Dec 200/99 M Print R2558

AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

Workplace Relations Act 1996

s.45 appeal against decision Print Q6463

issued by Commissioner Raffaelli on 18 September 1998

R.C. Fischer

(C No. 25062 of 1998)

s.170CE Application for relief re termination of employment

R.C. Fischer

and

Telstra Corporation Limited

(U No. 20870 of 1997)

VICE PRESIDENT ROSS
DEPUTY PRESIDENT DUNCAN
COMMISSIONER REDMOND	MELBOURNE, 1 MARCH 1999

Appeal re alleged unlawful termination.

DECISION

Background
1.	Ronald Fischer worked for the Telstra Corporation Limited (Telstra) for more than 36 years. At all relevant times he was employed as a Customer Service Representative. Mr Fischer also performed the functions of a `Happy to Help' Co-ordinator and at times worked in a position described as an Assistant Centre Schedule Administrator.
2.	Employees working in the positions of either Customer Service Representative or Assistant Centre Schedule Administrator have access to telephones with two lines available for outgoing or incoming calls.
3.	One of the facilities available on those telephones is known as the Spectrum Transfer Facility. This facility operates as follows:
	(i)		The employee makes or receives a call on one of the lines on his or her telephone.
	(ii)		The employee places that call on hold.
	(iii)		The employee then calls a further telephone number using the second line on the phone.
	(iv)		The employee can then connect the two external parties.
	(v)		It is possible for the three parties to speak in conference.
	(vi)		The employee may hang up, which will leave the two external parties connected.
4.	Telstra bears the costs associated with all calls made by the employee. This includes the costs of the call between the external parties, even after the employee hangs up.
5.	All employees of Telstra are required to abide by a Code of Conduct. The relevant part of the Code states:
		"The Company recognises the increasing business demands and pressures placed upon employees and recognises that many employees have family and domestic responsibilities. The Company understands that it may be necessary for an employee to make contact with the family and/or to make other necessary personal calls during the course of the working day. Similarly, it may be necessary to receive calls at work of a personal nature.
		These demands are exacerbated for those employees whose work and travel commitments extend outside of normal business hours and take them away from their families and personal commitments.
		However, this benefit must not be abused by employees and calls should be kept to a minimum number and duration and wherever possible should be made in the employee's own time."1
6.	Between 30 August 1996 and 16 June 1997 Mr Fischer made a number of telephone calls from his telephone extension at Telstra to his home telephone number and then used the Spectrum Transfer Facility to connect those calls to various private telephone numbers. The cost of each of these calls is set out in Annexures `B' to `F' to Exhibit F1. About 55 such linked phone calls were made and the total cost amounted to $1301.74. Some of the calls were in excess of one hour in duration.
7.	On 25 June 1997 Mr Fischer was served with a letter from Telstra that alleged that he had engaged in improper conduct in his use of the Spectrum Transfer Facility. Mr Fischer was asked to provide a written explanation of his behaviour.2
8.	On 29 June 1997 Mr Fischer wrote to Ms Judy Butler at Telstra in response to the letter of 25 June 1997. In his letter Mr Fischer referred to the fact that during the relevant period he had been going through a difficulty time in his personal life. In particular he was endeavouring to resolve a number of family law issues associated with the custody of his children and his rights of access. In this regard Mr Fischer was obtaining advice from the parents of his housemate, a Mr Lance Williams. The Spectrum Transfer Facility was used to connect Lance Williams to either Mr or Mr Williams in Mt Isa. The purpose of these calls was said to be to obtain advice for Mr Fischer. In the course of his correspondence Mr Fischer said:
		"I didn't think this was steeling (sic) or costing Telstra any money as they control the network, if I thought this, I wouldn't have used the phone, as a matter of fact I thought I was paying for it, as I rang my home in an insidences (sic)."3
9.	On 1 July 1997 Mr Fischer was served with a letter dated the same day from Sandy McIntosh, Telstra's Customer Services Manager, Outer West Customer Services Centre. In that letter Mr Fischer was informed that he had been charged with improper conduct as specified in clause 10 of the Telstra Corporation General Conditions of Employment Award 1996 and the Agreed Procedures made pursuant to that Award. Mr Fischer was informed that an Inquiry would be conducted.
10.	There were five specific charges each of which alleged that Mr Fischer was guilty of improper conduct as an employee in that between certain defined periods he personally made telephone calls from his Telstra allocated outgoing extension number to his home telephone number and then using the Spectrum Transfer Facility connected these calls to various other private telephone numbers.4
11.	At about the same time, Mr Fischer was served with a Notice of Suspension from Duty dated 30 June 1997 and signed by Brian Douglas, Telstra's General Manager, Personnel Services. In that notification Mr Fischer was informed that he was suspended from duty with pay forthwith.5
12.	Mr Graeme Garlick, Telstra's National Manager Safety C and C Service, was appointed as the Inquiry Officer. He was responsible for conducting an investigation into the Applicant's conduct in accordance with the terms of the Award and the Agreed Procedures.
13.	Mr Garlick conducted a number of interviews and in a letter dated 12 August 1997, but signed on 13 August 1997, he wrote to Mr Fischer to report on his findings following the investigation. Mr Garlick found that Mr Fischer was guilty of committing each of the five charges which had been laid against him. In respect of each charge he recommended that Mr Fischer be dismissed from employment with Telstra.6
14.	On 13 August 1997 Mr Les Ayres, Telstra's Regional Manager, wrote to Mr Fischer. Mr Ayres informed Mr Fischer that he had accepted the recommendations of the Inquiry officer and advised that the decision had been made to dismiss him from Telstra's employ. In that letter Mr Ayres also explained to Mr Fischer his rights to appeal the decision to a Disciplinary Appeal Board.7
15.	On 15 August 1997 Mr Fischer wrote to Telstra advising of his intention to appeal the decision to dismiss him from employment.8
16.	The Disciplinary Appeal Board hearing was conducted on 22 September 1997. On the same day the Board handed down its decision dismissing the appeal. The Board found the charges against Mr Fischer proven and imposed a penalty of dismissal.9
17.	On 23 September 1997 Mr Ayres wrote to Mr Fischer informing him that his appeal to the Disciplinary Appeal Board had been unsuccessful and that his dismissal from Telstra was to take effect from the close of business on Monday, 22 September 1997.10
18.	Mr Fischer subsequently lodged an application for relief pursuant to s.170CE of the Workplace Relations Act 1996 (Cth) (the Act). Conciliation was unsuccessful and the application proceeded to arbitration.

Decision at First Instance
19.	On 18 September 1998 Commissioner Raffaelli handed down his decision in which he concluded that the termination of Mr Fischer's employment was not "harsh, unjust or unreasonable" and dismissed the application [Print Q6463]. The matter before us is an appeal from that decision.
20.	A key issue at first instance was whether Mr Fischer had abused his position as an employee by initiating personal phone calls at the expense of his employer. On Mr Fischer's behalf it was contended, among other things, that he had received no specific training in the Spectrum Transfer system and genuinely thought that the cost of the calls in question was being billed to his home telephone account.
21.	In relation to whether there was a valid reason for Mr Fischer's termination the Commissioner's findings are set out at pp 6-8 of the decision. The Commissioner found, among other things, that:
	· Mr Fischer made the phone calls that were the subject of the charges against him.
	· The phone calls at issue were phone calls linking Mr Fischer's home residences (he moved home during the relevant period) to several numbers in Mt Isa, through the Spectrum facility utilised by Mr Fischer from his workplace in Parramatta.
	· Mr Fischer was aware of the existence of the Code of Conduct and that part of the Code relating to personal use of Telstra phones at work.
	· The phone calls were principally for Mr Williams to talk to his mother in respect of their own personal problems.
	· Mr Fischer's assertion that he was unaware of how the Spectrum system charged for calls is a fabrication. Mr Fischer was aware that his personal phone calls were being made at Telstra's expense.
22.	The Commissioner concluded that Telstra had a valid reason for terminating Mr Fischer's employment.
23.	The Commissioner also found that the applicant had been notified of the reasons for his dismissal and was given an opportunity to respond to those reasons. In respect of other relevant matters the Commissioner said:
		"I have been most conscious that Mr Fischer has had in excess of 36 years of service with the company. In that time he has performed to the satisfaction of his employer. There was no information before the Commission that indicated that he had previously been counseled or disciplined in any way.
		I have considered this factor."11
24.	The Commissioner concluded his decision in the following terms:
			"On balance, I consider that his dismissal was not harsh, unjust or unreasonable.
			Further, I have been conscious of the objects of the relevant Division of the Act and in particular my decision has been made in the context of the need to ensure that a "fair go all round" is accorded both Telstra and Mr Fischer.
			The application is dismissed."12
Summary of Submission in Support of the Appeal
25.	The appellant challenged the decision subject to appeal on three broad bases: 13
	_ Failure to consider a relevant matter: it was contended that the Commissioner had erred in failing to consider whether Mr Fischer had been warned before his termination.
	_ Failure to find a denial of procedural fairness: it was submitted that the Commissioner had erred in failing to find that the appellant was denied procedural fairness in the disciplinary process instituted by Telstra.
	_ Conclusion not supported by the weight of the evidence: it was contended that the Commissioner's conclusion that Mr Fischer's dismissal was not "harsh, unjust or unreasonable" was not supported by the weight of the evidence.
Failure to Consider a Relevant Matter - Absence of Warnings
26.	The appellant submitted that the Commissioner was bound to have regard to whether Mr Fischer had been warned before his termination because of the terms of s.170CG(3)(d). Further it was argued that in the circumstances of this case a warning accompanied by counselling would have been a more appropriate outcome.
27.	Section 170CG(3) provides that in determining whether a termination was "harsh, unjust or unreasonable" the Commission must have regard to the following matters:
		"(a)			whether there was a valid reason for the termination related to the capacity or conduct of the employee or to the operational requirements of the employer's undertaking, establishment or service; and
		(b)			whether the employee was notified of that reason; and
		(c)			whether the employee was given an opportunity to respond to any reason related to the capacity or conduct of the employee; and
		(d)			if the termination related to unsatisfactory work performance by the employee - whether the employee had been warned about that unsatisfactory performance before the termination; and
		(e)			any other matters that the Commission considers relevant."
28.	Section 170CG(3)(d) provides that in circumstances where a termination relates to the employee's unsatisfactory performance then whether the employee had been warned about that unsatisfactory performance before the termination is a matter which the Commission must have regard to in deciding whether the termination was "harsh, unjust or unreasonable".
29.	It seems to us that s.170CG(3)(d) is not relevant in this case. It was Mr Fischer's conduct which led to his termination not his unsatisfactory performance. Unsatisfactory performance is more related to an employee's capacity, not their conduct.
30.	There is a difference between capacity and conduct. This is apparent from the use of the two words as alternatives in s.170CG(3)(c).
31.	This issue was canvassed in the proceedings below. The following exchange took place between the Commissioner and Mr Linegar, counsel for the applicant:
				"MR LINEGAR: . . . being notified as to the reason is completely distinct from another matter that the Commission pursuant to that should take into account. That is whether there was a warning applied to Mr Fischer in relation to any conduct that is said to be, in this case misconduct. That is in (d) of that sub-section I am referring to and I have noted that at page 2 of my submissions Commissioner.
				THE COMMISSIONER: The warning in only for unsatisfactory performance is it not? It is not - well it may well be referable but the Act does not specifically refer to conduct, thus conduct is often a one off - punching the supervisor in the nose.
				MR LINEGAR: Oh sure, yes.
				THE COMMISSIONER: Stealing . . . . dollars on one occasion.
				MR LINEGAR: No. I appreciate that.
				THE COMMISSIONER: Therefore one would not think that an employer - that the Act does not, as a point of specificity say that there should be - or whether there has been a warning is something to be considered. So I do not know if (d) is necessarily relevant at all is it? I am not saying that a warning of his conduct may not be relevant, you obviously say it should have been, but (d) is not referable to this case is it? No one says it is unsatisfactory performance.
				MR LINEGAR: Yes, in terms of unsatisfactory performance that is - I take your point Commissioner. If for example that section would read: conduct, then yes. On that particular point, what I am saying to you would have had more weight certainly. Taking aside, or perhaps apart from what the Act says on that point, of course there is sufficient or quite a bit of case law that indicates warning as to conduct as opposed to performance and the role that a warning might play.14
32.	We agree with the Commissioner's observations in relation to s.170CG(3)(d). It is also apparent from the extract quoted that the Commissioner was not saying that the question of whether Mr Fischer had been warned before his termination was irrelevant. He was simply making the point that this issue did not arise under s.170CG(3)(d).
33.	In our view s.170CG(3)(d) is not relevant in circumstances where an employee has been terminated for misconduct. The absence of a warning in cases of misconduct is however a matter which the Commission may take into account pursuant to s.170CG(3)(e).
34.	We are satisfied that the Commissioner did in fact take this matter into account pursuant to s.170CG(3)(e). At page 10 of his decision the Commissioner states:
		"Other Matters
		I have been most conscious that Mr Fischer has had in excess of 36 years service with the company. In that time he has performed to the satisfaction of his employer. There was no information before the Commission that indicated that he had previously been counseled or disciplined in any way.
		I have considered this factor.
		On balance, I consider that his dismissal was not harsh, unjust or unreasonable."
35.	We do not agree with the appellant's submission on this point.
36.	The appellant referred to the decision of Murphy JR in Rutherford v Helmian Pty Ltd15 in support of the contention advanced. In our view that decision does not assist the appellant. It is clearly distinguishable from the matter before us. It was determined under the previous legislative provisions and the factual circumstances are quite different.
Denial of Procedural Fairness
37.	Counsel for the appellant contended that his client had been denied procedural fairness.
38.	Section 170CG requires the Commission to have regard to a number of factors in determining whether a termination was harsh, unjust or unreasonable. Some of these matters relate to whether the termination was procedurally fair, namely:
	-		whether the employee was notified of the reasons for their termination (s.170CG(3)(b));
	-		whether the employee was given an opportunity to any reason related to their capacity or conduct (s.170CG(3)(c)); and
	-		if the termination related to unsatisfactory performance by the employee - whether the employee had been warned about that unsatisfactory performance before the termination (s.170CG(3)(d)).
39.	We have already dealt with the relevance of s.170CG(3)(d) in circumstances where an employee has been terminated for misconduct.
40.	A number of points were advanced in support of the appellant's contention and we propose to address each of them:
	· It is not apparent that the appellant was notified of the reasons for his termination. At different time his alleged behaviour was described as "misconduct" "improper conduct" and "fraudulent behaviour".
41.	There is no merit in this submission. It is not in dispute that Mr Fischer was aware that the behaviour complained of related to allegations of excessive personal use of his work telephone.16 Further it is apparent that Telstra's concerns about Mr Fischer's behaviour and the facts giving rise to those concerns were clearly set out in the letter to Mr Fischer dated 25 June 1997.17 The alleged misconduct was further explained in the charges which were laid on 30 June 1997.18 The basis of Telstra's concern was the subject of discussion during the interview between the appellant and Mr Garlick, the Inquiry Officer, on 5 August 1997.19 The Inquiry Officer found that Mr Fischer was guilty of the charges against him and on this basis his employment was terminated.
42.	We agree with the respondent's submission that for the purpose of s.170CG(3)(b) regard must be had to the substance of the reasons advanced for termination rather than the appellation given to the conduct generally.
43.	The Commissioner concluded that Mr Fischer had been notified of the reason for his termination. In our view that conclusion was reasonably open.
	· The findings of the Inquiry Officer, Mr Garlick,20 misrepresented Mr Fischer's position in that he stated among other things: "the fraud was admitted by R. Fischer both in writing and at the inquiry and is a matter of record." It was conceded by Mr Garlick in the proceedings below that Mr Fischer in fact made no such admission. Mr Ayres adopted the reasoning of the Inquiry Officer in the decision to terminate Mr Fischer's employment. In these circumstances Telstra has failed to act in good faith toward Mr Fischer in the dismissal process.
44.	In our view this point is misconceived. Certainly the Inquiry Officer's `Overview' was in error in stating that Mr Fischer had admitted to fraud. But it is clear from Mr Ayres' evidence that he was not misled by this error. During his evidence Mr Ayres explained that when he received Mr Garlick's report he noticed what he described as an inconsistency. The second paragraph of the report commenced with the sentence: "The fraud was admitted by R. Fischer both in writing and at the inquiry and is a matter of record." However, later in the report Mr Garlick stated the matters to which he had regard when determining the appropriate penalty. Mr Fischer's alleged admission of fraud was not one of those factors. Mr Ayres made some inquiries and ascertained that Mr Fischer had made no such admission. Consequently, he was not misled.21
	· The appellant was denied an opportunity to cross-examine the Inquiry Officer at the hearing before the Disciplinary Appeal Board.
45.	In the course of his decision Commissioner Raffaelli dealt with this issue in the following terms:
	"I do not consider that the absence of Mr Garlick, prevented Mr Fischer from adequately dealing with the decision made to dismiss him by Mr Ayres and the issues relating to his alleged misconduct. The DAB was not ultimately concerned with what Mr Garlick had found. Rather it deliberated on the charge against Mr Fischer. However curious was the absence of Mr Garlick, I do not think that such absence denied Mr Fischer a fair opportunity of presenting his side of events to the DAB."22
46.	We think this conclusion was reasonably open to the Commissioner. The proceedings before the Disciplinary Appeal Board amounted to a rehearing. The distinction between an appeal stricto sensu and an appeal by way of rehearing was explained by Jessel MR in Quilter v Mapleson23 at 676:
	"On an appeal strictly so called, such a judgment can only be given as ought to have been given at the original hearing; but on a rehearing such a judgment may be given as ought to be given if the case came at that time before the court of first instance."
47.	The nature of the proceedings before the Disciplinary Appeal Board were clearly explained to counsel for Mr Fischer during those proceedings. This is apparent from the following extract from the transcript of the hearing before the Board:
	"Mr Linegar:					. . . One of the documents tendered in evidence is a letter presenting an overview of Telstra's case after all of the inquiries have taken place. That is a letter signed by Mr Garlick.
	Chair:					Mr Garlick's views on the matter are not relevant unless they are adopted by the Corporation. Mr Garlick's views are only his.
	Mr Linegar:					It is a matter that is in evidence.
	Chair:					So far as I am concerned, the only use that can be made of an Inquiry Officer's report is evidence of the fact that an inquiry was conducted as required by the agreed procedures, that the Inquiry Officer considered each of the charges and found the charges proven or not proven, and in the case of any charge found proven either imposed a penalty or recommended a penalty. The Inquiry Officer's views are only his own views. This Board forms its own views.
	Mr Linegar:					I certainly understand that.
	Chair:					It may be that the Corporation adopted Mr Garlick's views and reasoning and therefore adopted his recommendation, but the Board will consider whether or not the charges or any of them are proven and in the event any charges are found proven, a penalty, whether it should be dismissal or something else having regard to the evidence presented before the Board here and that does not take into account Mr Garlick's reasoning. That is not evidence. That is only his reasoning, not relevant to this Board. Do I make myself clear on that?
	Mr Linegar:					Yes. It was only because it was a document in evidence before the Board that I thought I could address on it.
	Chair:					You can certainly refer to the reasoning that Mr Garlick has raised, that is for you, but this Board puts no weight at all on Mr Garlick's reasoning.
	Mr Linegar:					I appreciate that aspect of it . . ."24
	· The appellant was denied the opportunity to verbally discuss the alleged misconduct with either his immediate supervisor, Ms Jodie Butler, or the branch manager, Mr Sandy McIntosh.
48.	The Commissioner dealt with this issue in the following way:
	". . . the applicant pointed to the refusal, once the `please explain' was issued, by his supervisors to discuss the matter with him verbally. It is clear that neither Ms Butler or Mr McIntosh responded to Mr Fischer's exhortations to discuss the circumstances with him. They both referred to the relevant procedures. Apparently, this was because of a belief by the two persons that the engaging in verbal discussions would possibly amount to `counseling' thus preventing the imposition of any other penalty in due course.
	This apparent reluctance to entertain discussion would seen odd. Normally an employee faced with serious concerns from his/her employer is entitled to know where they stand. However for reasons unknown to the Commission this is the apparent practice and process within Telstra. Moreover it is a process that is contemplated by the relevant award (the Telstra Corporation General Conditions of Employment Award 1996) and associated agreed procedures. These procedures have been agreed to by relevant unions. Consequently, the Commission can only assume that they are tailored to the specific needs of the employer and employees in this large corporation. The Commission makes therefore no adverse comment concerning the lack of verbal discussion at the outset. In the end, the refusal by the two supervisors of Mr Fischer to discuss the matter with him were ultimately of no consequence. They were not prejudicial to the final outcome."25
49.	In our view the conclusion reached by the Commissioner was reasonably open. Both Ms Butler26 and Mr McIntosh27 provided an explanation for their behaviour which the Commissioner was entitled to accept.
	· The involvement of Mr McIntosh, who had been the appellant's immediate superior, "in virtually every stage of the disciplinary process" was "inappropriate".
50.	We accept that Mr McIntosh was involved in the disciplinary process. But we are not satisfied that such an involvement was "inappropriate". A line manager would normally be expected to have some input into the disciplinary process. It also needs to be borne in mind that the decision to terminate Mr Fischer's employment was subsequently reviewed by the Disciplinary Appeal Board. At those proceedings Mr Fischer was represented by counsel and had the opportunity to call evidence, make submissions and cross-examine the witnesses called by Telstra.
Decision Not Supported by the Weight of the Evidence
51.	The following points were advanced in support of the contention that the Commissioner's conclusion was not supported by the weight of the evidence:
	· one of the crucial issues was whether the appellant was aware that Telstra would bear the cost of his personal phone calls connected using the Spectrum Transfer Facility. The evidence provided by a number of witnesses would tend to indicate that the appellant was under the misapprehension that he would bear the cost of the interstate calls. The Commissioner concluded that the appellant should have known how the calls were costed mainly because of his assumed knowledge and training. Relevant to this issue is the requisite standard of proof. Given that the allegations against Mr Fischer were extremely serious it should not be determined on the basis of "inexact proofs, indefinite testimony or indirect inferences".
52.	The Commissioner deals with this issue at page 8 of his decision in the following terms:
	"Mr Fischer submitted that he was unaware that he was doing anything wrong. He was not sufficiently aware of how Spectrum worked. He thought that as he rang Penrith first and then Mt Isa, the link between Penrith and Mt Isa would be charged to the Penrith (his home) phone. He only thought that Telstra was paying for the Parramatta (his worksite) to Penrith leg of the calls.
	He further submitted that he never checked his phone bills. He just paid them promptly without checking the details and assumed the relevant calls were on his bills. I accept that Mr Fischer may have been the sort of person that only gave cursory attention to his phone bill.
	However, I do not consider that he did not know that all the legs in the three and two way conversations were not being charged to the initiating caller (i.e. Mr Fischer at this work location).
	All CSRs are aware or ought reasonably to have been aware that calls which were transferred using the Spectrum system are charged to Telstra.
	A person who acts as a CSA or as an Assistant CSA is expected to have greater knowledge of the systems than CSRs. The applicant has been at times an Assistant CSA.
	Evidence was given by Lyn Herman, a Training Officer at Telstra. Her evidence, based on her observations of the applicant and her assessment of his knowledge, was that the applicant was well aware that Telstra would incur the costs of the transferred calls.
	Moreover, I consider that the "man (or woman) in the street" would think that prima facie an initiating caller pays the cost of a phone call. A person of Mr Fischer's experience in Telstra would be expected to have at least the same prima facie expectations. He gave no evidence as to relevant circumstances where the initiating caller does not pay for the call.
	Given what I would consider would be the obvious norm, then if Mr Fischer thought something to the contrary he should have taken steps to establish that fact. He certainly should have checked his phone bills so that they reflected his belief. This is so particularly given the incidences of such calls. He did not do so.
	In short, I consider that his assertion that he was unaware of how the Spectrum system charged for calls, is a fabrication. I find that Mr Fischer was aware that his personal phone calls were being made at Telstra's expense."
53.	The Commissioner makes a clear finding of fact in relation to this issue - namely that Mr Fischer was aware that the calls in question were being made at Telstra's expense.
54.	As noted in Pham v Taubmans Pty Ltd28, an Appeal Bench would be very reluctant to reverse a finding of fact made by a member at first instance and would only do so if satisfied that any advantage enjoyed by the member below as a result of hearing the relevant evidence was not sufficient to justify the findings made. As his Honour Mr Justice McHugh said in Abalos v Australian Postal Commission29:
				" . . . where a trial judge had made a finding of fact contrary to the evidence of a witness but has made no reference to that evidence, an appellate court cannot act on that evidence to reverse the finding unless it is satisfied `that any advantage enjoyed by the trial by reason of having seen and heard the witnesses could not be sufficient to explain or justify the trial judge's conclusion."
55.	Further, a finding of fact made by a member at first instance based, even partly, on the credibility of witnesses should not be set aside on appeal even where the Appeal Bench thinks that the probabilities of the case are strongly against that finding of fact. If a finding made by a member at first instance depends to any substantial degree on the credibility of a witness, that finding must stand, unless it can be shown that the member at first instance:
	-			acted on evidence inconsistent with facts incontrovertibly established by the evidence;
	-			acted on `glaringly improbable' evidence; or
	-			failed to use or palpably misused the advantage the member at first instance enjoyed in hearing the witnesses give evidence30.
56.	Where a member at first instance resolves a conflict of evidence between witnesses the subtle influence of demeanour on the member's determination cannot be overlooked. This is so even where the member at first instance made some observations about the demeanour of the witnesses and their manner of giving evidence but did not expressly rely on demeanour in making any findings of fact31.
57.	Further, it does not necessarily follow that because a member at first instance makes no express reference to demeanour and credibility that such factors played no part in any findings of fact made32. As Lord Sumner put it in SS Honestroom v SS Sagaporack33:
				" . . . not to have seen the witnesses puts appellate judges in a permanent position of disadvantage as against the trial judge, and, unless it can be shown that he has failed to use or has palpably misused his advantage, the higher Court ought not to take the responsibility for reversing conclusions so arrived at, merely on the result of their own comparisons and criticisms of the witnesses and of their own view of the probabilities of the case. The course of the trial and the whole substance of the judgment must be looked at, and the matter does not depend on the question whether a witness has been cross-examined to credit or has been pronounced by the judge in terms to be unworthy of it. If his estimate of the man forms any substantial part of his reasons for his judgment the trial judge's conclusions of fact should, as I understand the decisions, be let alone."
58.	Finally it is clear that in the event of an inconsistency between a witness's evidence and a member's findings of fact, then the member must be taken to have rejected that evidence34.
59.	We have applied the general observations set out above to the determination of the matter before us.
60.	In this case it is apparent from a review of the transcript that there was evidence upon which the Commissioner was entitled to rely in making the finding in issue. We do not propose to canvass all of the relevant evidence in this decision - the proceedings below took place over some ten hearing days and generated 825 pages of transcript. However the examples below make our point.
61.	The following exchange took place during the course of Mr McIntosh's evidence:
	"MR SLOAN: If I take you to Annexure H to Exhibit F1. Is that Mr Fischer's response to the please explain letter?
	MR MCINTOSH: Yes it is.
	MR SLOAN: Is it dated 29 June 1997?
	MR MCINTOSH: Yes it is.
	MR SLOAN: You see that over the course of slightly more than two pages it purports to explain his behaviour?
	MR MCINTOSH: Yes.
	MR SLOAN: Was that response satisfactory to you?
	MR MCINTOSH: No it wasn't.
	MR SLOAN: Why not?
	MR MCINTOSH: The calls - the number of calls that had been made and the period of time during which they had been carried out was too great I suppose to accept the extenuating circumstances that Ron described in his explanation. Where he stated that he did not realise that Telstra would be charged for the calls, I think is at the bottom of the second page, I simply could not accept that as an explanation. . .
	MR SLOAN: Why not?
	MR MCINTOSH: Because I take it for granted that it is a standard piece of knowledge that every employee of mine has that when they dial a telephone number, whether it be using the spectrum facility or any telephone, if they are involved in dialling the telephone number then the phone in which the number is dialled incurs the cost. That to me is a basic piece of information that I would regard every employee as having and a very logical piece of knowledge as well."35
62.	Further, Ms Herman, a workplace learning consultant with Telstra, gave evidence that Mr Fischer did understand who would pay for the calls.36 Ms Herman had known the appellant for a number of years and had observed in some 36 training sessions over the course of a six month period commencing in early 1997.37
63.	The Commissioner's conclusion is also supported by the evidence of Ms Magrow, a Telstra customer service representative, who despite having no formal training on the Spectrum Transfer Facility was well aware of the billing arrangements.38
64.	In relation to the submissions regarding the requisite standard of proof to be applied in the circumstances of this case the appellant relied on Briginshaw v Briginshaw and in particular the following extract from the judgment of Dixon J:
	"The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters `reasonable satisfaction' should not be produced by inexact proofs, indefinite testimony, or indirect inferences."39
65.	His Honour's observations were cited with approval by the High Court in Neat Holdings Pty Ltd v. Karajan Holdings Pty Ltd.40 In that case their Honours Mason CJ, Brennan, Deane and Gaudron JJ said:
	"The ordinary standard of proof required by a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so even where the matter to be proved involves criminal conduct or fraud. On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have often been made to the effect that clear or cogent or strict proof is necessary where so serious a matter as fraud is to be found. Statements to that effect should not, however, be understood as directed to the standard of proof. Rather, they should be understood as merely reflecting a conventional perception that members of our society do not normally engage in fraudulent or criminal conduct and a judicial approach that a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct."41
66.	The determination of whether an employee engaged in the conduct which led to his or her termination is obviously an important aspect of many s.170CG arbitrations. A termination may be "unjust" because the employee was not guilty of the misconduct on which the employer acted or may be "unreasonable" because it was decided on inferences which could not reasonably have been drawn from the material before the employer.42
67.	In the proceedings below the Commissioner was confronted with conflicting evidence. He decided that Mr Fischer was aware that his personal calls were being made at Telstra's expense. In our view that finding was reasonable upon the evidence before him. Further it was not the product of "inexact proof, indefinite testimony or indirect inferences". It is not necessary for us to determine the impact of the observation in Briginshaw and Neat Holdings Pty Ltd on proceedings pursuant to s.170CG. This issue was not argued below and even if the impact is as contended for by the appellant we are satisfied that the Commissioner did not fall into error in the manner contended.
	· a number of points were advanced in relation to Telstra's Code of Conduct. First, it was put that the Commission could approach the substantive issue before it by asking whether Mr Fischer's actions in fact constituted misconduct pursuant to the Code and if it did then did such misconduct justify dismissal. Second, in relation to the Code itself, the appellant submitted that "the relevant part of the Code is sufficiently vague and imprecise so as to not adequately lay down guidelines that can be effectively administered in the workplace."43
68.	The relevant part of the Code is set out at page 2 of this decision. The Commissioner dealt with this issue in the following terms:
	"I do not consider that its wording is so imprecise or vague that an employee would be entitled to consider that the use of the phones as occurred in this matter would be anything other than an abuse of the company's property and facilities.
	Even if there was no such reference in the Code of Conduct, it is reasonable to imply into the contract of employment that the extended use of such employer facility would amount to abuse of the employer's property or facility. There was no evidence, that Telstra had ever acquiesced in the extended use of its telephone facilities.
	I am satisfied that where an employee deliberately uses the phone in the manner as described in the relevant charges, the employer would have a valid reason to dismiss the employee."
69.	We do not agree with the appellant's submission on this point. The Commission's task in arbitrating s.170CE(1) claims is to determine whether or not the termination was "harsh, unjust or unreasonable" having regard to the factors set out in s.170CG(3). There is no warrant for imposing an additional requirement upon the Commission that it determine whether or not the relevant conduct amounted to a breach of the respondent's Code of Conduct. While the Code is relevant it is not determinative.
70.	It is an implied term of every employment contract that the employee owes the employer a duty of "fidelity and good faith"44. This concept is used as a matter of convenience to subsume a range of obligations which are intended to ensure that the employee renders honest and faithful service to the employer. They include an obligation to act honestly in handling the employer's property.45
71.	The Commissioner concluded that Mr Fischer's conduct provided the respondent with a valid reason to terminate his employment. In our view that conclusion was reasonably open.
	· inconsistency in treatment: the appellant submits that the termination was harsh, unjust or unreasonable given that another employee who had been found guilty of misusing Telstra's phone system had been subjected to less harsh treatment by Telstra than that accorded to Mr Fischer.
72.	For the purpose of s.170CG a termination of employment may be "harsh" because it is disproportionate to the gravity of the misconduct.46 In this regard inconsistency in the treatment of employees in respect of the same or substantially the same conduct may be relevant to the determination of whether a termination was harsh. This is particularly so if the inconsistency arises out of the same incident.47
73.	The respondent submitted that little persuasive evidence was raised by the appellant in the proceedings below to demonstrate that the circumstances of the two cases were sufficiently similar that a comparison between the treatment of the respective employees could properly be made. We agree. The Commissioner did not fall into error in the manner suggested by the appellant.
	· the appellant's length of service with Telstra and his satisfactory work record was said to be "a significant additional factor in deciding what is reasonable".48
74.	An applicant's length of service and work record are matters that can be taken into account in determining whether the termination of the applicant's employment was "harsh, unjust or unreasonable". Indeed that is what the Commissioner did in this case. At page 10 of his decision Commissioner Raffaelli says:
	"I have been most conscious that Mr Fischer has had in excess of 36 years of service with the company. In that time he has performed to the satisfaction of his employer. There was no information before the Commission that indicated that he had previously been counseled or disciplined in any way.
	I have considered this factor."
75.	The approach taken by the Commissioner in relation to this issue does not disclose a reviewable error.
	· Mr Fischer had offered to recompense Telstra for the cost of the private calls he made using the Spectrum Transfer Facility. This was not taken into account by Mr Ayres when he made the decision to terminate Mr Fischer's employment. Further, it is a matter that should have been taken into account by the Commissioner in deciding what was fair in all the circumstances.
76.	When confronted with the allegations of misconduct Mr Fischer did offer to pay for the cost of the relevant calls. It is apparent from Mr Ayres' evidence that he was unaware that Mr Fischer had made such an offer.49 However this information was clearly before the Disciplinary Appeal Board and was taken into account in the Board's decision to direct that Mr Fischer be dismissed.50
77.	It is also apparent from the Commissioner's reasons for decision that he was aware that early in the disciplinary process Mr Fischer had offered to pay the costs of the relevant calls. At page 5 of his decision the Commissioner sets out the arguments advanced on behalf of the applicant. These include the following point:
				"Mr Ayres had not been aware that Mr Fischer had early on in the process offered to pay the costs of the calls."
78.	We are not persuaded by the appellant's submissions on this point.
79.	In summary, we do not agree with the appellant's contention that the Commissioner's conclusion was not supported by the weight of the evidence.
Conclusion
80.	Section 170JF deals with appeals from orders arising from the determination of whether a termination was harsh, unjust or unreasonable. It states:
	"(1) An appeal to a Full Bench under section 45 may be instituted by any person who is entitled under section 170JD to apply for the variation or revocation of an order under this Part.
	(2) For the avoidance of doubt, an appeal to a Full Bench under section 45 in relation to an order made by the Commission under Subdivision B of Division 3 may be made only on the grounds that the Commission was in error in deciding to make the order."
81.	Section 45(2) provides that a Full Bench shall grant leave to appeal if `in its opinion, the matter is of such importance that, in the public interest, leave should be granted'. Having regard to the terms of s.170JF(2) we think that leave to appeal should generally not be granted unless the appellant satisfies the Commission that there is an arguable case that the member at first instance had either made a legal error or had acted upon a wrong principle, given weight to irrelevant matters, failed to give sufficient weight to relevant matters or made a mistake as to the facts or that the decision was plainly unreasonable or unjust. In the absence of an arguable case of either legal error or that the discretion was miscarried the Commission would not grant leave merely to substitute its decision for the decision under appeal.
82.	Leave to appeal is not a mere formality and a substantive submission is required if leave is to be granted.
83.	The requirement for an arguable case of either legal error or that the discretion has been miscarried means that the appellant must demonstrate that their case has a reasonable prospect of success. This requirement is rigorously applied in order to ensure that the standing and purpose of Commission proceedings at first instance are not diminished by automatic or unwarranted access to an Appeal Bench.
84.	We are satisfied that the conclusion reached by the Commissioner in the decision subject to appeal was reasonably open on the material before him.
85.	The appellant failed to establish an arguable case of either legal error or that the discretion was miscarried.
86.	The appellant advanced a number of other points in support of the granting of leave to appeal. We have considered these arguments but they do not persuade us that the appeal is of such importance that, in the public interest, leave to appeal should be granted.

87.	We have decided to refuse leave to appeal and we dismiss the appeal.

BY THE COMMISSION:

VICE PRESIDENT

Appearances:

P. Linegar of counsel for R.C. Fischer.

D. Sloan for Telstra Corporation Limited.

Hearing details:

1998.

Sydney:

December 21.

Decision Summary

		Termination of employment - unfair dismissal - appeal - full bench - whether employee had been warned before his termination - whether applicant denied procedural fairness in the disciplinary process instituted by employer - whether decision not supported by the weight of evidence - held s170CG(3)(d) not relevant - employee terminated for misconduct not unsatisfactory performance - absence of warning taken account of under s170CG(3)(e) - decision to terminate employee had been reviewed by internal appeal board at which he was represented - no procedural unfairness - conclusion reasonably open to Commission at first instance - appellant had failed to establish an arguable case of either legal error or that the discretion was miscarried - leave to appeal refused - appeal dismissed.
Fischer v Telstra Corporation Ltd
C No 25062 of 1998				Print R2558
Ross VP Duncan DP Redmond C			Melbourne	1 March 1999

Printed by authority of the Commonwealth Government Printer

<Price code F>

1 A copy of the Code is set out at Annexure A to Exhibit F1

2 A copy of the letter of 25 June 1997 is set out at Annexure G to Exhibit F1

3 Annexure H to Exhibit F1

4 A copy of Mr McIntosh's letter of 1 July 1997 and the enclosed charges is set out at Annexure I to Exhibit F1

5 A copy of the notice of suspension is set out at Annexure J to Exhibit F1

6 A copy of Mr Garlick's letter of 12 August 1997 is set out at Annexure N to Exhibit F1

7 A copy of Mr Ayres' letter of 13 August 1997 is set out at Annexure O to Exhibit F1

8 A copy of Mr Fischer's letter of 15 August 1997 is set out at Annexure P to Exhibit F1

9 The Board's decision and reasons are set out at Annexures V and W to Exhibit F1

10 A copy of Mr Ayres' letter of 22 September 1997 is set out at Annexure X to Exhibit F1

11 Print Q6463 at 10

12 Ibid

13 The appellant's written submissions are set out in full in Exhibits L1 and L2

14 Transcript 12 August 1998, page 764 at lines 17-31 and 765 at lines 1-11

15 VI 1722/96, 6 December 1996, unreported

16 See written submissions on behalf of the Appellant, Exhibit L1 at page 7

17 See Annexure G to Exhibit F1

18 See Annexure J to Exhibit F1

19 The transcript of this interview is set out at Annexure M to Exhibit F1

20 See Exhibit F2 in the proceedings below

21 Transcript at pages 175 at lines 4-33, pages 176 to 179 and pages 185 to 186

22 Print Q6463 at pages 9-10

23 (1982) 9 QBD 672

24 Transcript of the proceedings before the Disciplinary Appeal Board, page 105 at lines 42-54 and page 106 at lines 1-31, set out at Annexure U to Exhibit F1

25 Print Q6463 at page 10

26 Transcript 27 July 1998, page 618 at lines 2-21

27 Transcript 27 July 1998, page 684 at lines 1-10

28 Print P2322, 28 July 1997 per Ross VP, Drake DP and Cargill C, see further Department of Social Security and Dean Uink, AIRC Print P7680, 24 December 1997 at 16-17

29 (1990) 171 CLR 167 at 178

30 See Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479; Elitegold Pty Limited v CM Holdings Pty Ltd and Anor [1995] ATPR 40,753 at 47,759

31 Jones v Hyde (1989) 85 ALR 23 at 27

32 Martin v Option Investments (Aust.) Pty Ltd [No. 2} [1982] VR 464 at 468; Ablos v Australian Postal Commission (1988) 171 CLR 167 at 179

33 [1927] AC 37 at 47

34 Abalos v Australian Postal Commission (1990) 171 CLR 167 at 178-179

35 Transcript 28 July 1998, page 686 lines 20-31 and page 687 lines 9-15

36 Transcript 29 July 1998 page 741 lines 22-31 and page 744 lines 4-8

37 Transcript 29 July 1998 page 740 lines 4-10

38 Transcript 1 April 1998 page 38 lines 4-8 and page 41 lines 16-20

39 (1938) 60 CLR 336 at 362

40 (1992) 110 ALR 449

41 Ibid at 449-450

42 Byrne v Australia Airlines Limited 185 CLR 410 at 465; McLauchlan v Australia Meat Holdings Pty Ltd Print Q1625, 5 June 1998 per Ross VP, Polites SDP and Hoffman C at 10

43 Exhibit L1 at page 32

44 Blythe Chemicals v Bushnells (1983) 49 CLR 66

45 W.D. & H.O. Wills v Jamieson (1957) AR(NSW) 547; Sinclair v Neighbour (1967) 2 QB 279

46 Byrne v Australian Airlines (1995) 185 CLR 410 at 465 per McHugh and Gummow JJ

47 Mollinger v National Jet Systems Pty Ltd Print Q5911, 8 September 1998 per Ross VP; Federated Municipal & Shire Council Employees' Union of Australia, NSW Division v Liverpool City Council (1988) 25 IR 246

48 Exhibit L1 at 41

49 Transcript 28 April 1998 page 180 at lines 20-31

50 Exhibit F1, Annexure W at page 7

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