Industrial Relations Commission of New South Wales CITATION: NSW Attorney General's Department v Miller [2007] NSWIRComm 33 APPELLANT NSW Attorney General's Department PARTIES: RESPONDENT Bradley Robert Miller FILE NUMBER(S): IRC 3397 and 3499 of 2006 CORAM: Wright J President; Harrison DP; Boland J Appeal - Application for leave to appeal and appeal - Public sector employee in a senior position in Local Courts administration dismissed for harassment and sexual harassment of fellow employees - Employee reinstated at first instance - Appeal by employer against decision at first instance - Cross appeal by appellant regarding refusal at first instance to order costs in his favour - Meaning of harassment and sexual harassment - Harassment outside working hours - Charges of harassment and sexual harassment made out in part - Errors by Commission at first instance - Whether dismissal was harsh, unreasonable or unjust - Dismissal found to be harsh - Re-employment ordered on conditions - Leave to appeal on cross appeal refused CATCHWORDS: Unfair dismissal - Appeal - Application for leave to appeal and appeal - Public sector employee in a senior position in Local Courts administration dismissed for harassment and sexual harassment of fellow employees - Employee reinstated at first instance - Appeal by employer against decision at first instance - Cross appeal by appellant regarding refusal at first instance to order costs in his favour - Meaning of harassment and sexual harassment - Harassment outside working hours - Charges of harassment and sexual harassment made out in part - Errors by Commission at first instance - Whether dismissal was harsh, unreasonable or unjust - Dismissal found to be harsh - Re-employment ordered on conditions - Leave to appeal on cross appeal refused Anti Discrimination Act 1977 s 22A s22B LEGISLATION CITED: Industrial Relations Act 1996 s 89(8) s 169(1) s 187 s 188 s 192 Police Act 1990 s 181D Public Sector Employment and Management Act 2002 s 43 Briginshaw v Briginshaw and Another (1938) 60 CLR 336 Burge v NSW BHP Steel Pty Ltd (2001) 105 IR 325 Byrne v Australian Airlines Ltd, Frew v Australian Airlines Ltd (1995) 185 CLR 410 Carlton and United Beverages Limited and Philip Brunt [2006] NSWIRComm 98 Commissioner of Police v Dobbie (2006) 157 IR 44 Dee v Commissioner of Police, NSW Police & Anor (No 2) (2004) EOC 93-346 CASES CITED: Director - General of Education and Others v Suttling (1986) 162 CLR 427 Farquharson v Qantas Airways Limited (Print PR 971685, 10 August 2006) Hall and Others v A & A Sheiban Pty Ltd (1989) 20 FCR 217 Miller v NSW Attorney General's Department [2006] NSWIRComm 322 Miller v NSW Attorney General's Department (No 2) [2006] NSWIRComm 362 Riley v Workcover Authority (NSW) 151 IR 396 Rose v Telstra Corporation Limited (Print Q9292, 4 December 1998) R v Equal Opportunity Board Ex Parte Burns [1985] VR 317 HEARING DATES: 15 December 2006 DATE OF JUDGMENT: 22 February 2007 APPELLANT Mr S Benson of counsel Solicitor: Mr G De Courcey Crown Solicitor's Office LEGAL REPRESENTATIVES: RESPONDENT Mr S Coleman of counsel Solicitor: Mr L Adamson Luke Adamson and Co Solicitors JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES FULL BENCH CORAM: WRIGHT J, President HARRISON DP BOLAND J Thursday 22 February 2007 Matter No IRC 3397 of 2006 ATTORNEY GENERAL'S DEPARTMENT OF NEW SOUTH WALES v BRADLEY ROBERT MILLER Application by Attorney General's Department of New South Wales for leave to appeal and appeal from a decision of Deputy President Grayson given on 13 October 2006 in Matter No IRC 85 of 2006 Matter No IRC 3499 of 2006 BRADLEY ROBERT MILLER v ATTORNEY GENERAL'S DEPARTMENT OF NEW SOUTH WALES Application by Bradley Robert Miller for leave to appeal and appeal from a decision of Deputy President Grayson given on 14 November 2006 in Matter No IRC 85 of 2006 DECISION OF THE COMMISSION [2007] NSWIRComm 33 1 On 19 January 2006, Bradley Robert Miller was dismissed from his employment as an Assistant Registrar with the Attorney General's Department of New South Wales ("the Department"). Mr Miller sought reinstatement to his former position pursuant to the provisions of Pt 6 of Ch 2 of the Industrial Relations Act 1996. 2 Mr Miller's reinstatement application came before Grayson DP and on 13 October 2006, following a six day hearing, his Honour granted the application: Miller v NSW Attorney General's Department [2006] NSWIRComm 322 ("Reinstatement Decision"). In a further decision given on 14 November 2006, Grayson DP refused an application by Mr Miller for costs: [2006] NSWIRComm 362 ("Costs Decision"). 3 The Department subsequently sought leave to appeal and to appeal the Reinstatement Decision. Mr Miller sought leave to appeal and to appeal the Costs Decision. This decision deals with both appeals, which were made pursuant to ss 187 and 188 of the Industrial Relations Act. Background 4 Mr Miller had been employed by the Department since 1983 and held a senior position as Assistant Registrar at Manly Local Court at the time of his dismissal. On 3 June 2005 Mr Laurie Glanfield, Director General of the Department, advised Mr Miller that he had initiated a disciplinary investigation into allegations that Mr Miller may have engaged in misconduct. The misconduct was described as "sexual harassment towards co-workers" and "other inappropriate behaviour, including harassment, towards co-workers". Mr Miller was suspended from duty with pay. 5 In a letter to Mr Miller dated 21 November 2005, Mr Glanfield advised Mr Miller that he had considered a report of the investigation into Mr Miller's alleged misconduct and on the basis of the investigation had decided to suspend him without pay pending a decision on what disciplinary action would be taken. Mr Miller was provided with the details of the allegations against him and a copy of the investigation report. He was also provided with the opportunity of responding to the allegations and the contents of the report. 6 Mr Miller was advised that the Director General had reached certain conclusions in respect of misconduct and these are set out at [2] of Grayson DP's Reinstatement Decision: (i) During June 2004 Mr Miller privately interviewed Ms Watterson in a manner which intimidated her and reduced her to tears, and which left her unable to engage in a normal working relationship with him thereafter; (ii) On 25 February 2005, whilst attending a farewell function for Ms Sahara Hayes, Mr Miller sexually harassed Ms Watterson when, in the Steyne Hotel, he placed his hand on her hip and then ran it down over her backside in a manner unacceptable to Ms Watterson; (iii) On or about May 2004 Mr Miller, when discussing a resubmitted leave application with Ms Bewley, spoke to her in an offensive and inappropriate manner; (iv) Mr Miller sexually harassed Ms Bewley when he repeatedly asked her if she was pregnant after she and her partner had commenced cohabiting; (v) Mr Miller harassed Ms Rowan when he would attend Manly Court House outside normal working hours and whilst on extended leave and leave messages for Ms Rowan relating to her duties as Acting Assistant Registrar; (vi) When Ms Rowan raised the issue regarding the leaving of the messages with Mr Miller at lunchtime in the Ivanhoe Hotel, Mr Miller sexually harassed Ms Rowan by attempting to hug her and by telling her "I just want to have sex with you"; (vii) On 22 April 2005, when a number of officers from Manly Court were participating in a lawn bowls games at the "Diggers", Mr Miller sexually harassed Ms Rowan when he touched her on the backside and commented " ... he'd been wanting to do that all night"; (viii) On 26 April 2005 Mr Miller harassed Ms Rowan when they separately attended the Manly Wharf Bar and he directed inappropriate noises, to wit "woo-hooing", towards her when she and her then companion were leaving the premises; (ix) On 3 June 2005 Mr Miller sexually harassed Ms Rowan at the Steyne Hotel when he told her "she looked rootable". Ms Rowan found this comment particularly offensive because Ms Clifton, in her statement, claimed Mr Miller had made a similar comment to her regarding Ms Rowan at the bowls night of 22 April 2005. Ms Clifton stated Ms Rowan was very annoyed when she told Ms Rowan of Mr Miller's making the comment; (x) Later on 3 June 2005 Mr Miller again sexually harassed Ms Rowan when, after he had asked her out and she refused, he then tried to discuss the size of his penis with her. Mr Miller responded to the allegations in December 2005 in a 13-page submission, denying the charges of misconduct. 7 In his Notice of Decision, which was published and placed on Mr Miller's personnel file on 4 January 2006, the Director General stated: Mr Miller's response to the allegations shows he lacks understanding of the boundaries between personal and professional conduct, particularly outside of working hours. Many of the incidents occurred on occasions when Mr Miller admitted to consuming alcohol and it may be that his judgment was affected as a result. He failed to see that whilst he is prepared to condemn the drinking habits of the women making the allegations, he denies his own drinking pattern is equally irresponsible. His evidence clearly indicates that he and other staff members are part of a "pub" culture in Manly and at times had acted unprofessionally when on licensed premises. I am satisfied that, on occasions, his unprofessional behaviour would have extended to the inappropriate behaviour, which is the subject of the investigation. The evidence of Ms Watterson, Ms Bewley and Ms Rowan, which is supported by a witness, Ms Rebecca Clifton, is considered reliable and without contradiction. Mr Miller, as a senior officer of the Local Court, should have been particularly conscious of his responsibilities to other staff on the occasions when the allegations were made and should have done nothing that might have been construed as taking advantage of the situation. Therefore I am of the view that Mr Miller did behave in a manner that does constitute both harassment and sexual harassment under the Harassment Prevention Policy and as such he brought upon himself the consequences of disciplinary action. His behaviour is also in breach of the Department's Code of Conduct and Ethics. The Department's Code of Conduct and Ethics outlines the minimum standards of professional and ethical behaviour expected of all staff. Each officer has a responsibility to uphold the values of the Department, and it is the responsibility of all staff to be aware of, and comply with Department policies. In this regard I would have thought Mr Miller would have been particularly cognisant of his responsibilities, given my previous advice to him in September 2000 of the consequences of another breach of the Code of Conduct and Ethics. I believe Mr Miller's behaviour and response to the allegations has undermined his credibility as an officer, led to a challenge to his integrity and severely affected the trust management can have in him. He has also irreparably damaged his reputation and lost the respect of his peers. The conduct of the type engaged by Mr Miller is unacceptable for an officer of the Local Court and it is not appropriate for him to remain in the Public Service. Under the circumstances the disciplinary action I would normally consider taking would be dismissal from the Public Service, as I advised him by letter to him on 21 November 2005. However I do accept Mr Miller was influenced by the drinking culture and environment pervading Manly Local Court, which led to a significant blurring of professional and personal behaviour amongst those officers involved in the events leading to the allegations being made. Without condoning his behaviour in any way I acknowledge Mr Miller's judgment was affected when he was under the influence of alcohol. Therefore I have reconsidered my decision of dismissal and instead I now direct him to resign from the Public Service. Failure to resign within the time specified will result in his dismissal. The disciplinary action imposed is in accordance with s 46 of the Public Sector Employment and Management Act 2002. 8 On 4 January 2006, Mr Miller was advised in writing by the Director General that he had decided to take the following disciplinary action: Pursuant to s 46(2) of the Public Sector Employment and Management Act 2002 (NSW): you are directed to resign from the Public Service within seven days from the date of this letter and failure to do so shall result in your dismissal. 9 Mr Miller declined to resign and on 19 January 2006 he was dismissed from the Public Service, the dismissal being effective that day. Proceedings at first instance 10 Evidence was received from 12 witnesses, including Mr Miller and each of the complainants, namely, Ms Emily Watterson, Ms Joanne Bewley, and Ms Leanne Rowan. The complainants were employed in a clerical capacity at the Manly Local Court. Grayson DP considered, in turn, each of the Director General's findings of misconduct against the background of the evidence and submissions of the parties. His Honour's findings are summarised in the following paragraphs. 11 Intimidation of Ms Watterson in June 2004. Ms Watterson was interviewed by Mr Miller and asked to cease playing music CDs on her computer and doing other things in the open registry office that disturbed and distracted her fellow employees. His Honour found that it was more probable that Ms Watterson was upset by the criticism of her conduct rather than by any overtly aggressive or intimidatory behaviour on Mr Miller's part. His Honour found the allegation was not made out. This finding was not challenged on appeal. 12 Sexual Harassment of Ms Watterson in February 2005 at Steyne Hotel. Ms Watterson had said in her evidence that Mr Miller behaved inappropriately at a function by placing his hand on her buttocks and moving his hand in a downward motion. She said he appeared to be intoxicated. Ms Watterson said she felt repulsed and moved away as quickly as she could. After reviewing the evidence the Deputy President considered that it was more likely than not that "[Mr Miller's] hand may have brushed across Ms Watterson's buttocks as she said but given the circumstances in which that occurred which involved jocularity and skylarking on the part of both the applicant and Ms Watterson, I have little difficulty in accepting that it was most probably accidental." at [23] Grayson DP stated: I do not think it can fairly be said that inadvertent physical contact with Ms Watterson's backside in the environment of mutual frivolity which then existed, would be such as to constitute sexual harassment either within the ordinary meaning of the term or more importantly, within the legal meaning of the term as defined by the Anti Discrimination Act 1977. His Honour's findings were not challenged on appeal. 13 Spoke to Ms Bewley in an offensive and inappropriate manner in May 2004 regarding leave application. Ms Bewley had said she was rebuffed by Mr Miller who spoke rudely to her, who refused to consider her revised leave application and who screwed up the leave application and threw it in the bin. Ms Bewley said this occurred in front of other staff and that it not only annoyed her but it demonstrated poor management skills on the applicant's part. Grayson DP found that in the absence of corroborative evidence it would be mere conjecture on his part given Mr Miller's denial to find that he misconducted himself in his manner of dealing with Ms Bewley's leave application. This finding was not challenged on appeal. 14 Sexual harassment of Ms Bewley by repeatedly asking if she was pregnant. His Honour found that Mr Miller had raised the issue with Ms Bewley about whether she was pregnant and that Ms Bewley had asked him to stop. The relevant part of the decision is at [26]-[28]: 26 As to the fourth allegation namely, that the applicant sexually harassed Ms Bewley by repeatedly asking if she was pregnant, it is conceded by the applicant that subject matter of that nature was broached with Ms Bewley and although the applicant denies that he was ever told by Ms Bewley to cease such discussions with her, I am inclined, on balance, as the following transcript of her cross-examination indicates, to accept that she did: Q. I think you said in your statement you thought what he had to say was inappropriate in terms of your pregnancy? A. I was not pregnant at the time, it was a comment that continued for quite a while that I ended up finding quite offensive, annoying and just put a stop to it, but it was an example of the type of behaviour that I found annoying at work rather then just the regular staff. I say that because as Ms Bewley's evidence indicates, it was not unusual for her and the applicant to make highly personal observations to each other and about each other and such banter was not regarded as offensive. Conversely, such banter was a feature of the friendly relationship that existed between them and forms no part of her complaint against him. 27 In the case of the applicant's comments about Ms Bewley's pregnancy, however, it is plainly the case that the applicant went too far and was rebuked. Ms Bewley described the matter in cross-examination this way: Q. At page 2 of the transcript the very bottom I think you say the business about the pregnancy was over a period of a couple of weeks and it seemed to be a running joke because Brad knows my partner and we just moved in together and you said it was inappropriate? A. What was being said was and I don't know what instigated it, it was a constant commenting on "Have you been doing it all weekend" and excuse the language "I know you have been fucking all weekend", things like that and I remember making a comment to someone on the staff and saying just because Brad knows Duncan and I it really does not give an excuse to make comments like that and I had enough and I ended up saying "Brad, can you just stop it, it is offending me". Q. When you said that to him he stopped it? A. He did stop it immediately. 28 For all of that, one gets the clear impression that Ms Bewley was not incapable of setting appropriate boundaries in her interpersonal dealings with the applicant and further, that whilst she regarded his behaviour at times in the workplace as less than appropriate, she also thought of him positively as someone who cared about and made an effort by and large, to ensure harmony in the workplace. I am not persuaded that this allegation has been made out. His Honour's findings regarding Ms Bewley's complaint of sexual harassment were challenged on appeal. 15 The remaining six findings of the Director General regarding Mr Miller's misconduct arose from complaints by Ms Rowan. 16 Harassment of Ms Rowan. Mr Miller was absent on long service leave during the first half of 2005 and the complaint was that whilst Ms Rowan was acting in his place as Assistant Registrar, Mr Miller visited the office during non working hours and left notes for her and scrutinised her work. His Honour stated: Ms Rowan took umbrage at finding notes from the applicant who it seems visited the workplace out of hours whilst he was on leave and scrutinised her work. Ms Rowan said the notes were there when she arrived at work "pretty much every day" for the first three of four weeks after the applicant departed on leave. The applicant conceded he visited the workplace out of hours stating that he had done so for many years in order to keep abreast of his work and further, that whilst he may have left notes it was in an attempt to be helpful rather than to harass. His evidence as to the frequency of his out of hours attendance in the workplace and as to whether he knew and intended that Ms Rowan would be the recipient of the notes was, I am bound to say, lacking in clarity and candour. I am of the view on balance, that for reasons best known to himself he did adopt an approach of monitoring and critiquing of Ms Rowan's work. Such an approach as I am disposed is beyond what one would reasonably find acceptable particularly given that it occurred after hours and whilst the applicant was on extended leave. Ms Rowan felt and in my opinion, had every right to feel patronised by this conduct which she reported to Registrar Condie and other registry staff. His Honour, however, did not make any finding of harassment and his failure to do so was challenged on appeal. 17 Sexual harassment of Ms Rowan at Ivanhoe Hotel. Ms Rowan took up her concern about the monitoring of her work directly with Mr Miller during lunchtime in a local hotel and it was this encounter that gave rise to the second complaint of Ms Rowan. His Honour deals with this matter at [31]-[36] of his decision: 31 Ms Rowan said she spoke to the applicant in the hotel and said words to the effect "why are you leaving notes for me - don't you think I can do the job?" She conceded in cross-examination that the applicant said he was just trying to be helpful and may have said that he did not know she would be the recipient. She did not accept that and as earlier observed, nor do I. Ms Rowan said the applicant attempted to hug her as she was leaving and that he said to her "you know I just want to have sex with you." 32 For his part, the applicant emphatically denied saying those words and said that rather than trying to hug her, he merely reached up and patted Ms Rowan on the waist. He said he was sitting down having lunch at the time and she was standing beside him and his gesture was in response to Ms Rowan patting him on the shoulder as she was leaving and saying to him words to the effect "no worries mate". 33 Now whilst Ms Rowan made no reference in her written complaint (or subsequent interview with the investigator) to an exchange of this nature with the applicant, she did concede when taken to it in cross-examination that she patted the applicant on the shoulder as she was leaving and said words to the effect "yeah okay then" which in context are not dissimilar to the words attributed to her by the applicant. Ms Rowan said she behaved this way towards the applicant because she had to work with him and wanted to avoid any backlash. It is to be remembered here that the applicant was at the time of the encounter in the Ivanhoe Hotel, approximately one month into a four month period of leave and the notion that there might be a backlash seems to me, to have been somewhat misplaced given the extended period time before Ms Rowan would have been working with him again. 34 Be that as it may, Ms Rowan was adamant that the applicant did, in the course of the conversation about him leaving notes, state that he wanted to have sex with her. She said she took him to mean that he was leaving her notes as a way of getting her attention because he was attracted to her. She did not regard this as propositioning her for sex. She conceded that the applicant's practices of leaving notes ceased at the time of or shortly after the conversation in the Ivanhoe Hotel. I must say if the applicant's motivation for leaving notes had been because he was attracted to Ms Rowan and if it had been his intention to explain his motive for so doing by bluntly stating that he wanted to have sex with her, then it would have been a most curious way to go about it. 35 Moreover and again there is no contemporaneous record of the incident and no corroborative evidence called by the respondent in support of the allegation of sexual harassment notwithstanding that Ms Rowan left the hotel and went back to work in the company of a workmate, Janet Wagstaff. It can be assumed if Ms Rowan had felt harassed or offended by the applicant's conduct she would have at least mentioned it informally to Ms Wagstaff and I note in that regard that neither Ms Wagstaff nor Registrar Condie to whom Ms Rowan allegedly complained about the incident were called in the proceedings. Finally and even if the applicant did say the words attributed to him, it was conceded by Ms Rowan that she did not consider them as an invitation, unwelcome or otherwise, but rather a childish throw away comment. For his part the applicant maintained that nothing he said could have been construed as a request for sexual favours and in any event, he simply did not feel that way towards Ms Rowan. 36 At all events and as Mr Coleman submitted, it is difficult to see in the circumstances of this allegation, how the test for sexual harassment can be satisfied where neither of the participants in the conversation namely, Ms Rowan and the applicant, feel they have been harassed or have harassed. I am of the view and find accordingly that this allegation has not been made out. His Honour's findings were challenged on appeal. 18 Sexual harassment of Ms Rowan at lawn bowls game in April 2005. Ms Rowan had complained that Mr Miller had sexually harassed her at a social game of lawn bowls on 25 April 2005 by touching her on the backside and saying to her that he had "been wanting to do that all night". In relation to this matter, Grayson DP found: 38 The incident is said to have occurred at a social lawn bowls night which had been organised by Brendan Sullivan, the sheriff's officer at Manly Local Court. Ms Rowan said she and the applicant were drawn to play on the same team. She conceded as did the applicant that they both had quite a lot to drink and that at one stage, she stumbled or tripped on a mat. She remembered "high-fiving" with the applicant but denied dancing "the bumps" with him at various times throughout the night. She said the applicant put his hand on her right buttock and said he had "been wanting to do that all night". She said Registrar Condie and Chamber Magistrate Barber were standing behind them when it happened and that she spoke to Registrar Condie that night about what happened. There is no indication of any reference to this particular allegation in the investigator's record of interview with Ms Rowan and Ms Rowan conceded that she was not taken to it in the interview. The allegation appears to have derived from the written statement of complaint provided by Ms Rowan to Registrar Condie and in that statement as in her evidence in these proceedings, Ms Rowan refers to the touching incident at the lawn bowls night as having occurred in full view of other Manly Local Court staff. She did not name those other staff members. 39 For his part, the applicant denies touching Ms Rowan inappropriately that night and he denies saying the words attributed to him and the difficulty again emerges in that no attempt appears to have been made by the investigator to identify those persons who are said to have witnessed the incident and having done so, to elicit corroborative evidence from such persons in order to test or overcome the applicant's denial. In fact, the names of two such persons (Registrar Condie and Chamber Magistrate Barber) only emerged in the course of Ms Rowan's cross examination in these proceedings and I am bound to say as the transcript of her cross examination reveals, that Ms Rowan was somewhat unclear as to the events of that night. 40 Put simply, if there was contact made with Ms Rowan's backside that night it seems to me more likely to have been a careless and inadvertent act on the applicant's part and something which must be viewed in the context of both the applicant and Ms Rowan having been affected by alcohol at the time and both of them engaging in the frivolity of the occasion. I do not consider this allegation to have been made out. This finding was challenged on appeal. 19 Harassment of Ms Rowan at Manly Wharf Bar on 26 April 2005. Ms Rowan had alleged that she met a male companion for drinks at the Manly Wharf Bar. She had been there about one hour and was about to leave when she noticed Mr Miller seated at a table in the indoor section of the bar with approximately five other persons one of whom she recognised as a local solicitor. Ms Rowan said she felt this was voyeurism and that Mr Miller "had parked himself at a table with a clear direct view of my brief date". She said as she and her companion got up to leave more than one person at the table yelled out "woo hoo" loudly and that Mr Miller's voice was the loudest. 20 At [43] his Honour found: 43 Two of the persons identified as being in the applicant's company that day namely, Kent Ferebee and Dara Troy were called in the applicant's case and whilst both recalled seeing Ms Rowan and a male companion, they were adamant that there was no attempt on the applicant's part to place himself in a position where he could "spy on her" as Mr Troy put it and they were equally adamant that there was no yelling out or "woo hooing" (as Ms Rowan alleged) by the applicant or anyone else in their group. When Ms Rowan was taken in cross examination to her statement to the investigator to the effect that the applicant had positioned his group within the hotel for the express purpose of watching her, she conceded that "it's probably a bit paranoid on my behalf" and that the assertion was something of an exaggeration. She also conceded that her embarrassment stemmed from the fact that she was kissing her male companion and had been seen by colleagues and Magistrate Longley who had presided in proceedings she had brought against her previous partner. She further conceded that she was unaware that rather than having arranged the seating himself, the applicant had in fact joined Mr Ferebee and Mr Troy at the table where they were seated that day; that she did not actually see the applicant yelling in her direction and that she made no complaint about the applicant's conduct towards her when she spoke to him the next day. On the evidence as it stands, I am far from satisfied that this allegation has been made out. This finding was not challenged on appeal. 21 Sexual harassment of Ms Rowan on 3 June 2005 - offensive comment. Ms Rowan alleged that on 3 June 2005 at the Steyne Hotel Mr Miller sexually harassed her when he told her "she looked rootable". Ms Rowan said she found this comment offensive. Ms Rebecca Clifton, another registry officer at Manly, claimed in her statement (tendered in the proceedings), that Mr Miller had made a similar comment to her regarding Ms Rowan at the bowls night on 22 April 2005. Ms Clifton had informed Ms Rowan about the comment. 22 At [49] Grayson DP found: 49 As may be seen from the above versions of events the applicant is said by both Ms Clifton and Ms Rowan to have used the word "rootable" when referring to or speaking to Ms Rowan although the applicant does not recall using the word and does not believe he did. If Ms Clifton's unsworn and untested evidence in the form of an interview given to the investigator is taken at its highest, there is always the risk that the words attributed to the applicant may have been communicated to Ms Rowan inaccurately or out of context. I am simply not to know because Ms Clifton was not called. The applicant certainly recalls saying to Ms Clifton that Ms Rowan should not go out after the bowls night because she was intoxicated and Ms Rowan does not dispute that. The applicant said that Ms Rowan was in a similarly intoxicated state on 3 June 2005 at the Steyne Hotel (and again this is not disputed) inferring that she was not likely to have an accurate recollection of events on either occasion. Against that, there are two people who attribute the same comment to the applicant and whilst the applicant does not recall using the word, he does not strictly deny it. Frankly if he did use the term in talking about or directly to Ms Rowan as I am inclined on balance, to think he did then it was inappropriate conduct on his part. To her credit, Ms Rowan put him in his place. She acknowledged that she perceived the applicant to have meant it as a form of compliment and however backhanded or ill chosen it may have been, she did not take it as something other than that. In my view, the applicant's conduct although inappropriate and deserving of criticism, falls short of sexual harassment having regard to all the circumstances. Accordingly, this allegation is not made out. This finding was challenged on appeal. 23 Sexual harassment of Ms Rowan on 3 June 2005 - second offensive comment. Grayson DP referred to the evidence in the following terms at [50]-[53]: [I]t was common ground that there was a group conversation which took place in the hotel at about 2am. Ms Rowan accepted that she and the applicant and Ms Clifton were joint participants in the conversation and that at some stage, there was discussion about male genitalia which had been a feature of the television program Big Brother. She recalled Ms Clifton having made a remark in that regard. She also recalled a mood of joviality that night and dialogue between herself and the applicant about her recent relationship breakdown and how she jokingly referred to her generally antipathetic feelings towards men. 51 The point of difference, however, between her and the applicant's memory of events that night is that which forms the basis of the allegation against the applicant namely, that he suggested she go out with him and also that he discussed the size of his penis with her. 52 The applicant said he was commiserating with Ms Rowan that night and that he told her he had moved on after a failed relationship and she should do the same. He told her that she should go out not with him but generally and he said the only discussion about male genitalia that night took place in the context of the television programme Big Brother and not in relation to himself. 53 Bearing in mind the fact that the conversation took place at about 2am in the Steyne Hotel and further bearing in mind that alcohol had been consumed throughout the night, it would be unsafe to conclude in the face of the applicant's denial that he conducted himself in the manner alleged. This is particularly so given the absence of supporting or corroborative evidence and given that Ms Rowan otherwise accepted that the conversation between them that night was generally as the applicant described it. 24 At [55] his Honour stated that he did not consider "the evidence in relation to this particular matter to be sufficient to permit a positive finding that the allegation has been made out." His Honour's finding is challenged on appeal. 25 At [60] Grayson DP concluded that the dismissal was harsh and unreasonable: 60 To the extent that the respondent bears the onus of establishing the alleged misconduct upon which the dismissal is based, I am of the view for the reasons set out above that by and large, it has failed to do so. That is not to say that the applicant's conduct should be thought of as generally appropriate. The evidence in my opinion makes it clear that it was not and I refer here to the blurring of proper boundaries between someone in the applicant's supervisory position and those over whom he may be called upon to exercise supervisory control. To be fair to the applicant the evidence (particularly the photographic evidence) also makes it clear that the blurring of those boundaries and occurrence both in and outside the workplace of social interaction of a highly personalised nature, is not just a feature of the applicant's conduct but also of those with whom he worked at Manly Courthouse and in that respect the blame for any souring of personal relationships and/or disharmony in the workplace should not be laid solely at the applicant's door. I am of the view and find accordingly, that the dismissal was harsh and unreasonable. 26 Grayson DP also concluded that reinstatement of Mr Miller in his former position was not impracticable. His Honour made the following orders: 1. The respondent is to reinstate the applicant to his former position on terms not less favourable to him than those that would have been applicable if he had not been dismissed. 2. The respondent is to pay to the applicant an amount equating to the remuneration lost or foregone as a consequence of dismissal. 3. The period of employment is taken not to have been broken by the dismissal. Costs Decision 27 Having obtained a decision in his favour in respect of reinstatement Mr Miller sought an order for costs. His Honour noted at [5] of his Costs Decision as follows: 5 The applicant argues that the respondent unreasonably failed to agree to a settlement of the claim. That failure manifests itself in the respondent's rejection of the applicant's offer of settlement which was put in the course of attempted conciliation on 3 February 2006. The applicant then offered to accept re- employment in a lower graded position within the department and not to seek payment from the date of termination or suspension to the date of conciliation. No counter offer was made and the matter thereafter proceeded to hearing and determination. The applicant further argues that the respondent: · did not make a proper identification of the strengths and weaknesses of its case, including that the matter might ultimately turn on the characterisation of the complaints (which was the case from the earliest time) · did not call alleged witnesses in relation to the allegations of misconduct made against him · did not make a responsible, careful, objective and realistic assessment of the prospects of the litigation including the prospects of a costs order being made against it · at conciliation (or any other time) made no offer or attempt to settle and conducted itself in a manner inconsistent with any intention on its part to settle the matter on a reasonable basis · made allegations which were unmeritorious and which have resulted in significant expense to the applicant who ought not be required to pay for the successful reinstatement application. 28 At [8]-[10] of his Costs Decision the Deputy President concluded: 8 In my opinion, and in having regard in the circumstances to the case propounded by the respondent, it would be wrong to conclude that its rejection of the applicant's offer constituted an unreasonable failure to agree to a settlement of the claim. The test is not whether the respondent's case was ultimately unsuccessful as the applicant impliedly suggests and it is certainly not the case that the allegations against the applicant lacked substance when objectively assessed at the pre-trial stage. Indeed and as reasons for decision in the substantive proceedings reveal, the determination as to whether the applicant misconducted himself in the manner alleged, rested on a fine balance. 9 I consider the respondent had an arguable case based on the sworn evidence of the complainants and compelled as it was to use its best endeavours to prevent and deal appropriately with harassment by employees, it can hardly be said that rejection of an offer to re-employ that applicant constituted an unreasonable failure to agree to a settlement of the applicant's claim. 10 There is no basis for awarding costs in this matter and the application is accordingly refused. Grounds of appeal 29 The grounds of appeal in relation to the Reinstatement Decision were as follows: (1) The Deputy President erred by failing to take into account the principles contained in the Anti Discrimination Act, 1977 contrary to Section 169 of the Industrial Relations Act, 1996. (2) The Deputy President erred in not finding the applicant sexually harassed a female subordinate (Ms Bewley) in breach of both the Respondent's "Code of Conduct and Ethics" and "Harassment Prevention Policy" after the finding at [26] of the Decision that the applicant repeatedly asked Ms Bewley if she was "pregnant" when she was not and there was no reasonable basis for the applicant to think otherwise. (3) The Deputy President erred at [28] of the Decision in finding that the specific allegation of sexual harassment there being addressed had not been made out on the evidence. (4) The Deputy President further erred at [28] of the Decision by implicitly imputing responsibility for the applicant's offensive behaviour towards Ms Bewley by finding the victim of the harassment was responsible for such offensive conduct (in that his Honour found Ms Bewley was "not incapable of setting appropriate boundaries in her inter-personal dealings with the applicant"). (5) The Deputy President erred in not expressly finding at [29] of the Decision that the applicant engaged in misconduct in breach of the Respondent's "Code of Conduct and Ethics" and "Harassment Prevention Policy" when his Honour found that the Applicant had adopted an approach of monitoring and critiquing a female subordinate's work (Ms Rowan) when he was on extended leave. (6) The Deputy President erred at [33] of the Decision in being dismissive of the apprehension of a female subordinate of the applicant about the prospect of a possible "backlash" from the applicant consequent upon her rebuking him for sexually offensive remarks. The finding essentially trivialises the concerns of victimisation by an alleged victim of sexual harassment when seeking to establish appropriate boundaries in her relationship with the applicant. (7) The Deputy President erred at [35] of the Decision in finding that if the female subordinate (Ms Rowan) had felt harassed or offended by the applicant's conduct in the course of a lunchtime conversation at the Ivanhoe Hotel that on any rational basis it could be "assumed" Ms Rowan would have mentioned the improper conduct to a fellow colleague "informally" (that, with respect, was pure speculation on his Honour's part and not a result of logical deductive reasoning). (8) The Deputy President erred at [35] of the Decision in attributing evidence of the alleged victim of the applicant's harassment as a "concession" in that she apparently expressed the view that offensive remarks of a sexual nature made to her were not considered at that point as a sexual proposition. (9) The Deputy President erred at [36] of the Decision in finding that allegation (vi) had not been made out apparently by applying a subjective test of "sexual harassment" as distinct from the tests for appropriate conduct under both the "Code of Conduct and Ethics" and the "Harassment Prevention Policy". (10) The Deputy President erred in his reasoning between [30]-[36] of the Decision in failing to resolve the conflict in evidence between the applicant and the purported victim of sexual harassment (Ms Rowan) in respect of allegation (vi) (that is the Deputy President did not determine whether the applicant attempted to hug Ms Rowan at the Ivanhoe Hotel and tell her "I just want to have sex with you"). (11) Alternatively, the Deputy President erred at [36] of the Decision in finding that allegation (vi) had not been made out by the Respondent before first determining whether the conduct, the subject of the complaint had occurred. (12) The Deputy President erred in finding at [40] of the Decision that if the applicant had touched Ms Rowan on the "backside" on the evening of 25 (sic) April 2005 then such contact was more likely to have been a "careless and inadvertent act" on the applicant's part as the conduct was accompanied by the remarks at the time that the applicant had been "wanting to do that all night". (13) The Deputy President further erred at [40] of the Decision in suggesting that the alleged misconduct of the applicant was diminished or excusable by virtue of it occurring in a social setting. (14) The Deputy President further erred at [40] of the Decision in finding that allegation (vii) of alleged misconduct by the applicant had not been made out by the Respondent on the evidence. (15) The Deputy President erred at [49] of the Decision in not accepting, or giving any weight to, the contents of the Record of Interview of Ms Clifton (which was entered into evidence as part of the investigation report without objection) where Ms Clifton is reported as stating the applicant said to her "Yes, she (referring to Ms Rowan) looks rootable", which account was not denied by the applicant. (16) The Deputy President erred at [49] of the Decision in that, notwithstanding the Deputy President found as a fact that the applicant had said to a subordinate female court officer (Ms Rowan) that she "looked rootable"(which comment Ms Rowan found offensive) at the Steyne Hotel on 3 June 2005, his Honour did not give reasons for finding such conduct fell "short" of sexual harassment. (17) The Deputy President erred at [55] of the Decision in finding that allegation (x) of misconduct had not been made out by the Respondent. (18) The Deputy President erred in his analysis between [56] and [60] of the Decision in not clearly noting the specific findings of misconduct found against the applicant and then identifying all the factual circumstances the Deputy President had regard to in the weighing process before concluding that the dismissal was "harsh and unreasonable". (19) The Deputy President further erred at [60] of the Decision in his analysis by not giving any, or sufficient, weight to the written warning given by the Director General to the applicant on 4 September 2000 that any further breach of the department's Code of Conduct in any respect or failure to scrupulously observe any other policy of the Department covering behaviour of its officers would result in further disciplinary action and could result in termination of the applicant's employment. (20) The Deputy President erred at [60] of the Decision in again transferring responsibility in whole or in part for the applicant's misconduct to the apparent victims of such offensive conduct. (21) The Deputy President erred throughout his Decision in applying (to the extent ascertainable) an apparent subjective test of sexual harassment rather than an objective test. (22) The Deputy President erred at [60] of the Decision in exercising the functions under Part 6 of the Industrial Relations Act in failing to take into account the principles contained in the Anti Discrimination Act, 1977. (23) The Deputy President erred at [64] of the Decision as rejecting as a relevant factor to the issue of reinstatement the applicant's disclosure of confidential material to one of the complainant's (Ms Rowan) ex-partner with whom she was having continuing problems. (24) The Deputy President erred at [65] that [68] of the Decision in concluding that reinstatement of the applicant into his former position at the Manly Court House was practicable having regard to the nature of the complaints that had been levelled against the applicant by subordinate female staff who would face the prospect of possible retribution upon the applicant's return. (25) The Deputy President, having applied the wrong principles and either ignored or given insufficient weight to material facts, erred at [60] of the Decision in finding that the dismissal was harsh and unreasonable (but apparently not unjust). 30 The grounds of appeal in relation to the Costs Decision were as follows: 1. The Commission erred in concluding that the respondent did not unreasonably fail to agree to the settlement of claim No IRC 85 of 2006. 2. His Honour did not properly consider the conduct of the respondent in making no counter proposal or offer in relation to settling the matter. 3. His honour erred in concluding that the applicant impliedly suggested a test for the awarding of costs based on the respondent's case being ultimately unsuccessful. 4. His Honour erred by taking into account the assessment by the respondent of the allegations against the applicant at a pre-trial stage as relevant to the opening of the jurisdictional gateway to costs. 5. His Honour erred if it be said that his Honour considered the pre-trial allegations in relation to any general discretion to award costs, by failing to consider that the discretion to award costs is that costs follow the event but for any disentitling conduct during the conduct of the proceedings. 6. His Honour erred in finding or observing that the applicant proposed that the test for determining whether costs ought properly be awarded was ultimate success, in the face of the actual submissions of the applicant that the respondent a) did not make a proper identification of the strengths and weaknesses of its case - and at a trial did not call alleged witnesses, b) did not make a responsible and careful, objective and realistic assessment of the prospects of the litigation and of a possible costs order (it made no offers), and c) made no offer to settle and conducted itself in a manner inconsistent with an intention to settle, and in relation to discretion, that the significant expense incurred by the applicant in the successful application for the primary remedy of reinstatement. 7. His Honour erred by taking into account an irrelevant consideration, that is, it (sic) took into account the Code of Ethics and part 2A of the Anti Discrimination Act 1977 in relation to the question of the respondents obligation to attempt to settle the matter on a reasonable basis. 8. The Commission failed to give (sic) properly consider the factors relevant to the opening of the jurisdictional gateway, and then to exercise its discretions (sic) as to the granting of costs Leave to Appeal 31 We have decided to grant leave to appeal from the Reinstatement Decision. We have concluded that the Decision was affected by error to the extent that appellate intervention is warranted. For the reasons later expressed, we have decided to refuse leave to appeal in relation to the respondent's costs appeal. Nature of appeal from Reinstatement Decision 32 The appeal from the Reinstatement Decision involves mixed issues of fact and law as to whether the dismissal of Mr Miller was harsh, unreasonable or just and the exercise of discretion by Grayson DP as to what, if any, relief should be granted: see Burge v NSW BHP Steel Pty Ltd (2001) 105 IR 325 at 326. In Commissioner of Police v Dobbie (2006) 157 IR 44 the Full Bench considered an appeal by the Commissioner of Police from a decision of Marks J reinstating a police officer. The Full Bench gave consideration to the nature of the appeal at [17]-[18]. Whilst that case involved a consideration of s 181D of the Police Act 1990, the principles stated by the Full Bench in Dobbie, especially at [18], apply equally here and we respectfully adopt them: 17 As to the nature of the appeal, we respectfully agree with the observations of the Full Bench in Humphries v Cootamundra Ex-Services and Citizen's Memorial Club Ltd (2003) 128 IR 37 at [81]-[84]: 81 As was stated in King v The State Bank (unreported, Wright J, President, Walton J, Vice-President, & Kavanagh J, 23 December 2002 at 65): The nature of an appeal is to be determined as a matter of construction having regard to the provisions of the relevant statute providing for the appeal and the nature of the decision the subject of appeal. 82 It should be noted at the outset that the decision of Deputy President Sams to which this appeal relates was not one of a discretionary nature of the kind considered in House v The King . The question which his Honour determined was whether the dismissal was harsh, unreasonable or unjust in the circumstances. The determination of that question involved mixed issues of fact and law, rather than the exercise of discretion per se (see Burge v NSW BHP Steel at 4, citing Hollingsworth v Commissioner of Police (No 2) (1999) 47 NSWLR 151 at 181-182 and Port Macquarie Golf Club Ltd v Stead (1996) 64 IR 53 at 59). As such, the appeal is an appeal in stricto sensu (see King v State Bank at [65]). As cited in King v State Bank at [70], the relevant principles to be applied on appeal are those set out in the joint decision of Hungerford J and Murphy C (with respect to which Peterson J agreed, at 240) in Re Solicitors State Award (1997) 72 IR 225 (citing Haynes v CI&D Manufacturing Pty Limited (1995) 60 IR 149): It is not, of course, we would interpose, every case which would require an appellate court to substitute its views for those of the primary judge, and in that respect we agree with the comment by Hill J sitting on appeal in this Court in Hussmann Australia Pty Ltd v Walker ((1993) 48 IR 396 at 406) to the effect that there should be no interference with "conclusions on facts unless (the Full Court) is of the opinion that they were not reasonably open on the evidence". 83 The relevant principles to be applied on appeal in such circumstances may conveniently be adopted from the decision of the Full Bench in Burge v NSW BHP Steel (at [7]): The general principle is that an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge; in deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusions of the trial judge, but, once having reached its own conclusion, will not shrink from giving effect to it: Warren v Coombes (1978) 142 CLR 531 at p 551. And, in addressing error, an appellate court should not interfere with the trial judge's conclusions on facts unless it is of the opinion that they were not reasonably open (or were clearly wrong) on the evidence: Victorian Stevedoring and General Contracting Co Pty Ltd v Dignan (1931) 46 CLR 73 at p 107; Autobake Pty Ltd v Budd [1986] 19 IR 18 at p 25; Abalos v Australian Postal Commission (1990) 171 CLR 167 at pp 178 ff; Haynes v C I & D Manufacturing Pty Ltd (1994) 60 IR 149 at pp 153-155; and Port Macquarie Golf Club v Stead (64 IR at p 59). [Emphasis added]. 84 These principles were also articulated in Wilson v Department of Education and Training [2000] NSWIRComm 120 (at [61]-[62]): The appellate court substitutes its own judgments only if the trial judge makes a finding of fact which is wrong or not reasonably available on the evidence: ( Camilleri's Stock Feeds Pty Ltd v Environmental Protection Authority (1993) 32 NSWLR 683 at 688). The appellate court should otherwise not intervene. As Priestley JA recently observed in Martin v Byrnes (unreported, Court of Appeal, Priestley , Stein JJA and Sheppard AJA, 25 May 1999): The cases running through the hundred years from Coghlan v Cumberland [1898] 1 Ch 704 to Earthline Constructions [(1998) 160 ALR 588] all show that courts such as this court are duty bound to reverse conclusions based on trial judges' views of fact when those views of fact are plainly wrong but are equally duty bound not to reverse such decisions of a trial judge merely because the intermediate appellate court itself takes a view different from that of the trial judge of the factual findings that should have been made. This Commission and its predecessors have adopted the above view: ( Hussmann Australia Pty Ltd v Walker (1993) 48 IR 396 at 406; Haynes v CI&D Manufacturing Pty Limited (1995) 60 IR 149 at 154). 18 Humphries and the cases cited therein, are authority for the following relevant propositions: (1) The appeal in these proceedings is an appeal stricto sensu and not by way of a hearing de novo . (2) A decision as to whether a dismissal was harsh, unjust or unreasonable involves mixed issues of fact and law: see also Evans at [1] per Walton J. (3) If it is found the dismissal was harsh, unjust or unreasonable then the next issue involves the exercise of a discretion as to what, if any, relief should be allowed. (4) An appellate court or tribunal is required to determine whether findings of fact and the inferences drawn from them by the primary judge, and findings as to the law, reveal any error authorising appellate interference. (5) The appellate court or tribunal will substitute its own judgments only if the trial judge has fallen into error of law or has made a finding of fact that is clearly wrong or is not reasonably open on the evidence. Otherwise, the appellate court or tribunal should not intervene. (6) An appellate body is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge; in deciding what is the proper inference to be drawn, the appellate body will give respect and weight to the conclusions of the trial judge, but, once having reached its own conclusion, will not shrink from giving effect to it. (7) The principles governing appeals against a decision involving the exercise of a discretion by the primary judge require that the appellate body is not justified in interfering with the decision appealed from unless it reaches the clear conclusion that the judge acted upon a wrong conclusion, or allowed extraneous or irrelevant matters to guide or affect him or her, or mistook the facts, or did not take into account some material consideration, in which case the appellate body may exercise its own discretion in substitution for that of the primary judge if it has the materials for doing so. Approach on appeal 33 The first task on the appeal is to consider whether, in making findings of fact and drawing inferences from those facts, and in making findings as to the law, Grayson DP committed any error in finding the dismissal was harsh and unreasonable. The next task, depending on the outcome of the first, is to consider whether his Honour erred in the exercise of his discretion in reinstating Mr Miller. Thirdly, depending on its findings regarding the first and second of its inquiries, the Full Bench will need to consider which of the powers contained in s 192 of the Act should be exercised. Section 192 is in the following terms: 192 Powers on appeal (1) On an appeal under this Part to a Full Bench of the Commission, the Full Bench may (in accordance with this Act): (a) confirm, quash or vary the decision of the Commission concerned, or (b) direct a member of the Commission to take further action under this Act to carry its decision on the appeal into effect, or (c) refer the matter back to the member of the Commission, with such directions or recommendations as the Full Bench considers appropriate. The Full Bench may determine a part of the matter and refer the remainder back to the member of the Commission. (2) The Full Bench may direct that its decision on an appeal under this Part take effect as from any specified date after the lodging of the original application relating to the decision. 34 Any consideration of whether the Deputy President committed an error of fact or law needs to be undertaken against the background of understanding the nature of the misconduct for which Mr Miller was dismissed and we will address that next. 35 Before doing so, however, we should comment that the Full Bench did not have the benefit, as Grayson DP did, of observing the witnesses, including Mr Miller, giving evidence. Nevertheless, we consider that in the overall circumstances of the matter, that has not precluded the Full Bench reaching the conclusions that it has. An important factor in those circumstances is the detailed and careful decision the subject of the appeal. We make that observation notwithstanding our disagreement with a number of parts of his Honour's decision. Appellant's policies in relation to harassment 36 In a general sense, Mr Miller was dismissed on the grounds that his conduct constituted both harassment and sexual harassment in contravention of the Department's Harassment Prevention Policy and its Prevention of Sexual Harassment in the Workplace Policy, and was also in breach of the Department's Code of Conduct and Ethics. The Code noted that many of the obligations imposed, on both the Department and employees, were based on legislation including the Anti Discrimination Act 1977. The Code expressly listed a number of expectations for individual staff, including to: · act without discrimination; · not use offensive or obscene language. 37 The Code further noted under the sub heading "Personal and Professional Behaviour" that: We will ensure that we are familiar with the requirements of Equal Employment Opportunity, Anti Discrimination and Harassment … We will at all times act with propriety in our dealings with others. 38 The Department's Harassment Prevention Policy gave a definition of harassment as follows: Harassment is any form of behaviour that is not wanted, not asked for and creates a hostile environment. It is behaviour that humiliates somebody (puts them down), offends or intimidates them. Generally, harassment is an ongoing series of events. However, harassment does not need to happen more than once for it to be against the law. Just one act can be enough to constitute harassment. Harassment is not always behaviour that is deliberately intended to offend. In the workplace, harassment is behaviour that results in a co-worker, manager, client or visitor feeling intimidated, offended or belittled. Perception is the critical factor. The issue is how it affects the person, not whether the behaviour is deliberate or unintentional. 39 The nature of harassment was explained in the Policy in the following terms: Harassment is often about one person (or a group of people) using power inappropriately over another person or group of people. This power imbalance can sometimes make it difficult for a person who is being harassed to say no, or even to give an indication that the behaviour is not wanted. Harassment can occur both in and outside of the work environment. If an incident occurs at an event outside of work it may still be considered harassment if it impacts on workplace relations. 40 Under the Heading "Forms of Harassment" the Policy stated: As a guide, some forms of harassment could include: · abuse, threats, suggestive remarks or rumour spreading; · unwelcome suggestions (either indirect or explicit), requests for sexual favours, sexual propositions (including repeatedly asking someone out), suggestive looks, or wolf whistling; · stalking or persistently following someone; · displaying sexually suggestive, racist, offensive or derogatory material; · sexually, racially, etc., offensive gestures; · jokes or practical jokes that cause embarrassment; · questions about personal life, invasion of personal space or unnecessary physical contact (eg. slapping, touching, or kissing); · ignoring, isolating or segregating a person or group because of their sex, homosexuality, race, etc.; · derogatory comments about a person's residential location; or · sexual assault (as well as being a crime under the Crimes Act). 41 Under the heading "Responsibilities of managers and supervisors" it was stated: It is essential that all managers and supervisors promote an atmosphere of trust through clear communication and by being approachable. All managers and supervisors should ensure a harassment free work environment by: · prevention - by ensuring proper standards of conduct are maintained at all times and by setting an example for all staff (Appendix A); and · action - by taking appropriate measures to stop any form of harassment as soon as they become aware of it. It is the responsibility of all managers and supervisors to investigate any allegation of harassment. Any complaint of harassment is serious and must be investigated promptly and confidentially. There may also be occasions when it is necessary for a manager or supervisor to actively address an observable harassment situation before a complaint is actually made. 42 The Department had also promulgated a specific policy in respect of sexual harassment, entitled "Prevention of Sexual Harassment in the Workplace", which stated inter alia: The elements of sexual harassment contained in section 22A of the New South Wales Anti-Discrimination Act are that: · there is a sexual advance, a request for a sexual favour or conduct of a sexual nature · the advance, request or conduct is unwelcome in the circumstances, a reasonable person would have anticipated that the person would be offended, humiliated or intimidated. Sexual harassment includes a broad range of conduct such as: · sexual comments, taunts, propositions, jokes and questions about sex life · display or distribution of material such as cartoons, posters, graffiti, email, videos · leering, sexual gestures, kissing, hugging or other touching of a sexual nature. In general, sexual harassment is any form of sexually related behaviour that: · you do not want · offends, humiliates or intimidates you in the circumstances, a reasonable person should have expected would offend, humiliate or intimidate you. ... The Department has a zero tolerance policy to sexual harassment in the workplace and all managers have a role to play in preventing any form of harassment. It is important managers inform staff of the following: · what harassment is and that it is unacceptable - prevent harassment by making it clear that action will be taken if it is found to occur · inform people being harassed about the steps they can take if they are being harassed – Harassment Prevention Policy · inform people about how to respond if they witness or hear of harassment occurring · inform people about how to investigate allegations of harassment fairly and appropriately. ... 43 The Harassment Prevention Policy, the Department's Code of Conduct and Ethics and its Prevention of Sexual Harassment in the Workplace Policy were comprehensive documents that explained in unambiguous terms what was required of employees in terms of their conduct at work, ethical standards of behaviour, what constituted harassment and why harassment, in any of its forms, was not to be tolerated. 44 Undoubtedly, Mr Miller was aware of the Code of Conduct and there was no suggestion that Mr Miller was unfamiliar with the Harassment Prevention Policy or Prevention of Sexual Harassment in the Workplace Policy or that he did not understand he was bound by the Code and Policies. Indeed, Mr Miller accepted that it was part of his duties to enforce those policies. Mr Miller also professed an awareness of the Anti Discrimination Act. 45 We note that in respect of the Code, it was specifically drawn to Mr Miller's attention by Mr Glanfield in 1999 when an inquiry revealed Mr Miller had: ...used Departmental equipment to forward an electronic message which contained a sexually suggestive message to ... an officer at the Office of the Director of Public Prosecutions. 46 Mr Miller was warned that: Should you in the future breach the Department's Code of Conduct in any respect or fail to scrupulously observe any specific instruction or other policy the Department promulgates which covers the behaviour of its officers, further disciplinary action will be taken which may result in termination of your employment. 47 In considering the allegations of misconduct against Mr Miller the necessary benchmarks against which his Honour was required to assess the allegations were the Code of Conduct and Ethics and the Harassment Policies, underpinned as they are by the Anti Discrimination Act. After all, it was the criteria contained in the Code and the Policies that was applied by the Director General in coming to the view he did regarding the nature and gravity of Mr Miller's misconduct. Anti Discrimination Act 48 The Deputy President was also required to take into account the principles of the Anti Discrimination Act in determining Mr Miller's claim: s 169(1) of the Industrial Relations Act. The Anti Discrimination Act relevantly provides: 22A Meaning of "sexual harassment" For the purposes of this Part, a person sexually harasses another person if: (a) the person makes an unwelcome sexual advance, or an unwelcome request for sexual favours, to the other person, or (b) the person engages in other unwelcome conduct of a sexual nature in relation to the other person, in circumstances in which a reasonable person, having regard to all the circumstances, would have anticipated that the other person would be offended, humiliated or intimidated. 22B Harassment of employees, commission agents, contract workers, partners etc (1) ... (2) It is unlawful for an employee to sexually harass a fellow employee or a person who is seeking employment with the same employer. ... 49 Whilst Grayson DP did not, in any consistent way, draw any direct links between the alleged incidents of misconduct and the Code, Policies and Anti Discrimination Act for the purpose of demonstrating whether there had been breaches of those instruments, we accept that his Honour was alive to Mr Miller's obligations under the Code, Policies and Act and that Grayson DP made his assessments as to whether there was or was not misconduct having regard to the standards of behaviour set by those instruments. The question, however, remains whether his Honour's assessments were correct given the facts on which they were required to be based. So that, in relation to the first ground of appeal, we do not consider his Honour erred by failing to take into account the principles of the Anti Discrimination Act but whether he applied the principles correctly is to be determined having regard to each of the incidents raised in the appeal. 50 We would add this observation, however: Grayson DP was not assisted, as he should have been, to a proper extent on what constituted sexual harassment. It was not sufficient for the appellant to merely point to the provisions of its policy or the bald terms of s 22A of the Anti Discrimination Act and contend sexual harassment had occurred. There should have been a thorough analysis of the facts relating to each allegation and submissions made as to the application of the relevant law. That did not occur to the extent it should have. Harassment outside the workplace 51 The other issue of a general nature was whether the appellant was entitled to hold Mr Miller accountable for alleged misconduct that occurred away from the workplace and outside of working hours. The appellant's approach at first instance was that it had a reasonable, legitimate expectation that staff, including Mr Miller, when interacting with other staff inside and outside the workplace, would conduct themselves in a manner that would not have consequential adverse implications for workplace relations. Reference was made to the Harassment Prevention Policy that: Harassment can occur both in and outside of the work environment. If an incident occurs outside of work it may still be considered harassment if it impacts on workplace relations. 52 There is no reason to doubt the correctness of that statement. However, the statement serves to be clarified by the decision of Ross V-P of the Australian Industrial Relations Commission ("AIRC") in B Rose v Telstra Corporation Limited (Print Q9292, 4 December 1998) where his Honour formulated a summary of principles that may be applied in considering whether an employee's out of hours conduct justifies termination of the employee's employment: It is clear that in certain circumstances an employee's employment may be validly terminated because of out of hours conduct. But such circumstances are limited: · The conduct must be such that, viewed objectively, it is likely to cause serious damage to the relationship between the employer and employee; or · The conduct damages the employer's interests; or · The conduct is incompatible with the employee's duty as an employee. In essence the conduct complained of must be of such gravity or importance as to indicate an objection or a repudiation of the employment contract by the employee. See also the decision of the Full Bench of the AIRC in Anthony Farquharson v Qantas Airways Ltd (Print PR 971685, 10 August 2006) at [18]-[20]. 53 Grayson DP had regard to the decision in Rose. At [58]-[59] his Honour stated: 58 In Rose v Telstra Corporation Limited IRComm 1592 to which I was taken, Ross VP discussed the issue out of hours conduct and held (after considering the authorities) that such conduct might justify a termination where the conduct breaches an implied or express term of the employment contract; where the conduct is of such gravity or importance as to indicate a rejection or repudiation of the employment contract and is likely to seriously damage the employer/employee relationship or damages the employer's interests or is incompatible with the employee's duty as an employee. Absent those elements, the conduct will lack the connection with work necessary to provide a valid reason for dismissal (see also Hussein v Westpac Banking Corporation (1995) 59 IR 103). 59 In saying those things about out of hours conduct, I should not be taken to mean that none of the out of hours allegations in this case could, if proven, have been validly taken into account. It is merely to observe that caution needs to be exercised in the extent to which an employee may be held accountable by an employer for out of hours activities. 54 His Honour's reference to "saying those things about out of hours conduct" was a reference to paragraph [57] of his decision, where he stated: 57 The reality is, however, and leaving aside for a moment the conclusions reached in relation to the individual allegations, that much of the alleged misconduct - indeed the overwhelming majority of it when viewed by degree of potential seriousness - involved social activity at various licensed establishments outside working hours and away from the workplace and it seems to me, as Mr Coleman submitted, that there are significant limitations on an employer's legitimate interest in an employee's conduct outside the workplace. These limitations apply for a number of fairly obvious public policy reasons including but not limited to privacy considerations. 55 The appellant also drew our attention to the meaning of "misconduct" as it is defined in s 43 of the Public Sector Employment and Management Act. The statutory definition provides, inter alia, that the subject-matter of an allegation of misconduct may relate to an incident or conduct that happened while the officer concerned was either on duty or not on duty. Mr Miller was employed pursuant to the Public Sector Employment and Management Act and as the appellant submitted, his rights must be ascertained by reference to its provisions. Mr Benson referred to Director - General of Education and Others v Suttling (1986) 162 CLR 427 where Brennan J stated at 437-438: To the extent that the statute governs the relationship, it is idle to inquire whether there is a contract which embodies its provisions. The statute itself controls the terms of service... 56 Given that Grayson DP found that none of the allegations had been made out to a level that would justify dismissal, it was probably not necessary for his Honour to have applied the tests laid down in Rose. But the issue of out of hours conduct remains a live issue on the appeal and we propose to address it in the context of dealing with the appeal grounds as they relate to the individual incidents that led to Mr Miller's dismissal. Sexual harassment of Ms Bewley 57 The first of the incidents raised on the appeal involved Ms Bewley and the allegation that Mr Miller sexually harassed Ms Bewley by repeatedly asking if she was pregnant. Mr Miller apparently was friendly with both Ms Bewley and her partner and it seems a "running joke" developed about when Ms Bewley might fall pregnant to her partner. 58 His Honour accepted (at [26]-[27] of his decision) Ms Bewley's version of events that Mr Miller repeatedly asked her about whether she was pregnant, and that she had asked Mr Miller to stop. However, his Honour said: Ms Bewley was not incapable of setting appropriate boundaries in her interpersonal dealings with the applicant and further, that whilst she regarded his behaviour at times in the workplace as less than appropriate, she also thought of him positively as someone who cared about and made an effort by and large, to ensure harmony in the workplace. It appears that it was on this basis that his Honour found the allegation was not made out: [28]. 59 The Deputy President's treatment of this incident in his Reinstatement Decision left his Decision open to the criticism that his Honour excused the misconduct of Mr Miller by transferring responsibility to the victim. Mr Benson for the appellant submitted: It is an extraordinary proposition that a female subordinate who is the subject of sexual harassment at work by her male supervisor ought be held responsible for her supervisor's conduct by not establishing "appropriate boundaries". Under the departmental policies it was the supervisor who had primary responsibility for ensuring a harassment free workplace; not the subordinate. 60 We are satisfied the questioning of Ms Bewley by Mr Miller regarding pregnancy, or at least some of it, occurred during working hours. It is apparent that Ms Bewley found the questioning, both as to its manner and subject, offensive and asked him to stop, which he did. Undoubtedly, Mr Miller engaged in conduct of a sexual nature towards Ms Bewley by persistently asking her whether she was pregnant. Ms Bewley regarded the conduct as unwelcome. Would a reasonable person, having regard to all the circumstances, have anticipated that Ms Bewley would be offended, humiliated or intimidated? That is to say, the test is an objective one that requires the finder of fact to ask whether a reasonable person would consider that the conduct in question would be likely to offend, humiliate or intimidate: see for example, Dee v Commissioner of Police, NSW Police & Anor (No 2) (2004) EOC 93-346 at [51]. 61 It has been held that: Where a person has made known that the conduct is unwelcome, it can be generally be concluded that the conduct is such that a reasonable person would have anticipated that the other person would be offended: Asnicar v Mondo Consulting Pty Ltd [2004] NSWADT 143 at [90]. 62 The onus, of course, was on the Department to show that, having regard to all the circumstances, a reasonable person would have anticipated Ms Bewley would be offended, humiliated or intimidated by the questioning relating to pregnancy. Given that the dismissal of Mr Miller was summary in its nature, the onus was at the level laid down in Briginshaw v Briginshaw and Another (1938) 60 CLR 336 at 362 per Dixon J. 63 What clouds the issue here is that there was evidence, as his Honour noted, of a friendship between Ms Bewley and Mr Miller and that it was not unusual for them "to make highly personal observations to each other and about each other and such banter was not regarded as offensive". In relation to the questioning about pregnancy, it is important to note that it appears that the questioning had been going on for some time and eventually Ms Bewley became fed up and offended and asked Mr Miller to stop. Would a reasonable person in Mr Miller's position, have anticipated Ms Bewley would be offended, humiliated or intimidated by the questioning relating to pregnancy when: she had a friendship with Mr Miller; engaged in highly personal observations about him in the course of their "banter"; and, made no objection to his questioning "over a period of a couple of weeks"? 64 Notwithstanding these mitigating factors, in our opinion a reasonable person would have anticipated that a constant barrage of highly personal questioning of Ms Bewley at work about whether she was pregnant would cause her to be offended. It was Ms Bewley's evidence regarding Mr Miller's questioning that it was in the following context: "a constant commenting on 'Have you been doing it all weekend' and ... 'I know you have been fucking all weekend'". 65 We find Grayson DP erred in finding the appellant's allegations in respect of Mr Miller's conduct towards Ms Bewley were not made out. Harassment of Ms Rowan - leaving of notes 66 The next incident raised on the appeal was Ms Rowan's complaint of harassment. The circumstances alleged were that Mr Miller attended Manly Court House outside normal work hours throughout April 2005 and perhaps early May 2005 whilst on extended leave and left messages for Ms Rowan relating to her duties as Acting Assistant Registrar. Mr Miller estimated he attended work out of hours whilst on leave some 20 times over three months. 67 His Honour made the following findings of fact at [29] of his decision: (a) Mr Miller did adopt an approach of monitoring and critiquing Ms Rowan's work out of work hours and whilst on extended leave; (b) Such conduct was beyond what one would reasonably find acceptable; (c) Ms Rowan felt, and had every right to feel, patronised by Mr Miller's conduct. 68 In light of these findings and given what constitutes harassment, we do not consider that Grayson DP was correct in finding that the Director General's fifth allegation had not been made out. Mr Miller's "monitoring and critiquing" of Ms Rowan's work occurred at the workplace whilst she was not present; Ms Rowan found such conduct patronising - "as if I was stupid"; and, Ms Rowan took up the issue with Mr Miller and informed him she did not like his practice of leaving notes. 69 In our opinion, Grayson DP erred in not finding Ms Rowan had been the victim of Mr Miller's harassment at work, although we must add that, taken in isolation, the harassment could hardly be regarded as conduct justifying termination of employment. Sexual harassment of Ms Rowan - Ivanhoe Hotel 70 The next incident flowed from the last and occurred when Ms Rowan encountered Mr Miller at the Ivanhoe Hotel and raised the issue of the notes with him. Mr Miller was on leave at the time and although the incident occurred outside the workplace it was work related. Any response by Mr Miller to Ms Rowan's concerns about him monitoring and critiquing her work should have been given in a proper and professional way as if the issue had been raised at work during working hours. If Mr Miller was not in a position to respond at the time, he should have deferred responding and taken the matter up with Ms Rowan at work, even if that meant breaking his leave, which would not seem to have been a problem given his after-hours visits to the Registry during his leave. 71 Ms Rowan's complaints about the Ivanhoe Hotel incident appear to be that Mr Miller attempted to hug her as she was leaving and that he said to her, "you know I just want to have sex with you." Mr Miller emphatically denied saying those words and said that rather than trying to hug her, he merely reached up and patted Ms Rowan on the waist. 72 Mr Benson, for the appellant, contended that in view of Mr Miller's denial of saying the words attributed to him by Ms Rowan an issue of credit arose. It was submitted Grayson DP failed to address the question of the respondent's credit. If he had done so, it was submitted, his Honour should have found that Mr Miller was not a witness whose evidence could be accepted as a witness of credit without independent corroboration. 73 To illustrate the point, Mr Benson said that elsewhere in his Reinstatement Decision the Deputy President: (1) Noted the equivocal nature of Mr Miller's evidence at [20] when his Honour compared Mr Miller's "absolute" denial of touching Ms Watterson's backside with Mr Miller's concession in cross-examination that he may have "inadvertently or accidentally" so touched her; (2) Preferred the evidence of Ms Bewley to the denial of Mr Miller that she told Mr Miller to cease making offensive remarks about her non-existent pregnancy; (3) Found the evidence of Mr Miller was "lacking in clarity and candour" on the issue of whether Mr Miller knew or intended Ms Rowan to be the recipient of notes he left in the workplace whilst on extended leave at [29] and [31]; (4) Preferred Ms Rowan's account that Mr Miller told her that she " looked rootable" when his Honour found the respondent did not strictly deny the comment [49]. 74 It was further submitted that in assessing Mr Miller's credit, his Honour ought to have had regard to the contradictory evidence given by Mr Miller on important matters. For example: (1) The vacillation between Mr Miller's denial in his submission to the Director General dated 13 December 2005 that he "never said anything to the girls about my penis" as compared with Mr Miller's assertion in his affidavit of 10 March 2006 of having no recollection whether he discussed the size of his penis with Ms Rowan or not in a particular circumstance. (2) The vacillation between denial by Mr Miller in his affidavit of 10 March 2006 of referring to Ms Rowan as "looking rootable" and later under cross examination having no recollection in a discussion with Ms Clifton; (3) The vacillation between Mr Miller's denial in his affidavit of 10 March 2006 of telling Ms Rowan directly she " looked rootable" and later under cross examination having no recollection. 75 Mr Benson also submitted that the language used by Mr Miller towards Ms Rowan was "in character". He referred to the evidence of Ms Bewley who said Mr Miller had made: · unsolicited comments on the sexual habits of female staff members; · comments about one female staff member's physical size and how she was "looking really fat"; · derogatory remarks about females in general so that the whole office could hear in a tone that reduced females to, I feel, a lower class, and solely as sexual objects. 76 Further reference was made to the evidence of Ms Rowan who stated: During my ten years at Manly I have observed a number of questionable incidents involving Bradley Miller or have been told by the person themselves, that are of a professionally inappropriate or chauvinistic nature. Most persons have been female but not always... 77 Mr Benson also referred to Ms Clifton's evidence about the bowls night when Mr Miller said to her on that occasion that Ms Rowan "looks rootable". 78 Grayson DP did not determine whether or not Mr Miller grabbed Ms Rowan on the waist or attempted to cuddle her or whether he said to her "you know I just want to have sex with you." His Honour seems to have dismissed Ms Rowan's allegation about the words spoken on the basis there was "no contemporaneous record of the incident and no corroborative evidence" and that, in any event, Ms Rowan "did not consider them [the words spoken by Mr Miller] as an invitation, unwelcome or otherwise, but rather a childish throw away comment." At [36] of the Reinstatement Decision his Honour stated: 36 At all events and as Mr Coleman submitted, it is difficult to see in the circumstances of this allegation, how the test for sexual harassment can be satisfied where neither of the participants in the conversation namely, Ms Rowan and the applicant, feel they have been harassed or have harassed. I am of the view and find accordingly that this allegation has not been made out. 79 Ms Rowan's evidence about the encounter at the Ivanhoe Hotel and the words spoken to her by Mr Miller, who Ms Rowan said was moderately affected by alcohol, was that: (1) After Mr Miller spoke the words, Ms Rowan said, "Don't speak to me like that because I am speaking to you about something professional. I don't want you to start and feel like sex." (2) "Then things had got a little bit uncomfortable". (3) Ms Rowan did not "really want to leave things uncomfortable and said to Mr Miller, "Okay then", and patted him on the shoulder because she "really didn't want any backlash later". (4) Ms Rowan's did not take the words "I just want to have sex with you " as a proposition by Mr Miller. Rather, "It was like an attention thing: I am giving you the attention because I just want to have sex with you"... "I thought it's to do with him leaving me notes and him ... giving me attention by leaving me notes. I thought that's what it stems from. I don't consider that a proposition." 80 Ms Rowan had decided to take up the issue of Mr Miller leaving notes about her work when she saw him at the Ivanhoe Hotel during his period of leave. We do not accept that because Mr Miller was on leave there could have been no misconduct on his part even if Ms Rowan's version of events was to be preferred. Mr Miller was a senior employee with the Department with supervisory responsibility and the matter he was asked to respond to was work-related. If it were to be concluded that Mr Miller sexually harassed Ms Rowan we consider that such conduct would be incompatible with Mr Miller's duty as an employee. 81 According to Ms Rowan, after she raised the issue of the notes, Mr Miller responded to her concerns, in part, by saying, "I just want to have sex with you". Mr Miller denied saying the words. The Deputy President's finding that Ms Rowan did not consider the words spoken by Mr Miller as an "invitation, unwelcome or otherwise, but rather a childish throw away comment" is at odds with Ms Rowan's evidence that she had a professional matter to raise with Mr Miller and did not want him to speak to her the way he did. That Ms Rowan did not regard Mr Miller's words as propositioning her for sex does not support a finding that Ms Rowan did not find the words unwelcome; on her evidence she clearly did. Moreover, there was no evidence that Ms Rowan regarded the words as a "childish throw away comment". Rather, Ms Rowan interpreted the words, together with Mr Miller's conduct in leaving notes after hours, as "an attention thing" because, whilst he was not propositioning her, she felt he was signalling that he harboured a desire for sex with her. Mr Miller denied he felt any sexual attraction to Ms Rowan. 82 If Ms Rowan's evidence about the Ivanhoe Hotel incident were to be accepted, the question would then become whether she was sexually harassed. Whether her evidence is to be accepted involves a consideration of her credibility as a witness as opposed to Mr Miller's credibility. Grayson DP did not address the credibility of either Ms Rowan or Mr Miller and dismissed the allegation of sexual harassment on a basis that we consider to have been erroneous. It then becomes necessary for us to address the credibility issue. In that respect, for the reasons generally submitted by Mr Benson, we consider the evidence of Ms Rowan is to be preferred to that of Mr Miller. His Honour preferred Ms Rowan's evidence to that of Mr Miller in relation to two other incidents and there is no basis upon which to disbelieve the evidence of Ms Rowan in relation to the Ivanhoe Hotel incident. 83 We conclude that Mr Miller said the words attributed to him by Ms Rowan and placed his hand on her waist. That it is highly probable that he did say the words is reinforced by evidence that to have done so was entirely in character for Mr Miller. It follows that Mr Miller engaged in conduct of a sexual nature. It was conduct Ms Rowan did not welcome. 84 Would a reasonable person in Mr Miller's position have anticipated Ms Rowan to be offended, humiliated or intimidated? We consider in this case that a reasonable person would have anticipated that Ms Rowan would be offended by Mr Miller's comment. We recognise that it was only one incident but it is not necessary for it to be a course of conduct engaged in by the harasser to be regarded as sexual harassment. The comment, "I just want to have sex with you", caught Ms Rowan completely by surprise and Ms Rowan made it clear she did not welcome it. Ms Rowan raised a legitimate work-related matter with Mr Miller only to be met with a sexually charged comment. There was no relationship that existed between Ms Rowan and Mr Miller or other circumstance that would render his comment acceptable or inoffensive. 85 We note the evidence that when Ms Rowan was leaving the Hotel she said to Mr Miller, "Okay then" and patted him on the shoulder. Her evidence was that she wanted to avoid a backlash later, by which we understood her to mean she did not want to be the subject of any vindictiveness on Mr Miller's part when he returned from leave. To some extent, Ms Rowan's evidence that she patted him on the shoulder and said okay, adds to the plausibility of her evidence that Mr Miller said to her "I just want to have sex with you." If she had concocted those words, it is unlikely she would admit to having said it was okay and patted him on the shoulder. 86 Moreover, Ms Rowan considered that Mr Miller could be rude, patronising and offensive at work. It is understandable she did not wish to make herself a target. 87 Taken on its own, having regard to all of the circumstances, the Ivanhoe Hotel incident would not be regarded as a serious contravention of the appellant's policies regarding sexual harassment and was not one that warranted summary dismissal. But it, nevertheless, constituted sexual harassment by a person who was under a particular obligation, given his role and power relationship to Ms Rowan, not to conduct himself in such a manner. Taken together with the other incidents of sexual harassment that we shall come to, Mr Miller's conduct at the Ivanhoe Hotel takes on a more serious quality. 88 We find that Grayson DP erred in finding the fifth allegation had not been made out. Sexual harassment of Ms Rowan - bowls night 89 The next allegation was that Mr Miller sexually harassed Ms Rowan on 25 April 2005 by purposely touching her on the right buttock and saying to her that he had been "wanting to do that all night". Mr Miller denied the allegation. 90 The Deputy President concluded at [40] of the Reinstatement Decision that: [I]f there was contact made with Ms Rowan's backside that night it seems to me more likely to have been a careless and inadvertent act on the applicant's part and something which must be viewed in the context of both the applicant and Ms Rowan having been affected by alcohol at the time and both of them engaging in the frivolity of the occasion. I do not consider this allegation to have been made out. 91 The Deputy President appears to have discounted Ms Rowan's evidence about what happened at the bowls night on the basis that she was affected by alcohol, she had been engaging in "high-fiving" with Mr Miller, her recollection of events was unclear and there was no corroborative evidence. 92 Ms Rowan conceded that she "had quite a bit to drink" at the bowls night. There was evidence to the effect that Ms Rowan was so affected by alcohol she was incapable of recalling Mr Miller's conduct but that was Mr Miller's evidence, who also stated somewhat self-servingly, that he, on the other hand, was not "heavily intoxicated". Nevertheless, Ms Rowan's recollection about what occurred was quite unequivocal: Mr Miller touched her on the right side of her buttock and said to her, "I have been wanting to do that all night". 93 As to the absence of corroborative evidence, Ms Rowan said that standing behind her and Mr Miller when the buttock-touching incident was alleged to have occurred, were Mr Condie and Mr Barber. Ms Rowan was not, however, certain either person saw the incident. However, Ms Rowan said she later told Mr Condie of the incident. Mr Condie was not called because, apparently, he retired overseas. 94 Mr Miller stated in his submission to the Director General dated 13 December 2005 that: Leanne [Ms Rowan] is a 'strong personality' and because of her very loud and opinionated personality it is absolutely impossible to believe that if I had deliberately touched her inappropriately by patting her on the behind that other people hadn't seen it and that she didn't protest loudly at the time. Leanne is a bully and always complains loud and hard immediately something happens that she doesn't like. I and every single person who knows her would find it impossible to believe that someone would touch her inappropriately and she would not yell and bellow her protests loud and hard at the time. 95 In his affidavit Mr Miller stated: Ms Rowan is quick to take offence and would have treated any action like that [touching on the buttock] with instant annoyance. She did not. Mr Miller did not seek to corroborate his evidence regarding Ms Rowan's propensity to take quick and loud offence, despite his statement that everyone who knew her was of the same opinion. 96 His Honour's conclusion that if contact was made by Mr Miller with Ms Rowan's buttock that it had to be viewed in the context of them having been affected by alcohol and that both were "engaging in the frivolity of the occasion", took no account of Ms Rowan's evidence that the touching was allegedly accompanied by the words, "I have been wanting to do that all night". 97 His Honour's finding that the allegation was not made out necessarily meant that his Honour did not accept Ms Rowan's evidence that Mr Miller said to her "I have been wanting to do that all night". It must follow that his Honour preferred Mr Miller's evidence, namely, that he did not say the words attributed to him and that either Mr Miller did not touch Ms Rowan or, if he did, it was accidental. 98 We are unable to discern any proper basis for his Honour's rejection of Ms Rowan's evidence about what occurred at the bowls night. That both Mr Miller and Ms Rowan were affected by alcohol, as his Honour found, is not a basis for disbelieving Ms Rowan, given her clear recollection of the incident. Even if Ms Rowan could not recall accurately all of the events of that evening, to reject her evidence about the words spoken to her by Mr Miller means that his Honour considered the words must have been concocted by Ms Rowan. It is highly improbable that she wrongly recollected the words having been spoken if they were not spoken at all. We can thus discern no proper basis upon which his Honour could find the words attributed to Mr Miller were not spoken. 99 Given our earlier conclusions regarding the credibility of the two witnesses, we consider that, on the balance of probabilities, the incident occurred as Ms Rowan described it. The incident amounted to sexual harassment. That Mr Miller and Ms Rowan may have been affected by alcohol and may have "engaged in the frivolity of the occasion" by "high fiving" is no basis for accepting that a reasonable person would not have anticipated Ms Rowan would have been offended, humiliated or intimidated by Mr Miller's conduct. Neither the consumption of alcohol nor engaging in frivolity amounts to an invitation to engage in conduct of a sexual nature or excuses such conduct if it is unwelcome. 100 The conduct of Mr Miller at the bowls night occurred outside the workplace but it was at a work-related function. Touching Ms Rowan on the buttock and saying to her, "I have been wanting to do that all night" was inconsistent with Mr Miller's duty as a senior employee with supervisory responsibilities towards Ms Rowan. 101 One further matter that we consider deserves comment is that Ms Rowan said she reported the incident to the Registrar, Mr Condie. Ms Rowan also said she reported the Ivanhoe Hotel incident to Mr Condie. On neither occasion, does it appear from the evidence that Mr Condie took any immediate steps to deal with the complaint. Mr Condie's conduct in failing to take any action in respect of Mr Miller was not explored in the evidence and Mr Condie was not given the opportunity to respond to the matter so we are unable to take the matter further except to observe that it is possible that Mr Condie failed in his duty as a supervisor. However, it is not appropriate to make a finding as to that matter in the circumstances. Sexual harassment of Ms Rowan - First incident at Steyne Hotel 102 The next incident dealt with by his Honour relates to the Director General's ninth allegation. This was alleged to have occurred on 3 June 2005 at the Steyne Hotel. Ms Rowan's evidence was that a number of staff had been at the Hotel late that evening when Mr Miller told her that she "looked rootable". Rebecca Clifton, another registry officer at Manly, claimed Mr Miller had made a similar comment to her regarding Ms Rowan at the bowls night of 22 April 2005 and Ms Clifton had passed this information on to Ms Rowan. Ms Clifton made the claim to Ms Nix the investigating officer. Ms Clifton was not called in the Department's case. The Deputy President considered he was not in a position to know from the evidence whether Ms Clifton's claim was true. In relation to the allegation that Mr Miller said the words directly to Ms Rowan at the Steyne Hotel on 3 June 2005, the Deputy President found at [49] of the Reinstatement Decision: [I]f he [Mr Miller] did use the term in talking about or directly to Ms Rowan as I am inclined on balance, to think he did then it was inappropriate conduct on his part. To her credit, Ms Rowan put him in his place. She acknowledged that she perceived the applicant to have meant it as a form of compliment and however backhanded or ill chosen it may have been, she did not take it as something other than that. In my view, the applicant's conduct although inappropriate and deserving of criticism, falls short of sexual harassment having regard to all the circumstances. Accordingly, this allegation is not made out. 103 We do not consider it was open to find that Ms Rowan "perceived the applicant to have meant it as a form of compliment and however backhanded or ill chosen it may have been, she did not take it as something other than that". Ms Rowan conceded that Mr Miller "probably" meant what he said as a compliment but she also said she regarded the words as "pretty offensive" and said to Mr Miller: You know you can't speak to me like that; I don't want to hear that, you've been told that before. 104 The statement that, "you've been told that before" referred to the earlier occasion when Mr Miller allegedly said to Ms Clifton that Ms Rowan looked "rootable" and Ms Clifton was alleged to have rebuked him. 105 Conduct can amount to unlawful sexual harassment regardless of whether a person who commits the conduct at issue intended to sexually harass. As we noted earlier, the test for sexual harassment is an objective one. In relation to the Steyne Hotel incident Mr Miller engaged in conduct of a sexual nature that was unwelcome: Ms Rowan found the words to be offensive and told Mr Miller not to say such things. 106 The conduct, of course, occurred outside the workplace. However, Mr Miller was a person in authority in the workplace and it was incompatible with his duty as a senior employee, whose responsibilities included the maintenance of harmonious workplace relations, to engage in sexual harassment of a subordinate outside the workplace. 107 In this respect, Mr Benson referred appositely to Hall and Others v A & A Sheiban Pty Ltd (1989) 20 FCR 217 at 232 where Lockhart J referred with approval to observations of Nathan J in R v Equal Opportunity Board Ex Parte Burns [1985] VR 317 at 323 that: [A] benefit of employment is the entitlement to quiet enjoyment, that is the freedom from physical intrusion, the freedom from being harassed, the freedom from being physically molested or approached in an unwelcome manner. In Horne v Press Clough Joint Venture [1994] EOC 92 – 556 the Tribunal referred to the right of employees to quiet enjoyment of their employment and expressed the view that this extends to not having to work in an unsought sexually permeated work environment. 108 In our opinion, Mr Miller's conduct towards Ms Rowan at the Steyne Hotel on 3 June 2005 was sexual harassment. In finding that the Department's ninth allegation had not been made out, Grayson DP erred. Sexual harassment of Ms Rowan - Second incident at Steyne Hotel 109 The final incident, and the subject of the Department's tenth allegation, was also said to have occurred on 3 June 2005 at the Steyne Hotel. It was late, about 2.00 am. It is apparent that Ms Rowan was affected by alcohol. She was also experiencing severe domestic problems with her partner in respect of whom she had obtained a restraining order that week for physical and emotional abuse and on the Friday night was "feeling a bit sorry for myself." Ms Clifton and Mr Miller were also present, although Ms Clifton was not privy to the whole of the conversation between Mr Miller and Ms Rowan. Reference had been made in the conversation to the television program "Big Brother" and some discussion ensued about male genitalia. Ms Rowan recalled Ms Clifton having made a remark in that regard. In her statement to Ms Nix, in describing what occurred after Mr Miller told her she looked "rootable" Ms Rowan said in answer to questions from Ms Nix: I was sitting down in the lounge and he made that comment to my face about looking rootable and I said what I said earlier. And he was going on about why do I look around at other men in the room, because I'm trying to work out where my life is going basically because I'm single again and I don't really like it and he knows that, well and truly. I mean it's just weird, you know, and he's saying 'Why don't you look at me, what about me, what about going out with me' and I said 'I don't want to go out with anyone from work, no' and he was going on about the size of his anatomy as well ... Q. Are you referring to his penis? A. Yes, I am, telling me that it was big. And I don't want to know that at all and he said that a number of times. Q. So he told you how big it was? A. No, he said that it was big and I wouldn't worry about it being small. And I was not having that conversation, why I would I don't know but I was not having it anyway. Q. What did you say when he said that? A. I said 'I don't want to know, I don't want to know', and I also thought at this particular point in time what's he doing, is he targeting me because he thinks I'm vulnerable, because he knows that I'm going through court. ... See, he knows that I've had a lot of turmoil in my private life and I was starting to think if he was targeting me because he thought I was weak, which I find morally abject ... 110 Mr Miller had initially denied mentioning his penis in any conversation with Ms Rowan and later said he had no recollection whether he discussed the size of his penis with Ms Rowan. Later again, under cross-examination, Mr Miller reverted to his initial denial. In any event, the Deputy President found the tenth allegation had not been made out. That is the allegation that Mr Miller sexually harassed Ms Rowan when, after he had asked her out and she refused, he then tried to discuss the size of his penis with her. His Honour stated at [53] to [55] of the Reinstatement Decision: 53. Bearing in mind the fact that the conversation took place at about 2am in the Steyne Hotel and further bearing in mind that alcohol had been consumed throughout the night, it would be unsafe to conclude in the face of the applicant's denial that he conducted himself in the manner alleged. This is particularly so given the absence of supporting or corroborative evidence and given that Ms Rowan otherwise accepted that the conversation between them that night was generally as the applicant described it. 54. A passage from Ms Rowan's cross-examination where she was taken to the applicant's version of their interaction that night serves to illustrate the point: Q. At one of the conversations during this time you said to him you'd been drinking black ice coolers? A. Not sure if I said it or Rebecca but yes, that was said. Q. And you said to him, "All men are bastards", do you remember saying that? A. Yes, I was talking about dating. Q. And Mr Miller said to you, "Don't be like that, you'll be all right"? A. Yes. Q. And, "Don't worry, you'll find someone"? A. Yes. Q. And, "I moved on from my break up last year, you have to get on with your life"? A. Yes. Q. And so he was offering you some sort of friendly advice at that stage? A. Just general comments. Q. And he said, "You look good. You can get anyone you like"? A. Yes. 55. As with other allegations, I do not consider the evidence in relation to this particular matter to be sufficient to permit a positive finding that the allegation has been made out. 111 Why the Deputy President was inclined to believe Ms Rowan's evidence that immediately before the alleged discussion involving Mr Miller's penis Mr Miller said that she looked "rootable", but was not inclined to believe her evidence about Mr Miller's penis, is not apparent. There was some equivocation in Mr Miller's evidence about whether he discussed the size of his penis, which, it appears, the Deputy President may have overlooked. Moreover, the conversation referred to by his Honour between Mr Miller and Ms Rowan that is recorded at [54] of his Decision was not the entirety of the exchange and is not inconsistent with Ms Rowan's evidence about what occurred. As to the absence of corroborative evidence, no one else was present during the conversation about Mr Miller's penis, according to Ms Rowan. 112 It is Ms Rowan's version of events that is to be preferred. There is no proper basis for accepting the truth of Ms Rowan's evidence regarding the "rootable" comment and not accepting her evidence about the penis discussion. For the same reasons we found that Ms Rowan had been sexually harassed when Mr Miller said to her she looked "rootable", we find that Ms Rowan was again sexually harassed when, after he had asked her out and she refused, he then discussed the size of his penis with her. Accordingly, Grayson DP erred in finding the Department's tenth allegation had not been made out. Whether dismissal was harsh, unreasonable or unjust 113 Mr Benson submitted the dismissal of Mr Miller was not harsh, unreasonable or unjust. Counsel submitted that in weighing up the relevant considerations the Commission should have regard to the following: (1) The seriousness of the misconduct found established against the respondent; (2) The duty to take into account s 169 of the Industrial Relations Act consistent with the principles set out in Re Nursing Homes and Nurses (State) Award (2001) 110 IR 433 at 438-9; (3) The fact that the respondent's duties involved supervising the court office staff at Manly; (4) The fact that the respondent acknowledged that he held a senior position within the department; (5) The fact that the respondent was aware of departmental policies covering harassment and sexual harassment as well as the Code of Conduct; (6) The fact that the respondent accepted that it was part of his duties to enforce those policies; (7) The fact that on 4 September 2000 the respondent had been issued with a warning letter from the Director General that should he in future breach the Code of Conduct or other policies covering behaviour expected of staff then disciplinary action would be taken which might result in the termination of his employment; (8) The importance to the appellant that it be able to rely upon the conduct of supervisors such as the respondent to meet its legal obligations under the Anti-Discrimination Act and be able to hold accountable supervisors who harass and/or sexually harass subordinate staff; (9) The right of all staff to have the right to "quiet enjoyment" to discharge their functions free from harassment or sexual harassment; (10) The blurring of social and work interaction was not a mitigating factor for the respondent as he, as the supervisor, had the responsibility to ensure the workplace was free from harassment or the consequences of harassment. 114 These are powerful considerations in support of the appellant's position that the Commission should find the dismissal of Mr Miller was not harsh, unreasonable or unjust. There are, however, a number of other matters that we need to consider in weighing up the gravity of Mr Miller's misconduct and whether the dismissal of Mr Miller was harsh, unreasonable or unjust. 115 First, we do not consider the harassment of Ms Bewley was of such gravity or importance as to indicate an objection to or a repudiation of the employment contract by Mr Miller. We take the same view about the harassment of Ms Rowan by the leaving of notes about her work. The sexual harassment of Ms Rowan, however, was more serious although we are also satisfied the second and third incidents of sexual harassment of Ms Rowan would not have occurred if appropriate action had been taken by the relevant manager or supervisor after the Ivanhoe Hotel incident. Nevertheless, none of the harassment should have occurred in the first place. 116 Secondly, there was no evidence of Ms Rowan suffering any ill effects from the harassment, other than the initial feelings of being offended. 117 Thirdly, as the Director General noted in his Notice of Decision, Mr Miller and the complainants were: [I]nfluenced by the drinking culture pervading Manly Local Court, which led to significant blurring of professional and personal behaviour amongst those officers involved in the events leading to the allegations being made. 118 The Director General acknowledged that Mr Miller's judgment was affected when he was under the influence of alcohol. On that basis the Director General directed Mr Miller to resign rather than take the decision to dismiss. Whilst Mr Miller did not resign and dismissal followed, we agree with the Director General that a mitigating factor was alcohol, not only affecting Mr Miller but also some of those who made the allegations against him. 119 Fourthly, whilst the intention of the harasser is irrelevant as to whether sexual harassment occurred, it is apparent that Mr Miller did not intend to harass and did not understand his conduct might amount to harassment. 120 Fifthly, there was a significant amount of evidence from persons who knew Mr Miller that he was a person of good character. Except for the regrettable flaw that is evident in his dealings with women who are his subordinates at work, we are prepared to accept that Mr Miller is otherwise a person of good character. 121 Sixthly, we accept that Mr Miller was a conscientious, competent employee, strongly dedicated to his work. Almost the whole of his working life has been with the Department in the court system. His dismissal has caused a major upheaval to his personal life and the stigma of the dismissal would make it very difficult for him to obtain alternative employment at a similar level to that of Assistant Registrar either in the public or private sector. There will be some level of stigma remaining after this decision. 122 We have decided, not without hesitation, that Mr Miller's dismissal was, in the circumstances, harsh because it was disproportionate to the gravity of the misconduct and because of the consequences for the personal and economic situation of Mr Miller: see Byrne v Australian Airlines Ltd, Frew v Australian Airlines Ltd (1995) 185 CLR 410 at 465 per McHugh and Gummow JJ. Part of our hesitation stems from a concern that a finding that the dismissal was harsh might be seen as condoning Mr Miller's conduct and thereby undermining the appellant's obvious entitlement to rely on supervisors to conduct themselves properly in the workplace and to ensure others did so in accordance with the Department's policies. 123 We should make it perfectly clear in that regard that for a person in the relatively senior position of Assistant Registrar, who prided himself on his work achievements and his ability to manage people and deliver "great results", we have been left with the distinct impression on the evidence that Mr Miller's attitude to those women in respect of whom he held a supervisory responsibility at Manly was boorish, insensitive, inconsistent with the position he held and constituted unacceptable behaviour. It is only by the narrowest of margins that we have found the dismissal harsh. No employee who engages in harassment of any kind could take any comfort from our decision. Form of relief 124 We turn to the question of relief. Grayson DP reinstated Mr Miller to his former position on terms not less favourable to him than those that would have been applicable if he had not been dismissed. Given our findings on appeal it would be most inappropriate to reinstate Mr Miller to his former position at the Manly Local Court. All that we would be achieving in doing so is perpetuating a hostile working environment. This is especially so given the bitterness that obviously exists at least between some the employees involved. Accordingly, reinstatement is impracticable. 125 We have decided that Mr Miller shall be re-employed by the Department in another position that it has available subject to conditions we intend to impose pursuant to s 89(8) of the Act (as to whether a position is available see Riley v Workcover Authority (NSW) 151 IR and Carlton and United Beverages Limited and Philip Brunt [2006] NSWIRComm 98). Those conditions will be as follows: (1) Mr Miller will be re-employed from the date of this decision in a senior position commensurate with his experience at one level below the level of his position at Manly Local Court and paid as such for a period of 12 months, but if such a position is not available and he has to work in a position at the same grade as his previous position at Manly, he shall be paid at one level below the salary level of that position for 12 months. (2) Re-employment shall not be at the Manly Local Court. (3) Mr Miller shall not be eligible for promotion for a minimum period of 12 months from the date of his re-employment. After that time Mr Miller will return to his current level in a position commensurate therewith but not at Manly Local Court. (4) Mr Miller shall immediately provide written apologies to Ms Rowan, Ms Bewley and to the Director General of the Department for the harassment we have found in this decision to have occurred. 126 We intend to further order that Mr Miller's period of employment with the Department is to be taken as not having been broken by the dismissal provided that Mr Miller shall not be entitled to the payment of any salary for the period since his dismissal up to the date of the Reinstatement Decision. From the date of that Decision to the date of his re-employment Mr Miller shall be paid an amount of remuneration commensurate with the grade at which he is re-employed. 127 In light of our findings and decision in the substantive appeal it would be inappropriate to grant leave to appeal in respect of the cross-appeal relating to costs. Therefore, leave to appeal is refused and that appeal is dismissed. Orders 128 We make the following orders: Matter No IRC 3397 of 2006 (1) Leave to appeal is granted. (2) The appeal is upheld. (3) The Reinstatement Decision and the orders made by Grayson DP pursuant to that Decision are set aside. (4) Bradley Robert Miller is to be re-employed by the Attorney General's Department in another position that it has available effective from the date of this decision subject to the following conditions: (a) Mr Miller will be re-employed from the date of this decision in a senior position commensurate with his experience at one level below the level of his position at Manly Local Court and paid as such for a period of 12 months, but if such a position is not available and he has to work in a position at the same grade as his previous position at Manly, he shall be paid at one level below the salary level of that position for 12 months; (b) Re-employment shall not be at the Manly Local Court; (c) Mr Miller shall not be eligible for promotion for a minimum period of 12 months from the date of his re-employment. After that time Mr Miller will return to his current level in a position commensurate therewith but not at Manly Local Court; (d) Mr Miller shall provide written apologies to Ms Rowan, Ms Bewley and to the Director General of the Department for the harassment we have found in this decision to have occurred. (5) Mr Miller's period of employment with the Department is to be taken as not having been broken by the dismissal provided that Mr Miller shall not be entitled to the payment of any salary for the period since his dismissal up to the date of the Reinstatement Decision except as provided by this decision. (6) From the date of the Reinstatement Decision to the date of his re-employment Mr Miller shall be paid an amount of remuneration commensurate with the grade at which he is re-employed. (7) The monies paid as part of the terms on which the stay application of Grayson DP's orders was granted shall be adjusted to reflect the effect of order (6) hereof provided that the respondent will not be obliged to repay any monies to the appellant. Matter No IRC 3499 of 2006 (1) Leave to appeal is refused. (2) The appeal is dismissed. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.