| FWC 2087
|FAIR WORK COMMISSION
Fair Work Act 2009
Westpac Banking Corporation T/A Westpac Retail and Business Banking
SENIOR DEPUTY PRESIDENT HAMBERGER
SYDNEY, 15 MAY 2015
Application for relief from unfair dismissal.
 Mr George Mihalopoulos (the applicant) applied on 8 October 2014 for an unfair dismissal remedy in relation to the termination of his employment by Westpac Banking Corporation (the respondent) on 22 September 2014.
 On the day of his dismissal the applicant was provided with a hand delivered letter, signed by Mr Troy Fedder, the respondent’s Regional General Manager for the Illawarra and South Coast. The letter included the following:
‘I refer to allegations of misconduct put to you by letter dated 9 September 2014 and your response to those allegations dated the same day.
The allegations put to you were as a result of your disclosure to me that you had conducted an affair with a subordinate [Ms A], were the subject of an interim Apprehended Violence Order (AVO) issued as a result of a complaint to the NSW Police by [Ms A], and had breached the interim AVO and were now the subject of a police investigation.
The allegations which you have responded to are as follows:
What you fail to appreciate is that there is an inherent conflict in creating a situation whereby there is a perception of favouritism from other subordinate is in the branch. The fact that I directly asked you to confirm the affair was a result of “office talk” which reached me. “Office talk” is fundamentally counter-productive to a high performing environment.
Once again you have failed to appreciate why your behaviour may be a problem for me and something that I should need to know about and possibly act upon. Ultimately this has proved to be the case with two people in my region involved in such a level of conflict that criminal charges have been made.
However as stated above, you are the branch ambassador for the Illawarra region -- my most senior Bank Manager. As I’m sure you already appreciate, Westpac is one of the most recognisable brands in Australia and it is highly likely that your court appearance will attract media attention and your personal conduct scrutinised. This will undoubtedly reflect poorly on Westpac.
It is a fact that your team knows the full extent of your affair with [Ms A], the AVO and the Police matter. This is all a result of your inappropriate disclosures. There was no need for you to expand the number of people who knew about your personal problems. Not only has this placed your team in a compromising position with respect to the upcoming court matters, you have created a situation whereby rumours about you may spread through the local community further tarnishing Westpac’s brand and your personal reputation. Furthermore, you have created an untenable position for your team who should naturally look up to your position and respect you as a sales leader.
Westpac has determined that of the seven principles in Westpac’s Code of Conduct, you have breached six of them. The principles are listed below:
1. We act with honesty and integrity
2. We comply with laws and with policies
4. We respect confidentiality and do not misuse information
5. We value and maintain our professionalism
6. We work as a team
7. We manage conflicts of interest responsibly.
As a result of your actions I have lost trust and confidence in you as a senior leader in my business. I do not believe that you can restore that loss of trust and confidence. I therefore see no future for you in my business.
I have determined that your employment with Westpac shall be terminated immediately. In accordance with the Westpac Group Enterprise Agreement 2013 and your Employment Agreement with Westpac, you will be paid four (4) weeks’ salary in lieu of notice of the termination of your employment ...’
 Mr Mihalopoulos’ application was referred to me for determination. Arbitration hearings were conducted in Sydney on 29 and 30 January and 18 March 2015. The applicant was represented by Mr Ian Neil SC, and the respondent by Mr M Seck, of counsel.
 Witness statements were tendered from;
 All witnesses were cross-examined, with the exception of Ms Hinder, Ms Shepherd and Ms Jess. In addition, Mr James Dickinson (a colleague and friend of the applicant) gave oral evidence, under a summons sought by the applicant. Mr John Dryden, the Regional General Manager, Commercial Banking, Southern Sydney, also gave oral evidence.
 The applicant was born on 29 November 1978. He commenced working for the respondent two years after completing his HSC, in 1998. He started as a teller and worked his way up over the course of 16 years through various positions with Westpac in Sydney and Wollongong. He was promoted to the Bank Manager’s position at the Wollongong Branch in September 2012 (after having previously worked for some time as Branch Manager at the Corrimal Branch).
 Until the events that led to his dismissal the applicant had had a largely blemish free history with the respondent. In about 2003 he was suspended for a short period when the respondent investigated a transaction in which he was involved. However he was subsequently cleared of any wrongdoing. 1
 During his cross-examination, Mr Fedder said that he had formed a favourable assessment of the applicant as a banker up until the events that led to his dismissal. 2 Nor had he had any reason to be concerned about his adherence to the respondent’s code of conduct and policies.3
 The applicant’s letter of offer for the Wollongong Bank Manager’s role indicated that the position was classified as an ‘increased risk role’ and was subject to the completion of satisfactory criminal and various other background checks. His contract of employment included the following:
‘Your continued employment is subject to you maintaining a clear criminal record, you maintaining any necessary qualifications under any licensing regime (e.g. ASIC or APRA), you satisfying certain criteria imposed by any applicable regulatory or statutory authority and subject you not been listed on any Department of Foreign Affairs and Trade terrorist watch list or Politically Exposed Person list. It is your responsibility to let us know if this status changes. You should inform your manager immediately if you are involved with (including being investigated about), are charged with or convicted of any offence or breach that could be relevant to your employment or which may bring Westpac into disrepute.’
 The contract also contained a requirement to continue to observe and comply with Westpac’s procedures and policies including but not limited to the code of conduct and the conflict of interest policy. The contract indicated that these policies would be available on the intranet and that employees should familiarise themselves with all updated versions of applicable procedures and policies. During his cross-examination, the applicant denied being aware of the conflict of interest policy and said that he had not complied with the direction to familiarise himself with all updated versions of applicable procedures and policies. 4
 The applicant’s contract of employment included a specific section on conflict of interest. It stated:
‘During your employment, you must avoid situations which could give rise to a conflict of interest. For example, you must not be involved in activities or decisions which conflict, or appear to conflict, with your work at Westpac or the business of any other member of The Westpac Group.
You must let us know straight away if you think that any activity you are considering might conflict with our core values or business. If you are unsure about whether a situation creates or has the potential to create a conflict of interest, please discuss it with your manager before taking any further action.’
 The applicant denied that this meant that ‘whilst you may not necessarily have a conflict of interest, if it might be perceived by a third party to be a conflict, that is sufficient to you to avoid or disclose.’ 5
 The applicant agreed that he had received on-line training in managing conflicts of interest. 6
 The applicant’s contract employment indicated that the respondent could terminate the applicant’s employment in writing without notice if he were to:
‘(i) commit serious misconduct or any serious breach of this Agreement including, without limitation, intentional disobedience, dishonesty or serious or persistent neglect; or
(ii) [be] convicted of a criminal offence or have acted in a manner which, in our reasonable opinion, will detrimentally affect Westpac or any other member of The Westpac Group.’
 In the position description for Bank Manager in Retail & Regional Banking the scope of the role included:
‘[b]uilding up a positive high profile in the local community, actively promoting Westpac and developing strong relationships with key members of the local community to develop a strong referral base.’
 However the applicant denied that he was, in effect, ‘the public face of Westpac within the local community’. He said that ‘it would not have been readily known by even senior people of the community that I’m the bank manager of Westpac Wollongong.’ He said that he did not attend any significant community events on behalf of the respondent, or spearhead any interaction with the community. He said this was because he had not been given the opportunity to do so by Westpac. 7
 The applicant said he had never dealt with the media, local or community groups on the respondent’s behalf. 8
 The applicant became involved in a romantic relationship with one of the employees at the Wollongong Branch - Ms A. Ms A reported directly to the applicant. The relationship started in February 2014. The applicant and Ms A moved in together in March 2014 and lived together until the relationship ended.
 According to the applicant, Ms A ‘may have received one bonus or so during that time of our relationship.’ He said that he did not have any direct involvement in the formulation of the amount of the bonus which was based on her financial performance. 9 He also said he was not involved in recommending bonuses for employees.10 He was however involved in conducting performance appraisals, including for Ms A.11 He also had a role in recommending employees for potential promotion.12
 According to Ms Jess:
‘By around February 2014, I thought that Mr Mihalopoulos and [Ms A] were in a relationship however I cannot confirm this. This was because they arrived at the branch together, they had lunch together, and they spent a lot of time in each other’s offices and left the branch together at the end of the work day.’
Rumours were also circulating amongst staff in the branch that Mr Mihalopoulos and Ms A were in a relationship.
I recall that sometime in 2014, I tried to change [Ms A’s] lunch break by 15 minutes for a business-related reason which suited the business better. Ms A complained to Mr Mihalopoulos about this, saying words to the effect of: “she’s trying to move my lunch break” to which he said words to the effect of: “under no circumstances are you to change [Ms A’s] lunch break time” slamming something in his hand on to a table at the same time.’ 13
 The applicant’s direct supervisor, Mr Troy Fedder, had a conversation with the applicant in around March 2014. According to Mr Fedder, the applicant said to him:
‘[Ms A], the personal banker in my team, has been approached by CUA. She’s at risk of leaving. They are offering her $80,000 to $90,000 as a Branch Manager. We should be trying to retain her given her performance and future potential.’
 Mr Fedder responded:
‘Based on what you have said to me I support your recommendation. However, I am only comfortable paying her $75,000. She will need to decide whether she prefers a lending role or a leadership role.’ 14
 According to the applicant’s oral evidence, he based his understanding that Ms A had been offered a position at CUA on what Ms A had told him. 15
 According to Mr Fedder, the applicant and he had a number of conversations in respect of Ms A moving into a different role. For example he says that the applicant said to him:
‘[Ms A] would be a really good HFM 16. This is the sort of role we need to provide to retain her. I could help develop her in this role and we could put her into a development role. An HFM role would provide her with a better salary.’
 Mr Fedder responded:
‘We could put her into a development HFM role and move her into a HFM role once one becomes available. Her salary would not be more than $80,000.’ 17
 In his statement, Mr Fedder said that Ms A was one of the top performing bankers in the region based on her performance results at the time. He commented that ‘when a senior manager such as Mr Mihalopoulos provided a recommendation in respect of the staff member, it carried weight. Given this, I thought it was appropriate to try and retain [Ms A] in the business.’ 18
 Mr Fedder added:
‘Around this time, I had a conversation with [ Ms A] because she had not yet made up her mind about the Personal Banker -- Premium and a development HFM role and I wanted to make sure we were on the same page:’
 Mr Fedder asked her what she was looking for in order to stay. She responded:
‘My husband is pushing for me to go to CUA. Salary is a big driver and it’s a leadership role. If I stayed, my preference would be to go into a HFM role.
‘Ultimately, I decided to promote Ms A to the role of Personal Banker -- Premium. This was a specialist role looking after Westpac’s affluent customers in the region. She was also provided with a salary increase from $58,000 to $75,000. [Ms A] continued to report to Mr Mihalopoulos in her new role.
[Ms A] was also placed into a development HFM role around the same time. This was not an official role but [Ms A] would receive training in this capacity so that she would be ready for a HFM role once one became available in the region. She was also later issued with a letter of offer dated 6 June 2014 for a HFM role, which meant that she would be placed into a HFM role once one became available in the region. This was effective 1 October 2014.
If Mr Mihalopoulos had not approached me about promoting [Ms A] and providing her with a salary increase, I would not have approached her myself for this purpose. [Ms A] would have been eligible to apply for any advertised role through Westpac’s normal recruitment process, but I would not have gone outside of this process, but for Mr Mihalopoulos.’ 19
 During his cross-examination, Mr Fedder agreed that - based on her sales performance - Ms A was one of the top performing bankers in his region, and that the possibility that the respondent might lose her to another financial institution was a possibility that he would be concerned about. 20 He would have expected the applicant to advise him if another organisation was offering her more money.21 He agreed that the applicant’s recommendation accorded with Ms A’s objective performance results.22
 On 23 May 2014, the applicant sent Mr Fedder an email regarding Ms A. This was concerned with providing her with further development opportunities. It included the following:
‘[Ms A] is excited, motivated and driven more than ever to really be a standout & successful HFM. I have no doubt this will be the case.’
 The email included asking to arrange a mobile phone for [Ms A] and finalising as soon as possible her letter of offer. 23
 During his examination-in-chief, the applicant agreed that he ‘positively advocated for promotional opportunities for Ms A’. 24
 Mr Fedder said in his written statement:
‘I made the decision to promote [Ms A] and to provide her with a salary increase based strongly on Mr Mihalopoulos’ recommendation. I did not think this was unusual at the time as Mr Mihalopoulos was [Ms A’s] manager and had oversight of her performance. I was not aware that Mr Mihalopoulos was in a relationship with [Ms A]. Nor did he disclose this to me.
I considered this to be a quick ascension for [Ms A] in terms of promotion. Westpac employees are usually expected to remain in a position for at least 12 months before they move to a new position. However, this period may be shorter in circumstances where the employee is a strong performer. I regarded [Ms A] as a strong performer based on her performance results at the time and Mr Mihalopoulos’ recommendations in respect of her performance and capabilities.
Mr Mihalopoulos did not approach me regarding any other members of his team for promotion or salary increase.’ 25
 According to Mr Fedder, approximately one month after his discussions with the applicant about promoting Ms A to the role of Personal Banker - Specialist, he became aware of rumours amongst Westpac staff in the region concerning a romantic relationship between the applicant and Ms A. After hearing rumours to the effect that the applicant was spending a disproportionate amount of time with Ms A from a number sources he decided to speak to the applicant. Mr Fedder asked whether the applicant was in relationship with Ms A. The applicant denied this and, according to Mr Fedder, said that he was disappointed that there were rumours circulating about the region about this matter. 26
 According to the applicant, Mr Fedder had an informal meeting with him in May 2014, where he raised the issue about whether or not he was involved in a relationship with anyone at the bank. His recollection was that Mr Fedder said words to the effect of:
‘I have heard some rumours from outside of the Wollongong Branch that [Ms A] seems to be spending a lot of time in your office and the door is constantly locked. Is there anything I need to know about that?’
 The applicant said that he responded with words to the effect of:
‘As per the development plan which you know about, I have been spending a fair bit of time with [Ms A] to help in her development for a new home finance role.’
 The applicant said that he also said words to the effect of:
‘The door’s faulty’.
 According to the applicant, Mr Fedder went on to say words to the effect of:
‘It’s okay if you’re in a relationship, I just would prefer to know. There is another Regional Manager in another region involved in a relationship with a home finance [manager] and it’s not a problem if you’re in a relationship’.
 In his written statement, Mr Fedder denied saying this to the applicant. 27 The applicant during his oral evidence was adamant about his recollection of the discussion.28 Mr Fedder was equally adamant that he had not said these words.29
 The applicant’s evidence is that he said words to the effect of:
‘There’s nothing going on between me and [Ms A].’ 30
 During his examination-in-chief, the applicant was asked by his counsel why he had denied that he was in a relationship with Ms A. He responded:
‘It was a question I wasn’t expecting. It definitely caught me by surprise. Look, that time of my life was extremely stressful. It still is stressful. I was married to my wife for 12 years. Two young children. I’ve had an affair. I obviously have done the wrong thing. Quite ashamed and embarrassed, to be direct. At the time I had not disclosed information to my wife about my relationship with Ms A, nor had she to her husband. It was only the start of the relationship, as well. I didn’t really know where the relationship was going. She had an opportunity to move away from Westpac, was retained in Westpac and she was then moving on to a different role outside the region. So, for me at the time, I had many personal issues that I was dealing with; again, extremely embarrassed, ashamed. I hadn’t really dealt with them. I wasn’t in a position to answer truthfully and at the time I just provided a non-truthful answer.’ 31
 In his written statement, Mr Fedder said:
‘If Mr Mihalopoulos had disclosed the relationship between himself and [Ms A], I would have put in place appropriate measures to address the potential issues that could arise from the conflict of interest created by his relationship with [Ms A]. For example, there was another RGM in a relationship at the time with a staff member who was not a direct report of his and measures had been put in place in respect of that relationship. If Mr Mihalopoulos had disclosed his relationship with [Ms A], I would have made arrangements to move either Mr Mihalopoulos or [Ms A] to another nearby branch given that [Ms A] was his direct report.’ 32
 During his cross-examination, the applicant agreed that the effect of his lying to Mr Fedder about his relationship with Ms A denied Mr Fedder the opportunity to put in place measures to avoid or minimise a conflict of interest. 33
 According to Mr Fedder, he continued to hear rumours about the applicant and Ms A; however based on his discussion with the applicant he believed the rumours were unfounded. He told his leadership team at a Bank Manager meeting that they should be discouraging rumours and gossip. 34
 Ms Hinder said in her written statement:
‘I recall that sometime in 2014, but before I commenced a period of long service leave, we had a team meeting at which Mr Mihalopoulos said words to the effect of:
There are rumours across the region. It has to stop. If it doesn’t, it may be instant dismissal. This has come from the RGM, Mr Fedder.
Mr Mihalopoulos did not say what the rumours were about.’ 35
 Ms Jess, in her written statement, gave very similar evidence:
‘In late February or early March 2014, I recall that there was a staff meeting at which Mr Mihalopoulos said words to the following effect:
There have been rumours which have to stop. I’m disappointed about this. I have discussed this with Troy & there will be no further rumours otherwise this could cost you your job.
Mr Mihalopoulos did not say what the rumours were. However, I felt it was about their relationship...’ 36
 In around July 2014, an HFM role became available at the Westpac Nowra Branch. Mr Fedder decided that the role provided a good opportunity to move Ms A to Nowra. He was partly influenced in this by the persistent rumours amongst staff about the relationship between the applicant and Ms A. 37 Ms A’s base salary increased to $80,000.38
 Mr Paul Lang, the Branch Manager at Nowra, gave evidence that he interviewed Ms A for the Nowra role. The interview took place at the Wollongong Branch at Ms A’s request. 39 After the interview, the applicant approached him and told him that Ms A had been offered a role with CUA paying $90,000. According to Mr Lang, the applicant said to him:
‘She’s worth the $90,000 as she’ll give 110% to the role. She’ll be successful.’ 40
 The applicant denied he had said the first sentence 41, though he agreed that he had probably said Ms A would be successful.42
 Mr Lang’s evidence is that he was not convinced that Ms A ‘had the right skill set for the HFM role.’ He was also concerned by the applicant’s behaviour. He felt the applicant ‘appeared to be negotiating on her behalf’.’ 43
 Mr Lang’s evidence is that he passed on his concerns, with regard both to Ms A’s suitability for the role and the applicant’s advocacy on her behalf, to Mr Fedder. Mr Fedder however told him that the HFM role at Nowra provided a good opportunity to move Ms A to a different branch due to the rumours in the region circulating about the applicant and Ms A. 44
 During his cross-examination, Mr Fedder agreed that while Mr Lang had concerns about Ms A’s appointment at the Nowra branch as an HFM, Mr Fedder was satisfied that the appointment was entirely appropriate. 45
 Mr Lang’s evidence is that shortly after Ms A commenced her secondment at the Nowra branch, the applicant told him he wanted to attend the branch to speak to the Personal Banker at Nowra. Mr Lang said:
‘Mr Mihalopoulos was responsible for broker development, and it was within his area of responsibility to develop Personal Bankers. However, in the two years that I had been Bank Manager of the Nowra branch, he had never attended the Nowra Branch to speak to the Personal Banker. I thought it was unusual for him to want to attend now, but agreed to it.
Mr Mihalopoulos attended the Nowra Branch on [Ms A’s] second day there. [Ms A] and Mr Mihalopoulos arrived at the branch together. Mr Mihalopoulos spent about half an hour with the Personal Banker at the Nowra branch. He spent the rest of the time with [Ms A], performing small tasks for her, such as her photocopying. I thought this was very unusual behaviour. Many of the staff in the Nowra Branch also made comments to me to this effect.’ 46
 According to the applicant. He spent about an hour and a half with the Personal Banker in Nowra. 47 However he agreed that he spent most of the day at Nowra, mainly with Ms A.48 He denied he was spending personal time with her. He said he was ‘helping her out’ as a member of ‘a close team’.49 When asked why she could not have asked Mr Lang, her own Branch manager, for assistance, the applicant replied that Mr Lang was not available.
‘I don’t believe she felt at the time she was getting the support she required from him and she had files to work on and I offered my assistance.’ 50
 In around late July 2014, a work-related event was organised by the home finance team to take place in Adelaide. By this time Ms A had moved to the Nowra Branch. According to Mr Fedder, it was appropriate for Ms A to attend the event in Adelaide. A number of Bank Managers who had responsibility for home finance member development also attended.
 According to Mr Fedder, the applicant contacted him two working days before the event and asked if he could also attend. He said that they had a conversation to the following effect:
‘Mr Mihalopoulos: I’d like to attend the Adelaide event.
‘Me: Are you sure you want to attend? There are still rumours in the region about you and [Ms A]. This could create further rumours, given [Ms A] is attending.
‘Mr Mihalopoulos: The rumours are untrue.’ 51
 During his examination-in-chief the applicant agreed that he had made such a statement. 52 When asked by his counsel why, he responded:
‘Very similar to my first response. Quite simply, embarrassed and ashamed. I hadn’t spoken to family, friends, wife, absolutely no one about it. Ms A and I had had discussions about possibly disclosing our relationship to family. At the time I was quite forward in saying, “Look, we should disclose it.” She has been in a similar position in her life and she was extremely worried about how she would be perceived, and we decided that we wouldn’t disclose it. Again, you know, external to work I was juggling many things with regard to family, pressure, stress, seeing my children. That was, sort of, my priority at the time.’ 53
 According to Mr Fedder, the applicant and Ms A appeared to spend a lot of time with each other in Adelaide and he was concerned that they may indeed be in a relationship. However he did not have time to speak to the applicant at the event about it. The applicant commenced a period of planned annual leave shortly after the event for a period of three weeks, commencing on 5 August 2014. Mr Fedder decided that he would speak to the applicant about the matter when he returned to work from annual leave (on 25 August 2014).
 Mr Fedder took annual leave from 18 August to 22 August 2014. The applicant rang Mr Fedder on Wednesday 20 August 2014 but was not able to get hold of him and left a message asking if he could see him when he returned from leave the following Monday. According to the applicant, he had called Mr Fedder to tell him about the relationship with [Ms A] and that it had now ended. 54 According to the applicant, the relationship had (at that point) ended amicably.55 However on the Thursday and Friday before the meeting with Mr Fedder occurred, in the applicant’s words ‘events took place that were quite serious and I disclosed those events to Mr Fedder, as well.’56
 When asked to describe these events, the applicant said:
‘Essentially there was an altercation at the apartment that me and Ms A used to reside in. I went to the police. I had sought police advice and decided not to proceed with anything from the police that the police advised me to.’ 57
 During his cross-examination, the applicant agreed that there were allegations of damage to a dining room table and internal walls. 58
 The applicant described Mr Fedder’s response to these disclosures:
‘He advised that, you know, I should have come to him sooner; that ultimately we’d just see essentially how it all pans out. There was an anticipation from me, because of what took place on Thursday and Friday, whether there might be an allegation from Ms A internally or possibly externally with police, as well, and Mr Fedder at the time essentially said, “Look, we’ll just wait and see exactly what happens.” I requested an additional week’s leave, because I was still on leave at the time, because I was in the process of trying to reconcile with my wife, and then we agreed upon that I’d be - we had a discussion about going back to the branch, advising some staff members that I’d be on leave for an extra week and whatnot.’ 59
 Mr Fedder’s evidence is that he met with the applicant at 9:30 am on Monday 25 August 2014. At that meeting they had a conversation to the following effect:
‘Mr Mihalopoulos: I need you to know, I lied to you. I have been in a relationship with [Ms A] for six months. We went on holidays together to China. I felt guilty being away, I’ve cut the kids off and I want to reconnect with my wife. [Ms A] and I share an apartment and I tried to break it off with her last week. It did not go well. She was very unstable. I was put in a bad position. Ms A threw something at me and I had to defend myself. I had to go to the emergency department.
Me: I’m disappointed. You’re a senior leader. You did not disclose this to me even after I asked you. You should have disclosed this to me and we would have implemented appropriate measures. For example, there’s a Regional Manager in a relationship with a home finance manager who is not a direct report and we have put in place measures there. You’ve made a series of very poor decisions. As you know, there’s been a lot of rumours about this.
I think you should take some further annual leave this week. You should also speak to ACCESS.
Mr Mihalopoulos: Yes, agreed. I have some personal matters to attend to. I’m going to pop into the branch and let staff know that I’m off for another week.
Me: OK.’ 60
 It appears that that when the applicant subsequently visited the branch he told some of the staff about the difficulties he had been having. For example, Ms Hinder (who had known the applicant for around four to five years) said in her statement that:
‘I recall having a conversation with Mr Mihalopoulos in August 2014 in the branch to the following effect:
‘I want to apologise. I have made some mistakes in my personal life. I have not been myself. I have left my wife and kids down.’
He did not mention [Ms A] but he seemed to assume that I knew what he was talking about. I felt he was apologising for not having been available at work.’ 61
 Ms Jess’ evidence is that:
‘In around early September [sic], Mr Mihalopoulos attended the branch and took staff individually into an office. When I met him that day, we had a conversation to the following effect:
Mr Mihalopoulos: I’m so sorry for my recent behaviour I should have given you more of my time, it’s over now & I am trying to reconcile with Rosie, I can’t believe this has happened & that I was so stupid.’ 62
 During his cross-examination, the applicant agreed that he also spoke to another staff member, Mr Mark Franklin (who was the Home Finance Manager at the Wollongong Branch) and told him ‘the whole story about [his] relationship with Ms A’ including that they had broken up and that he was facing potential criminal charges. This discussion took place outside of work, and was in response to an offer from Mr Franklin (whom he had known for some time) to be someone with whom he could confide. 63
 The applicant was asked by his counsel when was the next occasion after the meeting on 25 August 2014 that he discussed the matter with Mr Fedder.
‘So the initial discussion was on the Monday. The following day, on the Tuesday, my brother made me aware that a detective was trying to contact me. I then met with that detective that afternoon, who served me an interim AVO and advised that certain allegations had been made against me. It was at that time that I contacted Troy, briefly mentioned that over the phone and set up another meeting with him to discuss that ...
I advised him about the interim AVO. I advised him what allegations Ms A had made against me, which were communicated from the police. The recommendation at the time was that I was still on leave. I was still employed. I wasn’t suspended or anything along those lines. Troy essentially had told me, “Obviously we’ll just have to wait and see what actually happens.” If I am formally charged with something, he needs to be made aware of it immediately and that’s when he’d contact HR and discuss what the next steps would be.’ 64
 The next occasion when the applicant discussed the matter with Mr Fedder was after he had breached the interim AVO (on 1 September 2014): 65
‘I had contacted Ms A via a phone call and essentially breached the AVO. The phone call was non-threatening. It was trying to sort the mess out. Unfortunately, as minor as that is, it was still a breach of the AVO, which I appreciate.
How did that involve Mr Fedder? - Essentially because he advised me - for me to advise him as soon as a charge was brought forward - I was then charged with breaching the AVO by the police, so I’d then obviously gone to Mr Fedder to advise, “Unfortunately, Troy, I’ve breached the AVO, which has resulted in a charge.”
What response did he make on that occasion? - At that time he advised that I’d have to leave it with him. He’d have to refer to HR and determine what the next steps are.’ 66
 Mr Fedder’s evidence is that around this time he had a conversation with Mr Franklin, to the following effect:
‘George has come into the branch and met with four or five staff members. He told them about his relationship with [Ms A]. He has told me about his relationship with [Ms A].’ 67
 Mr Franklin also told him:
‘George said they broke up and that it was messy. He said there were some additional serious matters relating to a potential criminal matter and property damage.’ 68
 Mr Fedder said in his statement:
‘I did not know that Mr Mihalopoulos intended to disclose the details of his relationship with [Ms A] to staff members at the Wollongong branch. Based on our conversation earlier that day, I had thought he only intended to inform staff members that he would be away on annual leave for another week. In my view, it was inappropriate for Mr Mihalopoulos to tell staff at the branch about his personal relationship with [Ms A]. It had the potential to cause staff unnecessary stress and concern (particularly given the criminal charges against Mr Mihalopoulos), and to disrupt normal business at the branch and it placed staff in the middle of a difficult situation that they did not need to be involved in with their manager.’
 Mr Fedder’s evidence is that he was concerned that the applicant did not appear to regard his breach of the AVO as a serious matter. 69 It was upon learning about the breach of the AVO that Mr Fedder decided that he needed to speak to HR.70 Based on advice from the respondent’s human resources specialists, Mr Fedder decided to investigate the matter further and to suspend the applicant on full pay.
 A meeting was organised for 9 September 2014 to provide the applicant with a letter of allegation.
 According to Mr Fedder’s written statement, he contacted a detective at Wollongong police station on 9 September 2014 about the AVO. The detective confirmed that the applicant had breached the AVO. Mr Fedder’s statement also said the detective had told him:
‘He has also been criminally charged with sexual assault.’ 71
 Mr Fedder said during cross-examination that at the time the decision was taken to dismiss the applicant he did not believe that he had been charged with this offence. The only criminal charge that he had taken into account was the breach of the AVO. 72
 The applicant gave evidence that on the Friday prior to this meeting a colleague and friend of his, Mr James Dickinson, contacted him and encouraged him to resign from Westpac. 73 Mr Dickinson gave evidence that this was in response to a request to him from Mr Fedder and Mr Dryden to talk to the applicant and tell him that it would be in his best interests to ‘step down’.
‘George would be better to walk away without a black mark against his name and that’d sort of help him with his own future employment and so on.’ 74
 Mr Dickinson agreed during his cross-examination that it was never expressed to him that the respondent had reached a concluded view as to the allegations. 75
 Mr Fedder met with the applicant on 9 September 2014. Mr Dickinson attended as the applicant’s support person. Mr Dryden was also in attendance. At the meeting, the applicant was provided with an allegation letter. The letter stated that if the allegations were found to be proven, they could lead to disciplinary action being taken against him, including termination of his employment. According to Mr Fedder, the applicant raised a few points during the meeting. The applicant was also given the opportunity to provide a written response to the allegations. He did so in a detailed letter later that day. 76
 Mr Fedder’s evidence is that the respondent considered the applicant’s response but decided that it was untenable for him to remain as a Bank Manager and that his employment should be terminated. On 22 September 2014, Mr Fedder met again with the applicant, together with Mr Dryden. Mr Dickinson was also present as the applicant’s support person. His evidence is that:
‘Mr Mihalopoulos could have resigned if he wanted to, but did not ask to do so.’
 During a break, while Mr Fedder was out of the room, Mr Dryden advised the applicant that it would be in his best interests to resign. 77 Mr Dickinson was also present at the time. Mr Dryden’s evidence is that he was not involved in the decision making process to terminate the applicant’s employment.78
 The applicant was provided with four weeks’ payment in lieu of notice. 79
 The applicant was charged with two breaches of the AVO, malicious damage and break and enter. He received the court attendance notices in relation to the malicious damage and break and enter after he ceased employment with the respondent. The break and enter charge was subsequently dropped. The applicant pleaded guilty to the malicious damage charge and the Local Court, on 5 November 2014, issued a good behaviour bond under Section 10 of the Crimes (Sentencing Procedure Act) 2009, without proceeding to a conviction. The applicant also pleaded guilty to the first breach of the AVO, and another ‘Section 10 bond’ was issued on 22 January 2015, again with no conviction recorded. According to the applicant, the breach related to three phone calls. The second breach was not pursued. The interim AVO was removed. 80
 The applicant agreed during cross-examination that Ms A co-operated with him in providing statements in relation to his criminal proceedings. 81
 In considering whether the dismissal of the applicant by the respondent was harsh, unjust or unreasonable, I must take into account:
(a) whether there was a valid reason for the dismissal related to the applicant’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the applicant was notified of that reason; and
(c) whether the applicant was given an opportunity to respond to any reason related to his capacity or conduct; and
(d) any unreasonable refusal by the respondent to allow the applicant 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 applicant had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the respondent’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 the FWC considers relevant.
 I will consider each of these factors in turn (with the exception of (e) and (g) which have no relevance to the facts of this case, as the applicant was not dismissed for unsatisfactory performance, and the respondent had access to specialist human resource management expertise).
 The primary reasons proffered by the respondent for the applicant’s dismissal can be summarised under four headings:
 Employers cannot stop their employees forming romantic relationships. However, in certain circumstances, such relationships have the potential to create conflicts of interest. This is most obviously the case where a manager forms a romantic relationship with a subordinate - especially where the manager directly supervises the subordinate. It is virtually impossible in such circumstances to avoid - at the very least - the perception that the manager will favour the subordinate with whom they are in a romantic relationship when it comes to issues such as performance appraisals, the allocation of work, and promotional opportunities.
 The applicant was Ms A’s manager when he commenced his relationship with her. As could be expected given his position, he played a key role in supervising her work, conducting her performance appraisals and recommending her for promotion.
 The applicant went to considerable lengths to help Ms A in her professional capacity. There is no doubt that she was a high performing employee, and it is conceivable that he would have taken many of the actions he did - such as helping her get a promotion - even if she had not been his lover. On the other hand, it defies credibility that some of his actions - such as his visit to the Nowra branch - would have occurred if he had not been in a relationship with her. There is little doubt that he spent more time with Ms A than with other members of his branch because of their relationship. Ms Jess said that the applicant - when he came to the Wollongong branch after his meeting with Mr Fedder on 25 August 2014 - apologised to her for not giving her more of his time. Ms Hinder likewise said that she felt that the applicant was apologising to her for not having been available at work. Neither witness was cross examined about this evidence.
 Employers have a reasonable expectation that employees will disclose any potential conflicts of interest, so that they can be appropriately managed. The obligation of the applicant with regard to disclosing potential conflicts of interest was referred to in his contract of employment and the respondent’s conflict of interest policy. That policy identified three types of conflict of interest:
‘(a) An actual conflict of interest - where an activity causes a conflict of interest;
(b) A potential conflict of interest - where an activity could give rise to an actual conflict, either at the time of the activity or at some time in the future; and
(c) An apparent conflict of interest - where an activity or transaction of which a third party could reasonably form the view that a conflict exists.’ 82
 Under the policy employees are required to identify actual, potential or apparent conflicts of interest, and declare them to their manager to enable those conflicts to be managed. The policy does not specifically refer to romantic relationships between managers and subordinates; however it does not seek to codify all conflict of interest scenarios. To be blunt it should be obvious to any reasonably intelligent person that for a manager in an organisation such as Westpac to form a romantic relationship with a direct subordinate creates the potential for a conflict of interest. The applicant should have disclosed his relationship with Ms A - at least from the time they moved in together - to Mr Fedder. This would have enable the respondent to put in place appropriate arrangements to manage any potential conflict of interest.
 The issue of dishonesty cannot be separated from the conflict of interest. The applicant had a duty to disclose his relationship with Ms A to his manager even before Mr Fedder asked him about it. This failure to disclose was greatly compounded when he lied to Mr Fedder about the relationship. His explanation as to why he lied to Mr Fedder when the latter first asked him about the rumours of a relationship was that he was caught by surprise, in an informal meeting, that he was going through a stressful time, and that he was embarrassed and ashamed. Even if - as the applicant asserts - Mr Fedder sought to downplay the implications of his having a relationship with Ms A, there can be no doubt that Mr Fedder expected to be told the truth. It might be understandable that the applicant at first denied that the rumours were true, given that he was taken by surprise, he had the opportunity to set the record straight after this conversation, when he had had an opportunity to reflect on the matter. Not only did he fail to do so, but he then lied to Mr Fedder about his affair with Ms A a second time when he spoke to him about the Adelaide trip.
 I find that the applicant’s failure to disclose his relationship with Ms A, especially when combined with his dishonesty in lying to his manager about the affair on two separate occasions, constitutes a valid reason for the applicant’s dismissal.
 I am less convinced that the ‘criminal conduct’ engaged in by the applicant is a valid reason for his dismissal. The applicant’s contract of employment provided that his employment was subject to him maintaining ‘a clear criminal record’.
 The conduct - in breaching the interim AVO, and damaging property during his altercation with Ms A after they broke up - was at the lowest end of the scale of criminal conduct. No conviction was recorded by the Magistrate.
 The respondent submitted that the conduct had the potential to cause significant damage to the bank’s reputation in the community. It relied, in part, on the supposed role of the applicant, as a bank manager, in acting as ‘the public face’ of the bank in the local community. I have no doubt that in the past bank managers had a prominent role in many local communities. However, times have changed. Based on the applicant’s evidence, I find that this ‘public face’ role is more a theoretical than a practical proposition - at least insofar as the applicant was concerned. The applicant did not, in fact, act as the ambassador of the bank in the Wollongong community.
 There was no significant risk that the applicant’s conduct would have any detrimental effect on the respondent’s reputation. Certainly the evidence is that no such damage occurred.
 The final reason proffered by the respondent for the applicant’s dismissal was that he inappropriately disclosed to staff members his romantic relationship with Ms A. The applicant and Mr Fedder agreed on 25 August 2014 that the applicant would take a further week of annual leave. The applicant said he would visit the staff to tell them of this. However he went rather further than this, and when he went to the branch he spoke to some of the staff about his relationship with Ms A, and apologised for his recent conduct.
 The respondent submitted that the applicant made these disclosures for purely personal reasons, knowing that they were likely to cause disquiet in the workplace. It submitted that in making these disclosures, the applicant made an already awkward and difficult situation much worse. His actions denied the respondent a proper opportunity to manage the fallout of the situation in an orderly manner.
 There is no doubt that the whole affair caused considerable disquiet amongst the staff. However, based on the evidence of the two staff members who worked in the branch at the time (Ms Hinder and Ms Jess), a lot of the disquiet came in the form of sympathy for the applicant, who was someone they had worked with for some years and generally liked and respected. While it might have been better for the applicant not to have discussed the matter with the staff at that point, I find it hard to condemn him for wishing to apologise to them for his recent behaviour. I do not consider that the discussions the applicant had with members of the Wollongong branch on and around 25 August 2014 constituted a valid reason for the applicant’s dismissal.
 In summary I find that the applicant’s relationship with Ms A had the potential to create a conflict of interest. His failure to disclose this relationship to his manager, and his subsequent (and repeated) dishonesty when asked about the relationship by that manager - in combination - amounted to a valid reason for his dismissal.
 The applicant was advised (in the letter from Mr Fedder of 9 September 2014) of the allegations against him that led to his dismissal.
 The applicant was given an opportunity to respond to the allegations. He wrote a detailed letter in response.
 The applicant was allowed to have a support person (Mr Dickinson) at the meetings on 9 and 22 September 2014.
 The procedures the respondent adopted were consistent with it being a very large employer.
 The applicant contended that the penalty of dismissal was disproportionate to the gravity of his conduct. He submitted that the gravity of his dishonesty was mitigated by a number of facts. Some of these I have already considered under the discussion of whether the respondent had a valid reason for the applicant’s dismissal, including that the first lie took place in an informal setting, that Mr Fedder allegedly downplayed the significance of his question about the applicant’s relationship with Ms A, and that the applicant’s lie was not premeditated. Other factors put by the applicant as mitigation are that he voluntarily and freely confessed to having lied and has never sought to avoid the fact, that he regrets his dishonesty and would never reoffend, and that the question asked by Mr Fedder did not concern a matter at the core of the respondent’s business or the applicant’s duties as an employee. The applicant further submitted that Mr Fedder did not regard the applicant’s lies with the seriousness that he later attributed to them. Indeed he did not take any active step in relation to the applicant’s employment until the applicant told him that he had breached the AVO.
 In arguing that dismissal was disproportionate to his misconduct, the applicant pointed out that he had worked for the respondent for 16 years, largely in senior and responsible positions, and that he had made the whole of his career with the respondent. Until the events leading to his dismissal he had a very good employment record, and was regarded as an effective, loyal and trustworthy employee, devoted to his job.
‘The impact on Mr Mihalopoulos’ career has been devastating. As at the time of the hearing he had not succeeded in finding another job. Summary dismissal for dishonesty obviously has the potential to destroy or impair his prospects of employment in the banking industry, which [is] the only occupation he has ever known, for the rest of his life. He is 36, with many years of productive life before him, the prospects of which are now destroyed or seriously diminished. He has family responsibilities.’
 I have given very careful consideration to these submissions. There is no doubt that the effect of his dismissal has been particularly serious for the applicant - especially as he has spent virtually all his working life with the respondent. However, I do not agree that the factors referred to by the applicant outweigh the seriousness of his misconduct.
 In my view, the applicant’s misconduct was serious, and should not be downplayed. Moreover, I am not convinced, based in particular on his behaviour in the witness box that the applicant fully appreciates what he has done wrong. He still seems not to understand fully the potential conflict of interest involved in his acting as Ms A’s manager and ‘promoter’ while they were having a romantic relationship and the potential for this to damage the respondent’s business. I found his protestations that he spent no more time with Ms A than he would have for any other employee particularly unconvincing. While he did eventually admit to Mr Fedder what had been going on, this was only after the relationship had come to an end.
 It is possible that Mr Fedder would not have moved to dismiss the applicant if the AVO had not been breached. Certainly the evidence suggests that Mr Fedder did not speak to HR until after he was told about the AVO breach. However even if that were true it does not mean that the applicant’s failure to disclose his relationship with Ms A and then his repeated dishonesty were not by themselves enough to justify his dismissal.
 It is important to acknowledge that the applicant held a senior position which required a high degree of honesty and personal integrity. His behaviour - in failing to disclose his relationship with Ms A and then (twice) lying about it to his manager - fundamentally undermined the trust and confidence which is at the heart of the employer-employee relationship.
 Having considered and weighed up all the relevant factors, I am not satisfied that the applicant’s dismissal was harsh, unjust or unreasonable. The application is dismissed.
SENIOR DEPUTY PRESIDENT
I Neil Senior Counsel for the applicant
M Seck Counsel with S Mitchell Solicitor for the respondent
29, 30 January
1 Exhibit M1, paragraph 9
4 PN512, 518
6 PN954 - 975
9 Exhibit M1, paragraph 14
13 Exhibit W6, paragraphs 10- 17
14 Exhibit W2, paragraph 33
15 PN236, PN1119
16 Home Finance Manager
17 Exhibit W2, paragraph 35
18 Exhibit W2, paragraph 36
19 Exhibit W2, paragraphs 38-41
23 Exhibit W2, annexure G
25 Exhibit W2, paragraphs 43-45
26 Exhibit W2, paragraphs 46-50
27 Exhibit W2, paragraph 52
28 PN178-182, PN1246
30 Exhibit M1, paragraphs 18-26
32 Exhibit W2, paragraph 54
34 Exhibit W2, paragraph 57
35 Exhibit W4, paragraphs 12-13
36 Exhibit W6, paragraph 13
37 Exhibit W2, paragraph 60
38 Exhibit W2, paragraph 61
39 Exhibit W1, paragraph 13
40 Exhibit W1, paragraph 14
43 Exhibit W1, paragraphs 19-20
44 Exhibit W1, paragraphs 21, 24
46 Exhibit W1, paragraphs 28-29
51 Exhibit W2, paragraph 65
54 Exhibit M1, paragraphs 27-28
60 Exhibit W2, paragraph 71
61 Exhibit W4, paragraphs 15-16
62 Exhibit W6, paragraph 20
63 PN1433 - 1439
67 Exhibit W2, paragraph 77
68 Exhibit W3, paragraph 4
69 Exhibit W2, paragraph 84
70 PN2743, PN2819
71 Exhibit W2, paragraph 89
76 Exhibit W2, annexure I
79 Exhibit W2, paragraph 105
80 PN318-328, Exhibit W9
82 Exhibit W2, Annexure B
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