Industrial Relations Commission New South Wales Medium Neutral Citation: South Eastern Sydney and Illawarra Area Health Service v Dimovski [2011] NSWIRComm 139 Hearing dates: 22 September 2011 Decision date: 17 October 2011 Jurisdiction: Industrial Relations Commission Before: Boland J, President, Haylen J, Tabbaa C Decision: The Full Bench makes the following orders in the appeal: (1) Leave to appeal is granted. (2) The appeal is upheld. (3) Orders of Lynch AC are set aside. (4) The application by the respondent for reinstatement, or re-employment, or monetary compensation is dismissed. (5) The stay orders made on 20 July 2011 are dissolved from the date of this decision. The Full Bench makes the following orders in the cross-appeal: (1) Leave to cross-appeal is granted. (2) The cross-appeal is dismissed. Catchwords: APPEAL - Application for leave to appeal and appeal by employer - CROSS-APPEAL - Application by employee for leave to cross-appeal and cross-appeal - Security officer dismissed for misconduct - At first instance dismissal found to be harsh but not unjust or unreasonable - Dismissed employee re-employed at lower level - On appeal and cross-appeal whether dismissal was unjust or unreasonable and whether dismissal was harsh - Derogatory and insulting language used by security officer to junior officers regarding manager - Inference available that dismissed employee intended to have manager removed from his position - Dismissal not harsh - Appeal by employer upheld - Cross-appeal by employee dismissed Legislation Cited: Independent Commission Against Corruption Act 1988 Industrial Relations Act 1996 Protected Disclosure Act 1994 Cases Cited: Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 Dimovski v South Eastern Sydney and Illawarra Area Health Service [2011] NSWIRComm 1029 Category: Principal judgment Parties: South Eastern Sydney and Illawarra Area Health Service (Appellant in Matter IRC2011/1248; Respondent in Matter IRC2011/1523) Jorgo (George) Dimovski (Respondent in Matter IRC2011/1248; Appellant in Matter IRC2011/1523) Representation: Mr J Murphy of counsel (Appellant in Matter IRC2011/1248; Respondent in Matter IRC2011/1523) Mr D Mahendra of counsel (Respondent in Matter IRC2011/1248; Appellant in Matter IRC2011/1523) Bartier Perry (Appellant in Matter IRC2011/1248; Respondent in Matter IRC2011/1523) Cain Kensit Messenger, Solicitors & Attorneys (Respondent in Matter IRC2011/1248; Appellant in Matter IRC2011/1523) File Number(s): IRC 1248 of 2011 IRC 1523 of 2011 Decision under appeal Citation: Dimovski v South Eastern Sydney and Illawarra Area Health Service [2011] NSWIRComm 1029 Date of Decision: 2011-06-22 00:00:00 Before: Lynch AC File Number(s): IRC 1309 of 2010 DECISION OF THE COMMISSION 1This decision concerns an appeal by South Eastern Sydney and Illawarra Area Health Service ("SESIAHS") from a decision and orders of Acting Commissioner Lynch ( Dimovski v South Eastern Sydney and Illawarra Area Health Service [2011] NSWIRComm 1029) and a cross-appeal from the same decision and orders by Jorgo Dimovski. 2Mr Dimovski was employed as a Senior Security Officer at St George Public Hospital. On 26 October 2010, Mr Dimovski was dismissed from his employment. The grounds for dismissal by SESIAHS was a "serious breach" of NSW Health's Code of Conduct found to have occurred following an external investigation. The allegation investigated and the conclusion reached by the external investigator were in the following terms: Allegation One - That you acted in a derogatory manner and spoke words of insult regarding the Security Operations Manager, Joseph Demiglio (sic). Evidence and Analysis There is evidence that you have acted in a derogatory manner and spoke words of insult regarding the Security Operations Manager, Mr Joseph Demiglio (sic) with at least a strong inference that this occurred with the intention of preventing and eventually removing Mr Demiglio (sic) from his position in an improper (unlawful) way. 3Mr Dimovski denied the allegation and any wrongdoing on his part. He claimed that he was the victim of an organised and systematic program of discrimination aimed at removing him from his position and that other security officers employed at the Hospital had been encouraged by management to fabricate the allegation. 4Mr Dimovski sought relief from what he alleged was an unfair dismissal under the provisions of Pt 6 of Ch 2 of the Industrial Relations Act 1996 ("the Act"). Acting Commissioner Lynch found that Mr Dimovski had engaged in the conduct alleged against him and that his dismissal was not unjust or unreasonable in the circumstances. However, the Acting Commissioner found the dismissal was "too harsh" in all the circumstances for the reason that Mr Dimovski had an unblemished record of 22 years in employment with the appellant and was a man of 60 years of age with little likelihood of future employment. 5Lynch AC ordered, pursuant to s 89(2) of the Act, that SESIAHS re-employ Mr Dimovski in another hospital, other than St George Public Hospital, as a Security Officer and not as a Senior Security Officer. Issues raised by appeal and cross-appeal 6There are two issues raised on the appeal. The first is whether the Acting Commissioner erred in finding that the decision to dismiss Mr Dimovski "was too harsh in all the circumstances for the reason that Mr Dimovski has an unblemished record of 22 years in employment with SESI Area Health Service" and because he was "a man of 60 years of age with little likelihood of future employment." Secondly, that Lynch AC erred in ordering re-employment under s 89(2) of the Act. 7The cross-appeal, however, raises an antecedent issue that being whether the Acting Commissioner erred in finding that the dismissal was not unjust or unreasonable, that Mr Dimovski had misconducted himself in the manner alleged by SESIAHS and that his misconduct was of such seriousness as to warrant dismissal. Background 8Before considering the issues raised on the appeal and cross-appeal, it is necessary to provide some background, particularly regarding the workplace context in which the issues arose. 9First, the chain of command. Mr Nick Skleparis, Corporate Services Manager appears to have had overall responsibility for security. Reporting to him was Mr Ray Andraos, Security Manager. Mr Andraos was appointed as Security Manager in December 2008. Prior to that Mr Andraos had been employed in the Australian Federal Police as the Duty Operations Manager, Protective Service Counter Terrorism First Response Unit. Mr Joseph Dimeglio reported to Mr Andraos. Until Mr Andraos' appointment Mr Dimeglio had been Acting Security Manager following the dismissal of the previous incumbent, Mr John Hugon, in September 2008. Following Mr Andraos' appointment, Mr Dimeglio was appointed Security Operations Manager following a period of acting in that position. Reporting to Mr Dimeglio were four Senior Security Officers (including Mr Dimovski) and about ten Security Officers. 10It seemed to Lynch AC that there were "2 clear camps" within the Security Department of the Hospital. The first of these was Mr Dimovski and the group supporting him, namely, Mr David Kotevski, Mr Mladen Mofardin and Mr Toni Anevski - each of whom was a Security Officer. Mr Dimovski was the longest serving Security Officer at the Hospital. Mr Mofardin referred to him as the "boss" or the "General". The other group identified by Lynch AC was that "supporting management": Mr Andraos; Mr Skleparis; Ms Lynette McCamley, Senior Security Officer; Mr Lindsay Robinson, Security Officer; Mr Arthur Vay, Security Officer; and Mr Petro Calligas, Senior Security Officer. 11This division into "camps" was, in our view, potentially misleading. The evidence supports the conclusion that there was a reasonably close relationship between Mr Dimovski and Messrs Kotevski, Mofardin and Anevski. However, in so far as the other "camp" was concerned the common thread between the individuals was that they gave evidence in the proceedings adverse to Mr Dimovski. 12Initially, Mr Dimovski and Mr Dimeglio appeared to be friends. However, Mr Dimovski stated in his evidence that upon his appointment as Acting Security Manager, Mr Dimeglio immediately began to "micro-manage, bully and intimidate people." In September 2008, Mr Dimeglio directed Mr Dimovski, Mr Kotevski and Mr Anevski not to speak to each other in Macedonian whilst on duty. Mr Dimovski and the other two officers refused to accept this direction. Mr Dimovski was annoyed at this direction. They continued to speak in the Macedonian language. The three officers later complained to Mr Andraos and, in June 2010, made a formal complaint to the Australian Human Rights Commission. The complaint had not been dealt with at the time of the hearing before Lynch AC. The Acting Commissioner considered it was this incident that was the genesis of the resentment against Mr Dimeglio. 13At sometime in October 2008, Mr Dimovski was informed by Mr Kotevski that Mr Dimeglio made the following comment to him, "David this Department is full of old people that have bad memories and cannot remember things and are also unwilling to change. If you and others continue on this path then I can replace you with contract labour which is much cheaper. What this Department needs is totally new blood." 14On 25 November 2008 a Union meeting was called to address Mr Dimeglio 's alleged bullying, harassment and micro-management. The meeting was informed by the Union Organiser that a new manager (Mr Andraos) was about to commence and the issues concerning Mr Dimeglio would be resolved. 15In November and December 2008 and January and February 2009, Mr Kotevski and Mr Anevski complained by email to Mr Dimeglio about the allocation of overtime, and that it was not being done fairly. The tone of the emails was hostile and in parts abusive. Following an investigation, Mr Andraos found there was no substance to the complaints. Indeed, Mr Andraos found that Messrs Kotevski, Anevski, Dimovski and Mofardin were all "receiving overtime well in excess of other security officers." 16In November 2008, Mr Kotevski lodged a complaint with Mr Skleparis alleging bullying and harassment by Mr Dimeglio. Mr Andraos found the allegations were unsubstantiated, but proposed mediation, a course Mr Kotevski rejected. 17In December 2008, Mr Dimovski said he spoke to Mr Dimeglio. He stated that he had received complaints from several individuals that Mr Calligas was very aggressive towards patients and he also received instruction that no one with a provisional security licence should be working at any Health Department establishment. Mr Dimovski said he requested Mr Dimeglio to allocate Mr Calligas to his team so he could keep an eye on him and train him properly. Mr Dimeglio allegedly said "Don't worry about him, as I said before, he won't be much longer with the Security Department for you to worry about". Mr Dimovski said that when Mr Andraos was appointed Security Manager the issue regarding Mr Calligas being removed from the Department changed. Mr Dimovski alleged Mr Calligas appeared to be favoured by both Mr Dimeglio and Mr Andraos. Mr Calligas was allowed to do whatever he pleased, Mr Dimovski said, despite holding only a provisional licence requiring supervision. 18At the end of January 2009, Mr Dimovski said he informed Mr Dimeglio that he was approached by a number of Security Officers who raised concerns that Mr Calligas was physically and verbally assaulting mental health patients and that he was constantly breaching hospital policy by distributing photocopies of patients' X-Rays depicting foreign objects in rectums and vaginas. Mr Dimovski alleged that Mr Dimeglio had said that he would speak to Mr Andraos about this but to Mr Dimovski's knowledge nothing was done and Mr Calligas' inappropriate behaviour continued. Mr Dimovski said he also noticed that Mr Calligas' behaviour changed towards him and he would often ignore him or fail to answer his questions. 19The issue of abuse of patients was referred to again in Mr Dimovski's evidence. This was described at [54]-[55] of the Acting Commissioner's decision: [54] In the beginning of March 2009 Mr Dimovski informed Security Manager, Mr Andraos that he was approached by Mr Anevski, Mr Mofardin and Mr Kotevski who raised concerns that Mr Calligas continued to physically and verbally assault mental health patients and was continuing to distribute inappropriate photo copies of patients' X-Rays. Mr Dimovski also informed Mr Andraos that he had personally warned Mr Calligas not to physically and verbally assault the patients. He also told Mr Andraos that since his initial complaint about Mr Calligas to Mr Demiglio (sic), Mr Calligas was now ignoring him. He also informed Mr Andraos that Mr Calligas spent a considerable amount of time in Mr Andraos' office and that Mr Calligas was following Mr Andraos around everywhere which made it impossible for Mr Dimovski to control him and ultimately do his work. [55] Mr Andraos responded "I run this Department not you, I will run it anyway I see fit". The conversation ended by Mr Dimovski stating that Mr Andraos should be supporting Mr Dimovski when he is trying to do the right thing by the Hospital and not undermine him by not disciplining individuals who are doing the wrong thing. 20Mr Mofardin said in his evidence he had also brought to Mr Andraos' attention that Mr Vay and Mr Calligas had ill-treated patients. 21Mr Andraos in his evidence denied that he had received any complaints concerning physical or verbal abuse by Mr Calligas against patients. In relation to Mr Dimovski's evidence that in March 2009 he informed Mr Andraos that he was approached by Mr Anevski, Mr Mofardin and Mr Kotevski about concerns that Mr Calligas continued to physically and verbally assault mental health patients, Mr Andraos said the conversation with Mr Dimovski never occurred. Mr Dimeglio was not called by SESIAHS to give evidence in the proceedings. 22In relation to the complaints allegedly made to Mr Andraos regarding ill-treatment of patients, Lynch AC found as follows: [377] I do not accept that Mr Dimovski made these complaints to Mr Andraos. The first time that Mr Dimovski put the allegations in writing was on 28 May 2010 to the NSW Ombudsman, approximately one month after the report of the External Investigator into the allegations against Mr Dimovski. Mr Vay and Mr Calligas in cross-examination denied that they had abused mental health patients. [378] I find the evidence of Mr Dimovski that he complained to Mr Andraos about Mr Calligas' and Mr Vay's treatment of mental health patients untruthful. It was in April 2009 that Mr Calligas had made an allegation about Mr Dimovski making derogatory remarks about Mr Demigilio (sic). It was from this point on that Mr Dimovski made allegations against Mr Calligas that he had abused mental health patients. In September 2009 Mr Vay made a complaint to Mr Andraos that Mr Dimovski had made derogatory remarks about Mr Demigilio (sic) to remove him from his position. I find that Mr Dimovski was a very close colleague of Mr Kotevski, Mr Mofardin and Mr Anevski. Mr Dimovski described his relationship as no more or no less friendly than any other work colleague. I prefer the evidence of Mr Vay and Ms McCamley that the four men had a close relationship. Therefore I find the evidence of Mr Kotevski, Mr Mofardin and Mr Anevski also not true. 23In February 2009, Mr Anevski alleged that Mr Dimeglio had bullied and harassed him. He also alleged sexual harassment by Mr Dimeglio had occurred in December 2008 when Mr Dimeglio rubbed his groin on Mr Anevski's shoulder in the Security control room. Mr Anevski said he did not report the matter immediately because he was embarrassed. An investigation was carried out and six of the eight allegations were found to be unsubstantiated, including the allegation regarding sexual harassment. In respect of the remaining two allegations, these were relatively minor and informal counselling of Mr Dimeglio was recommended. 24In early 2009, Mr Calligas said he overheard someone say that Mr Anevski had made a formal complaint against Mr Dimeglio including a complaint of sexual harassment. Mr Calligas thought that was wrong and so advised Mr Andraos in March 2009 of what he had heard and seen over past months. This was described by the Acting Commissioner at [319]: [319] On 9 December 2008 Mr Dimovski was rostered on shift with Mr Calligas. In the course of that shift Mr Calligas alleges that Mr Dimovski said referring to Mr Demigilio (sic) "he always has bad breath." Mr Dimovski called Mr Demigilio (sic) a "faggot" and said, "he always has bad breath, he must suck cock." Mr Calligas said, "he's all right", and then Mr Dimovski said to him, "are you fence seater?" to which Mr Calligas replied, "I'm just here to work." Mr Calligas made a note of that discussion in his Note Book for that day. Mr Calligas was next rostered on shift with Mr Dimovski on 11 December. So two days later Mr Dimovski said to him, "if we put in a lot of complaints against Mr Demigilio (sic) he won't get the job." 25In September 2009, Mr Andraos was approached by Mr Vay who told Mr Andraos he was thinking of quitting his job. He informed Mr Andraos of remarks Mr Dimovski had made to him in July and August 2009. This was described by the Acting Commissioner at [321]: [321] On 12 July 2009, some 6 months later, Mr Dimovski was again given a newly recruited junior officer, by the name of Mr Vay. He was supervised by Mr Dimovski. On one of the first shifts that they worked together he said to Mr Vay, "what do you think about poofs?". Mr Vay was surprised to hear this and he replied, "I've got no problems with anyone, as long as there is a mutual respect both ways." Mr Dimovski then said that, "Joseph Dimeglio's a poof. He shouldn't be in his position." On 5 August, so roughly three weeks after that, Mr Vay was again rostered to work with Mr Dimovski who said to him during the shift, "If you get close enough to Joseph (Mr Demigilio (sic)), he has cock breath." Mr Vay was disturbed to hear this, but he decided against reporting the matter because at the time he had been employed for about two months. 26Both Mr Vay and Mr Calligas claimed that they made contemporaneous notes in their Note Books regarding Mr Dimovski's denigration of Mr Dimeglio. Mr Dimovski claimed the entries were fabricated. Lynch AC referred to the evidence in this respect at [365] (The reference in the quotes to "Joseph" is a reference to Mr Dimeglio. The reference to "George" is a reference to Mr Dimovski. The reference to "Ray" is a reference to Mr Andraos): [365] The particular entries which the applicant alleges were fabricated were as follows: Mr Calligas' Note Book No. 103436 entry on 9/12/08: "S/O Dimovski making vulgar and disrespectful comments towards operation manager Joseph Dimeglio. George called Joseph a faggot, and that Joseph always had bad breath, he said he must be sucking cock. S/O Dimovski did ask if I was a fence sitter. I replied to him I'm just here to work, I feel like he is testing to see my reaction or comments on this." Mr Calligas' Note Book No. 103436 entry on 11/12/08: "S/O Dimovski made comments to me about Norm the casual, that he is a poof, and not to trust him, he also stated again that if we put alot of complaints in against joseph he wouldn't get the operation's managers job . I simply couldn't believe what i had heard from a senior security officer. I don't really need this bullshit. I can't believe i left radiology for this shit." Mr Vay's Note Book No. 103421 entry on 12/7/09: "While on N/S I was conducting a routine Patrol with George Dimovski. He asked me what I thought of poofters! I said that I don't really have a problem with anyone. I said I don't care ... what the person is as long as Mutual respect is both way's. He said that our Operations Manager is a Poof and that he should Not be in that Position. I was taken back about these comments. I did not say anything to George. I jut thought he may have had a argument with Joseph. I don't want to get involved." Mr Vay's Note Book No. 103421 entry on 05/8/09: "George told me that if you get close enough to Joseph he has Cock breath. I think I should speak to Ray. I really can't handle this. I have only been here a couple of months there is so much anger towards Joseph. I do not want to continually hear about this. I think they hate Joseph being Ops. Manager." 27In relation to Mr Dimovski's claim that the entries in the Note Books were fabricated, the Acting Commissioner found as follows at [366]-[373]: [366] Prior to November 2009 Note Books were issued with a registration number beginning with the letter "N". Between December 2008, the time when Mr Andraos commenced employment and 18 September 2009 there is no record of any Note Books issued in the Security Note Book Register (Exhibit 10). Mr Andraos in cross-examination agreed that no Note Books had been issued. Mr Andraos further said in cross-examination that Note Books of a different batch were ordered some months before the current batch runs out and they are not in a sequential order. [367] Mr Vay's and Mr Calligas' Note Books contained entries which preceded and postdated the date of the entries in question. For Mr Vay and Mr Calligas to have fabricated their Note Book entries on the relevant dates they would have had to copy all the earlier and later entries as well. The applicant submitted that all Mr Vay and Mr Calligas had to do was to get a copy of the Shift Log Reports and copy them into their fabricated Note Books. There is no evidence that they have done this. [368] An examination of the Note Book Register (Exhibit 10) reveals that a Note Book No. N049145 was issued to Ms McCamley on 9/11/07. The next Note Book to be issued was Note Book No. N049244, issued to Mr Kotevski on 10/11/07. Although these Note Books were issued one day after another there is an increase in the numbers from N049145 to N049244. The next entry on the Note Book Register reveals a Note Book No. N048960 was issued to C Wright on 18/9/09. This Note Book represents a decrease in number from the Note Book issued to Mr Kotevski No N049244, although it was issued at a later date. The Note Book Register reveals that Note Books issued were not done so in a sequential order, that is the Note Book numbers increase and decrease in a non-sequential order. [369] Mr Calligas' Note Book No 103436 was issued to him on 18 August, 2008, the day of his first shift (Exhibit 15). On the 29 July, 2008 he signed, as an item designation, for such things as a Note Book, shirts, trousers, pouch handcuffs and the like (Exhibit 14). However, the 29 July, 2008 was not the date when the Note Book was issued to him. [370] Mr Calligas' Note Book was issued to him on 18 August 2008. It is not recorded in the Note Book Register (Exhibit 10). The Note Book No. 103436 of Mr Calligas was issued in between Note Book No. N049244 issued on 10 November 2007 and Note Book No. N048960 issued on 18 September 2009. [371] Mr Vay's Note Book was issued to him on 20 June 2009. It was not recorded in the Note Book Register (Exhibit 10). The Note Book No. 103421 of Mr Vay was also issued in between Note Book No. N049244 issued on 10 November 2007 and Note Book No. N048960 issued on 18 September 2009. [372] There is approximately a two year gap in the Note Book Register (Exhibit 10) during which time no entries were recorded. This is not conclusive evidence that the Note Book entries were fabricated. [373] I find the Note Books of Mr Calligas and Mr Vay were not fabricated. The Note Book Register does not provide evidence that the Note Books are fabricated. It merely provides evidence that the Register was anything but reliable. Further, on the balance of probabilities, I find that the Note Books of Mr Calligas and Mr Vay had contained such a large number of incidents that it is highly unlikely that they are fabricated. 28Two other officers, Mr Robinson and Ms McCamley stated that they had heard derogatory remarks made about Mr Dimeglio. Mr Robinson said in his evidence he had heard Mr Dimovski and Messrs Mofardin, Anevski and Kotevski refer to Mr Dimeglio as a "poofter" and "faggot". Ms McCamley did not hear Mr Dimovski make derogatory remarks about Mr Dimeglio, however, she did witness Mr Anevski say to Mr Dimeglio that he was a "poofter". Ms McCamley also heard Mr Dimovski say to another officer some years earlier than 2008 that, in referring to Ms McCamley: "We need to get rid of that bitch and we'll do what we can to get rid of her. She's a dog, she's gonna go down. She doesn't belong in this department." Ms McCamley referred to Mr Dimovski as the "ringleader" of a group consisting of himself, Mr Mofardin, Mr Kotevski and Mr Anevski. 29In January 2010, Mr Kotevski complained to the Chief Executive of SESIAHS that Mr Andraos had engaged in corrupt behaviour. It was found, following an investigation, there was no evidence that Mr Andraos had acted improperly. In May 2010, Mr Dimovski and Mr Kotevski complained to the NSW Ombudsman, alleging corruption within the Security Department of the Hospital. 30As a consequence of the investigation into Mr Anevski's complaint in February 2009 that he had been sexually harassed by Mr Dimeglio, a complaint that was found to be unsubstantiated, Mr Anevski sought a review of the finding by the Professional Practice Unit ("PPU"), which found that it was not possible to sustain Mr Anevski's allegations. The PPU, however, recommended that an external investigator be appointed to "consider the allegations that staff have conspired and fabricated allegations against Mr Dimeglio in order to prevent him being appointed to the Operations Manager's position." 31In September 2009, Michael Maher was engaged to investigate the matters recommended by the PPU. Mr Maher provided his report in April 2010. He found that Mr Dimovski had acted in a derogatory manner and had spoken words of insult regarding Mr Dimeglio with at least a strong inference that this occurred with the intention of preventing and eventually removing Mr Dimeglio from his position in an improper (unlawful) way. Mr Dimovski was also found to have breached the NSW Health Code of Conduct and he failed in Key Performance Areas/Duties as set out in the Position Description of a Senior Security Officer and he may well have acted corruptly as defined by the Independent Commission Against Corruption Act 1988. 32It was subsequently recommended to the Chief Executive of SESIAHS that Mr Dimovski be advised of the intention to terminate his employment based on Mr Maher's report and to show cause why that should not occur. At the time, Mr Dimovski was on leave so a decision was taken to suspend him on full pay effective from 26 July 2010 until the Chief Executive had made a decision regarding termination. In the meantime, Mr Dimovski made further complaints about various members of the Security Department to the Privacy Commissioner, the NSW Ombudsman and the Human Rights Commission. 33Mr Dimovski replied to the show cause letter denying all of the allegations against him and claimed that the evidence upon which the allegations were made was fabricated. He further claimed that the allegations against him were part of the ongoing bullying and harassment of him by management. 34On 26 October 2010, the Chief Executive wrote to Mr Dimovski terminating his employment. The Chief Executive indicated in his letter that he had accepted the recommendation to terminate on the grounds of serious breach of the NSW Health Code of Conduct, particularly Section 1.1 Personal and Professional Behaviour, 1.2 Good Faith, Section 2 Conflicts of Interest (2.1 and 2.2) and Section 7 Discrimination, Harassment, Bullying and Violence. Mr Dimovski was paid one week's salary in lieu of notice. Whether dismissal was unjust or unreasonable 35As we earlier noted, Lynch AC found that Mr Dimovski had engaged in the conduct alleged against him and that his dismissal was not unjust or unreasonable in the circumstances. The Acting Commissioner stated in this respect: [380] Having carefully considered the relevant evidence and mindful of the requisite test to be applied, I make the following positive finding: That Mr Dimovski acted in a derogatory manner and spoke words of insult regarding the Security Operations Manager, Mr Demigilio (sic), with at least a strong inference that this occurred with the intention of preventing and eventually removing Mr Demigilio (sic) from his position in an improper (unlawful) way. [381] The action on the part of Mr Dimovski was clearly misconduct and I find that SESI Area Health Service have discharged the requisite onus applicable under the cases cited above to establish that misconduct on the part of Mr Dimovski did take place. [382] Such action by Mr Dimovski against Mr Demigilio (sic) was clearly contrary to the Code of Conduct and indeed would be contrary to acceptable standards of conduct in a work place and was of such seriousness as to warrant dismissal. 36Relevantly, Lynch AC also found at [408]: [408] ... I am mindful that Mr Dimovski did not follow the chain of command and did not carry out the functions of his position in that he spoke derogatory words against Mr Demigilio (sic), who was Mr Dimovski's superior. He spoke those words with the intent of having Mr Demigilio (sic) removed from his position. Mr Dimovski has breached the Code of Conduct. 37On the cross-appeal counsel for Mr Dimovski conceded that it was open to the Acting Commissioner, on the evidence, to find that Mr Dimovski had engaged in the actual misconduct alleged (that is, making derogatory remarks about Mr Dimeglio). That finding was not challenged. What was challenged was the finding that Mr Dimovski engaged in the misconduct "with the intention of preventing and eventually removing Mr Dimeglio from his position in an improper (unlawful) way". 38The concession by Mr Dimovski was properly made. The evidence supporting the Acting Comissioner's finding regarding what Mr Dimovski said about Mr Dimeglio was strong. 39The evidence regarding the Note Book entries was critical. As we earlier noted, Lynch AC found the notes made by Mr Vay and Mr Calligas were not fabricated. That finding was open to the Acting Commissioner and we are strengthened in that view by the fact that Mr Dimovski does not seek to challenge the findings of Lynch AC that the words recorded in the note books denigrating Mr Dimeglio were in fact spoken by Mr Dimovski. This undermines Mr Dimovski's claim that Mr Calligas fabricated the Note Book entry for the purpose of orchestrating Mr Dimovski's dismissal. 40Counsel for Mr Dimovski submitted, however, that the language used by Mr Dimovski was not such that it warranted dismissal. It was submitted: At best, the only findings the Acting Commissioner could make are as follows: (a) In December 2008, the Applicant called Mr Demiglio (sic) a 'poof' in front of Mr Calligas in December 2008; (b) In December 2008, the Applicant said that Mr Demiglio (sic) is a 'faggot' and that he has bad breath because he must be 'sucking cock'; (c) In July 2009, the Applicant called Mr Demiglio (sic) a 'poof' in front of Mr Vay; (d) In August 2009, the Applicant said to Mr Vay that Mr Demiglio (sic) has 'cock breath'. The above conduct would perhaps justify a first and final warning having regard to: (a) The Applicant's age; (b) The Applicant's 22 years of service; and (c) The Applicant's prior unblemished record. ... The conduct would, without doubt, justify a written warning being issued to the Respondent but does not justify the removal of an employee who has been serving the Appellant for over 20 years without incident. 41Counsel for Mr Dimovski understated the seriousness of Mr Dimovski's conduct. The words were not uttered in an occasional fit of pique, but rather over a period of nine months. The words were insulting, hostile towards someone that Mr Dimovski considered to be homosexual, and constituted the language of discrimination. Moreover, the words were spoken by a senior officer about his superior and addressed to junior officers. Mr Vay, for example, had only been employed for two months before Mr Dimovski said to him that Mr Dimeglio was a "poof" and had "cock breath". Regardless of Mr Dimovski's motive in using the language he did, it embarrassed Mr Vay and Mr Calligas, caused Mr Vay to consider resigning his position with the Hospital and had the potential of undermining Mr Dimeglio's authority and damaging his standing and reputation amongst junior officers. Mr Dimovski was responsible for the training and supervision of junior Security Officers and he was responsible for mentoring junior Security Officers. In our view he betrayed that responsibility. 42Mr Dimovski agreed that he had read the NSW Health Code of Conduct. Mr Dimovski was obliged under that Code to undertake his duties in good faith, with courtesy and respect for everyone and with the best motives. These things he failed to do. He was clearly acting in bad faith towards his superior in the Security Department. 43It may well have been open to find that based only on his insulting and derogatory language conveyed to junior officers and directed against Mr Dimeglio, that there were grounds to find the dismissal of Mr Dimovski was not unjust or unreasonable. 44However, Lynch AC did not confine herself to the utterances of the derogatory words. The Acting Commissioner also found that Mr Dimovski had been untruthful in giving his evidence, had acted contrary to the Code of Conduct and "contrary to acceptable standards of conduct in a work place." 45Further, the Acting Commissioner found that Mr Dimovski uttered the words against Mr Dimeglio with the intent of having Mr Dimeglio removed from his position. Initially, the Acting Commissioner found there was "at least a strong inference that this occurred with the intention of preventing and eventually removing Mr Demigilio (sic) from his position in an improper (unlawful) way". Lynch AC, however, seems to have later strengthened this finding by refraining from any reference to inference. Why the Acting Commissioner did this was not explained and we do not consider it was necessary. But if Lynch AC was correct in finding at least an inference could be drawn that there was intent, we consider the Acting Commissioner erred in finding the dismissal was "too harsh". 46In his submissions, counsel for Mr Dimovski contended that t he evidence was insufficient and not persuasive enough for the Acting Commissioner to be satisfied that Mr Dimovski made a derogatory remark with the intention of having Mr Dimeglio removed from his position. It was submitted that: The Acting Commissioner did not provide any reasons or analysis as to how she came to the conclusion that Mr Dimovski spoke the words with the intent of having Mr Dimeglio removed from his position. The evidence that was available to the Acting Commissioner was two diary entries, one by Mr Calligas and one by Mr Vay. Neither entry provided sufficient proof of intent to have Mr Dimeglio removed from his position. The Acting Commissioner drew no more than an indirect inference from the indefinite testimony of Mr Calligas' and Mr Vay's Note Book entries, that Mr Dimovski engaged in the misconduct with the intention of preventing and eventually removing Mr Dimeglio from his position in an improper (unlawful) way. The evidence was insufficient and not persuasive enough for the Acting Commissioner to be comfortably satisfied that Mr Dimovski made a derogatory remark with the intention of having Mr Dimeglio removed. 47It does not appear that Mr Dimovski was challenging the Acting Commissioner's finding that he said to Mr Calligas "if we put in a lot of complaints in against Joseph he wouldn't get the operation's manager's job" or the finding that he said to Mr Vay "Our operation's manager is a poof and he should not be in that position." 48Even if it were challenged it seems hardly likely that Mr Vay and Mr Calligas made up these statements. If their evidence regarding the derogatory words is to be accepted, we see no reason why their evidence regarding Mr Dimovski's statement proposing complaints to prevent Mr Dimeglio getting the manager's job or removing him from the position he was in, should not also be accepted. 49Mr Vay's evidence, but particularly the evidence of Mr Calligas that Mr Dimovski said "if we put a lot of complaints in against Joseph he wouldn't get the operation's manager's job", cannot be assessed in isolation. To do so, one would be left with an entirely ambiguous statement that could not satisfy the onus described by Dixon J in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 at 361-363. 50The allegation that Mr Dimovski made the odious comments about Mr Dimeglio and in the course of doing so intended to encourage Mr Vay and Mr Calligas to make a lot of complaints against Mr Dimeglio so that he would not get the manager's job on a permanent basis or to remove him from the position he was in, is a very serious allegation and as counsel for Mr Dimovski submitted, may amount to corrupt conduct under the Independent Commission Against Corruption Act . Dixon J observed in Briginshaw : The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal in such matters, "reasonable satisfaction" should not be produced by inexact proofs, indefinite testimony or indirect inferences. 51Reliance solely on the evidence of Mr Vay and Mr Calligas in the face of strong denials by Mr Dimovski, supported by the evidence of Mr Anevski and Mr Kotevski, falls short, in our opinion, of establishing on the balance of probabilities that Mr Dimovski was seeking to encourage the two junior officers to make complaints against Mr Dimeglio in order to prevent him getting the manager's job or to have him removed from the position he was in. 52However, there is also evidence that, from about October or November 2008, complaints began to be made against Mr Dimeglio sourced from Mr Dimovski, and Messrs Anevski and Kotevski. There were the complaints about allocation of overtime that were found to be groundless. There was the complaint by Mr Kotevski alleging bullying and harassment by Mr Dimeglio, which was found to be unsubstantiated. 53Mr Dimovski said he spoke to Mr Dimeglio in December 2008 regarding ill-treatment of patients by Mr Calligas but that no action was taken by Mr Dimeglio. Mr Dimeglio was not called to give evidence, which raises the question why not? However, Mr Andraos gave evidence that despite Mr Dimovski and Mr Mofardin saying they had raised complaints about Mr Calligas' ill-treatment of patients with him, Mr Andraos categorically denied this was the case. It is clear from the evidence that Mr Andraos addressed each of the complaints raised with him regarding Mr Dimeglio. It is most unlikely that Mr Andraos would not have investigated serious allegations of patient mistreatment if such allegations had been put to him. He would have been aware that had he not investigated the allegations, it would have been a simple matter for Mr Dimovski or Mr Mofardin to refer their complaints to Mr Skleparis or some other agency and Mr Andraos would have found himself the subject of dereliction of duty charges. 54It seems to us that a similar logic applies in respect of Mr Dimeglio. It was Mr Dimovski's evidence that it was in December 2008 and again in January 2009 that he raised mistreatment of patients with Mr Dimeglio and nothing was done. Mr Dimeglio would have been conscious of the fact that a failure to investigate, or pass on to his superiors, a grave complaint of patient mistreatment would have placed him in serious jeopardy. As it was, Mr Dimovski did not make a written complaint until 28 May 2010 and that was to the NSW Ombudsman. In other words, Mr Dimovski left it until over 12 months of alleged failure to act by Mr Andraos before he made a complaint to an external agency. This was after the external investigator, Mr Maher, had interviewed various persons, including Mr Dimovski, and completed his report into the allegations against Mr Dimovski. 55In February 2009, Mr Anevski made his complaint that Mr Dimeglio had bullied and harassed him. He also alleged sexual harassment. An investigation was carried out and six of the eight allegations were found to be unsubstantiated. In respect of the remaining two, these were relatively minor and informal counselling of Mr Dimeglio was recommended. Mr Anevski was dissatisfied with the outcome of the original investigation, which was followed up by the PPU, with no different outcome. 56In our opinion, a reasonably strong inference can be drawn that Mr Dimovski engaged in a campaign to undermine Mr Dimeglio with a view to either preventing him being permanently appointed to the manager's job or removing him from his position. There is the evidence of Mr Vay and Mr Calligas, recorded contemporaneously in their Note Books and there is evidence of a series of complaints - some expressed in disrespectful if not hostile terms - but mainly unsubstantiated, against Mr Dimeglio emanating from Mr Dimovski, Mr Anevski, Mr Kotevski and Mr Mofardin. 57Mr Calligas gave evidence that he witnessed Mr Dimovski assist Mr Kotevski in constructing an email complaining about Mr Dimeglio. There was other evidence we referred to earlier that supports a conclusion there was a reasonably close relationship between Messrs Dimovski, Anevski, Kotevski and Mofardin and the inference is available that they cooperated in a campaign against Mr Dimeglio. It is evident that Mr Dimovski objected to Mr Dimeglio's supervisory style and it may also be concluded from the language Mr Dimovski and the other three men used in referring to Mr Dimeglio that they considered him to be a homosexual and, therefore, to be denigrated. 58Mr Dimovski's defence was to deny outright any wrongdoing - that he never used insulting language with respect to Mr Dimeglio and never had any intention of preventing him being appointed to the manager's position. Mr Dimovski's evidence was that he had become the victim of an organised and systematic program of discrimination aimed at removing him from his position of employment within the Hospital. He also believed that Mr Andraos, Mr Skleparis, Mr Dimeglio, and a former Acting Security Manager, Mr Hugon, encouraged Mr Calligas and others to provide written fabricated statements against him under the Protected Disclosure Act 1994. He believed that their sole intention was to illegally and unfairly remove him from his position of employment. Their motive, he claimed, was to cover up his allegations of patient abuse and breach of patient privacy within the Hospital system and to support Mr Dimeglio against the grievances raised by Mr Anevski. 59There are significant difficulties in accepting Mr Dimovski's defence. There is no probative evidence of a conspiracy amongst the persons named by Mr Dimovski. In relation to Mr Hugon, Mr Dimovski's evidence was summarised by Lynch AC as follows: [33] In September of 2008 acting Security Manager, Mr Hugon was stood down from his position for allegedly distributing inappropriate emails on the hospital email system. According to Mr Dimovski, Mr Anevski later told him that Mr Hugon contacted Mr Anevski on his mobile phone and said words to the effect of "tell Jorgo [Mr Dimovski] I am not going to go down on my own, I am taking every one down with me. I know it was Jorgo [Mr Dimovski] that did it. I will be telling the Hospital Management and Human Resources Department everything and anything I can think of". Mr Hugon was referring to his dismissal. Mr Dimovski said he informed Mr Anevski that he had absolutely no involvement and requested that he contact Mr Hugon to tell him this. [34] About 3 weeks after the dismissal of Mr Hugon, Mr Kotevski informed Mr Dimovski that he had a conversation with Mr Calligas, who informed him that he has been in constant contact with Mr Hugon. Mr Calligas informed him that Mr Hugon wanted it known that he knew people from his previous employment in the NSW Prison System and that Mr Kotevski and others responsible for Mr Hugon's dismissal would be done over. Mr Kotevski informed Mr Dimovski. 60Mr Andraos said he met Mr Hugon once by chance on 19 August 2009. Mr Andraos had not met him before and had not seen Mr Hugon since that time. There was no evidence to the contrary. It is most unlikely that Mr Andraos joined forces with a person he hardly knew as part of a conspiracy to get rid of Mr Dimovski. 61In relation to the allegation he was seen having coffee with Mr Calligas, Mr Andraos said he had coffee with Mr Calligas from time to time, as he has done with other hospital staff. This and other instances of contact between Mr Andraos and Mr Calligas do not constitute evidence of a conspiracy. 62Lynch AC found that the entries in the Note Books of Mr Vay and Mr Calligas were not, as Mr Dimovski claimed, part of the conspiracy to oust him, but rather represented factually what had occurred. We concur. 63More significantly, however, are the problems with what Mr Dimovski claimed were the motives in getting rid of him. Having Mr Dimovski removed would not have prevented him from pursuing his allegations of patient mistreatment. He could have referred the matter for investigation to any relevant agency regardless of whether he remained in employment. Moreover, there was plenty of time for Mr Dimovski to take action in the face of alleged inaction over his allegations of patient mistreatment whilst he was still employed. He contended he raised the matter with Mr Andraos in March 2009. A decision was not taken to investigate complaints against Mr Dimovski until September 2009, but it took Mr Dimovski until April 2010 to raise the matter with the NSW Ombudsman. Furthermore, the decision to undertake an investigation into Mr Dimovski's conduct arose out of a recommendation by the PPU; it was not instigated by Mr Skleparis or Mr Andraos. It should also be noted that we do not accept that Mr Calligas was part of any conspiracy against Mr Dimovski. As we earlier found, his notebook entries were not fabricated, but rather were a true reflection of what Mr Dimovski said to him regarding Mr Dimeglio. 64As for the contention that Mr Dimovski's removal was in order to support Mr Dimeglio against the grievances raised by Mr Anevski, there was a review by the PPU of the investigation's into Mr Anevski's complaint of bullying and sexual harassment. There was no suggestion that the review was tainted in any way. The PPU completed its review into Mr Anevski's complaint in September 2009. The PPU found it was not possible to sustain Mr Anevski's allegations. Mr Dimovski's employment was not terminated until October 2010. We see no connection between Mr Dimovski's removal and Mr Anevski's complaint against Mr Dimeglio. 65It was argued at first instance that the external investigation by Mr Maher was procedurally unfair because it was improperly influenced by Mr Andraos. The Acting Commissioner found the investigation was not procedurally unfair. We note this finding was not challenged in the cross-appeal. 66We find that the inference is available that Mr Dimovski sought to influence junior officers, namely, Mr Vay and Mr Calligas to make complaints against Mr Dimeglio for the improper purpose of preventing Mr Dimeglio being permanently appointed to the position of Security Operations Manager or removed from the position he held at the time. Whether the dismissal was harsh 67We consider Lynch AC erred in finding the dismissal of Mr Dimovski was harsh. The Acting Commissioner found that the decision to dismiss was " too harsh in all the circumstances for the reason that Mr Dimovski has an unblemished record of 22 years in employment with SESI Area Health Service. He is a man of 60 years of age with little likelihood of future employment." 68That finding fails in a serious way to have full and proper regard to the nature and quality of Mr Dimovski's misconduct. On her own assessment the Acting Commissioner found that Mr Dimovski: (a) over an extended period of time, made statements to fellow security staff about the acting Security Operations Manager, Mr Dimeglio, that were derogatory, insulting and intended to prevent and eventually remove Mr Dimeglio from his position in an improper (unlawful) way ([365], [373] and [380]); (b) denied making such statements and claimed that the Note Book entries made by other staff recording those statements were fabricated, when he knew that they were not fabricated ([365] and [373]); (c) claimed that he had made complaints to the Security Manager, Mr Andraos, about the abuse of mental health patients by other Security Officers, when he had not made such complaints ([375]-[377]); (d) given untruthful evidence in the proceedings at first instance ([378]); (e) engaged in action which was clearly misconduct ([381]); and (f) engaged in action which was clearly contrary to the appellant's Code of Conduct and contrary to acceptable standards of conduct in a work place and was of such seriousness as to warrant dismissal ([382]). 69We accept the appellant's submission that Mr Dimovski's misconduct was serious and that it justified dismissal. The misconduct: (a) was deliberate; (b) occurred over an extended period of time; (c) involved the making of salacious, homophobic and offensive statements about his immediate supervisor to other staff; and (d) was designed to undermine the position of his immediate supervisor leading to the supervisor's eventual removal. 70Even on Mr Dimovski's own concession in his evidence at first instance, if such conduct had been engaged in it was unacceptable. 71The matters Lynch AC took into account in making her finding that the decision was "too harsh" (the test is harsh, not "too harsh") were matters properly taken into account. But Mr Dimovski's misconduct was of such a nature as to have been totally repugnant to what is required in an employer-employee relationship. His termination will no doubt result in hardship for him, but his dismissal cannot be regarded as harsh when weighed against the misconduct. Other matters 72There were other matters raised by SESIAHS on the appeal involving additional errors committed by the Acting Commissioner. These included a failure to give adequate reasons as to why re-employment was chosen over reinstatement and the use of s 89(2) as a vehicle to demote Mr Dimovski. We think SESIAHS was correct in identifying these as errors. However, in light of a conclusion that the Acting Commissioner erred in finding the dismissal was too harsh and our view that the dismissal was justified, it is unnecessary to explore further issues relating to re-employment or reinstatement. 73There were other matters also raised in the cross-appeal including the submission that the Acting Commissioner erred by failing to make an order pursuant to s 89(3) that the appellant pay to the respondent an amount the respondent would, but for being dismissed, have received before being re-employed and that the Acting Commissioner erred by finding that the respondent gave "untruthful" evidence in circumstances where such a finding was not open to the Acting Commissioner. In light of our conclusions we do not find it necessary to address these matters. Because we have not found it necessary to make any finding about Mr Dimovski's truthfulness or otherwise that should not be taken as endorsing the Acting Commissioner's finding in this respect. Leave to appeal 74In our opinion, the matters raised on appeal and in the cross-appeal were of such importance that, in the public interest, leave should be granted. Orders 75The Full Bench makes the following orders in the appeal: (1) Leave to appeal is granted. (2) The appeal is upheld. (3) The orders of Lynch AC are set aside. (4) The application by the respondent for reinstatement, or re-employment, or monetary compensation, is dismissed. (5) The stay orders made on 20 July 2011 are dissolved from the date of this decision. 76The Full Bench makes the following orders in the cross-appeal: (1) Leave to cross-appeal is granted. (2) The cross-appeal is dismissed. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 October 2011