Edwards v The Commissioner of Taxation [1998] IRCA 18

INDUSTRIAL RELATIONS COURT OF AUSTRALIA INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - review of decision of judicial registrar - applicant was employee of Australian Taxation Office - charges of misconduct brought against applicant under Public Service Act - applicant found guilty of accessing taxation records of persons without authorisation and not in the course of his duties - application of s 8XA Taxation Administration Act - s 8XA applies to employees of the Australian Taxation Office - allegations of misconduct proved - employer had a VALID REASON to terminate applicant's employment

Workplace Relations Act 1996 (Cth), s 170DE(1) Taxation Administration Act 1953 (Cth), s 8XA

Cosco Holdings Pty Ltd v Thu Thi Van Do (1997) 150 ALR 127, explained Ram v Minister for Immigration and Ethnic Affairs (1995) 130 ALR 314, applied Sherman v Peabody Coal Ltd (Moore J, FCA, 27.2.1998, unreported), followed RODERICK ST JOHN EDWARDS v THE COMMISSIONER OF TAXATION NI 4361 of 1995 MADGWICK J 9 JUNE 1998 SYDNEY

IN THE INDUSTRIAL RELATIONs COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NI 4361 of 1995

BETWEEN: Roderick St John Edwards

Applicant

AND: The Commissioner of Taxation

Respondent

JUDGE(S): MADGWICK

DATE OF ORDER: 9 june 1998

WHERE MADE: SYDNEY

SHORT MINUTES OF ORDER

THE COURT ORDERS THAT: 1. The application is dismissed.

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NI 4361 of 1995

BETWEEN: Roderick St John Edwards

Applicant

AND: The Commissioner of Taxation

Respondent

JUDGE(S): MADGWICK

DATE: 9 june 1998

PLACE: SYDNEY

REASONS FOR JUDGMENT HIS HONOUR: This is a review of a decision of a judicial registrar, who held that the respondent had a valid reason to terminate the applicant's employment, and dismissed the applicant's application for relief under s 170EA of the Workplace Relations Act 1996 (Cth). Background The applicant, Mr Edwards, commenced employment as an Administrative Services Officer at the Australian Taxation Office ("ATO") on 28 July 1986. At the time of his dismissal on 8 March 1995, and at the time of his conduct which led to his dismissal, he was employed as a Grade 3 officer in the Record Keeping Small Business Income Group of the Parramatta Office. The Group's function was to assist small business entities to maintain proper records for taxation purposes. Prior to his assignment to the Group, the applicant had worked in an auditing capacity, where he would search the tax records of persons he suspected of avoiding paying tax. Staff in that audit area were encouraged to use their own initiative and to identify possible targets from their own observation. If someone was seen to be driving "a flash car", as one witness put it, that might be regarded as warranting enquiry, through the computer, as to the records of that person. In practice, the approval of a supervising officer was not always obtained before such enquiry, although it should have been under the prevailing procedures. The misconduct The incidents which led to the applicant being dismissed occurred on 28th July, and the 1st and 2nd of September 1994. The applicant accessed the computerised tax records of several persons without authorisation. In each case, mere impertinent prying into other people's private affairs was involved. In three instances, those pried upon were people known personally to the applicant. One of them was a woman he had known and admired some years previously. One was a former supervisor from a private enterprise job the applicant had had during a period of leave without pay from the public service. The other was a female friend of his wife's. Two more were, as his counsel put it, "attractive female sports stars". Another, whose case is of special significance only because it serves to illustrate the potential seriousness of the applicant's conduct for the ATO and the revenue was a well-known programme presenter in the electronic communications media. The applicant was only discovered because, unbeknown to him, one of his targets had become a police officer and was working on tasks of a sensitivity such that, through administrative arrangements, the applicant's accession of the records came to notice. The applicant's computer use was then audited and his other prying was discovered. Taking action to obtain information from ATO records, otherwise than in the course of the performance of his duties, is a criminal offence under s 8XA of the Taxation Administration Act 1953 (Cth), although, as it will be seen, it was argued on behalf of the applicant that this provision did not apply to him as an "officer" of the ATO. On 20 October the applicant was interviewed twice by Mr Baldock, an internal security investigations officer. At the first interview the applicant indicated that he either could not remember the accessions or explained them away as "stupid curiosity" or as having been undertaken for the purpose of personal research into tax planning. At the end of the interview, Mr Baldock indicated to the applicant, not by way of threat, that he was considering referring the matter to the Department of Public Prosecutions, as he was not convinced by the applicant's answers. The applicant told Mr Baldock that he was prepared to make a further statement and a second interview was conducted. The applicant was then able to recall some of the details and confirmed that he had made the accessions for non-work related purposes, although he reiterated that he had no reason other than curiosity and that he had not recorded any of the information or attempted to receive any financial gain from it. Mr Baldock considered that prosecution was not warranted, but recommended that disciplinary action be taken against the applicant. The inquiry under the Public Service Act On 6 December the applicant was charged under s 61(2) of the Public Service Act 1922 (Cth) in that he had failed to fulfil his duty as an officer within the meaning of s 56(f)(i) of that Act. Section 56(f)(i) provides that an officer shall be taken to have failed to fulfil his duty as an officer if and only if he contravenes or fails to comply with a provision of the Act or the regulations. Somewhat circuitously, the applicant was charged with failing to comply with regulation 8A(b) of the Public Service Regulations, which provides that an officer shall "comply with any enactments, regulations, determinations, awards or departmental instructions applicable to the performance of his or her duties". The applicant's failure so to comply, it was alleged, stemmed from a breach of s 8XA of the Taxation Administration Act 1953 , which provides: "A person must not knowingly take action for the purpose of obtaining information about another person's affairs that: (a) is contained in records in the possession of the Commissioner; and (b) is held or was obtained by the Commissioner under or for the purposes of a taxation law; unless the person takes the action: (c) under the Freedom of Information Act 1982; or (d) in accordance with the processes of a court or the Tribunal; or (e) in the course of exercising powers or performing functions under or in relation to a taxation law. Penalty: $10,000 or imprisonment for 2 years, or both." Mr Foster, a senior officer, was appointed by a delegate of the Commissioner to hold an inquiry into the charges of misconduct. His role was to examine whether the allegations were true and to recommend what action (if any) should be taken in respect of them. The applicant provided Mr Foster with a written submission in respect of the allegations in which he stated: