applications since his termination of employment. 20

[9] Mr Aitchison gave sworn evidence and submitted a witness statement 21. He is a Security Support Officer at Rosehill and has worked in that position since February 2012. He works in the Control Room on a rotating roster. Prior to taking up employment with Armaguard, he worked as a guard in the New South Wales prison system and in hotel security. In total, he has been employed in the security industry for some 8 years.

[10] Mr Aitchison’s statement went on to say, in summary, that:

● He has known the Applicant since he began working at Armaguard but has never worked directly with him.
● The external hard drive was provided to him by his brother-in-law and contained in excess of 500 movies.
● It was his understanding that employees could watch movies and access the internet if they were not busy. “I’m only talking about appropriate movies, and not the movie on the hard drive that the Applicant watched, you could definitely not watch that at work. I didn’t even know that movie was on the hard drive until Mr Cataldo and Mr Gianetti told me about it.”
● He denied the Applicant’s evidence alleging that he told the Applicant that his employment would be terminated due to age.
● “I deny that I found my hard drive and provided it to the Applicant as he has set out and that we had any conversation as described. As I have stated above, I did not realise that I had left the hard drive at work until I spoke to Mr Cataldo and Mr Gianetti about it. I did not take the hard drive to work to watch the movies on it. I just had it with me and then left it behind.”
● He denied showing Mr Lusica how to utilise the hard drive. He went on to say that all employees working in the Control Room know how to use an external hard drive as it is required in their daily work.
● Mr Lusica started work in the Control Room before him and was involved in training him when he started that type of work.
● “Throughout my time working with the Applicant, I never saw that he had any issue with Mr Gianetti or Mr Cataldo or that they had any issue with him. They just treated him the same as everyone else.”

[11] In cross-examination, Mr Aitchison denied having any conversation with Mr Lusica in relation to his external hard drive containing movies. 22 He further denied offering the hard drive to Mr Lusica or allowing him to borrow it.23 In answer to a question from me, Mr Aitchison said that he accepted that he had left the hard drive on the desk of the Control Room.24

[12] Mr Aitchison went on to say that he did not know the contents of the hard drive except that “there were movies on there.” 25

[13] Mr Aitchison denied accessing his external hard drive at work. 26 He went on to say that when he was interviewed by Mr Cataldo on 17 March 2014, he did not know that Mr Lusica had been dismissed but did know that the investigation concerned the hard drive and the movie which was watched by Mr Lusica.27

[14] In re-examination, Mr Aitchison said that he had never watched ‘adult movies’ whilst at work. 28

Mr Cataldo

[15] Mr Cataldo gave sworn evidence and submitted a witness statement 29. Mr Cataldo was Armaguard’s Security Manager for NSW and the ACT from March 2012 until late April 2014. In that role he was responsible for a wide range of security functions. Prior to working with Armaguard, his background included work as a Police Officer in the NSW Police Force from 1992 to 2009.

[16] On 3 March 2014, he was advised by Mr M Morris, the Branch Manager at Rosehill, of an employee complaint concerning the Control Room operator on duty on 28 February 2014 watching an inappropriate movie at around 7 pm on that day. He then spoke to Mr Giannetti and checked the CCTV archives. “It was at this stage that I saw the Applicant viewing a video on the Armaguard computer provided in the Control Room. The video clearly contained naked human males and females engaged in sexual activity.”

[17] His remote viewing of the CCTV footage (from Lidcombe) showed that Mr Lusica had been watching the Movie for approximately one hour and had on several occasions got up to attend to a staff member. He then went to the Rosehill branch with Mr Giannetti and the Branch Manager on 3 March 2014 and spoke to Mr Lusica, informing him that an investigation was being conducted concerning the watching of the Movie during Mr Lusica’s Control Room shift on 28 February 2014.

[18] At around 6.15 pm on 3 March 2014 he met with Mr Lusica and Mr Giannetti in the Board Room and again raised the allegation of Mr Lusica watching inappropriate material on his computer whilst on duty. Mr Lusica was then suspended on pay. “We asked the Applicant to leave the workplace and advised him that we would be in contact with him to schedule a meeting at which we would put the allegations to him in detail and he would be able to respond.” He later obtained a copy of the movie and reviewed a copy of it. 30

[19] He and Mr Giannetti met with Mr Lusica at around 3 pm on 10 March 2014 to put allegations to him regarding the Movie incident and to give him an opportunity to respond. He worked on a contemporaneous record of the meeting as it progressed. 31 Mr Diaz attended the meeting with Mr Lusica.

[20] During a break in the meeting on 10 March 2014 Mr Cataldo consulted with Armaguard senior management members and discussed Mr Lusica’s responses to the allegations against him. Also discussed were the Applicant’s length of service, his performance history and “his age in the context of him being towards the end of his working life and how a termination might impact on him.” He came to the view that Mr Lusica’s behaviour led him to contemplate the termination of the Applicant’s employment. “I said that I had considered the other disciplinary outcomes available, but that I decided termination was the most appropriate. I considered giving the Applicant a final written warning, but given his performance history and the seriousness of the matter, I was of the view that this sent the wrong message to other employees.”

[21] After again consulting with senior management, Mr Cataldo returned to the meeting with Mr Lusica and Mr Diaz and told them that he was contemplating the termination of Mr Lusica’s employment and asking him “if he would like to raise any further responses or any mitigating circumstances that he would like me to consider in making my decision.” After hearing the Applicant’s responses, he took a further break from the meeting to consider the information that Mr Lusica had put forward. Mr Cataldo said that he remained concerned that the viewing of the type of movie watched by Mr Lusica on 28 February 2014 was against Armaguard’s Workplace Diversity and Equal Opportunity Policy. He was also concerned that the Movie had been seen by another employee and the potential for it to have been seen by a number of employees due to the busyness of the branch at the time the Movie was being watched by Mr Lusica. “I was also conscious that my own Security team at any time could through proactive or reactive investigations observe the Control Room and whatever was occurring in there via dialling into the CCTV. The Applicant had said that he had minimised the video screen when other employees came past the Control Room, and I had noticed on the footage that he had done this, however the Applicant had his back to a window that lead out into the foyer of the Branch, where there is also a large meeting room. The screen faced the window, so I was conscious that other employees and authorised visitors could have seen the video without the Applicant knowing as they walked through the foyer or into or out of the meeting room and he would not have known they were there In my view, by minimising the screen the applicant was demonstrating that he knew his behaviour was wrong.”

[22] “I was also concerned that the Applicant in watching the video for approximately one hour had not been devoting his full attention to his work duties at that time. This means that during that period he was not devoting his attention to monitoring the numerous CCTV screens that are in the Control Room and controlling access to and from the Branch. The Branch contains a number of different rooms for processing different types of currency, that is notes, coin and foreign currency and also separate rooms for packing and unpacking ATM cassettes, and running notes through high speed machines that check their fitness to Reserve Bank Standards.”

[23] Mr Cataldo went on to say that the uploading of hard drive content onto the Armaguard computer was contrary to their IT policy because it had not been screened for viruses. The Company’s computer system is security sensitive as it deals with matters such as account details and balances of customer cash holdings. Attached to the witness statement was a copy of Armaguard’s Internet and Email Usage Policy 32 (the IT Policy).

[24] Mr Cataldo said that he considered Mr Lusica’s responses but “his focus seemed to me to be on there not being anything wrong with him watching the inappropriate material and that ‘no-one should have been looking’ at what he was watching. I gave the Applicant a number of opportunities to satisfy me that he knew that the behaviour was wrong and to express that he was sorry,and apart from saying he was remorseful at the end he did not convince me that he knew the behaviour was inappropriate or that the behaviour would not be repeated. The Applicant’s responses seemed to be contradictory, in that he was saying to me that he didn’t necessarily think that there was anything wrong with the material, but on the other hand he had minimised the screen a number of times, which led me to conclude that he did know it was wrong.”

[25] In considering whether to terminate Mr Lusica’s employment, Mr Cataldo said that he considered the Applicant’s employment history and two recent incidents in which he had been involved, including one where Mr Lusica had been found to be asleep at his desk whilst on duty. “I also considered … the Applicant’s age and length of service with Armaguard and how that would impact upon the Applicant personally, and in terms of his capacity to get another job. I also considered that given the Applicant’s age, he should have a level of maturity and ‘grounding’ that would mean he knew that this kind of behaviour was wrong. He had been in the workforce a long time, both at Armaguard and with other employers, and the kind of behaviour he demonstrated is inappropriate no matter where you work, even thought there were particular implications given his role at Armaguard. In my view, this meant that he should have known better, particularly given we’d had specific cause to speak to him about these issues on previous occasions.”

[26] Mr Cataldo then concluded that: “termination of employment was the appropriate outcome in these circumstances given the seriousness of the matter.” He then communicated that decision to Mr Lusica.

[27] Mr Cataldo’s statement went on to reply to elements of the statement of Mr Lusica. He denied making any statement to the Applicant to the effect that Control Room Operators could watch movies during low activity periods. He went on to say that Control Room Operators were allowed to briefly access the internet for personal reasons “but otherwise expected them to maintain their focus on their duties. In this case, the Applicant was not maintaining his focus on his duties, and was distracted for the hour period during which he was watching the video.”

[28] In cross-examination, Mr Cataldo:

● Agreed that he did not have direct personal knowledge of the complaint from another staff member about the movie being watched by Mr Lusica and had relied on information from Mr Morris. 33

●Said that he had viewed CCTV footage of Mr Lusica looking at the Movie on his computer screen. 34

●Confirmed that he made a decision to dismiss Mr Lusica on 10 March 2014. 35

● Agreed that he interviewed Mr Aitchison after the dismissal of Mr Lusica. 36

●Denied that there was any element of haste in Mr Lusica’s dismissal before he fully investigated all the circumstances surrounding the incident. 37

●Denied that the watching of movies in the Control Room by staff during slow periods was a common event. 38

●Denied that the watching of movies was tolerated and went on to say that it is against the Company’s policy and “is against the way I manage people in their responsibility in that Control Room”. 39

●Said that he no longer worked for Armaguard. 40

[29] Mr Forster gave sworn evidence and submitted a witness statement 41.

[30] In his statement, Mr Forster said that he is employed by Armaguard as the New South Wales Security Manager and has held that position since June 2014. He has been employed by Armaguard since July 2013 and prior to that he was a Detective Sergeant in the NSW Police Force for 19 years.

[31] Mr Forster went on to give details of the layout of the Control Room at Rosehill. He said:

“The eastern wall of the room has a large glass panel that extends along the length of the room, starting from about chest height on that wall and extending to the ceiling. This eastern wall is directly opposite the ATM room in the Branch where employees work packing and unpacking ATMs. There is also a window and hatch on the western wall that faces the Reception area of the Branch, where the employee working in the Control Room will visually identify and speak to visitors to the Branch. The computer screen is visible through those windows, and also if the Control Room Operator is to open the door of the Control Room.”

[32] Mr Forster went on to say, in summary, that:

● The Rosehill branch Control Room is the largest Armaguard branch in Australia.
● The control room is rectangular in shape, approximately 3 metres x 3.5 metres. It operates 24 hours a day on rotating shifts.
● “The principal role of an employee working in the Control Room is to maintain the overall security of the Rosehill Branch and control access to and from the premises. The employee is required to continually monitor the ten CCTV screens that are installed to protect both the internal and external aspects of the Branch. This includes identifying any suspicious activity in the Rosehill Branch car park and surrounding areas that may indicate a potential threat to the security of the premises.”
● “The employee working in the Control Room also monitors the site access of employees, contractors and visitors into and out of the Branch. Persons wishing to enter the Branch approach an external gate and are then identified by the Control Room employee and allowed access to the general area of the Branch. They are required to be further identified by the Control Room employee before being allowed access to the internal areas of the Branch. The Control Room employee also monitors access of employees in armoured vehicles returning to the Branch, including ensuring that the persons returning the vehicles are Armaguard employees and that they are not under attack or duress when returning.”
● The Control Room Operator is also responsible for bag searches of persons leaving the branch. This requires the Operator to open the door of the room which enables people in the area to see what is on the Operator’s computer screen.
● “There are periods of down time in the Control Room employee’s duties during which they are permitted to access the Internet or watch video content not in breach of Armaguard policies for a short period of time, perhaps up to fifteen minutes. However, this is contingent upon it being a low traffic time of day and them remaining in a position where they are able to continue to monitor the CCTV cameras.”
● 7 pm in the evening is a high volume period with a large number of employees requiring access to and from the premises.
● Some 80 employees were rostered to work inside the cash processing room at 7 pm on 28 February 2014. A further 20 employees were performing other duties. In addition, road crew employees were returning at that time.

[33] In cross-examination, Mr Forster:

● Was asked: “Do you agree that it is common or usual for security officers in the control room and probably tend to watch internet and video during the lull time or not busy time?” and said: “I don’t suggest that it is common, but there are short periods where appropriate content can be watched via the internet.” 42

●Was asked by me: “So, in and of itself the watching of appropriate content is not a disciplinary matter?” and said: “Not provided you can perform your primary functions, Commissioner.” 43

[34] A written outline of submissions was not filed on behalf of Mr Lusica. Mr Diaz relied on Mr Lusica’s witness statement to also form a written outline.

[35] Armaguard filed a written outline of submissions. 44 The Company’s outline set out the background to the operations at Rosehill and then dealt with the incident which occurred on 28 February 2014. The details of that incident are also contained in the evidence of Mr Cataldo and therefore I will not repeat them here.

[36] The Company’s submissions go on to consider each of the requirements of s.387 of the Act. I have paid regard to that material in its totality. In relation to the Movie watched by the Applicant on 28 February 2014, which formed the core reason for the termination of employment, the Company submitted:

“The Applicant contends that he did not consider his watching of the video to be inappropriate if it could not be seen by others, and that the movie was ‘educational’. He also contends that the behaviour was out of character. He stated that he enjoyed watching the movie because it was educational and he learned something from it. The claims of the Applicant in this regard must be rejected. On viewing the video it is clear that it is not ‘educational’, it is very explicit, pornographic material. For the Applicant to view such material in the workplace was clearly inappropriate, and his behaviour in attempting to conceal his viewing of the video and acknowledgement that it was not to everyone’s taste is contradictory to his claim that the video was ‘educational’. Moreover, the Applicant’s contrition was limited and belies the one hour he watched it for. ... In any event, and regardless of the method by which the Applicant gained access to the hard drive, it remains that he chose to view a movie on the hard drive that contained inappropriate material. As the evidence of Mr Aitchison attests, the hard drive contained a significant number of other movies of the ‘mainstream’ block-buster variety. The period of the viewing and the distraction to his duties in the context of a highly exposed cash handling facility are also critical to the particular circumstances of the Respondent.”

[37] The Company submitted that the termination was therefore for a valid reason and was not harsh, unjust or unreasonable

Final written submissions

[38] Both parties filed final written submissions in accordance with directions made on 21 August 2014, as later amended.

The Applicant

[39] Mr Lusica’s final submissions, per Mr Diaz, set out the Applicant’s employment history at Armaguard and his duties as a Control Room Officer.

[40] In summary, the submissions went on to say:

“The Applicant contends, that the dismissal is unfair as the real reason for dismissal is because of his age and [Mr Cataldo]’s personal dislike of the Applicant, Mr. Cataldo tried to cover this up in an elaborate set up with the collusion of other employees who are still employed by the Respondent. The Applicant further contends that watching movies during the lull period is not a valid ground for dismissal and in all the circumstances, his dismissal is disproportionate to the severity of the conduct he engaged and thus harsh, unjust and unreasonable.”

[41] “We submit the reason for the dismissal is capricious, fanciful and prejudiced. In matters involving misconduct, the Commission must look at the conduct of the dismissed person and determine on the balance of probabilities what the conduct was and whether it took place. The test I whether the conduct took place, not whether the employer believed on reasonable grounds, after sufficient enquiry, that the conduct took place. While the Applicant admitted that he switched on the computer to watch a movie, which contains adult material, the circumstances of alleged conduct pointed to a set up and cast doubt that the conduct took place …”

[42] Mr Diaz went on to argue that there was no evidence that Mr Lusica had watched the full Movie and that no evidence was brought forward from the employee who allegedly complained that he saw Mr Lusica watching the movie in question. In any event, Mr Lusica maintains his view that the Movie was ‘educational’.

[43] In relation to procedural fairness, Mr Diaz submitted: “that the interview/investigation that took place on 10th March 2014 as procedural proforma and that a decision to terminate Applicant’s employment is foremost in Mr. Cataldo’s mind solely on alleged viewing of inappropriate material.” “Mr. Cataldo … was not interested in the full circumstances of the movie in question. … but it did not occur to him to interview Mr. Aitchison before dismissing Mr. Lusica.”

[44] The submissions do not claim reinstatement as a remedy. Rather, compensation is claimed in the following terms:

“The Respondent had employed the Applicant for over 14 years. There was no evidence of any issue being taken with his conduct, capacity or work performance in that period, but for the dismissal, in a manner and upon grounds, which made the dismissal unfair, Mr. Lusica would have remained in employment for a period of at least a further three years or 36 months and for that period would have received remuneration of $252,000.00”

[45] The submissions cited a number of items of case law relevant to the arguments raised. I have paid regard to that case law and to the analysis of it provided by Mr Diaz.

Armaguard

[46] Armaguard’s final submissions, per its solicitors, argued that the Applicant’s action in viewing allegedly pornographic material while at work was contrary to Armaguard policy and also meant that his attention was not fully applied to his operator duties. Those factors formed a valid reason for dismissal. The Company went on to argue that Mr Lusica was aware of the Company’s Workplace Diversity and Equal Opportunity Policy (the WDEO Policy) from at least July 2012 when there was a complaint against him about his behaviour towards female employees. In any event, the prohibition on accessing pornography in the workplace was common knowledge amongst employees.

[47] “The Applicant has admitted to conduct which constitutes breaches of the Respondent’s policies. He has admitted viewing the material and that he knew it to be an ‘adult film’. He has admitted that the material contained naked adults engaged in sexual intercourse. He states that upon discovering it was an adult film, he became curious and continued watching. In this regard, there is no evidence that the Applicant inadvertently watched the material and ceased doing so once he discovered the nature of it. He has further admitted that the material is not to everybody’s taste. The admissions are consistent with those made by the Applicant in the disciplinary meeting held with him on 10 March 2014.”

[48] Armaguard further argued that the Applicant’s claim that the film was ‘educational’ does not excuse his behaviour. “It is not the Applicant’s perception of the material that is relevant in the context of a risk of sexual harassment occurring in the workplace, but rather the risk of that material being ‘unwelcome’ to another person who was subjected to it in their workplace.”

[49] “The Applicant has further admitted that the physical layout of the Control Room is such that there are windows into various parts of the Rosehill facility, and a window in the door of the Control Room. The evidence of Mr Forster specifically describes the layout of the Control Room and was not contradicted by the Applicant. The Applicant admitted that others could look into the Control Room without his knowledge, and that they could view the material on his computer screen when doing so. The Applicant’s submission that the activities undertaken were ‘private’ is entirely without foundation.”

[50] Armaguard said further that Mr Lusica did not present any evidence to contradict that of Mr Cataldo concerning Mr Cataldo’s accessing of CCTV footage to determine the length of time the Movie was watched by the Applicant.

[51] The Company’s submissions further argued that Mr Luscia was advised of the allegations against him and that the Company was considering termination of his employment and he was offered an opportunity to respond. The Applicant was allowed to have a support person present during the disciplinary interview.

[52] Nothing in the Applicant’s evidence showed any support for the contention that Mr Cataldo held a personal dislike for him. Mr Aitchison’s evidence was that Mr Cataldo and Mr Gianetti treated the Applicant in the same manner as they did other employees. The allegation that Mr Lusica was ‘set up’ to be dismissed “is a complete fabrication”: “In any event, the alleged set-up requires extraordinarily elaborate conduct and produces a far from guaranteed result that the Applicant would engage in inappropriate behaviour. The alleged set-up required the Applicant to, following the provision of a hard drive containing some 500 films including mainstream films, select an inappropriate film from amongst those, and on recognising it was an adult film, continue of his own volition to watch it for a considerable period of time. An argument that such a set-up existed is entirely implausible. There was no ‘bait’ for the Applicant to take, because there was no bait at all. The Applicant’s conduct was his own and his attempt to lay the blame at the feet of others only serves to further show his complete lack of remorse and militates heavily against any suggestion that the outcome was harsh in this case.”

Conclusions and Findings

[53] Section 385 of the Act provides:

“385 What is an unfair dismissal
A person has been unfairly dismissed if FWA is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”

[54] As the Applicant’s conduct on and in relation to 28 February 2014 was the reason for the termination of his employment, I have to determine for myself whether the impugned conduct occurred and, if so, its nature and then, depending on the outcome of my determination of the earlier matters, whether any such conduct amounted to a valid reason for termination of employment. In this regard I respectfully agree with the following observations of the Full Bench in King v Freshmore (Vic) Pty Ltd 45:

“When a reason for a termination is based on the conduct of the employee, the Commission must, if it is an issue in the proceedings challenging the termination, determine whether the conduct occurred. The obligation to make such a determination flows from s.170CG(3)(a). The Commission must determine whether the alleged conduct took place and what it involved.

The question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the proceedings before it. The test is not whether the employer believed, on reasonable grounds after sufficient enquiry, that the employee was guilty of the conduct which resulted in termination.”

[55] In Container Terminals Australia Limited v Toby 46, a Full Bench said: “In our view, the consideration of whether there was a valid reason for termination is a separate issue from the determination of whether a termination was harsh, unjust or unreasonable…”47

[56] Northrop J in Selvachandran v Peteron Plastics Pty Ltd 48 said:

“In its context in s 170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s 170DE(1). At the same time the reason must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must ‘be applied in a practical, commonsense way to ensure that’ the employer and employee are each treated fairly, ….”

[57] In Qantas Airways Ltd v Cornwall 49, the Full Court of the Federal Court said:

“The question is whether there was a valid reason. In general, conduct of that kind would plainly provide a valid reason. However, conduct is not committed in a vacuum, but in the course of the interaction of persons and circumstances, and the events which lead up to an action and those which accompany it may qualify or characterize the nature of the conduct involved.”

[58] In Edwards v Justice Giudice 50, Moore J said:

“The reason would be valid because the conduct occurred and justified termination. The reason might not be valid because the conduct did not occur or it did occur but did not justify termination.”

[59] Mr Lusica’s employment was terminated on 10 March 2014 at the initiative of Armaguard. For the termination, Armaguard largely relied upon Mr Lusica’s alleged action in accessing and viewing a sexually explicit movie which could have been seen by other persons whilst he was on duty in the Company’s Control Room at Rosehill. Mr Lusica was the only operator in the room at the relevant time.

[60] After an investigation, the genesis of which was a complaint to Mr Morris from another employee, Armaguard viewed Mr Lusica’s action as a breach of its WDEO Policy 51. The Company further believed that Mr Lusica’s action in viewing the movie at work created a real possibility that he would neglect his duties. In this regard, the Company said that the incident occurred at a busy time at Rosehill and Mr Lusica’s duties included remotely allowing employees and other authorised persons to enter and leave the facility. To a lesser extent, the Company believed that the insertion of a non-company external hard drive containing the movie in question had the capacity to introduce computer viruses which could compromise Armaguard’s computer system. In this regard, Armagurad relied on the position description for a Control Room Operator52 which sets out the Company’s policies in relation to the use of its IT system. In proceedings before me, the Company also referred to two earlier incidents involving Mr Lusica. The first of those incidents related to him being counselled after complaints of his behaviour towards female staff members and the second related to him being found asleep whilst on duty in the Control Room. In relation to the first earlier incident, the company said that the process involved would have specifically drawn Mr Lusica’s attention to the terms of the WDEO Policy.

[61] Mr Lusica maintains that employees in the Control Room were permitted to watch movies during low activity periods provided that their normal duties were not compromised. Regarding the Movie itself, Mr Lusica said that it was educational in nature and he took pains to ensure that it could not be seen through the Control Room windows by other persons. In addition, Mr Lusica maintains that he was ‘set up’ by Mr Aitchison and Mr Cataldo by way of Mr Aitchison offering to lend him the external hard drive containing the Movie. Mr Lusica denies that he neglected his duties on 28 February 2014 while watching the Movie. He goes on to claim that there was no valid reason for the termination of his employment and that it was harsh, particularly on the ground of his age and Mr Cataldo’s personal dislike of him.

[62] After a thorough review of the oral and documentary evidence available to me, I have come to the following conclusions:

1. At the relevant time, Armaguard at Rosehill tolerated employees accessing the internet and watching movies during low activity periods in the Control Room, provided that they did not thereby neglect their duties.

2. I am unable to safely come to any conclusion as to how Mr Aitchison’s external hard drive came into Mr Lusica’s possession. In any event, the method by which Mr Lusica obtained the external hard drive is a matter of small importance to my consideration. It was Mr Lusica’s use of the hard drive which led to the termination of his employment and this was not the fault of Mr Aitchison.

3. Any possible breach of Armaguard’s IT Policy has been a neutral consideration in my decision making.

4. I am satisfied that Mr Lusica was aware of the Company’s WDEO Policy but cannot conclude that him watching the Movie was a conscious breach of that Policy.

5. It is uncontested that Mr Lusica viewed the Movie on the evening of 28 February 2014. I am satisfied that this was a busy period at Rosehill and am further satisfied that Mr Lusica watched the movie on and off for some 60 minutes.

6. Having viewed the Movie myself, I believe that it would have been apparent to Mr Lusica from the first frame that the content was highly sexually explicit and absolutely unsuitable for viewing in the workplace.

7. Mr Lusica’s characterisation of the Movie’s content as ‘educational’ is merely disingenuous and a later invention to justify his conduct.

8. I am satisfied that Mr Lusica was aware that he should not have watched the Movie and his actions in minimising the screen and taking care to avoid detection, are indicative of this. In his evidence, Mr Lusica described himself as being ‘curious’ when he turned the movie on. After he became curious I believe that his desire to keep watching it overcame his commonsense. This in no way excuses Mr Lusica’s behaviour or absolves him of responsibility for taking the foolish decision which he did.

9. I am satisfied that the layout of the Control Room would have allowed other persons to see the Movie on Mr Lusica’s computer screen. I further accept the evidence of Mr Cataldo as to a complaint being made to Mr Morris in this regard.

11. I can safely prefer the evidence of Mr Cataldo and Mr Forster where such evidence conflicts with that of Mr Lusica.

10. I am satisfied that Mr Lusica engaged in a conscious and continuing act of misconduct in relation to the watching of the Movie.

12. I am satisfied that there was no conspiracy to dismiss Mr Lusica.

[63] All in all, and on the balance of probabilities, I find that there was a valid reason for the termination of Mr Lusica’s employment for misconduct by Armaguard based on the events of 28 February 2014.

[64] I now turn to the question of whether the dismissal of the Applicant was harsh, unjust or unreasonable. Section 387 of the Act sets out the criteria for considering harshness etc. It provides:

“387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that FWA considers relevant.”

[65] In Byrne v Australian Airlines 53, McHugh and Gummow JJ of the High Court said:

“It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”

[66] In Parmalat Food Products Pty Ltd v Wililo 54, the Full Bench held:

“The existence of a valid reason is a very important consideration in any unfair dismissal case. The absence of a valid reason will almost invariably render the termination unfair. The finding of a valid reason is a very important consideration in establishing the fairness of a termination. Having found a valid reason for termination amounting to serious misconduct and compliance with the statutory requirements for procedural fairness it would only be if significant mitigating factors are present that a conclusion of harshness is open.” 55

[67] In Miller v University of New South Wales 56, the Full Bench held:

“The entire relevant factual matrix must be considered in determining whether an employee’s termination is for a valid reason: Allied Express Transport Pty Ltd v Anderson (1998) 81 IR 410 at 413. In Izdes Beazley J said:

‘In determining whether a refusal to carry out the lawful and reasonable directions of an employer constitutes a valid reason for termination, it is necessary to have regard to all the circumstances, including the nature and degree of the employee's conduct.’ (61 IR 439 at 451)

In considering the validity of the reason, “it is not the court's function to stand in the shoes of the employer and determine whether or not the decision made by the employer was a decision that would be made by the court but rather it is for the court to assess whether the employer had a valid reason connected with the employee's capacity or conduct”: see Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681 at 685.” 57

[68] The question of valid reason is dealt with above.

[69] It is clear that Mr Lusica was notified of the reason(s) for the termination of his employment verbally by Mr Cataldo on 10 March 2014 and I so find. It is further clear and I find that Mr Lusica was given an opportunity to respond to the allegations against him before a decision was made to terminate his employment. Further, he was permitted to have Mr Diaz present on 10 March 2014 to assist him at the discussions with the Company.

[70] The size of the employer’s enterprise is a factor which is likely to have impacted on the procedure followed in effecting the Applicant’s dismissal. On what is before me, I conclude that the size of Armaguard’s operations and its access to professional advice led it to conduct a procedurally fair process leading up to the dismissal and I so find.

[71] I have also taken into consideration a number of other factors. These include Mr Lusica’s age, his background and experience, his lengthy period of employment with Armaguard, his future employment prospects and the economic and personal effects of the termination of employment on him.

[72] All in all, I am unable to find that the termination of Mr Lusica’s employment was harsh or unjust or unreasonable. Mr Lusica embarked on a course of conduct on 28 February 2014 that led to him being dismissed. Mr Lusica accessed the Movie and when he discovered its content, he made the decision to continue watching it on and off for some one hour. He was not dismissed as a result of some conspiracy against him but rather because his fascination with the Movie’s content overcame his commonsense.

[73] Mr Lusica’s application for relief is therefore dismissed.

[74] In accordance with s.381(2) of the Act, I am further satisfied that each party has been accorded a ‘fair go all round’.

[75] An order reflecting this decision is in PR555712.

COMMISSIONER

Appearances:

J Diaz, for Renato Lusica.

C Brown for Linfox Armaguard Pty Ltd.

Hearing details:

2014.

Sydney:

August 21.

Final written submissions:

12 September 2014.

 1   Exhibit Lusica 1.

 2   Transcript PNs79-81.

 3   Transcript PN115.

 4   Transcript PN119.

 5   Transcript PN122 and following.

 6   Transcript PN141 and following.

 7   Transcript PN148 and following.

 8   Transcript PNs156-157.

 9   Transcript PNs163-164.

 10   Transcript PN168.

 11   Transcript PN171.

 12   Transcript PNs184-185.

 13   Transcript PN192 and following.

 14   Transcript PNs201-202.

 15   Transcript PN204.

 16   Transcript PN205.

 17   Transcript PNs226-227.

 18   Transcript PN265.

 19   Transcript PNs269-272.

 20   Transcript PNs274-277.

 21   Exhibit Linfox 3.

 22   Transcript PN441.

 23   Transcript PN442.

 24   Transcript PNs445-450.

 25   Transcript PN452.

 26   Transcript PNs466-470.

 27   Transcript PNs472-474.

 28   Transcript PN498.

 29   Exhibit Linfox 2.

 30   See Attachment GC-1 to Exhibit Linfox 2.

 31   See Attachment GC-2 to Exhibit Linfox 2.

 32   See Attachment GC-6 to Exhibit Linfox 2.

 33   Transcript PN326.

 34   Transcript PNs331 and 334.

 35   Transcript PNs354-355.

 36   Transcript PN358.

 37   Transcript PN359.

 38   Transcript PNs371-372.

 39   Transcript PN373.

 40   Transcript PN377.

 41   Exhibit Linfox 4.

 42   Transcript PN567.

 43   Transcript PN568.

 44   Exhibit Linfox 1.

 45   Print S4213, 17 March 2000, per Ross VP, Williams SDP and Hingley C.

 46   Print S8434, 24 July 2000, per Boulton J, Marsh SDP and Jones C.

 47   Ibid at para 15.

 48   (1995) 62 IR 371 at 373.

 49   [1998] FCA 865.

 50   [1999] FCA 1836.

 51   See Attachment GC3 to Exhibit Linfox 2.

 52   See Attachment GC4 to Exhibit Linfox 2.

 53   (1995) 185 CLR 410.

 54   [2011] FWAFB 1166

 55   Ibid at para 24.

 56   PR910187, 11 October 2011, per Boulton J, Drake SDP and Larkin C.

 57   Ibid at para 75.

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