Industrial Relations Commission of New South Wales CITATION: Lupcho Dafkovski v Attorney General's Department [2006] NSWIRComm 378 PARTIES: Lupcho Dafkovski Attorney General's Department of New South Wales FILE NUMBER(S): IRC 890 of 2006 CORAM: Grayson DP Unfair dismissal - Application for relief - Allegations of harassment and sexual harassment both in and outside workplace - Breaches of employer code of conduct and harassment prevention policy - Applicant a senior officer in supervisory position over complainants - Credibility of witnesses - Unsatisfactory nature of evidence of complainant - Relevance of out of hours conduct - Whether proceedings initiated in GREAT preclude applicant from bringing and maintaining proceedings before the Commission - Statutory construction - Whether in exercise of discretion out of time application should be accepted - Burden of proof - Doctrine of condonation and waiver CATCHWORDS: Held - Applicant not precluded from bringing proceedings here - Out of time application accepted - Less serious charges made out - More serious charges not made out - Dismissal harsh - Applicant reinstated on conditions - Nil back pay ordered - Nil continuity of employment ordered. Anti Discrimination Act 1977 LEGISLATION CITED: Government and Related Employees Appeal Tribunal Act 1980 Industrial Relations Act 1996 Australiasian Transport Officers v Department of Motor Transport (1998) 25 IR 235 B. Rose v Telstra Corporation Limited - 1444/98 N Print Q9292 [1998]IRCommA 1592 (4 December 1998) Bhattacharya v Director General of Department of Education and Training [2000] NSWCA 74 Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66 Burge v NSW BHP Steel Pty Ltd (2001) 105 IR 325 Byrne & Anor v Australian Airlines (1995) 61 IR 32 Cavacuiti & Anor v Toyota Motor Corporation Australia Limited (2002) 122 IR 247 Cementaid (NSW) Pty Ltd v Chambers (unreported, Supreme Court, Spender AJ, 29 March 1995) Clarence v Electricity Commission (NSW) (1990) 33 IR 94 Clarke v Metropolitan Meat Industry Board [1967] AR (NSW) 16 Colonial Sugar Refining Company Limited v Irving [1905] AC 369 Commonwealth v Verwayen 170 CLR 394 Farquarson v Qantas Airways Ltd (PR97168, 10 August 2006] CASES CITED: Forbes v Public Service Board (NSW) (1986) 14 IR 375 Gallo v Dawson (1990) 64 AJLR 458 Jones v Dunkel (1959) 101 CLR 298 McManus v Scott-Charlton (1996) 140 ALR 625 Pastrycooks Employees, Biscuitmakers Employees and Flour and Sugar Goods Workers Union (NSW) v Gartrell White (No 3) 35 IR 70 Public Employment Office, Department of Corrective Services v Boda [2006] NSWIRComm 1 Public Service Association of NSW v NSW Crime Commission (1993) 48 IR 363 R v Baker [1999] NSWCCA 277 Secretary of the Department of Health (NSW) v Harvey (1990) 34 IR 58 Skelly v Prouds Jewellers Pty Ltd (1994) 53 IR 3 Smith v Allan, Secretary, Treasury of New South Wales (1993) NSWLR 52 Wang v Crestell Industries Pty Ltd (1997) 73 IR 454 WorkCover Authority of New South Wales v Parkes Council (1999) 70 IR 298 Zoological Parks Board of NSW v AWU (2004) 135 IR 56 HEARING DATES: 11/19/06, 12/09/06, 13/09/06, 14/09/06, 15/09/06, 24/10/06 DATE OF JUDGMENT: 12/07/2006 Applicant Mr A Hatcher, of counsel instructed by W.G McNally Jones Staff LEGAL REPRESENTATIVES: Respondent Mr S Benson, of counsel instructed by Crown Solicitors Office JUDGMENT: - 55 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: Grayson, DP 7 December 2006 Matter No IRC 890 of 2006 Lupcho Dafkovski and Attorney General's Department of New South Wales Application by Lupcho Dafkovski re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION [2006] NSWIRComm 378 1 The applicant, Lupcho Dafkovski commenced employment with the respondent on 6 April 1987 and was dismissed for misconduct on 22 December 2005. At the time of his dismissal, he held the substantive position of Deputy Registrar, Downing Centre Local Court. 2 The matter raises three essential issues for determination which may be described in broad terms as follows: · Whether the applicant is precluded by the Government and Related Employees Appeal Tribunal Act 1980 (the GREAT Act) from bringing and maintaining these proceedings · Whether the Commission in the exercise of discretion under s 85 (3) of the Industrial Relations Act 1996 (the IR Act) should accept the present application made out of time · Whether the applicant was dismissed unfairly within the meaning of Part 6 of Chapter 2 of the IR Act 3 The first issue (which the respondent raises by notice of motion) arises in circumstances where the applicant initiated appeal proceedings in GREAT on 19 January 2006. Those proceedings were formally discontinued on 24 February 2006, two days after he filed his application for relief in this jurisdiction. 4 It is the respondent's contention that the applicant is precluded from instituting these proceedings by s 25 (3) of the GREAT Act. Given that the legal argument as to this issue involves a wider consideration of the provisions of s 25, it is convenient to set out the whole section as follows: 25 Alternative rights of appeal (1) Nothing in section 24 derogates from or otherwise affects any right of appeal an employee may have, or other proceedings which may be instituted by the employee or on his or her behalf, under any other Act or law or any industrial award or agreement (whether enacted, existing or made before, on or after the day appointed and notified under section 2 (2)) in respect of a decision of a kind referred to in section 23 (1). (2) Where: (a) an employee elects, in writing, to forego a right of appeal under section 24 in respect of a decision of a kind referred to in section 23 (1), or (b) an employee makes an appeal or institutes other proceedings or proceedings are instituted on the employee's behalf in respect of a decision of a kind referred to in section 23 (1) under an Act or law or an industrial award or agreement referred to in subsection (1), the employee may not thereafter appeal to the Tribunal under section 24 in respect of that decision. (3) Where an employee appeals to the Tribunal under section 24 in respect of a decision of a kind referred to in section 23 (1), the employee may not thereafter, in respect of that decision, appeal or institute other proceedings or proceedings may not be instituted on his or her behalf under an Act or law or an industrial award or agreement referred to in subsection (1). 5 Mr Benson for the respondent argues on the basis of the mandatory 28 day time limit for the filing of appeals under s 29 of the GREAT Act (for discussion see Secretary of the Department of Health (NSW) v Harvey (1990) 34 IR 58) that the appeal right contemplated by the GREAT Act may be taken to have been exercised upon the filing of the notice of appeal or in other words, the initiation of appeal proceedings before GREAT and thus, the preclusionary provisions of s 25 (3) above have force and effect. Furthermore, the existence of the right to appeal to GREAT (as distinct from the exercise of that right) does not remove the right of an employee to bring an application for unfair dismissal where that right otherwise exists (Clarence v Electricity Commission (NSW) (1990) 33 IR 94). Further yet, s 25 (3) of the GREAT Act was held by Lusher J to preclude the bringing of declaratory relief proceedings in the Supreme Court following an unsuccessful attempt by an employee to appeal to GREAT against his dismissal (Forbes v Public Service Board (NSW) (1986) 14 IR 375). I note in Forbes, however, that the appeal proceedings in GREAT had run their course - that is, the appeal in GREAT had been heard and determined unlike the present case where the appeal was withdrawn and discontinued prior to hearing and determination. 6 Mr Benson sought to distinguish the recent decision of the Full Bench in Public Employment Office, Department of Corrective Services v Boda [2006] NSWIRComm 1 on the basis that the decision in that case turned on the operation of s 90 of the IR Act and not s 25 of the GREAT Act the latter of which was not raised for consideration. In Boda, the facts were similar to those in the present proceedings in that the dismissed employee first commenced and later withdrew appeal proceedings before GREAT choosing instead to pursue an unfair dismissal claim before the Commission. 7 The applicant resists the respondent's motion to dismiss the proceedings on the following bases: · s 25 (3) of the GREAT Act only operates where the appellant has fully exercised the right of appeal under section 24 of the GREAT Act, not where the appeal has been withdrawn before it has been heard. · This is a case where section 25 (2), not section 25 (3), of the GREAT Act applies. The applicant, by filing a notice of discontinuance in GREAT, elected to forego his right of appeal under the GREAT Act. This left it open to him to pursue other remedies available to him at law. · In any event, section 90 of the Industrial Relations Act 1996 (the IR Act) is the provision which deals with the issue of availability of alternative remedies insofar as unfair dismissal applications are concerned. Section 90 does not prevent the application being brought in this case. · To the extent there is any inconsistency between section 90 of the IR Act and section 25 (3) of the GREAT Act, the former prevails, by reason of express provision in the IR Act (s 405) and/or because it impliedly repealed the earlier provision in the GREAT Act. 8 Mr Hatcher argues that in considering the purpose of s 25 of the GREAT Act as a whole, the Commission would have regard to the second reading speech of the then Premier Mr N. K. Wran QC when introducing the bill which became the GREAT Act (Legislative Assembly 20 February 1980) as follows: As to the problem of dual access, the Government has decided that there should be an option in disciplinary cases so that a person may elect to forego a right of appeal to GREAT and let his union pursue the matter on his behalf through the Industrial Commission of New South Wales 9 Plainly, Mr Wran sought to emphasise that where an employee elected to forego rights of appeal to GREAT, alternative rights such as those conferred by industrial relations legislation were to remain undiminished. The applicant elected to forego his rights by the discontinuation of the GREAT proceedings on 24 February 2006. If the respondent's construction of s 25 of the GREAT Act were preferred, it would be inconsistent with the stated intention of Parliament. In order for that result to obtain, the words of s 25 would need to be expressly and unambiguously in favour of the respondent. On a proper construction, the section is directed at curing the mischief of "dual access" and this rather than the removal of rights is its purpose. 10 Mr Hatcher argues as a general proposition and as is well established, that the GREAT Act is beneficial legislation which is therefore to be construed beneficially in favour of the maintenance of rights (Smith v Allan, Secretary, Treasury of New South Wales (1993) NSWLR 52 at 63 per Kirby P). Any construction of the GREAT Act which would effectively deny an otherwise eligible employee a right of appeal under any law would not be adopted unless the language of the relevant provision was utterly intractable. 11 Further, when the section is considered, it is plain that the existence of a right of appeal to GREAT does not derogate from or affect other rights of review of decisions to dismiss (s 25 (1)). It follows that the capacity to seek relief in unfair dismissal in this jurisdiction remains undiminished unless in some way restricted by s 25 (2) or s 25 (3). The former subsection provides that the right of appeal to GREAT is extinguished when the employee either elects in writing (as the applicant here did) to forego that right or the employee exercises other rights and there is nothing in the sub-section to suggest that the provision only operates where the written election is made before an appeal is instituted in GREAT. The subsection should therefore be interpreted to operate where the written election is made any time before the appeal right is fully exercised by way of hearing and determination. 12 Mr Hatcher submits that s 25 (3) is to be interpreted, as far as the language allows, in a way which achieves the result intended by the Parliament namely, that the written election to forego the right of appeal to GREAT nonetheless permits the exercise of rights under industrial relations legislation. The correct construction of the provision turns on the opening requirement "Where an employee appeals to the Tribunal...". The respondent contends that the simple fact of filing an appeal, even if the appeal is not subsequently continued, is sufficient to meet this requirement. However, on the applicant's argument, this cannot be correct. An appeal is a substantive right, not merely a matter of procedure (Colonial Sugar Refining Company Limited v Irving [1905] AC 369). A right of appeal is not substantively exercised merely by the lodging of a notice of appeal where the appeal is subsequently discontinued prior to hearing. 13 It is further submitted for the applicant that the phrase " Where an employee appeals to the Tribunal" should be interpreted as referring to the substantive exercise of the right of appeal - that is, having the appeal heard and determined by GREAT. This is because: · It is an interpretation which is open on the language of the provision · It is consistent with the proper interpretation of s 25 (2), under which, as earlier stated, a written election may be made at any time prior to when an appeal has been heard and determined by GREAT · It is an approach which would be consistent with Parliament's stated intention as to the purpose of section 25 · It is an approach which is also consistent with the proposition that section 25, to the extent that it contains exclusionary provisions, should be interpreted so as to preserve access to appeal rights so far as possible: see Clarence v Electricity Commission of NSW (1990) NSWLR 1 at 4-5 per Kirby, P. Therefore section 25 (3) operates where the employee had appealed to GREAT in the sense that the employee's appeal has been heard and determined. In that situation, and only in that situation, the bar to other proceedings operates (as in Forbes ). 14 Having considered the competing contentions and having regard in particular to the statutory objective of avoiding duality of proceedings, I am persuaded that the construction for which Mr Hatcher contends is the proper one in the circumstances. This is not a case where appeal rights have been substantively exercised under the GREAT Act. Rather there has been an express written election by the applicant to forego those rights and as may be apparent, I do not accept the respondent's argument that the procedural stop of filing a notice of appeal under the GREAT Act amounts to a substantive exercise of the right of appeal as contemplated by the opening words of s 25 (3). 15 Although it is not strictly necessary to now decide the alternative argument mounted by the applicant in opposing the respondent's motion, I would observe in my opinion, that there is merit in Mr Hatcher's submission. If there is inconsistency between the provisions of the GREAT Act and the provisions of the IR Act there are clear indications of parliamentary intention that the latter should override the former. For example, s 405 of the IR Act relevantly provides:- 405 Statutory provisions relating to public sector employees (1) Any award or order of the Commission does not have effect to the extent that it is inconsistent with: (a) a right of appeal under the Government and Related Employees Appeal Tribunal Act 1980 or the Police Service Act 1990, or (b) ... (2) The regulations may provide that an award or order of the Commission has effect despite any right or function referred to in subsection (1). (3) This section does not affect any decision of the Commission under Part 6 of Chapter 2 (Unfair dismissals). 16 In relation to an identical provision in the Industrial Relations Act 1991, the Full Commission said in Public Service Association of NSW v NSW Crime Commission (1993) 48 IR 363 at 370: It is apparent from these extracts that Parliament went to some considerable detail to emphasise the primacy of Part 8 of Chapter 3 of the 1991 Act over the GREAT Act. and it is correct to say, in my opinion, that the same primacy over the GREAT Act applies to Part 6 of Chapter 2 of the IR Act which means that s 25(3) of the GREAT Act, to the extent of any inconsistency with s 90 of the IR Act does not have operative effect. 17 Having so concluded, I dismiss the respondent's motion and turn to the next issue raised for determination namely, the out of time issue. The respondent, in opposing the extension of time, submits that the applicant was represented by and accepted the advice of his union (the Public Service Association) at the time proceedings were commenced on his behalf under the GREAT Act on 19 January 2006. The evidence relied upon by the respondent to support that contention, being the evidence given by the applicant which is extracted below, is capable of being read and understood differently: Q. Finally, in paragraph 36 of your first statement, you say that you received a termination letter on 23 December 2005. Can you describe what steps you took after that date, to, as it were, contest your dismissal? A. Obviously it was a shock, 23 December 2005, just two days before Christmas. I didn't think it was the appropriate time to get in contact with the PSA at that time, having regard to the fact that during that period, Christmas and New Year. Subsequently, I did get in touch with the Public Service Association. Q. I stop you there. Do you remember when that was? A. I would say it was the second of third week in January, just off my memory. Q. What happened as a result of that contact? A. I think I spoke to Lisa Nelson, who is the officer and they actually, I think, drafted the appeal paper for GREAT. That was faxed down to me. I faxed it back, I think that was on the last day that it was due to be filed. They immediately, I think it was 19 January or thereabouts, I faxed it back, and then the PSA actually lodged on my behalf. Q. As you are aware, the GREAT application was subsequently withdrawn. Can you explain why that happened? A. The application was withdrawn. The notice of termination that I received from the department, the supporting documentation in regards to my records that I had only alluded to the GREAT appeal. Subsequently I found out, I do have some colleagues and friends that are in the legal field, and I sought their advice and they advised me to submit an application to the Industrial Relations Commission; and if possible, to have the GREAT appeal withdrawn. So I advised the union that is what I wanted to do. 18 To my mind, the applicant is there saying he was advised by the respondent of his right of appeal under the GREAT Act and sought the union's assistance in drafting and filing the notice of appeal. It was only after this was done and after he had taken advice independently of the union, that the option of proceeding in this jurisdiction was identified and chosen. Plainly, the respondent cannot and to be fair, does not assert that it was not placed on notice from an early date that its decision to terminate the respondent's employment would be challenged. Further, and as Mr Hatcher submits, the out of time point was not taken on a preliminary basis and as the case has now been fully prepared and argued (on both sides of the record), it is clear that no prejudice has been visited upon the respondent in the conduct of its case by the application being filed out of time. Having regard to the matters required by s 85 (3) of the IR Act to be taken into account and to the principles guiding the exercise of discretion to extend time (see WorkCover Authority of New South Wales v Parkes Council (1999) 70 IR 298; Skelly v Prouds Jewellers Pty Ltd (1994) 53 IR 3; Gallo v Dawson (1990) 64 AJLR 458 and others) and in particular to the ultimate requirement to do justice between the parties (Cavacuiti & Anor v Toyota Motor Corporation Australia Limited (2002) 122 IR 247) I consider in the circumstances of this case, that manifest injustice would be done if the applicant were deprived of the opportunity to have his case heard and determined. Accordingly, I accept the application out of time. 19 Turning then to the third issue raised for determination namely whether the applicant's dismissal was harsh, unreasonable or unjust, it is alleged and the respondent bears the onus of proving to the requisite standard (Pastrycooks Employees, Biscuitmakers Employees and Flour and Sugar Goods Workers Union (NSW) v Gartrell White (No 3) 35 IR 70; Wang v Crestell Industries Pty Ltd (1997) 73 IR 454 and others) that: 1. During the period April 2004 and May 2005 the applicant sexually harassed or harassed Ms Mary Odichou and Ms Samar Khazma. His actions are said to be in breach of the Department's Code of Conduct and Ethics and the Harassment Prevention Policy. The details are: a) During the period April 2004 to January 2005 he sent text messages and/or made comments to Ms Odichou which contained sexual connotations including "I love you", "miss you", "it's me" or words to that effect; b) During the period April 2004 to May 2005 he made comments to Ms Khazma which contained sexual connotations including "your so fucking hot I want to fuck you" or words to that effect; c) On or about 9 July 2004 outside normal working hours he harassed Ms Odichou in that he continued to contact her by mobile telephone after being advised to cease; d) In December 2004 whilst attending the Shark Bar in Liverpool Street, Sydney he sexually harassed Ms Khazma in that he put his hand down her skirt and pinched her bottom. e) Whilst attending the Shark Bar in Liverpool Street he sexually harassed Ms Odichou in that he would touch her in ways, such as putting his arms around her and attempting to kiss her. Ms Odichou told him to stop as his actions made her uncomfortable; f) He intimidated Ms Odichou and Ms Khazma as they were apprehensive about his intentions when he asked them to attend his office. g) His behaviour towards Ms Odichou and Ms Khazma left them powerless and their work was affected to the extent that they were unable to continue working with him as their manager. 2. In June 2004 or there about, he caused damage to a motor vehicle owned by a member of the public and his actions have brought the Department's name into disrepute. His actions are said to be in breach of the Department's Code of Conduct and Ethics. The details are: a) Ms Nahren Saliba and Ms Odichou drove him to his home in the Wollongong area following repeated telephone calls from him. Upon exiting Ms Saliba's motor vehicle he slammed the car door with force, which caused damage to the door. 20 The matter was the subject of attempted albeit unsuccessful conciliation and thereafter proceeded to hearing in the course of which and in addition to the documentary material tendered and relied upon by either side of the record, evidence was taken from the following witnesses: · Luphco DAVKOVSKI, Deputy Registrar, Civil Claims Registry Office Downing Centre Local Court · Daphne ANLEZARK, Clerk, Downing Centre Local Court Registry · Francis ZAHARIAS, Clerk, Downing Centre Local Court Registry · Jeffrey BONHAM, Office Manager, Downing Centre Local Court Registry · Monica SWEENEY, Clerk, Downing Centre Local Court Registry · Bruce RAYNER, Office Manager, Downing Centre Local Court Registry · Ekaterina JEBELEV, Personal Assistant, an un-named law firm · Samar KHAZMA, Clerk, Downing Centre Local Court Registry · Glen EWING, Court Officer, Downing Centre Local Court Registry · Mary ODICHOU, Clerk, Downing Centre Local Court Registry · Nahren SALIBA, social acquaintance and friend of Mary Odichou · Craig COOKE, Deputy Registrar, Downing Centre Local Court · David TROTTER, Registrar and Zone Manager, Downing Centre Local Court · Brett DAVIES, Solicitor, Crown Solicitor's Office · Vladmir KROUGLOV, Investigator, Maxwell Investigations · Nicole NIX, Project Officer (Investigations) Attorney General's Department of NSW 21 As a starting point in the respondent's case, it is contended that the charges of harassment or sexual harassment against the applicant involve breaches of the departmental Code of Conduct and Ethics and the Policy on Ensuring a Harassment Free Workplace. Documents setting out the code and the policy were tendered and admitted into evidence. 22 Extracts of the code said by the respondent to be relevant include: · A message from the Director General stating, among other things: The Code of Conduct has been developed in consultation with staff to convey the standard of behaviour expected of every individual in the Department. The Code reflects the Department's commitment to maintaining a harmonious, diverse workplace in which the contribution of every individual is valued. It also promotes our commitment to quality service by emphasising the need to treat all colleagues and clients with respect. · At clause 2.1 dealing with personal and professional behaviour: All individuals within the Department must conduct themselves professionally and ethically at all times. Our behaviour should demonstrate our respect for our clients and each other . · At clause 2.6 dealing with the duties of individuals: All staff must treat each other ... with respect and courtesy · At clause 2.7 dealing with duties of supervisors: All supervisors must always demonstrate professional and ethical behaviour; and ensure the maintenance of a harassment free workplace. · At clause 4.1 dealing with accountability: Every individual is responsible for their own actions and omissions and will be held accountable for them. 23 In addition to the code of conduct, the policy and guidelines on ensuring a harassment free workplace, expressly proscribe such conduct and warn that it will not be tolerated in any form. The policy defines harassment as any form of behaviour that is not wanted, not asked for and creates a hostile environment. It is behaviour that humiliates, offends or intimidates and need not be intentional. Perception is said to be the critical factor and it can occur both in and outside of the work environment. If outside the work environment, it may still be considered harassment if it impacts on workplace relations. 24 The policy sets out various forms of harassment including but not limited to suggestive remarks, unwelcome suggestions (either indirect or explicit), requests for sexual favours, sexual propositions (including repeatedly asking someone out), questions about personal life, invasion of personal space or unnecessary physical touching (eg slapping, touching or kissing). Plainly and it is not contended otherwise, the code and the policy give the clearest guidance to employees and in particular, to those employees in supervisory positions (such as the applicant) as to the employer's expectations of them in their interpersonal dealings with each other both within and outside of the workplace. The applicant accepted that he was at all material times aware of the code and the policy; that he was aware of their objectives in seeking to promote harmony within the workplace and that he was aware he would be held accountable for any transgression. He chose to categorically deny each of the allegations against him 25 The respondent submitted that the code and the policy have become incorporated into the contracts of employment of all its employees including the applicant and subject to the express statutory regime governing the applicant's employment, it is well established in respect of public sector employment, that the contractual relationship of employer/employee remains and carries with it all the consequences which flow from it (Bhattacharya v Director General of Department of Education and Training [2000] NSWCA 74). It follows that the respondent had a legitimate contractual basis on which to hold the applicant accountable for his conduct both within and outside the workplace to the extent that such conduct impacted adversely on workplace relations. In a substantive sense, the respondent's code of conduct and anti-harassment policy give "flesh" to what would otherwise be the employee's implied duty of fidelity. 26 In support of that contention, the respondent cites the following passage from the recent Full Bench decision (Lawler VP, O'Callaghan SDP and Rafaelli C) of the Australian Industrial Relations Commission in Farquarson v Qantas Airways Ltd (PR97168, 10 August 2006) which addressed the legal principles relating to termination of employment for "out of hours" conduct: [18] In Rose v Telstra , Ross VP undertook a detailed analysis of the law relating to termination of employment for "out of hours" conduct. Referring to the judgment of McHugh and Gummow JJ in Byrne v Australian Airlines , his Honour noted that the emergence of the modern law of employment can be seen as a movement away the status of servants in a master/servant relationship to a focus on contract with the result that: "[a]n employee's behaviour outside of working hours will only have an impact on their employment to the extent that it can be said to breach an express or implied term of his or her contract of employment." [19] The issue, then, is whether the "out of hours" conduct involves a breach of an express or implied term of the contract of employment. Ross VP then considered the relevant implied terms: An employee's implied duty of fidelity and good faith is particularly relevant here. One of the most concise and authoritative statements of what is generally encompassed by the duty of fidelity and good faith is to be found in Blyth Chemicals v Bushnells . In that case their Honours Dixon and McTiernan JJ said: "Conduct which in respect of important matters is incompatible with the fulfilment of an employee's duty. Or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee, is a ground of dismissal ... But the conduct of the employee must itself involve the incompatibility, conflict, or impediment, or be destructive of confidence. An actual repugnance between his acts and his relationship must be found. It is not enough that ground for uneasiness as to future conduct arises." In the same case their Honours Starke and Evatt JJ note: "The mere apprehension that an employee will act in a manner incompatible with the due and faithful performance of his duty affords no ground for dismissing him; he must be guilty of some conduct in itself incompatible with his duty and the confidential relation between himself and his employer." ... The obligations imposed by the common law duty of fidelity and good faith operate to prohibit acts outside of the employment which are inconsistent with the continuation of the employment relationship. But as Spender AJ observed in Cementaid (NSW) Pty Ltd v Chambers , 'an actual repugnance between the employee's acts and his relationship with his employer must be found'. More recently the implied term of fidelity and good faith has been expressed as an obligation to serve the employer loyally and not to act contrary to the employer's interest. In England this obligation appears to have been subsumed by the more general obligation of mutual trust and confidence. The implied term of mutual trust and confidence imposes reciprocal duties on the employee and employer that they shall not 'without reasonable and proper cause, conduct themselves in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee'. If conduct objectively considered is likely to cause serious damage to the relationship between employer and employee then a breach of the implied obligation may arise. There is some support for the proposition that the existence of an implied term of trust and confidence in contracts of employment has been accepted in Australia. The words `trust and confidence' in this context are used in a contractual sense rather than as an ingredient of a personal relationship. As McCarry notes: "... the words `trust and confidence', just like the employee's reciprocal duties of 'fidelity and good faith', do not now refer to the ingredients of a personal relationship, even if they once did. The words now represent, in shorthand form, a bundle of legal rights which have more to do with modes of behaviour which allow work to proceed in a commercially and legally correct manner than with ingredients in an interpersonal relationship." The above statement is consistent with the shift in the nature of the employment relationship, from status to contract, referred to earlier. [20] His Honour then formulated a summary of principle which has now been applied on a number of occasions: "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 a rejection or repudiation of the employment contract by the employee." 27 Turning then to the specific allegations of misconduct, it is convenient to deal with them as the respondent does in its submissions firstly in terms of those raised by the complaints of Ms Odichou and then in terms of those raised by the complaints of Ms Khazma. Ms Odichou's allegations 28 By way of background, the applicant was at all material times a Deputy Registrar (Clerk Grade 9/10) at the Downing Centre Local Court having commenced there in the criminal jurisdiction in October 2002 and having moved thereafter to the civil jurisdiction in the early to middle part of 2003. Ms Odichou worked with the applicant in a Clerk Grade 1/2 support role from the time he came to the civil jurisdiction until about mid-2004. The two worked closely together and spent time together after work in the company of other colleagues in local licensed establishments (the Shark Bar or Stratton's Bar). Each came to regard the other as a friend. 29 Ms Odichou said they would arrive for work drinks at about 4.30pm on Thursdays and Fridays each week and the applicant would sometimes leave at about 6 pm. At other times, she said, the applicant would stay late, get drunk and say inappropriate things to her such as "I love you" and would touch her in ways that made her feel uncomfortable. She said the applicant would put his arms around her, put his arm on her, come close to her and whisper things in her ear. At such times she would move away from the applicant and tell him to desist. She said and the applicant denies, that on one occasion the applicant approached her, grabbed her and tried to kiss her on the lips. She said she turned away and told him he was an idiot and what he was doing was wrong. She said the applicant would apologise for his conduct and she would ask that it not be repeated. 30 On another occasion, the applicant was drunk and asked Ms Odichou and her friend Ms Saliba to drive him to Sutherland Station so he could catch the train home to Port Kembla. They left the applicant at Sutherland station and were on the way back to the city when the applicant phoned and asked them to return and drive him home as he had missed the last train and the taxis would not take him home in his inebriated state. After initially refusing, they returned to Sutherland Station, picked the applicant up and drove him (in Ms Saliba's car) to Port Kembla. The applicant was said to be unpleasant and became angry when asked not to talk, not to smoke and to wind his window up. Ms Odichou said he slammed and kicked the car door when he got out causing damage to Ms Saliba's car. Ms Saliba said her car window seals were damaged when the applicant slammed the car door. She said he did not kick the door but that experience and a prior experience with him at a Christmas party in 2003 where she first met him caused her to form an adverse view of the applicant and to want no more to do with him. Ms Saliba said she thought the applicant stood too close to her friend Ms Odichou and she noticed him whispering to her. Ms Odichou said the applicant would say things to her about his personal problems which would also make her feel uncomfortable. 31 For his part, the applicant takes issue with his alleged regular weekly attendance at the pub stating that he would usually attend if there was some occasion and that when he did attend it was with a group of colleagues not just Ms Odichou. He said he and Ms Odichou were in regular communication by email or SMS text message and it was not unusual for them to exchange messages outside the work environment. For example, Ms Odichou sent him a New Year's Eve greeting when he was on holidays with his family in 2003. Ms Odichou said it was a broadcast SMS message sent to about thirty people and did not contain the words of affection alleged by the applicant. She denied any arrangement with the applicant, as he asserted, that he would use the pseudonym "Tonie" on occasions when he rang her mobile phone and a person other than Ms Odichou answered and she said she sought to distance herself from the applicant in mid 2004 by firstly moving to another area in the Downing Centre precinct and secondly, moving to Balmain Local Court. The applicant said the respondent was going through a recruitment drive in mid-2004 and that Ms Odichou moved to another area in the Downing Centre because she applied for and secured an acting position at the higher grade Clerk 3/4 level. She was later seconded to Balmain Local Court at the same level. 32 The communication between Ms Odichou and the applicant was the cause of domestic upheaval on two occasions in their respective households. The first was the occasion of Ms Odichou's birthday on Friday 9 July 2004 when some work colleagues including the applicant took her to lunch. Alcohol was consumed. After work, there were further drinks at the Shark Bar. Ms Odichou said she left the Shark Bar and walked to Oxford Street to meet her husband and some friends. As she walked to her destination she received a call from the applicant who sounded drunk. The applicant began to ask her where she was going and who she was going with. Ms Odichou asked the applicant not to ring her and hung up. A short time later, the applicant rang again and repeated the questions. She hung up again. This occurred a number of times, she did not recall how many, and eventually thinking it would continue, she switched off her phone. 33 On Sunday evening 11 July 2004, Ms Odichou sent an SMS text message to the applicant's mobile phone to the effect of "Hope you've recovered from Friday night". In the absence of a response, she sent a further text message to the effect of "Just wondering if you're OK". The applicant's wife, who had retrieved the messages from his phone, then rang Ms Odichou and angrily remonstrated with her for causing marital discord. A short time later the applicant's daughter did the same. 34 For his part, the applicant denied being drunk on 9 July 2004, asserted that he only rang Ms Odichou once after she left the Shark Bar and concurred in the description of the events of Sunday evening 11 July 2004. Ms Odichou said she was upset and angered by the sequence of events and confronted the applicant at work the next day seeking an explanation as to why he kept ringing her the previous Friday night when she asked him not to. She also sought an undertaking that he would explain things to his wife and would respect both their marriages. 35 She said she told the applicant she was moving to another area in the Downing Centre which she did in about August 2004 by arrangement with Registrar Trotter. Ms Odichou said her motive for moving was to distance herself from the applicant although she did not say that to Registrar Trotter. The applicant said it was never suggested to him that this was Ms Odichou's motive - at least, not before he was informed a year or so later of the allegations against him. He said, as earlier observed, that she moved for promotional reasons although I note his later reply evidence that: I was aware that Ms Odichou did not get on with her co-employee and that was the reason for her request to move to level 4. 36 Imprudent though it was (by her own admission) for Ms Odichou to send the text messages to the applicant that Sunday evening, her explanation that she was in a thoughtful way, seeking to enquire as to his welfare after the events of the previous Friday night seems plausible to me and suggests that it was more likely than not that the applicant, in an inebriated state, conducted himself in the way she described. It is otherwise difficult to understand why Ms Odichou would be concerned for the applicant's welfare and conversely, if he was intoxicated the previous Friday evening it is understandable having regard to his earlier experience of being stranded at Sutherland Station in a similar state, that Ms Odichou would be concerned. 37 That being said, however, there seems to me no rational basis on which to hold the applicant directly or solely accountable for the consequences of an imprudent text message sent to him by Ms Odichou. That was, after all, the reason why the applicant's wife and daughter rang and remonstrated with Ms Odichou and to the extent that the applicant may have misbehaved towards Ms Odichou the previous Friday evening as I think he did, there would be only the most tenuous connection between that misbehaviour and the aftermath of Ms Odichou's imprudent text message. Taken at their highest, I think the phone calls she received from the applicant's wife and daughter may have been and probably were the catalyst for Ms Odichou's decision to put some space between her and the applicant and to put their relationship on a qualitatively different footing. That is not to say that Ms Odichou did not have every right to be offended by the applicant's behaviour the previous Friday evening. 38 Communication between them continued, however, and the second incident of domestic upheaval, this time in Ms Odichou's home occurred in this way. The applicant sent Ms Odichou a text message to the effect (on the applicant's version) "Hi it's me - sorry I missed you" or to the effect (on Ms Odichou's version) "Miss you". The message was sent late on Sunday night 23 January 2005 at a time, the applicant said, when he thought Ms Odichou would be asleep and most likely to retrieve the message the next morning. The message was sent that Sunday night, according to the applicant, in response to emails he had received from Ms Odichou the previous Friday 21 January 2005 in the following terms: email 1 - Sorry, been realy (sic) busy but I'm ok. How are you? 11:45 am email 2 - Hope you have a wonderful time away! Take care and 2:23pm chat when you get back! 39 As may be apparent from the content of the last email the applicant was departing on leave and his last day at work prior to so doing was Friday 21 January 2005. He said he sent the text message to Ms Odichou late on Sunday 23 January 2005 so she wouldn't think he was rude for not getting back to her before departing on leave. Two things make me doubt the accuracy of that evidence. Firstly, the applicant was there referring to the departure for Bali which on his evidence occurred three days later on Australia Day 26 January 2005. Thus there was more than enough time to send the message at a more opportune time. Secondly, the email to which he responded plainly contemplated further communication upon his return from Bali - "chat when you get back" - and thus required no response on Sunday 23 January 2005. I do not accept the applicant's explanation as to his motive for sending the text message at such an inopportune time and for reasons which I will explain in a moment, I am of the view that the messages most probably contained the words "I miss you" as Ms Odichou said (and steadfastly maintained) rather than the words "Sorry, I missed you" as the applicant said. This is because Ms Odichou's emails to the applicant on 21 January 2005 were on their face and according to her evidence, in the nature of an exchange with him after he had telephoned her at Balmain Local Court and therefore would not logically call for a "sorry I missed you" response. Further, it is unlikely that a "sorry I missed you" text message would cause the same angry response from Ms Odichou's husband as a more overtly affectionate message "I miss you" would - and an angry response is indeed what the message caused. 40 Ms Odichou's husband, it seems, retrieved the applicant's text message, rang the applicant and angrily demanded that he desist. The evidence was that the incident caused significant marital disruption. 41 Ms Odichou took the matter by way of a complaint to Deputy Registrar Cooke and Registrar Trotter the latter of whom gave the following evidence: Craig Cooke approached me about the situation, and informed me that Mary's husband was extremely angry, and was adamant some official action should be taken, not least because Lupcho was in a management and supervisory position over Mary. With Craig as intermediary, since both Mary and her husband were comfortable dealing with him, Craig and I sought Mary's views on how she wanted the matter to be dealt with, outlining the options including formal grievance procedures, and assuring her of our support in whatever course she chose. Given the nature of the allegation, Craig and I both determined that it was a case where, in conjunction with Mary's wishes, we had some discretion on how we proceeded, rather than it being a mandatory formal procedure. Mary's preference was that the matter be dealt with at the local level, rather than on a formal complaint basis, and we assured her that would be done. She did not wish to be involved in a formal complaint process, both from a personal and professional standpoint. Her main wish was that Lupcho have absolutely no contact or dealings with her. From a work point of view that was relatively easy to assure for the immediate future, since she had taken up a position at Balmain for a period of six months several weeks before this incident. Craig also spoke with her husband, who was prepared to accept our undertakings that we would deal with the matter. On 31 January or 1 February 2005, Craig Cooke and I spoke with Lupcho and outline the concerns we had. He appeared to be remorseful about the problems he caused Mary and her husband, and agreed to our ultimatum that there be absolutely no contact from him to Mary. It was made clear to him that any breach of that undertaking would see the matter escalate to formal proceedings, without me necessarily relying on Mary's consent to that course. It is my understanding that Lupcho has kept that undertaking in relation to Mary, and there has been no contact since Craig and I spoke to him on that occasion. Despite that, it is my understanding that the situation has caused many serious problems, personally and in terms of her marriage, for Mary Odichou. A combination of factors, including Mary becoming aware of the type of behaviour was occurring again to someone else, means she is now prepared to come forward on a more formal basis. Ms Khazma's allegations 42 It is a matter of some controversy in the proceedings whether the "someone else" referred to in the above extract was Ms Khazma but at all events, Ms Khazma complained to Deputy Registrar Cooke on Friday 13 May 2005 about the applicant's behaviour towards her. The complaint initially took the form of a casual conversation over drinks that evening at the Shark Bar which was repeated at Mr Cooke's invitation during the next working day (16 May 2005). Mr Cooke then recounted Ms Khazma's complaint to Registrar Trotter who progressed the matter. On 20 May 2005 the applicant was suspended from duty and a formal disciplinary process commenced. 43 Ms Khazma's complaint's involved the applicant allegedly calling her into his office several times a day and on almost every occasion commenting on her appearance. He would allegedly make comments such as "You look sexy", "Those stockings look hot on you", "That top looks hot on you" and "I love your colour - it's hot". Ms Khazma said she took the last comment to be a reference to her skin colour. She said she became friends with Ms Odichou and would attend lunches and work drinks which the applicant would also attend. The applicant would lean close to her and whisper in her ear. 44 She recalled on one occasion a lunch at the Shark Bar, the applicant spoke to her in words to the effect "I want you - I don't want Mary. I want to fuck you. Mary wants to leave her husband for me but I don't want her. I want you". Ms Khazma said she understood the applicant to be referring to Mary Odichou and she recalled that incident occurring prior to Ms Odichou's secondment to Balmain Local Court. 45 On another occasion at works drinks in December 2004, Ms Khazmar said the applicant called her over and invited her to sit next to him which she did. She said the applicant told her "You're so fucking hot" and simultaneously put his hand down the back of her skirt and pinched her bottom. She said she yelled out in shock and got up and went over to where her partner Glen Ewing (also a Downing Centre employee) was sitting. 46 On yet another occasion in December 2004 also at works drinks the applicant was said to be affected by alcohol and unable to locate his bag as he was leaving to go home. Ms Khazmar said she found the bag and gave it to the applicant who hugged her and said "You're so fucking hot - now fuck off" in a very aggressive manner. 47 In late 2004, the applicant is alleged by Ms Khazmar to have told her of his purchase of a Harley Davidson Fat Boy motorcycle. She said the applicant told her "I'll come and pick you up on my fat boy and we'll spend the whole weekend together". She said she had no doubt that the applicant intended his remarks as a sexual proposition. 48 Ms Khazma said she began to avoid going into the applicant's office when asked and would wait until someone else was in the office before going in. She said the applicant became less friendly and even hostile towards her and removed staff who had assisted her thus making her workload more onerous and difficult to complete. 49 For his part, the applicant admits to the occasional lunch at work drinks at which Ms Odichou and Ms Khazma among others would be in attendance. He denies the allegations of improper conduct in their entirety. He recalled, however, that he had cause to counsel Ms Khazma and another employee Ms Zaharia both of whom were having a heated argument in the open registry office. The counselling took place in his office with the door closed and so far as he was concerned, the matter was resolved. At other times, if the applicant had cause to speak to Ms Khazma he would go to her workstation. 50 The applicant said there were many occasions when Ms Khazma flirted with him and other male employees in the workplace. This was corroborated by other witnesses in the applicant's case such as Ms Zaharias and Ms Anlezark. 51 The applicant also described an occasion where he was approached by Ms Khazma and asked to provide a reference for her. He told her she should obtain such a reference from Mr Bonham, her direct supervisor. The applicant understood and Mr Bonham confirmed that he (Bonham) told Ms Khazma that any reference provided would have to be honest in its appraisal of her strengths and weaknesses. Ms Khazma became annoyed and as the applicant described it, stormed into his office to complain about Mr Bonham's approach. Ms Khazma then stormed out of his office saying something which he did not hear. Ms Anlezark heard Ms Khazma say "You will pay for this" as she stormed out of the applicant's office and she noticed a cooling in Ms Khazma's previously friendly attitude towards the applicant after that incident. Submissions 52 Mr Hatcher submitted that the majority of the allegations against the applicant relate to the conduct outside of the workplace and outside of working hours, a fact which imposes significant limits on the extent to which an employee may be dismissed or disciplined for such conduct. The employer is not the moral adjudicator of the private lives of its employees. Out of work behaviour may only be the subject of disciplinary action by an employer where the conduct has significant and adverse effects in the workplace, because of its impact on workplace relations, on the work of other employees or on the effective conduct of the employer's business (McManus v Scott-Charlton (1996) 140 ALR 625; Rose v Telstra Corporation AIRC, Ross VP, Print Q 9292, 1998). This is recognised in the respondent's harassment prevention policy which states: 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. 53 It is further submitted that there is no evidence at all to support allegations 1(f) and 1(g) and no evidence to support allegation 2 that the respondent's name was brought into disrepute by the applicant slamming Ms Saliba's car door. 54 In relation to the reasons for dismissal set out in the letter of 20 December 2005 from the Director General Mr Glanfield, the following passage appears: Mr Dafkovski throughout the investigation denies the allegations. This, in my experience, is quite typical of those charged with sexual harassment or harassment. Officers the subject of breaches of discipline involving harassment generally see nothing wrong with the way they treat others. What disturbs me about this matter is the way Mr Dafkovski attempts to put the blame on the two complainants and the officer who undertook the disciplinary investigation. I am of the view that the conduct demonstrated by Mr Dafkovski does constitute sexual harassment and harassment and his conduct has been such that it brings upon himself the consequences of disciplinary action. He fails to see that his treatment of Ms Odichou and Ms Khazma was wrong. His comments directed towards those officers shows a total lack of professionalism and the type of conduct Mr Dafkovski has engaged in is contrary to the professional and ethical behaviour expected of all staff in the department. Mr Dafkovski has not really taken responsibility for what occurred. Employees have the right to a safe working environment free from harassment. The actions of Mr Dafkovski concerns unacceptable behaviour. 55 Mr Hatcher submitted that this is a distortion of the applicant's denials of the allegations against him and demonstrates in a procedurally unfair way, a refusal on the Director General's part to properly consider the applicant's response to the allegations. The same fundamental flaw is evident in the investigation carried out by Ms Nix who essentially proceeded on the basis that because Ms Odichou and Ms Khazmar said certain things, they did happen. In the case of the bottom pinching incident, for example, Ms Khazmar said she jumped up and said to Carla Gigliotti "he pinched me". When Ms Gigliotti was eventually interviewed by Ms Nix (as a direct result of the applicant complaining to the Director-General that relevant witnesses had not been interviewed) she was never asked about the pinching incident, was unable to recall any episode of improper conduct by the applicant (although she did observe him hugging and kissing people on occasions at the Shark Bar) and was said by the investigator to be "unable to assist with the matters subject to investigation". I note, however, from the record of her interview with the investigator that Ms Khazmar was by no means certain that it was in fact Carla Gigliotti to whom she directed that remark. 56 As Mr Hatcher submitted, bearing in mind its evidentiary onus, one of the difficulties in the respondent's case is that it relies largely upon on the uncorroborated testimony of the two complainants. The respondent, I note, called Ms Saliba in support of the door slamming incident and it called Mr Ewing to say that his partner Ms Khazmar had complained to him about suggestive and at times sexually explicit remarks made by the applicant. Mr Ewing also recalled Ms Khazmar describing how the applicant had put his hand under her skirt at the Shark Bar on one occasion. In his record of interview with the investigator, Mr Ewing said this: Q. I just would like to ask you, you mentioned before you didn't remember times, dates, things like that, but if you can just comment for me on any of the comments she may have made to you regarding the treatment or things said to her. A. Certainly. Well, I guess I can equate the best time to prior February of this year, that's when both of us went on holiday, that's Samar and myself, to Fiji. I know it was happening prior to that date, which was obviously in 2004. Months and days I couldn't specifically tell you, suffice to say that generally when these situations happened her response time to notify me was generally that evening or the following day. The early things that may have happened I think were said to her and I guess my interpretation was the way it was expressed that it could have been one thing or the other, it may have been made in fun even though it may have been inappropriate. It suddenly spiralled out of control subsequent to Christmas of 2004 where on one occasion, this was a function, lunch function at the Shark Hotel which Lupcho Dafkovski was obviously there, there was a number of people there from the Downing Centre, both levels 4 and 5, where subsequently Lupcho Dafkovski had reached under Samar Khazma's skirt and pinched her on the backside what at that particular time was highly inappropriate. I didn't personally observe that happening. There were a number of people there that probably didn't either and I'm not too sure, nobody approached me bar Samar Khazma who notified me directly in her own way. When it subsequently happened she raced over and sat close to me and was obviously, you know, of somewhat of a state, which I didn't understand at this particular time but I was notified later that evening as to what took place. Certain other events became more graphic. If that's not graphic enough, then the legible conversation or the audible conversation became more profoundly vulgar in as much as I on one occasion was - the retort of her was 'I want to fuck you, now fuck off' was one situation. Q. And she told you about - - A. She told me that day or the following day, subsequently I think the last occasion or the one that I said enough is enough, because at my behest I was trying to get some formal liaising between human resources and herself at that particular time. I guess it all came to a head when - and I'm not sure of this date, suffice to say it was probably the last occasion or the last thing that was said when Lupcho Dafkovski, to everyone's knowledge, had brought himself a Harley Davidson model called a fat boy. At some instance he had actually said to her , I wasn't privy to hearing it, subsequent to being told that evening, he had said 'I would like to get you on my fat boy and take you to a hotel'. Now this must have been on Friday night because he was basically talking about a Saturday morning breakfast brunch after a subsequent ride on the fat boy. At that particular time, if not prior, that's when I was more animated in something official being done about this gentleman. Now let me say he was my boss and was my boss during this entire time and to subsequently have to guard not only that I said but my actions in liaising with this gentleman, whether it be in Court as the Registrar, in Court or in capacity as a Registrar, as administration, I really had to watch what I said and done because, as I think most people can appreciate, I was not one to take this lightly at all. 57 The difficulty in the respondent's evidentiary case to which Mr Hatcher alluded is compounded however, by the glaring inadequacies in Ms Khazma's evidence which are comprehensively and compellingly set out in the following extract from Mr Hatcher's submissions: Ms Khazma's Complaints General Credibility as a Witness 10. Ms Khazma cannot be accepted as a witness of credit. Her oral evidence was marked by refusals to answer direct questions (even when repeatedly requested to so), evasive answers, contradictions, exaggerations, abrupt changes in her story, the raising of important factual matters which had never been mentioned before, and, regrettably, outright lies. Nothing she said should be accepted unless directly corroborated by another witness. Unfortunately, virtually every part of her story which could be checked against the evidence of another witness turned out to be untrue. On any matter upon which her evidence conflicted with Mr Dafkovski, the evidence of Mr Dafkovski should be preferred. His evidence was consistent, clear, in accordance with the probabilities, and not affected by cross-examination. Some examples of clear untruths told by Ms Khazma, as demonstrated by the evidence of other witnesses (very often the Department's own witnesses) are as follows: Ms Khazma said that, beyond looking at parts of it in draft form while it was on the computer screen, she had never read her affidavit after it was printed out or before deposing to it [T 202.1-43]. The file note [Ex 29] of Mr Davies, the solicitor who took the affidavit and witnessed it, makes it perfectly clear that she did in fact read it after it had been printed out. (The Department's legal representatives acted properly in tendering this file note, since a legal practitioner cannot in any legal proceedings let evidence be given which the practitioner knows to be false without either taking steps to have it corrected or withdrawing from the proceedings). Ms Khazma said that " of course " she told Mr Ewing her story about being pinched by Mr Rayner [T 188.13-28]. However, Mr Ewing's evidence gave the lie to this: he said that Ms Khazma had never alleged to him that anyone apart from Mr Dafkovski had engaged in sexual harassing or inappropriate physical or sexual behaviour towards her [T 211.41-212.20]. Ms Khazma, in describing the alleged difficulties she had with partner Mr Ewing about her allegations concerning Mr Dafkovski conduct towards her at the workplace, said that Mr Ewing had said to her that " you probably like it, that is why you don't stop him " [T 140.16-17 & 21-22]. Mr Ewing's evidence made it clear that this was completely false: his initial reaction to the proposition that he had said this to Ms Khazma was " Are you serious ? ", and he rejected it as both untrue and offensive [T 213.14-40]. Ms Khazma absolutely denied having any discussion with Ms Odichou about their respective allegations concerning Mr Dafkovski prior to her speaking to Mr Cooke at the Shark Bar on 31 May 2005 [T 128.15-20, 129.55-130.9, 132.19-33], and said that she had not been in contact with her for some time [T 129.40-46]. Ms Odichou revealed this evidence to be false: they had met and there had been at least some discussion of Ms Khazma's allegations [T 233.43 - 234.19; 277.19-21] - although it is doubtful that Ms Odichou told the whole truth about this meeting. The real picture is conveyed in Annexure A to Mr Cooke's affidavit [Ex 24]: Ms Odichou said to Mr Cooke on 13 May 2005 that " it is happening again " (which she indicated involved Mr Dafkovski - T 305.32-34]), and Ms Khazma said to Mr Cooke on 16 May 2006 that " she was aware of another incident involving another female staff member and that she would be prepared to take the issue further if the other person was also prepared " (which Mr Cooke took as a reference to Ms Khazma having prior knowledge of Ms Odichou's allegations - T 307.16-29). When this part of Mr Cooke's affidavit was raised with Ms Khazma, she initially explained it [at T 144.45-57] by referring to another purported allegation involving a person named "Veronica" (not otherwise referred to anywhere in the evidence), and stated [T 148.50-149.1] that she had told Mr Cooke about this allegation (of which no mention is made in Mr Cooke's affidavit), but then she changed her story and explained it [at T 149.7-56] by saying that she was 80% sure that Mr Cooke had told her about there being another allegation (which Mr Cooke denied - T 307.10-14). This was obviously all false evidence to conceal her prior knowledge of Ms Odichou's allegations. In revealing her allegations about Mr Dafkovski to Mr Cooke at the Shark Bar on or about 13 May 2005, Ms Khazma said that she sought and obtained a promise from Mr Cooke that what she said was private, confidential and would go no further [T 127.52.57]. She further said that later that evening, at the Retro Bar, Mr Cooke was " pressuring " her to make a formal complaint [T 131.35-42]. The following Monday (16 May 2005), according to Ms Khazma, Mr Cooke called her into his office, and told her that he had already spoken to somebody else about the matter because of his duty of care, and a formal complaint had to be made. Ms Khazma then says she protested at the breach of the promise of confidentiality [T 131.50-58]. It is clear that Ms Khazma's evidence in this connection was to support her claim that she never intended to "hurt" Mr Dafkovski - effectively seeking to transfer the responsibility for the complaint to Mr Cooke. However, Mr Cooke's evidence demonstrated that Ms Khazma was lying about this [T 307.44-308.39]: (i) he denied that he had been sworn to secrecy by Ms Khazma; (ii) he denied that he broke any promise of confidentiality to Ms Khazma in taking the matter further; (iii) he did not pressure Ms Khazma at all to make a complaint, and any suggestion to the contrary was absolutely untrue and false; (iv) Ms Khazma had, on the evening of 13 May 2005, agreed to come into his office the following Monday (16 May 2005) for the purpose of speaking to him in a professional capacity; (v) he had not required her to come to his office on the following Monday. Ms Khazma said that she told Mr Cooke on 16 May 2005 about her allegation that Mr Dafkovski made sexually offensive remarks to her in the office [T 140.54-141.48, 142.35-56]. However, Mr Cooke demonstrated this to be false: he said [T 309.19-26] that there was " absolutely not " the slightest suggestion made by Ms Khazma on either 13 or 16 May 2005 of any allegations against Mr Dafkovski pertaining to his conduct in the workplace. Mr Bonham, Ms Khazma's supervisor, gave clear evidence that Ms Khazma had been the subject of disciplinary action in mid-2005 because of her coming back from lunch 40-45 minutes late when she performing duties as a court officer [T 98.46-99.13]. Ms Khazma, saying that she would remember something like that, completely denied that it had happened, and suggested Mr Bonham had lied about it [T 122.18-43]. That this was not simply a lapse in memory on Ms Khazma's part is demonstrated by Ms Khazma's assertion that Mr Bonham had never been critical of her work performance [T 122.10-16]. She subsequently admitted that Mr Bonham had taken issue with her returning late from lunch on a number of occasions [T 122.51-123.1], as Mr Bonham said he had [T 99.19-24]. However, when this inconsistency in her evidence was raised with her, she said that she did not regard this as a work performance issue at all - a scarcely credible answer [T 123.21-32]. Ms Khazma said that Ms Anlezark (whom she pointed to as sitting in the court room) and Ms Zaharias had got up a petition against her, which led to a number of workplace meetings [T 171.33-42, 194.1-3]. Counsel for the Department never put this to either Ms Anlezark or Ms Zaharias - undoubtedly because he knew nothing about it prior to Ms Khazma giving her evidence. No evidence was adduced from any of the Respondent's witnesses (such as Mr Ewing, Mr Cooke or Mr Trotter) to support this allegation. Ms Anlezark was called at short notice in reply, and she denied that she had organised any such petition, or that anyone else had, or that there were any communications from management about this [T 328.29-58]. This was simply another invention by Ms Khazma. It would be an impossible task to give a complete analysis of all the flaws in Ms Khazma's evidence. However, a typical example of the evasions, inventions, exaggerations and contradictions in Ms Khazma's evidence is the following exchange in cross-examination, with added commentary [T 156.41-157.6]: A. … I have no resentment towards Lupcho. I have no ill feelings toward Lupcho whatsoever, whatsoever. I am here today because I have to be here. I am not here because I want to be here. Please get that right. [Ms Khazma volunteers in a non-responsive way that she is giving evidence under some form of compulsion]. Q. Have you attended under summons to give evidence ? A. I had to come here [Ms Khazma avoids answering direct question which tests her previous statement]. Q. Have you attended under summons to give evidence ? A. No, but the department told me I had to be here [she answers the question - thus admitting she was not giving evidence under compulsion - but comes up with an alternative explanation]. Q. Who told you that ? A. I have a letter [i.e. she identifies a letter as the source of the requirement from the department for her to be there]. Q. Who told you that ? A. Well its from the Crown Solicitor, so I don't know [she cannot in fact identify anyone from the department as having required her to be there]. Q. And what is it they said ? A. I am supposed to be here [i.e. this is what was allegedly said in the letter]. Q. As a requirement of your employment ? A. I don't think employment came into it. Honestly, I didn't read the letter, I didn't read the letter [if true, this means her last answer that the letter said she was supposed to be here was false, since she never read it . It also leaves her without any basis for her original assertion that she was only giving evidence because "I have to be here". It is a matter which, once tested, goes nowhere]. Further detracting from Ms Khazma's credit as a witness was her tendency to impute, without basis, improper motives or behaviour to every co-worker who gave evidence inconsistent with hers. For example, she said that Ms Anlezark was "not an honest person " and was very rude, and that she couldn't stand her [T 194.1-11]. Ms Zaharias hardly worked or wouldn't really work, had cigarette breaks a lot, and was very moody [T 116.51-58]. Mr Bonham was incapable of giving her a truthful and honest reference because of a "personality clash" between them [T 124.14-30]. Mr Rayner was also guilty of sexually harassing her (see below). This general analysis of Ms Khazma's evidence would itself be sufficient to found the conclusion that the Department had not proven her allegations. However, a more detailed analysis of her specific allegations makes this conclusion even clearer. The Allegation of Sexually Offensive Comments at the Workplace Ms Khazma's allegation was that, on a very regular basis, Mr Dafkovski made outright sexually offensive comments to her in his office at work. These comments included " You look sexy ", " You're so fucking hot ", " Those stockings look hot on you " and " I love your colour – its hot " [Ex 17 par 5]. Ms Khazma's evidence was that there was nothing ambiguous in the type of remarks which she said Mr Dafkovski made to her at the office, but that they were " straight out " [T 140.32-46]. This is probably the most serious allegation made by Ms Khazma, since it involves clearly inappropriate behaviour in the workplace. However, the evidence shows that this complaint was so altered and exaggerated over time it is impossible to tell what, if any, basis it ever had. Firstly, Mr Ewing said that when Ms Khazma first raised the complaint with him, it was that Mr Dafkovski had made " suggestive and ambiguous comments " to her [Ex 20 par 6], and that " it could have been one thing or the other, it may have been made in fun " [Ex 20 Annexure A p.4 lines 5-7]. Mr Ewing said that Ms Khazma told him the details of what was said, but that he could not recall any specific remarks [T 215.22-36]. Mr Ewing said that none of the alleged remarks set out in paragraph 15 above were identified at the time by Ms Khazma as having been said by Mr Dafkovski [T 219.9-220.1]. He did say he recalled the remark " That top looks hot on you ", but agreed it was not an innuendo-type remark [T 220.3-13]. Mr Ewing evidence therefore does not support Ms Khazma's evidence, but contradicts it. As has been earlier stated, when Ms Khazma first raised her harassment allegations with Mr Cooke on 13 and 16 May 2005, Mr Cooke's evidence was that she made no mention of anything having occurred in the workplace (see paragraph 11.6 above). His notes of the meetings support this: " I asked Ms Khazma if these incidences occurred in the workplace or in a social setting to which she replied 'at the Shark Bar' ." His notes make no mention of the type of remarks set out in paragraph 15 above having been made in any context. It seems therefore that Ms Khazma did not think that there had been any workplace conduct on the part of Mr Dafkovski worth complaining about as at May 2005. The matter first arose when Ms Khazma was interviewed by Ms Nix in June 2005, and was explained in an extremely garbled way [see Ex 17 Annexure A]. Ms Khazma was specifically asked about the frequency of the sexually offensive comments at work, and she answered: " Probably twice a month, sometimes three, four times " [ibid p.12 lines 44-5]. However, this had changed by the time of her affidavit, when she referred to being called into Mr Dafkovski's office and receiving these types of comments about her appearance " on almost every occasion " [Ex 17 par 4]. In cross-examination, this became usually a daily event: [T 136.34-35]. When this inconsistency was raised with her in cross-examination, Ms Khazma initially conceded that there was an inconsistency between in her affidavit and what she said during the interview [T 137.6-18]. She then said that the version she gave in court was the truth [T 137.20-21], that she had a more accurate recollection in September 2006 than in June 2005 [T 137.32-35], and that the answer she gave at the interview was not true and correct [T 138.1-2]. She could give no explanation as to why, having read the transcript of the interview, she took no steps to correct any answer she gave as to its substance [see T 138.17-139.17], despite it being clear that she had the opportunity to do so [Nix, T 326.41-49]. Subsequently, Ms Khazma tried to contend that she had understood the question in the interview concerning the frequency of offensive remarks in the workplace as relating to the specific "fat boy" comment only [T 167.13-38]. However, neither the particular question in the interview or the surrounding context provide any support for Ms Khazma's evidence in this regard. It is submitted that this was all a dishonest attempt to avoid having to explain the clear inconsistency in her evidence. Ms Khazma stated in her affidavit that Mr Rayner was present on occasions when Mr Dafkovski made sexually offensive remarks to her in his office [Ex 17 par 12] Ms Khazma repeated this in her oral evidence, and indeed went further, saying that Mr Rayner " was always in his office " [T 151.19-41]. However, the transcript of Ms Khazma's interview in June 2005 is to the entirely opposite effect [Ex 17, Annexure A, p.9.49-52]: Q. Did anyone else hear him say those things ? A. No, because it was mainly in his office when there's no-one there, you know, get on his fat boy, pick me up. No, there was no-one there. When confronted with this direct inconsistency in her evidence, Ms Khazma said (as with the frequency of the comments) that she understood the question related to the specific "fat boy" comment [T 166.39-167.11]. Again, neither the particular question in the interview or the surrounding context provide any support for Ms Khazma's evidence in this regard. She plainly invented it an attempt to avoid admitting what was obvious - that in June 2005 she had made it clear that there were no witnesses to Mr Dafkovski's alleged office conduct, and that she had contradicted this in her affidavit. Mr Rayner denied in his affidavit that he had ever observed Mr Dafkovski behave in any inappropriate manner toward and staff member whilst he worked with him [Ex 15 par 5]. Specifically, he said that at no time while he was present in Mr Dafkovski's office did Mr Dafkovski make any inappropriate comments to Ms Khazma [Ex 15 par 10]. Although Mr Rayner was briefly cross-examined about this (without effect), it was never suggested to him that his evidence about this was untruthful [T 104.13-33]. Ms Khazma took her line about Mr Rayner one step further in her oral evidence, saying that he had made the same sort of sexually offensive remarks to her in the workplace that Mr Dafkovski allegedly had [T 151.29-36, 153.50-52]. It is important to note that this was not a matter ever put to Mr Rayner by counsel for the Department when he gave evidence - as it should have been, since if it had any basis to it, it was a matter going to his credibility as a witness. This was undoubtedly not due to any omission on the part of counsel for the Department, but rather because Ms Khazma had never mentioned this story to anyone before - not to Mr Ewing, or to Mr Cooke, or to Ms Nix, or to Mr Davies when he took her affidavit. Her stated reason for mentioning this for the first time in court was her purported belief that " if it is said in courtrooms it can't be taken any further " [T 155.29-30], but she was completely unable to identify the basis or source of this belief [ibid]. This was, in reality, another spur of the moment invention by Ms Khazma to evade difficult questions in cross-examination. The allegations themselves, once placed in the physical context of the office environment at the Registry at Level 5 of the Downing Centre, are literally incredible. Mr Dafkovski had an office that was glass-walled on four sides, with another office on one side [T 157.42-50]. The venetian blinds over the walls were almost always left open [Zaharias Ex 11 pars 7, 15; Rayner Ex 15 par 7]. The door was never closed, according to Ms Khazma [T 158.46-47; see also Zaharias Ex 11 par 15 and Rayner Ex 13 par 5]. There were registry staff situated about two metres away from the open door, as Ms Khazma agreed [T 160.22-28]. It could not have been the case that Mr Dafkovski could, on an almost daily basis, have made sexually offensive remarks to Ms Khazma without at least once being overheard by somebody. However, nobody corroborated Ms Khazma's allegations in this regard. An important part of Ms Khazma's allegations in this regard was that Mr Dafkovski would, on a daily or more than daily basis, summons her to his office by saying " Hey, Sam, get in here now ". Ms Khazma described Mr Dafkovski as " yelling it across the office ", and said that there was no doubt it would have been heard by other Registry staff [T 162.4-20]. Yet, as earlier stated, the Department called no witness from the Registry staff to corroborate this. Of a number of witnesses from the Level 5 Registry staff called by the Applicant, only one (Ms Anlezark) was cross-examined about this, and she denied that it ever occurred [T 77.9-13]. The Allegation re Removal of Resources Ms Khazma alleged in her evidence that "When I began avoiding Mr Dafkovski after the incident at the Shark Bar described in paragraph 8 above, he proceeded to remove resources from my work area" [Ex 17 par 13]. This allegation was not listed in the Department's reasons for dismissal of Mr Dafkovski, although it was clearly known about, since it was raised by Mr Khazma in her interview in June 2005 [Ex 17 Annexure A p.7 lines 17-19]. It is therefore cannot be relied upon by the Department to justify the dismissal. However, the allegation was clearly false, and so it is another matter going to Ms Khazma's credibility. That it was false was demonstrated by the evidence not only of Mr Dafkovski [Ex 6 par 9.12], but also of Ms Zaharias, her assistant [T 80.49-81.19, 81.48-82.22], Mr Bonham, her direct supervisor [T 94.18-43], and Ms Anlezark [T 72.27-73.2]. They all testified that she had a number of persons assisting her during the period that she was acting list clerk, and that any problems she had were a consequence of her generally late attendance at work and her incompetence. The falsity of the allegation was also demonstrated by an issue which arose about the time at which this removal of resources was meant to have occurred. In her affidavit [Ex 17 pars 12-13] , Ms Khazma said that Mr Dafkovski began to " remove resources " from her work area after she began to avoid him following an incident in the Shark Bar [described in par 8] in which he allegedly made some offensive remarks concerning Ms Odichou and herself ("the Odichou incident"). In her evidence on 13 September 2006, Ms Khazma gave a different version. She said she was still going into his office after the Odichou incident (which she said occurred before Ms Odichou went to Balmain Local Court, making it prior to November 2004), but stopped doing so in January 2005 after the bottom-pinching incident at about Christmas 2004 [T 163.28-165.4]. On this basis, she identified paragraph 12 of her affidavit as being incorrect [T 165.16-30]. On the following hearing day, 14 September 2006, Ms Khazma initially confirmed again that both paragraphs 12 and 13 were incorrect, and that she began avoiding Mr Dafkovski in January 2005 [T 173.3-48]. Subsequently, she again confirmed that the alleged removal of resources occurred in January 2005 or afterwards, as a result of the alleged pinching incident around Christmas 2004 [T 198.45-54]. However, as was pointed out to Ms Khazma, the time sheets tendered by the Department [Ex 18] showed her complaining about (allegedly) reduced resources on 3 November 2004 – at least two months earlier. This of course showed that even if resources were reduced, they were reduced well before the time when Ms Khazma says she began avoiding Mr Dafkovski, demonstrating that there could not be any causal link between the two matters. When confronted with this, Ms Khazma initially stonewalled – saying "… I knew deep down in my heart, I knew this is why he was doing this " [T 200.44-5], without even attempting to justify the illogicality of her position. However, shortly afterwards – realising her difficulty – she changed her evidence again, and said that paragraphs 12 and 13 of her affidavit were in fact correct in identifying her avoidance of Mr Dafkovski as occurring after the earlier Odichou incident [T 201.8-50]. This shift of course solved the temporal problem for her. When Ms Odichou was tested as to why she had earlier given contrary evidence, she initially prevaricated with the lie that she had not read her affidavit [T 201.52-202.40]. When pressed about this timing issue, she then said " I will be honest with you, I don't recall " [T 203.6] – another change in position, with the answer suggesting an admission that her earlier evidence about this had not been honest. She was then asked why she had given clear evidence about the matter earlier if she didn't remember, to which she responded by changing her position again and saying she began avoiding Mr Dafkovski after the alleged pinching incident – eventually firmly adopting this as her position [T 203.16-58]. When it was again pointed out to her that that position meant that there could be no connection between the earlier alleged removal of resources and the later alleged avoidance by her of Mr Dafkovski, Ms Khazma merely asserted " There is a connection " without attempting to explain herself further [T 204 8-12] (of course, there was no logical explanation, unless Mr Dafkovski had the ability to travel back in time). Such an analysis of just one aspect of Ms Khazma's evidence is somewhat tedious, but it is necessary to demonstrate her complete recklessness as to the truth. It shows that she changed her evidence no less than four times about the same matter, as it suited her in order to deal with the questions she was asked in cross-examination. Her evidence that Mr Dafkovski " removed resources " from her work area in retaliation to her supposedly avoiding him cannot be believed. In fact, the evidence is that she never did have resources removed from her. Nor did she ever avoid Mr Dafkovski; the evidence in fact is that he began avoiding her after he had to call her into his office after she had a shouting match with Ms Zaharias in the workplace, resulting from her making false allegations about Ms Zaharias' work performance. This subsequently caused Ms Khazma to say: " Lupcho hardly talks to me anymore. He never comes into our section anymore " [Ex 11 pars 13-14]. The Fat Boy Allegation Ms Khazma gave the following evidence in relation to this matter: Mr Dafkovski said to her "I'll come and pick you up on my fat boy and we'll spend the whole weekend together" [Ex 17 par 10] Ms Khazma's complaint was not that the reference to the "Fat Boy" was a double entendre, since she clearly understood he was only talking about his motor bike [T 188.56-189.6], nor would she have regarded a simple invitation to her to go a ride with him on the motor bike as being improper [T 189.19-25]. Rather, she regarded the reference to the spending the whole weekend together as being a sexual proposition [ibid; T 189.50-190.3]. Further, Ms Khazma said this invitation was made not one, but " once a week " over several weeks [T 190.5-191.8]. Importantly, Ms Khazma located these comments as having been made at the office , not at the Shark Bar. That Ms Khazma's was replete with falsifications and exaggerations is demonstrated by comparing it with the evidence of Mr Cooke and Mr Ewing: Mr Cooke, as stated earlier, made it clear that Ms Khazma had never complained to him about anything inappropriate having occurred at the office. Mr Ewing gave evidence as to what Ms Khazma had originally told him about the matter. Mr Ewing said that he was quite clear in his recollection about this [T 223.12-19]. Firstly, he identified the words used as " I'd like to take you on my fat boy, we could have breakfast or brunch at a hotel " [Ex 20 par 9, as explained at T 214.28-54; 224.22-25]. Mr Ewing inferred that there was a sexual invitation in this [T 223.28-48]. However, no such inference necessarily arises from the words. When this version was put to Ms Khazma, she agreed that if that was what had been said, " I wouldn't have taken it as anything " [193.38-46]. Secondly, Mr Ewing's evidence was that Ms Khazma's "fat boy" complaint related to a single incident – not a repeated one [T 222.39-57]. Therefore, because of the manifest inconsistencies in the Department's own evidentiary case (and having regard to the general unreliability of Ms Khazma's evidence), it is impossible draw any clear conclusions about what was actually said, where it was said, how many times it was said, and (most importantly) whether what was said necessarily contained any sexual innuendo. Mr Dafkovski denied the allegation as made by Ms Khazma. He gave evidence of a quite different conversation about the fat boy which was initiated by Ms Khazma with the words " Lupcho, when are we going for a ride on your bike [Ex 6 par 9.10]. For reasons earlier identified, Mr Dafkovski's evidence would be preferred over that of Ms Khazma. In this connection, it might additionally be noted that during her cross-examination, Ms Khazma revealed that there was a conversation between her and Mr Dafkovski about the fat boy which she initiated [T 189.11-17]: " I remember I asked him 'what's a Fat Boy'. Or something I can't recall to the words of 'what's that ?'. And he told me it was a motor bike and it was one of those big motor bikes and I said 'Oh wow'. " It is not clear whether this was the same conversation in which Ms Khazma alleged that Mr Dafkovski made an invitation for her to come for a ride on his motor bike. If it was, it might simply be observed that any such invitation in the context of the conversation described by Ms Khazma would probably have been entirely innocent. It is also relevant that this alleged conversation (bearing in mind that Mr Dafkovski purchased the fat boy motor bike in late 2004) is entirely inconsistent with the general picture Ms Khazma tried to paint of her relationship with Mr Dafkovski. Ms Khazma's failure to provide this important contextual evidence in either her interview with Ms Nix or in her affidavit is another matter going against her credit. The Bottom-Pinching Allegation As earlier stated, it would not be open to the Commission to conclude that this allegation was made out, because: Mr Dafkovski's denial of this allegation would be preferred to Ms Khazma's evidence; and The Department's failure to call Ms Gigliotti, or any other employees present, to corroborate Ms Khazma's account gives rise to a Jones v Dunkel inference (and, in any event, the record of Ms Gigliotti's interview is entirely inconsistent with Ms Khazma's evidence). There are other problems with Ms Khazma's account. Firstly, she (and Mr Ewing) were completely unable to give any firm date for this incident, which otherwise they claim to have remembered so well. Mr Ewing placed it as being subsequent to Christmas 2004 in his interview [Ex 20, Annexure A p.4 lines 7-8]; but in his oral evidence was less clear about it [T 227.32-228.45]. Ms Khazma said it was "some sort of big event " held during either the " Christmas period or New year's period " [T 174.40-54]. This is important, because Mr Dafkovski was not at work during the first two working weeks of January 2005, meaning he could not have been in attendance if the event was in the New Year period. [Ex MEM-1, pp.192-194]. Again, the date of a " big event " like this was a matter which surely could have been corroborated by other employees. Secondly, Ms Khazma and Mr Ewing completely contradicted each other as to the time of day at which the incident was supposed to have occurred. Ms Khazma had no doubt that it occurred at an after work drinks function [T 177.29-36]. However, Mr Ewing was absolutely sure that it happened at lunchtime [T 227.53-228.5]. This was yet another example of the internal contradictions in the Department's evidentiary case. Finally, there was Ms Khazma's astonishing revelation that she had also been pinched by another employee at the Shark Bar. It must be recalled that Mr Dafkovski, in denying the pinching allegation in his reply affidavit, gave the following evidence [Ex 6 par 9.8]: " However, I do recall once occasion after work, when I had gone for a drink at the Shark Bar, I was standing with some others at the 'Stand-Up' section of the bar and Ms Khazma was standing at the bar when four or five males around her. She was in a very jovial mood and appeared to be having a good time. She caught my eye as she was being very animated with her hands when, suddenly she appeared to jump up, as if she had been startled. " When Ms Khazma was asked if there was such an occasion as described by Mr Dafkovski during which she was pinched, she immediately agreed that there was, and stated that Mr Rayner had done it [T 186.43-50] (thus confirming the correctness of Mr Dafkovski's recollection). This of course had never been revealed to anyone before – not to Mr Ewing (Ms Khazma's evidence to the contrary was a lie, as earlier stated), nor to Mr Cooke, or to Ms Nix. This allegation was never put to Mr Rayner when he gave evidence (as it obviously should have been), again undoubtedly because neither the Department or its lawyers were aware of it. It simply beggars belief that Ms Khazma was twice pinched on the bottom by fellow employees at the Shark Bar, and chose to report one of the incidents but keep the other entirely secret. Ms Khazma's attempt at explaining this was that she felt Mr Rayner " won't do anything ", whereas Mr Dafkovski would [T 187.28-54]. However, it had never been suggested by Ms Khazma before that her complaint about the pinch was not the pinch as such, but the fear of some unexplained consequence following the pinch. The fact was that Ms Khazma's complaint, until then, was simply that she had been pinched on the bottom by a fellow employee. If any explanation of this bizarre evidence is necessary, it is that Ms Khazma was pinched by another employee, but has deliberately chosen to falsely blame Mr Dafkovski for this. However, as earlier stated, it is sufficient for the Commission to conclude that the Department has not discharged its evidentiary onus with respect to this allegation. Other matters Ms Khazma made two other allegations about Mr Dafkovski's conduct at the Shark Bar: Mr Dafkovski allegedly said to her, on one occasion: "I want you – I don't want Mary, I want to fuck you. Mary wants to leave her husband for me, but I don't want her, I want you". Mr Dafkovski allegedly said on another occasion, when affected by alcohol: " You're so fucking hot, now fuck off ". Mr Dafkovski denied both of these allegations. His evidence should be preferred, which would be sufficient to dispose of these allegations. However, some additional matters may be taken into account: As to the first allegation, Ms Khazma's version as stated in her affidavit should be compared to Mr Odichou's evidence of what Ms Khazma told her about it: " That I was going to leave my husband for him " [T 275.16-21]. This is yet another case of Ms Khazma so exaggerating her allegation over time that it has become impossible to tell what basis, if any, it ever had to it. It should also be noted that Mr Ewing did not give evidence that Ms Khazma had ever told him about this allegation. As to the second allegation, Ms Khazma accepted that what she alleged Mr Dafkovski had said was not a proposition for her to go home and spend the night with him [T 198.11-13]. Ms Khazma's Motivation It has been submitted that, in making the allegations she did against Mr Dafkovski, Ms Khazma gave false evidence. It is not necessary, in order to demonstrate that a witness has lied, to prove that they had a motive to lie: R v Baker [1999] NSWCCA 277. However, in this case, there is considerable evidence of such a motivation – arising from the circumstances in which, in May 2005, Ms Khazma tried to obtain a reference to support her application to be promoted to clerk grade 3/4 (an application which was unsuccessful). Ms Khazma at first asked Mr Bonham, her immediate supervisor, for a reference. When he told her that he would have to give an honest and balanced reference, she immediately abandoned the attempt [Ex 13 par 7]. Ms Khazma's version was that she did not press Mr Bonham for a reference because she believed him incapable of giving a truthful and honest reference because of their " personality clash " [T 124.14-30]. However, it is abundantly clear that the true reason was that she knew he would make some criticisms of her work performance. She then went to Mr Dafkovski on 13 May 2005 and asked him for a reference - despite the fact that she says she believed at the time that Mr Dafkovski was not a person who would judge her on merit, but on what she could give him (presumably referring to sexual favours) [T 125.27-40]. In fact, it had been Mr Dafkovski who had appointed Ms Khazma to an acting grade 3/4 position when he became Registry Manager, as Ms Khazma conceded [T 126.21-29], giving the lie to the proposition that he would not treat her on her merits. That Ms Khazma sought a reference from Mr Dafkovski proves false her assertion that, so far as she was concerned, his conduct has caused her to avoid him as far as possible. It is not in dispute that Mr Dafkovski refused to give her a reference, on the basis that she had to get a reference from her immediate supervisor [Ex 6 par 9.13]. Ms Khazma then stormed out of his office, and said as she left: " You'll pay for this " [Anlezark, Ex 10]. Ms Khazma denied this, but admitted that she was angry, did storm out of his office, and " said a few things " [T 126.38-50]. It was that very night – as Ms Khazma herself emphasised – that she made her complaint to Mr Cooke [T 127.16-36]. The motivation is clear – particularly when Ms Khazma does not date any of Mr Dafkovski's alleged misconduct as having occurred later than January 2005. That Ms Khazma did not, before 13 May 2005, regard herself as having any real difficulties in her relationship with Mr Dafkovski is demonstrated by her evidence that Mr Dafkovski would, in social settings, give Ms Odichou and herself a hug and kiss upon departure, about which she said " I didn't find anything wrong with it " [T 133.42-134.1] (this incidentally again gives the lie to the notion that Ms Odichou was being singled out for some form of physical attention). Ms Khazma went on to give the following evidence about this [T 134.6-27, emphasis added]: "A. I thought it was innocent, I didn't think anything of it because he would do it in front of Glen. There was nothing wrong with it. Q. And he kept doing that all the time you knew him ? A. Most of the time, yes – not in the office. Q. At the Shark Bar ? A. Yes. Q. Up until the time when you made the complaints if you were there together he would give you that farewell hug and kiss, is that right ? A. Yes . Q. And he would do it in front of your partner ? A. Yeah ." (Ms Khazma tried to backtrack on this when the clear inconsistency with other assertions she had made about her avoiding Mr Dafkovski was pointed out, but the questions and answers are entirely clear). This shows that Ms Khazma remained friendly and at ease with Mr Dafkovski right up until 13 May 2005, when his refusal to give her a reference caused her to turn on him. 58 In the light of those submissions (which I accept) and notwithstanding Mr Benson's arguments to the contrary, I have formed the view that it would be unsafe to conclude that the allegations against the applicant, insofar as they relate to Ms Khazma, have been made out. There are too many doubts. 59 Mr Hatcher's submissions thereafter traversed the complaints brought by Ms Odichou and I have earlier expressed a view about my preference for elements of her evidence over the applicant's. Mr Hatcher submitted, however, that once Ms Khazma's allegations are rejected, the applicant's dismissal could not be justified on the basis of Ms Odichou's allegations even if they are accepted at their highest. 60 It is submitted that the complaints which Ms Odichou brought to the attention of Deputy Registrar Cooke on 24 January 2005 and which were in turn brought to the attention of Registrar Trotter, were taken up with the applicant on either 31 January 2005 or 1 February 2005 and satisfactory resolved by an undertaking (to which the applicant adhered) that he have no further contact with Ms Odichou. The matter can therefore be taken as a matter which was resolved to the satisfaction of all parties in early 2005 and even if there was anything in the allegations which justified dismissal, the fact that the respondent did not dismiss the applicant at the time but rather took an alternative course, meant that it condoned the conduct and waived the right to summary dismissal with respect to that conduct (Burge v NSW BHP Steel Pty Ltd (2001) 105 IR 325 at [31]). 61 In Burge there was reference to the line of cases enshrining the doctrine of condonation as part of the industrial jurisprudence (Australasian Transport Officers v Department of Motor Transport (1998) 25 IR 235 at 244) and the following statement by Cook J in Clarke v Metropolitan Meat Industry Board [1967] AR (NSW) 16 at 25 has been cited with approval: As I see the principle emerging from these cases it is that where an employer with a full knowledge of an act amounting to misconduct justifying summary dismissal does not exercise the right which he thereby possesses but elects to treat the contract as still subsisting, then he is regarded in law as having waived the right of summary dismissal for that offence, or of having "condoned" that offence, so that he cannot, therefore, in an action for wrongful dismissal based on misconduct, rely upon an offence which he has waived as justification for his action. 62 Mr Benson submitted that Burge and the authorities cited therein are referrable to the common law right of summary dismissal insofar as they refer to the defence of condonation and waiver. However the applicant's employment was governed by the Public Sector Employment and Management Act 2002 which provides a code for dealing with disciplinary action in Part 2.7. In particular the statute confers on the Department Head in s 46 the power to deal with an allegation of misconduct and that is what occurred in this case. The principles of condonation and waiver, in the absence of any relevant statutory provision, simply do not apply. 63 Mr Hatcher took issue with the proposition that the principle of waiver or condonation has no place in circumstances where a dismissal occurs pursuant to a statutory scheme as distinct from a right under contract. Waiver can equally apply to rights or benefits which arise under statute as well as to rights under contract (see for example Commonwealth v Verwayen 170 CLR 394; Zoological Parks Board of NSW v AWU (2004) 135 IR 56 at [57]-[61]). 64 Mr Benson further argued, correctly in my view, that even if the principle of condonation did apply, it would not be invoked in this case because there was no suggestion or reasonable basis to conclude that the local management representatives purported to exercise any delegated authority to foreclose the taking of disciplinary action and the prospect of the matter escalating to formal proceedings if the applicant breached the undertaking he gave in relation to Ms Odichou was expressly mentioned by Registrar Trotter. It did not need to be stated that should other allegations be made relating to harassment generally, that all allegations would come to be addressed. I would add to that, it is by no means clear from the evidence whether all the allegations exposed in the course of the formal disciplinary investigation were drawn to the attention of local authorities in January 2005. If there were allegations which only emerged later in the course of the disciplinary investigation as I suspect there were, then the respondent cannot be said to have condoned conduct not known to it in January 2005. I note in that regard that the focus of concern for Mr Cooke and Mr Trotter at that time was limited to the domestic upheaval caused by the SMS message intercepted by Ms Odichou's husband. What, if any, other complaints were made by Ms Odichou at that time is simply not apparent on the evidence as it stands. I therefore reject the submission that the respondent condoned the applicant's conduct towards Ms Odichou and is unable to rely upon it now as a basis for dismissal. 65 As to that conduct, Mr Benson submitted that the fact of the applicant's apologies to Ms Odichou (usually offered on the Monday at work following drinks the previous Friday) may be taken as an indication of his awareness of the inappropriateness of his conduct towards her and notwithstanding assurances that such conduct would not occur again, it did. Ms Odichou's evidence was that the applicant's words to her "I love you" were in no way intended as the applicant said, to be an expression of appreciation for her assistance to him at work and although she acknowledged that her relationship with the applicant was initially one of mutual friendship, as the following evidence indicates, it did not remain as such: Q. The words "I love you"; you never understood him to be expressing any form of romantic attachment to you? A. Not at the beginning no. Q. Not by the use of those words? A. Not by the use of those words at the beginning. Q. You never thought that he loved you did you? A. No, not at all. and later in cross-examination: Q. Whatever you say Mr Dafkovski said to you, on whatever occasions, did you understand him to say that he was actually in love with you; is that right? A. I don't think he was really in love with me, I think he was just saying - - Q. Just saying stupid things because he was drunk, is what you want to portray of him - - A. I don't think he was really in love with me but I don't know what else he wanted from me. He obviously tried to kiss me so he has tried to do something misleading in some way. Q. Even after you say he did that? A. Yes. Q. Did you continue social contact with him and you continued to go to drinks with him and others at the Shark Bar for a very long time? A. Yes, that's correct. He apologised and I accepted it. Q. You say he apologised and you accepted it. Did you accept because you knew it was a one-off act of stupid behaviour caused by alcohol? A. No, because I was angry, so he apologised. I was not very impressed with what happened that night. and later in re-examination: BENSON: Q. What were your concerns? A. My concerns were, we were friends. We enjoyed each other's company. We hung out a lot. We talked, then things changed. There was a sequence of events that changed our friendship. I could see that he was not just looking for a friendship and that was upsetting me. He was relying on me by making me drive him home all the way to Wollongong. He was trying to kiss me and he was telling me he loved me so that is not what used to happen. We used to be friends. We used to chat. We used to go home, that was it. Then it became like, it just became different and uncomfortable, but I don't deny ever being friends with him. 66 Mr Benson submitted that the evidence plainly gives rise to the inference that the applicant was seeking sexual gratification in circumstances where both he and Ms Odichou were in separate married relationships; where the applicant was Ms Odichou's supervisor at work and where there was a sixteen year age difference between them. I agree. In so doing I indicate as before that I accept Ms Odichou's evidence and to the extent that it is at odds with the applicant's evidence, I generally prefer it. I say generally because there are aspects of her evidence which do not have the same character of reliability as others but to my mind, those aspects are essentially peripheral and do not derogate from the main thrust of her evidence going to conduct on the applicant's part. 67 By way of example and as earlier described, Ms Odichou said she sought from Registrar Trotter (and obtained in mid 2004) a transfer to another floor in the Downing Centre because she was upset with the applicant over events which had occurred between them particularly after she had received irate phone calls from the applicant's wife and daughter. 68 The applicant's evidence was that Ms Odichou moved to another floor for career advancement and because she did not get on with another employee. Registrar Trotter recalled Ms Odichou asking to be moved to another floor and assumed the reason for her request (although none was sought or given) to be a clash with another staff member Ali Ryder. 69 Registrar Trotter recalled speaking to the applicant, as Ms Odichou's manager, about her request and he recalled leaving it to the applicant to facilitate as part of the normal rostering and rotation arrangements within the court registry. 70 Whilst, as Mr Hatcher correctly submitted, the state of that evidence raises certain doubts about the reasons given by Ms Odichou for requesting a move, they are not doubts which to my mind necessarily call for the rejection of her evidence. Ms Odichou after all, kept her reasons for moving to herself at the time she made the request and the mere fact she moved to a higher grade position may be no more than coincidence, the main point being insofar as she was concerned, that it provided her with an opportunity to move away from the applicant. 71 Conversely, there are aspects of the applicant's evidence some of which I have already alluded to which give me cause for disquiet as to its reliability. In addition to those aspects dealt with earlier in these reasons and by way of further example, the applicant showed that he was willing to engage in deceptive and misleading conduct whereby on occasions when he might ring Ms Odichou's phone and someone other than she might answer, the applicant was to ask for a fictitious person "Toni". The applicant said he was asked by Ms Odichou to do this. Ms Odichou strenuously denied that and offered what I consider to be a more plausible explanation (which need not be recited here) for the origin of the fictitious person. Plainly, however, by his own admission the applicant was willing to be a participant in the deception. 72 Another example emerged in the context of Ms Odichou's allegation that the applicant tried to kiss her. As earlier observed, the applicant denied this. If the evidence were left at that - an allegation and a simple denial - it might be one thing but it is quite another thing in my mind, when the applicant in his reply evidence and after seeing Ms Odichou's allegation, attempted to portray the incident in detailed mirror-image reverse. 73 It wasn't he who attempted to kiss Ms Odichou according to his reply evidence. It was she who attempted to kiss him. It wasn't he who followed Ms Odichou to the relative privacy of the Shark Bar poker machine room where the attempted kiss took place. It was Ms Odichou who asked him into the poker machine room and it was she who then "insisted" he go there although he did not want to. It was not Ms Odichou who turned her head to avoid being kissed on the lips. It was the applicant and it wasn't Ms Odichou's cheek on which the deflected kiss landed. It was his. It wasn't Ms Odichou who said "this is wrong". It was the applicant according to his reply evidence. 74 The applicant made no mention of this incident in his initial statement notwithstanding that he deposed to other incidents intended to portray Ms Odichou as the initiator of contact between them and frankly, to see that sort of evidence emerge by way of reply does nothing to commend it in preference to Ms Odichou's. 75 Another example relates to the incident which, as earlier found, occurred on the night of Ms Odichou's birthday on 9 July 2004 when the applicant made a series of annoying and repetitive phone calls to her after she had asked him repeatedly not to ring her. In his reply statement he said he called on only one occasion that night and he denied that he was asked not to. In cross-examination, he shifted his ground significantly as the following extract from transcript reveals: Q. It's the case is it not that you asked Ms Odichou when you phoned her where she was going? A. I might have, yes. Q. And who was she going with? A. I might have, yes. Q. And she told you not to call her; she was going out? A. She might have said that. Q. And not withstanding that request you continued to call her on a number of occasions with the same types of questions? A. I might have if the records indicate that, yes. 76 I am of the view, on balance, that Ms Odichou was a reasonably frank and candid witness and to the extent that her evidence is at odds with the applicant's, I prefer it. I do not accept and to my mind the evidence does not permit the conclusion for which Mr Hatcher contends namely, that Ms Odichou made her complaint to Deputy Registrar Cooke on 24 January 2005 substantially for the purpose of assuaging her husband's anger and in some way proving to him that his suspicions about her extra-marital activities were unfounded. 77 Having so concluded, however, the matter has a substantial way to travel before it can be said that the applicant's conduct amounted to misconduct justifying dismissal particularly after Ms Khazma's allegations have been rejected. For a start and as Mr Hatcher submitted with some persuasive force, the allegations that the applicant intimidated the complainants; made them apprehensive about his intentions when he asked them into his office; left them powerless and (by slamming the door of Ms Saliba's car) brought the department into disrepute are to put it as neutrally as I can, lacking in evidentiary foundation again particularly after Ms Khazma's allegations have been rejected. 78 The remaining allegations insofar as they relate to Ms Odichou involve firstly, sending text messages and making comments containing sexual connotations; secondly, making annoying phone calls on 9 July 2004 and thirdly, touching her and attempting to kiss her. As I have already indicated I accept Ms Odichou's evidence that these things occurred and I accept that on the occasions and in the circumstances they occurred, she was made to feel uncomfortable. Her discomfort was elevated to the level of annoyance and anger on occasions and emotional distress on other occasions and it cannot be said in my opinion that because these things occurred outside the workplace , the respondent has no relevant legitimate interest in them. To the contrary, it must be accepted that the applicant's out of hours conduct towards Ms Odichou had a direct and adverse impact on workplace relations. It is not conduct, however, and paying due regard as I must to the principles contained in the Anti Discrimination Act 1977, which warranted the termination of an eighteen year otherwise unblemished career in the respondent's employ and as much was impliedly recognised in early 2005 when Ms Odichou's complaints or at least some of them, were initially dealt with at the local level. I am of the view and find accordingly, that the applicant's dismissal was harsh. 79 Turning then to the question of remedy, it is submitted by Mr Benson in the event the dismissal is found to be unfair that the relief provided ought be tempered by the evidence overall. The respondent further submits that if reinstatement is contemplated, it ought be on conditions involving formal warnings and counselling and no back pay ought be awarded. 80 As to the former of those propositions, Mr Hatcher submitted that the applicant sees practical merit in the conditions proposed. As to the latter, Mr Benson submitted that the applicant's statement that he remained unemployed since his dismissal was misleading and deceptive given the evidence later obtained (and relied upon) by the respondent that the applicant and his wife were at all material times the legal and beneficial owners of a company that in November 2005 purchased a bistro and retail tobacconist in Wollongong. Further and as video surveillance conducted by the respondent's investigator revealed, the applicant worked in the bistro carrying out a range of duties normally associated with restaurant employees. 81 When taken in cross-examination to this aspect of his evidence the applicant (by then aware of the respondent's knowledge of his business activities) sought to explain his non-disclosure by saying among other things, that neither he nor his wife drew a wage from the business and he therefore thought of himself as technically unemployed. Mr Benson submitted that the Commission would regard that as a matter of choice on the applicant's part and would consider the value of his work contribution to the business by reference to the rates prescribed by the Restaurant Employees (State) Award. The Commission would also infer that any effort made by the applicant to mitigate his loss by seeking employment was artificially limited by his efforts in seeking to establish the commercial viability of his business venture. In that regard, the applicant said his attempts to find work were concentrated in the Illawarra region where jobs were in short supply. He did not explain, thus leaving open the above inference, why he imposed such a limitation given that his employment with the respondent was for many years in the heart of Sydney. 82 Having regard to those things and to the fact of the applicant's misconduct and the nature of it, I agree with Mr Benson that an order for back pay ought not be made. 83 The respondent is therefore ordered to reinstate the applicant in his former position on terms not less favourable to him than those that would have been applicable had he not been dismissed. I make no order as to lost remuneration and I make no order as to continuity of employment. 84 I further order that the applicant's reinstatement be on the following conditions: 1. That he be formally warned that he will be accountable for any future conduct involving his interaction with subordinate staff (whether at or outside work) which impacts adversely on workplace relations; 2. The he be formally counselled on the obligations of a supervisor under both the respondent's Code of Conduct and the Harassment Prevention Policy, and 3. That he be formally warned that encouragement of or acquiescence in the circulation at work of emails or other communications containing sexually explicit or other offensive material will ground serious disciplinary charges. 85 These proceedings are accordingly concluded. 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.