Transport Appeal Boards New South Wales Medium Neutral Citation: Han v Rail Corporation of New South Wales [2011] NSWTAB 1 Hearing dates: 20 January 2011, 21 January 2011 Decision date: 04 February 2011 Before: Connor C (Board) Decision: Mr Han has failed to provide RailCorp with complete details of his secondary employment, as he was obliged by the code of conduct to do, and that his failure to do so was intentional to cover up the private activities he was involved in whilst working for RailCorp. His use of RailCorp resources and time at work was excessive and he was continuing to perform much private activities in RailCorp time and with RailCorp resources despite counselling not to do so. His appeal over the termination of his services was dismissed Catchwords: DISMISSAL - rail services - breaches of the established code of conduct - failure to disclose secondary employment - improper use of employer's property and time to carry on secondary employment and for private purposes Cases Cited: Byrne v Australian Airlines Limited (1995) 61 IR 32 Del Casale v Artedomus (Australia) Pty Limited (2007) 165 IR 148 Metropolitan Meat Industry Board v Australasian Meat Industry Employees' Union (1973) AR 231 Pacific Power v Crump (1993) 48 IR 296 Perkins v Grace Worldwide (Australia) Pty Limited (1997) 72 IR 18 Category: Principal judgment Parties: Ping Han (Appellant) Rail Corporation of New South Wales (Respondent) Representation: Brendan Edghill Rail Tram and Bus Union (Appellant) Melanie Robinson Rail Corporation of New South Wales (Respondent) File Number(s): TAB 1602 of 2010 Decision Introduction 1Mr Ping Han was employed as a relief travel consultant with the Rail Corporation of New South Wales. He had fourteen years of service, firstly as reservation sales agent, later as a clerical and administrative officer and for the last five years as a relief travel consultant, when he was dismissed on Friday, 22 October, 2010 for his breaches of the RailCorp code of conduct. Mr Han's dismissal followed anonymous complaints made by Mr Han's fellow employee or employees that were ultimately the subject of investigation by RailCorp. 2There are several allegations made against Mr Han but essentially they centre on Mr Han conducting his own sole trader business as a ceiling installation installer [ABB 96 164 322 413] and conducting other personal business in RailCorp time, using RailCorp property and using qualifications obtained at RailCorp expense to further those private interests, viz: * that on three separate occasions - Thursday, 21 June, 2007, Monday, 30 June, 2008 and Thursday, 28 May, 2009 - he failed to seek approval from RailCorp when he was continuing to be engaged in secondary employment as a sole trader involved in ceiling insulation (Action PC Support) and an agency (Historical Wonder Travel) which he failed to disclose to RailCorp; * that on Thursday, 7 February, 2008 he sought from the RailCorp a reimbursement for education assistance for books for accounting for management and that was approved by RailCorp but which he subsequently recorded as expenses for his tax return for the 2008 financial year; * that he advised RailCorp that he required the use of a Chinese character software programme to assist him undertake RailCorp related Mandarin-English translation activities, was provided with that software but also used the programme for his own personal use and for a business (Interpreting Services); * that on Wednesday, 11 February, 2009 he forwarded a copy of a certificate obtained from a course (Australian Red Cross) paid for by RailCorp to the Federal Government to meet requirements provided for registration of his private business as ceiling insulation installer and that he subsequently used a RailCorp occupational health and safety course conducted over four days - Thursday, 19 November, 2009, Friday, 20 November, 2009, Monday, 23 November, 2009 and Tuesday, 24 November, 2009 - for his secondary employment needs as an insulation installer for home ceiling installation; * that on numerous occasions he misused resources of RailCorp in his private business and for his own personal use with respect to rental properties, conducting his business and personal affairs during times when he was working for and paid by RailCorp; and * that he regularly (and excessively) used the RailCorp e-mail facilities for private use connected to his ceiling installation business, his work as a translator and interpreter, his responsibilities with rental properties and his secondary employment as a migration agent. 3The RailCorp code of conduct, which applies to all RailCorp employees, contractors and consultants, relevantly directs (Clause 2) that in all work for RailCorp, there is an obligation to: "...* carry out your duties carefully, safely, honestly, courteously and fairly; * be aware of possible conflicts of interest and breaches of the code and notify senior employees as appropriate; * use your authority and delegation/s in an appropriate and unbiased way for the intended work purpose; * use RailCorp resources properly, efficiently and economically; * be honest and accurate in timekeeping and in meeting attendance requirements; * create and maintain full accurate records of work performed, including reasons for your decision making..." 4With respect to secondary employment, the RailCorp code of conduct (Clause 13) specifically provides: "....RailCorp requires every employee to complete a Secondary Employment Declaration Form each year. This will assist RailCorp to identify and manage potential conflicts of interest and other factors, such as fatigue, which may impact on RailCorp's efficiency, safety and reputation... Prior to undertaking a secondary employment (whether paid or voluntary) you must have written approval of your General Manager..." And the code of conduct goes on to provide: "....It is your responsibility to ensure that RailCorp is fully informed and has approved any secondary employment or volunteering BEFORE you start additional work (paid or unpaid). If you are considering employment with RailCorp you must gain written approval for all secondary employment and voluntary work...PRIOR to commencing your position with RailCorp..." 5Mr Han has pleaded guilty to the allegations of a breach of the code of conduct, but raises in mitigation assertions which would support his retention in employment with RailCorp. The Internal Investigation and Disciplinary Action 6An internal disciplinary investigation was conducted by Mr Thomas Wood, an investigator with the RailCorp's investigation unit. Company searches were conducted, RailCorp personnel were interviewed and the e-mails contained in the "inbox" and "sent items" in Mr Han's RailCorp computer were recovered to provide an analysis of the use he had made of those e-mail facilities. On Thursday, 22 April, 2010 Mr Wood forwarded a letter to Mr Han informing him of the allegations made against him. Mr Han responded to those allegations in a letter to Mr Wood on Thursday, 6 May, 2010. 7Mr Wood invited Mr Han to attend a disciplinary interview on Wednesday, 19 May, 2010 but Mr Han declined to attend, although on Tuesday, 18 May, 2010 he did provide an additional written response. The obligation on Mr Wood was to give Mr Han the opportunity to attend for an interview. Mr Han had that right to attend to the disciplinary interview but chose not to take the offer up. That does not suggest to me that there was any flaw in Mr Wood's investigation of the incidents or any procedural unfairness to Mr Han, however. I will discuss this matter in more detail later in this decision. 8Mr Wood concluded his investigation and produced his report on Friday, 20 August, 2010, rejecting one of the allegations made against Mr Han but determining that the other allegations were substantiated. Mr Wood forwarded his report to the RailCorp disciplinary review panel [DRP] for consideration. The DRP reviewed the evidence from Mr Wood's report on Monday, 13 September, 2010, disregarding one further allegation against Mr Han but recommending on the basis of the remaining allegations that there were grounds for Mr Han's dismissal. 9On Thursday, 23 September, 2010 Mr Greg McLeod, the general manager of customer services for the Hunter region of RailCorp, wrote to Mr Han, informing him that, on a preliminary view of the evidence, it was appropriate to dismiss him and giving him seven days to make submissions concerning the severity of that penalty and to produce anything further which he would wish to be taken into account. Mr Han provided that further written response on Tuesday, 5 October, 2010. 10Mr Han acknowledged his mistake in not declaring his secondary employment and using RailCorp resources for his own personal use but claimed that as soon as he realised his mistake he commenced rectifying the situation. He also indicated that he was the only "bread earner" for his family and the loss of his job would place his family under considerable financial hardship. 11Mr Wood reviewed Mr Han's position in the light of his further submissions but on Monday, 18 October, 2010 the DRP confirmed its recommendation for Mr Hall's dismissal. On Friday, 22 October, 2010 Mr McLeod wrote a letter to Mr Han indicating that his services were to be terminated. The Proceedings 12Mr Han immediately lodged his appeal against his dismissal to a Transport Appeal Board and the matter was scheduled for conciliation before the TAB (Oakman AC) on Tuesday, 16 November, 2010. Conciliation was unsuccessful and the matter proceeded before the TAB for arbitration. It was subsequently reallocated to me for that arbitration in a hearing set down over two days - Thursday, 20 January, 2011 and Friday, 21 January, 2011. 13Ms Robinson represented RailCorp in the hearing before the TAB. She called Mr Wood to give evidence in the hearing. She also called Ms Nicola McCallum, a RailCorp business manager (metropolitan), as a witness in the hearing. Mr Edghill represented Mr Han and the Rail Tram and Bus Union in the hearing. Mr Han is a member of the RTBU. Mr Edghill called Mr Han to give evidence in the hearing. Several written references in support of Mr Han were produced for evidence in this hearing by Mr Edghill and admitted into evidence without any objection from Ms Robinson . 14Standard directions had been issued for the filing of any evidentiary material. RailCorp filed and served its written case and accompanying evidentiary material on Tuesday, 14 December, 2010. Mr Han was to file and serve any material on which he intended to rely no later than Tuesday, 4 January, 2011 and any further reply from RailCorp was to be no later than 7 days from that date - Tuesday, 11 January, 2011. However, it was not until Thursday, 6 January, 2011 that Mr Han, through the RTBU, provided his evidentiary material. 15Consequently, on Thursday, 6 January, 2011 RailCorp wrote to the TAB foreshadowing objection to the evidentiary material provided by the RTBU. The RTBU responded with a letter to the TAB dated Friday, 7 January, 2011 pressing for the material it had provided to be admitted and pointing out: "...The statements provided on behalf of Mr Han are relatively short and I do not believe that receiving these documents on Thursday, 6 January, 2011 instead of Tuesday, 4 January, 2011 causes any real disadvantage to RailCorp in this matter. This is obviously a serious matter for Mr Han and his family and his right to take part in this appeal by making a statement should not be taken away on the basis of such a mistake. For this reason, I seek the Commission's leave to rely upon these documents in the hearing of this matter..." 16Having regard to the fact that the delay in the RTBU filing and serving its evidentiary material on behalf of Mr Han was only for two days - and over the Christmas/New Year period where industrial activities may be interrupted - the TAB was prepared to grant the RTBU the leave it sought for the evidentiary material to be admitted into evidence. The TAB does not believe that the RailCorp is disadvantaged by the two day delay in the RTBU filing and serving it on the RailCorp. However, the TAB granted the RailCorp a further extension of two days for the filing and serving of any further material on which they may chose to rely, informing the parties of that decision in that respect by telephone on Monday, 10 January, 2011. The Issues 17Whilst, as I indicated earlier in this decision, Mr Han has pleaded guilty to breaching the RailCorp code of conduct, he has argued certain issues in mitigation and Mr Edghill submitted that the breach of the code of conduct was not serious enough to warrant Mr Han's dismissal. For instance, Mr Han maintains that he did not understand the policy concerning undeclared secondary employment completely and correctly. He nevertheless had sought approval from the RailCorp for secondary employment in 2004 and 2006. In 2007 he did disclose some regular sales work he performed on weekends (Dick Smith Electronics) but excluded his other work. 18Mr Han recorded in a written statement which formed the basis of his evidence: "....I did declare Action PC Support as secondary employment in 2004 and 2006. I tried to declare this secondary employment again in 2007 but as the form had changed I did not understand if, or how, I was meant to declare it from 2007 onwards. I acknowledge that I made a mistake in not declaring Historical Wonder Travel. This business name was registered in July, 2000 but never used until 2009... I was not aware that I was meant to declare it..." In fact, in his evidence in the hearing Mr Han indicated that he had not really conducted any work for Action PC Support and his interpretation/translation services in 2007 and that he did not therefore see the need to disclose that fact to RailCorp. That assertion was not raised with RailCorp earlier and it was not contained in his written response to RailCorp submissions. Furthermore, Ms Robinson pointed out that Mr Han, in fact, had used RailCorp e-mail facilities for his interpretation services in 2008 without disclosing his secondary employment for that year. 19Mr Wood explained in his evidence that there is no obligation on a RailCorp employee to provide annual details of voluntary private activities which involve less than five hours per week. Mr Han asserts that in a training course in 2010 he was informed by a training officer that if a secondary job occupied him for less than six hours per week it was not necessary to declare it. That training officer was not a witness in this hearing. What Mr Han was told in 2010 does not, of course, retrospectively authorise his failure to disclose secondary employment to RailCorp in 2007, 2008 and 2009. In any event, it would appear that while Mr Han was working for RailCorp he was involved in private work for in excess of five (or six) hours per week. RailCorp regards Mr Han's arguments in that respect as implausible and has concluded that Mr Han's failure to disclose the secondary employment was deliberate. 20Notwithstanding that the RailCorp code of conduct specifically places an obligation on RailCorp employees to notify, and seek approval for, any secondary employment - and failure to do so constitutes a breach of that code of conduct - that would not, in my opinion, on its own necessarily constitute sufficient grounds for dismissal. It would no doubt raise concerns if there was a possible conflict of interests or whether there were safety concerns or the prospect that the secondary employment would lead to fatigue for the employee whilst working for RailCorp: I do not see those concerns arising in this case with Mr Han's secondary employment and there is no evidence that Mr Han was showing any signs of fatigue in his work for RailCorp. But it would, of course, remain a matter of concern if Mr Han's failure to disclose his other employment was simply to mask the private activities he was engaged in, using RailCorp resources and in RailCorp time - and that is RailCorp's view. 21There is also the allegation that Mr Han sought from RailCorp reimbursement for educational expenses, whilst recording them as expenses he incurred in his 2008 tax return. Mr Wood's investigation satisfied him that the cost of textbooks recouped from RailCorp [$204.10] and the amount he showed in his 2008 tax return for work related expenses [$210.00] are the same - a case of "double counting". However, Mr Han argued that the document on which RailCorp relies was a draft only and not Mr Han's final tax return for 2008 and that, in fact, he did not actually make the claim for those educational expenses. 22During the hearing, in fact, some doubts were expressed that the cost of the textbooks recouped from RailCorp and the amount shown in the tax return were identical: it is Mr Han's assertion that they are unrelated and he claimed that he had invoices to confirm that fact which he made available to RailCorp in the hearing for the first time. Nevertheless, Ms Robinson pressed this allegation. Her investigation of the invoices which Mr Han supplied (belatedly) satisfied her that they were not related to the educational expenses in issue in these proceedings. 23In any event, whilst this particular allegation may constitute an area of concern for the Australian Taxation Office that Mr Han has been guilty of providing a false taxation return, I am not convinced that it also raises the same level of concern for RailCorp. If Mr Han tended a claim for the reimbursement of educational expenses, and that claim was approved by RailCorp following its customary policy for such claims, then as far as RailCorp is concerned, his activities in that respect were legitimate. 24Likewise, I do not believe that the allegation concerning his private use of the Red Cross certificate and the occupational health and safety certificate he obtained at RailCorp's expense has any real substance either. It is not disputed by RailCorp that he required the certificates for his work for RailCorp and as a member of the RailCorp country link occupational health and safety committee. He chose to use it for the private purposes related to his ceiling insulation business, arguing that he "...thought the knowledge can be shared...". But, if he required the certificates for his work with RailCorp, then RailCorp was deriving a benefit from it. As far as the occupational health and safety course was concerned, Mr Han recorded in his written statement: "....This course was not completed for personal needs, but because RailCorp required me to complete it for my role as an OHS Committee member..." Mr Edghill highlighted in his submissions that the emphasis of the RailCorp code of conduct in that respect, as he understood it, was directed to address the private use of RailCorp material, equipment, etc (see for instance Clause 8), not necessarily for any qualifications obtained through RailCorp. 25Ultimately, the more serious allegations against Mr Han centre on his misuse of RailCorp resources and time for personal use, including his undisclosed secondary employment. Mr Han had requested a Chinese character software programme for his RailCorp computer, claiming that the utilisation of that programme was related to his work - as it no doubt was. It was also available for his personal use and for his interpretation services, however. RailCorp records in written submissions: "....While there is no issue that the software was authorised and required for a legitimate work-related purpose, the appellant's breach of the code of conduct lies in his use of the software in his undeclared, and therefore unauthorised, secondary employment activities. This is not considered appropriate personal use of RailCorp business resources..." 26Whilst Mr Han conceded that he had used RailCorp resources to conduct work not related to his RailCorp duties, he claimed in his evidence that he believed that the time RailCorp estimated that he spent on that personal work was greatly overestimated and that it did not interfere with his RailCorp duties to which he always gave priority. The computer records on which RailCorp principally relies suggest to me otherwise. Ms McCallum indicated in her evidence that she had not detected that Mr Han was derelict in his work for RailCorp but RailCorp argues, correctly in my view, that whilst working for RailCorp Mr Han was more frequently engaged on his personal documents than work related documents. RailCorp records in written submissions: "....In mitigation the appellant claims that he always put RailCorp and his duties and work first and dropped his personal things to assist his team or customers when needed. It is submitted that the attitude exhibited by the appellant is that he considered work hours his opportunity to attend to his personal and other business duties, and would 'drop' these things to attend to work duties only when necessary..." 27As Mr Woods noted in the report of his investigations, the serious and substantial misuse of RailCorp resources arose from the significant number of personal documents on Mr Han's RailCorp computer opened during working time. I accept that, as Mr Edghill submitted, it does not necessarily follow that, because a certain personal file was open for a period of time, Mr Han was actually working on it but it is logical for RailCorp conclude, and for the TAB to accept, that Mr Han opened that personal file for some reason unrelated to RailCorp activities and left it open to work on it. RailCorp also noted the number of e-mails related to his personal business concerns (ceiling insulation installation works, issues associated with his rental properties, translating/interpretation services and migration agency communications) and his access to the internet for those business activities during RailCorp working hours. 28RailCorp indicated in its written submissions: "....The appellant claims in mitigation...that he did not become conscious he had done something wrong until informed of the allegations, and that he was not given any counselling or warning about his wrongdoing. This is refuted by his previous disciplinary history, which shows counselling in 2005...in relation to making personal calls, excessively using the internet and computer facilities for personal use and doing these things at a rate that was excessive and interfering with his work. In addition, the appellant participated in a record of interview...in September, 2008 in which he was addressed about the use of his mobile phone while on duty. The appellant has had ample warning and counselling over many years about his use of RailCorp time and resources. His claim that he was not warned or counselled is blatantly incorrect..." 29Mr Han concludes in his written statement: "....I believe that I still have a lot to offer RailCorp and wish to continue my employment with RailCorp. I can be trusted not to make the same mistakes again..." Mr Han spoke in his evidence of the financial difficulties and domestic responsibilities he was confronting. Mr Edghill asserted in his submissions that those difficulties clouded his judgment. Findings 30Any contract of employment generally includes an implied term imposing a duty to act in good faith on the part of the employee [ Del Casale v Artedomus (Australia) Pty Limited (2007) 165 IR 148 at p.158]. The RailCorp code of conduct speaks of the obligation on an employee to carry out his duties "...carefully, safely, honestly, courteously and fairly..." and to "....use RailCorp resources properly, efficiently and economically...". Trust and confidence is a necessary ingredient in any employment relationship [ Perkins v Grace Worldwide (Australia) Pty Limited (1997) 72 IR 186 at p.191]. Clearly, Mr Han has abused that trust - and, whilst he is now prepared to acknowledge that fact by pleading guilty to the allegations made against him and admitting his mistakes, the question remains whether his assurances in that respect come too late to assist him in this hearing. 31Mr Edghill has suggested in his submissions that Mr Wood's investigation was procedurally unfair to Mr Han. In the judgment of the High Court (Brennan CJ, Dawson, Toohey, McHugh and Gummow JJ) in Byrne v Australian Airlines Limited (1995) 61 IR 32 the question of procedural unfairness was explored and, in particular, in the judgment of Brennan CJ, Dawson and Toohey JJ are the following comments (at p.43): "...However, it is clear that the use of unfair procedure may result in a dismissal being harsh, unjust or unreasonable. For example, the failure to afford an employee the opportunity to explain apparent misconduct where there is an innocent explanation available would result in the dismissal of the employee being (unfair)..." 32Mr Edghill submitted that some of the allegations on which Mr Han's dismissal was based were not brought to his attention in sufficient detail for him to provide a specific response to them. However, I have to say that any defects in that respect were due to Mr Han's own conduct in not attending to a disciplinary interview as he was invited to do. As I indicated earlier in this decision, I see no procedural flaws in Mr Wood's investigation that would undermine the recommendations that he made. To ensure fairness in the investigation process Mr Wood was obliged to give Mr Han an opportunity to defend his position. Mr Wood gave him that opportunity but Mr Han elected not to take that offer up. That was a matter for him but it does not follow that he was not afforded procedural fairness in the investigations. 33I note, in fact, that Mr Han appears to have reserved some of his responses to the allegation until this hearing before the TAB. He was unwise to do so. It leaves RailCorp, and the TAB, with the impression that his claims in that respect were an afterthought on his part. 34Nevertheless, no matter how comprehensive Mr Wood's investigation of those allegations may have been, the responsibility of the TAB in this hearing is to form an independent view concerning all the allegations made. The issue before the TAB for determination in this appeal hearing is essentially to determine whether, in the circumstances, Mr Han's conduct was such as to justify his dismissal and whether the RailCorp acted fairly and appropriately to him when it dismissed him. 35It is long established approach of all industrial tribunals in this country, which I believe is also appropriate for matters coming before the TAB, that an employer take into account factors in mitigation of unsatisfactory conduct when it is contemplating terminating the services of an employee. Also it has been accepted by industrial tribunals (and should, in my view, apply to appeals in TAB hearings) that an employer may act unfairly or inappropriately when he dismisses an employee if the offence against the employee is not sufficient to actually warrant dismissal: the "punishment" should always fit the "crime". The Full Bench of the State Industrial Relations Commission (Fisher P, Hungerford J and Connor CC) in Pacific Power v Crump (1993) 48 IR 296 commented in that respect (at p.302) that the test was whether or not: "...the ultimate sanction of termination of employment was too severe a penalty..." 36And even if there are grounds for terminating the contract of employment, it should still remain open to an independent body called upon to assess the appropriateness of the dismissal to have particular regard to the dismissed employee's otherwise satisfactory record of employment. Watson J of the former State Industrial Commission in Metropolitan Meat Industry Board v Australasian Meat Industry Employees' Union (1973) AR 231 commented (at p.233) that: "...in some cases, the issue of unfairness has been resolved because of the way in which the employer has exercised his right to dismiss or because of the absence of adequate justification for dismissal. But even if there are grounds for terminating the contract of employment, it is still open to the tribunal to examine the severity or otherwise of the step of dismissal. The Commission, commissioners and committees have so acted in the past and have intervened to order reinstatement where because of mitigating circumstances or past good conduct, termination has been shown to be too harsh a consequence..." 37Often, a dismissal may, in all the circumstances, be regarded as excessive and some other lesser penalty may be more appropriate. Ms McCallum conceded in her evidence that Mr Han appeared to her to perform the work required of him (although there is always the suspicion that the original complaints concerning him from his fellow employee or employees was because of the impression formed that he was not pulling his weight at work). Mr Edghill has provided a number of documents, which I was prepared to admit into evidence, supporting the RTBU contention that Mr Han was an exceptional employee of RailCorp with a good work ethics. He has been described in those references as a dedicated employee who has achieved outstanding results in his performance outcomes and has exercised initiative in the completion of tasks allocated to him. 38The problem I see from the evidence before me in this hearing is that much of his initiative seems to have been directed to his own personal interests and not those of RailCorp. And weighed against the positive comments made in the references which Mr Edghill supplied in support of Mr Han, is the evidence provided by Ms Robinson of the instances where Mr Han had been counselled and warned in the past over his personal use of RailCorp property. Mr Han attended a briefing over the RailCorp code of conduct in the middle of 2006 and RailCorp assert that, therefore, he either knew the requirements of the code of conduct or should reasonably have known them. 39I conclude from the evidence before me in this hearing that Mr Han failed to provide RailCorp with complete details of his secondary employment, as he was obliged by the code of conduct to do, and that his failure to do so was intentional to cover up the private activities he was involved in whilst working for RailCorp. I also conclude that his use of RailCorp resources and time at work was excessive and that he was continuing to perform much private activities in RailCorp time and with RailCorp resources despite counselling not to do so. Outcome 40The TAB therefore sees no grounds to intervene in support of Mr Han. In the circumstances, it believes that his dismissal was warranted. The TAB therefore dismisses the appeal Mr Han has lodged. P J CONNOR Commissioner ********** 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. Decision last updated: 04 February 2011