Transport Appeal Boards New South Wales Medium Neutral Citation: Elafchal v RailCorp [2012] NSWTAB 13 Hearing dates: 04/04/12 Decision date: 27 April 2012 Before: Ritchie C (Board) Decision: Catchwords: Customer Service Team Leader suspended from work, first on pay then without pay due to being charged with a serious criminal offence. Employee pleads guilty- recklessly dealing with proceeds of crime -placed on a 18 months good behaviour bond-employee terminated. Employee filed Notice of Appeal-Transport Discipline..-Respondent submitted that appellant pleaded guilty to a serious charge, rendered him incompetent to fulfil the duties and community expectations of his position-appellant submitted that whilst his position required to safeguard customers lost property etc not major part of his role and his actions did not repudiate his contract of employment. Board found that degree of trust required no longer existed, actions of appellant incompatible with his job, serious damage to relationship between appellant and respondent. Appeal dismissed. Legislation Cited: Crimes Act, 1900 : Transport Administration (Staff) Regulation 2005: Rail Safety Act, 2008: Rail Safety (Offences) Regulations 2008. Cases Cited: Rose v Telstra Corporation Limited (AIRC 1444/98 N Print Q 9292): HEF of Australia v Western Hospital (1991) 4 VIR 310 at 324:Hussen v Westpac Banking Corporation (1995) 59 IR 103 : Blythe Chemicals v Bushnells (1933)49 CLR 66: McManus v Scott- Charlton (1996) 140 ALR 625. Category: Principal judgment Parties: Mr Belal Elafchal (Appellant) Rail Corporation of New South Wales(Respondent) File Number(s): TAB 1508 of 2011 DECISION Introduction 1Mr Belal Elafchal (the appellant) filed a Notice of Appeal-Transport Discipline on 15 December 2011. In the Notice of Appeal the appellant noted his plea as guilty. The appellant had two periods of employment with Rail Corporation of NSW (the respondent). The first from 1999 to 2000 and the second from 17 February 2003 to his date of termination from the respondent on 14 December 2011. He was originally employed as a Customer Service Attendant and was promoted as a Customer Service Team Leader on 31 October 2004. 2The appellant was stood down from the respondent with pay in July 2007. This was varied in October 2009 when he continued to be stood down but this time without pay. Issue(s) 3The appellant's suspension in July 2007 was as a consequence of the respondent receiving information regarding a number of alleged criminal offences. He was suspended without pay effective 21 October 2009 due to being charged by the NSW Police for a number of serious criminal matters. 4On 22 September 2011 the appellant was convicted under section 193B(3) of the Crimes Act 1900. He was placed on an 18 months good behaviour bond. Respondent's and Appellant's Cases 5As the appellant had pleaded guilty the respondent did not call any witnesses. Mr John Kenny filed a statement, attached to it was his Investigation Report he was required to complete with respect to the appellant. He stated that the appellant was in 2005 and 2007 charged by the NSW Police with a number of serious criminal offences. A number of these charges were not proceeded with. On 22 September 2011, in the District Court, the appellant pleaded guilty to and was convicted of -Recklessly dealing with the proceeds of Crime 6In his report Mr Kenny stated that in 2006 a break and enter was committed at the premises of Strathfield Car Radio at Hurstville. A significant amount of property was stolen. On 7 March 2007, NSW Police executed a search warrant at 50 Woodburn Road, Berala. At the time the appellant was living with his parents at this address. During the search of the premises, Police located and seized a number of items including a mobile phone, navigation equipment and other items previously stolen from Strathfield Car Radio at Hurstville. The appellant was charged with Knowingly Deal with Proceeds of Crime with Intent to Conceal in relation to these items. The appellant pleaded guilty to these charges on 7 March 2011. The indictment stated: On 7 March 2007 at Berala in the state of New South Wales, dealt with proceeds of crime, namely, a mobile phone, navigation equipment and other items previously stolen from Strathfield Car Radio's store at Hurstville, in circumstances where he was reckless as to whether the said property was the proceeds of crime. 7The other charges against the appellant were not proceeded with. 8On 22 September 2011 the appellant was convicted of the offence and Judge Blackmore imposed a Section 9 Bond for 18 months. Mr Kenny stated that this was a serious offence which carried a maximum penalty of 10 years imprisonment. 9Mr Kenny stated that the appellant has recorded his Christian name with the respondent as Belal and for the court as Bilal. He also stated that in his criminal record the appellant has 14 aliases. 10The respondent stated that on 4 October 2011 the Disciplinary Review Panel reviewed the evidence in relation to the conviction and made a preliminary recommendation that the appellant should be dismissed. The appellant was written to and advised of this recommendation and given 14 days to respond to the allegations and to penalty and to submit any further evidence he may wish. 11On 2 November 2011 the appellant provided a written response and attached various character references. In his response the applicant noted the section of the Crimes Act he had been convicted under and the factual circumstances which led to the charges being laid against him. He claimed that the offence he committed was " best described as being passive" as he took no active part in the storage of the items but was aware that they were there and allowed his brother to store them. 12It was noted by Mr Kenny that the offence of being reckless as to whether property was the proceeds of crime is not a passive offence and that the mobile phone, identified as stolen property, was found in the top draw of the appellant's bedside cabinet and that other items were located within the appellant's residence. 13On 28 November 2011 the Disciplinary review Panel reconsidered the matter and confirmed their recommendation of dismissal. 14On 5 December 2011, Mr Rino Matarazzo, General Manager Customer Service CityRail CBD signed a letter confirming that the appellant was to be dismissed. 15The respondent submitted that the respondent is bound by the provisions of the Transport Administration (staff) Regulation 2005. Under section 39 a transport corporation may take disciplinary proceedings against an officer who is convicted of a "serious criminal offence", ie punishable by imprisonment for 6 months or more. What the appellant was convicted of had a maximum of 10 years imprisonment. 16The respondent is also bound by the provisions of Rail Safety Act 2008 which imposes a specific obligation on the respondent to ensure that each rail safety worker is of sufficient good health and fitness to carry out rail safety work and is competent to undertake that work. It was the respondent's submission that the appellant's conviction renders him incompetent to fulfil the duties and community expectations of the role of Customer Service Team leader. 17The respondent argued that the specific duties of a Customer Service Team Leader includes an obligation to take responsibility and comply with the procedures relating to lost property which involves the public interest and community expectations. There is a high community expectation that the respondent will deal with lost/abandoned property appropriately. A key accountability of the position of customer service team leader is the safeguard of luggage/ cloakroom/lost property in accordance with the respondent's policies, procedures and safeguards. 18It was submitted that a person who has a criminal conviction for being reckless as to the owner of property is incompatible with the duties to deal with lost property. The requirement of a customer service team leader to deal appropriately with lost property as part of their duties places a high level of trust in them and that trust is a fundamental and essential term in the contract of employment. A person who is guilty of being reckless as to the owner of property cannot meet the level of trust required of such a position. 19With respect to a petition that formed part of the evidence which was signed by 51 employees who declared the appellant as " valued, honest and respected", described as " a mentor" and " to be looked up to as a role model" gave the respondent concern that such employees consider a convicted criminal who was reckless as to the owner of property as someone to be looked up to as a role model. The respondent stated that it would be inappropriate to place the appellant back into a position of leadership and influence over employees who may also deal with lost property in the course of the daily duties. 20In the appellant's case it provided a statement from the appellant and a number of statements being character references for the appellant. Three of those gave brief evidence in the witness stand. 21The statement from the appellant outlined his history with the respondent culminating in he being responsible for the supervision and leadership of approximately 15 cleaning staff per shift. His statement outlined the responsibilities and duties of a Customer Service Team Leader especially when he was located at Central station detailing the complexity of working at that location. 22He stated that at Central, the Customer Service Team Leader is not required to operate within a luggage/cloakroom/ lost property office. He believed this is only required at certain locations. At Central station lost property is either handed to staff by members of the public or handed in by rail crew. Such items are then handed into the Station Manager's office and managed within. 23 Items on trains are handed to Customer Service Attendants and directed to the Station Manager's office. Paper work is raised in these transactions. 24He stated that during his employment with the respondent he had handled lost property when required and had never been brought under notice for misconduct. 25He stated that he did not believe that his conviction would have any effect on allowing him to fulfil his workplace obligations. He stated that he and his family had experienced great hardship and strain over the last four years and had been forced to sell assets and seek financial assistance from his immediate family to support his families day to day living. 26He stated that he was deeply sorry that he committed the said offence and that there is absolutely no prospect of re-offending. 27Eight officers provided character references and three gave evidence. Mr Bill Esmail, Mr Hani Barham and Mr George Seraskeris all work for the respondent. All spoke of the appellants assistance and guidance given to them when at work emphasising his integrity and honesty. 28In written submissions the appellant's legal representative stated that it did not allege that the dismissal was procedurally unfair. But the Board would need to weigh the seriousness of the conduct leading to the conviction and the relationship of the conduct to the contract of employment. The conviction dealt with proceeds of crime being reckless as to whether it is proceeds of crime. The proving of reckless does not require knowledge that the goods were stolen. In this case the court clearly saw the criminal offence at the very low end of the range of criminality. The sentence being a good behaviour of 18 months. 29 It was stated that the relationship with the contract is tenuous. It was accepted that Customer Service Team Leaders do have to safeguard lost property, the respondent did not suggest that this is a major part of the duties of the appellant. Also the Code of Conduct did not differentiate between employees with respect to some having a higher standard than others, ie, team leader to non team leader. Was the conduct complained of, of such gravity or importance as to indicate a rejection or repudiation of the employment contract by the employee. In this case it is no. Also the appellant was suspended without pay on 21 October 2009 which it was argued is sufficient punishment in the circumstances. Consideration and Decision. 30Both advocates quoted from the case Rose v Telstra Corporation Limited(AIRC 1444/98 N Print Q9292). In this case an officer of Telstra having been sent by his employer to another town to carry out some work and whilst staying at a hotel, had a fight in a room with another Telstra employee. Vice- President Ross stated : The issue in question is the extent to which an employee's conduct outside of their working hours can provide a valid reason for their termination. He went on to state: Nor is the conviction of a criminal offence, of itself, sufficient to warrant termination. The misconduct in question must have a relevant connection to the employment. For example in HEF of Australia v Western Hospital Lawrence DP observed: "The conviction of an individual for a criminal offence does not necessarily have any effect upon that person's employment The question of the relevance of a conviction or an employee's alleged misbehaviour to the employee's work should be considered in terms of whether or not the employee has breached an express or implied term of his or her contract of employment. Whether events occurring outside the actual performance of work will be relevant to the employment relationship will vary from case to case. For example, an accountant who has committed an act of dishonesty (for which he may have been charged and convicted) in the course of some activity outside his employment might be said to have breached a term of his contract of employment." and later he quoted: Depending on the circumstances a conviction for a criminal offence arising from out of work activities may lead to termination. In Hussein v Westpac Banking Corporation Staindl JR expressed the following view: "... a conviction on a drink-driving charge which occurred outside work hours would not be relevant to the employment of many people. However it would be of critical relevance to a truck driver or taxi driver. It seems to me that an appropriate test is whether or not the conduct has a relevant connection to the employment." and In certain circumstances an employee's out of work activities may be in breach of an implied or explicit term of their employment contract. 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 and from the same : "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." and later in his judgement he states: 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. Absent such considerations an employer has no right to control or regulate an employee's out of hours conduct. In this regard I agree with the following observation of Finn J in McManus v Scott-Charlton: "I am mindful of the caution that should be exercised when any extension is made to the supervision allowed an employer over the private activities of an employee. It needs to be carefully contained and fully justified." 31The respondent argued that there exists a practical connection between the criminal conviction and the appellant's specific duties as a Customer Service Team leader . In particular an obligation to take responsibility and comply with the procedures relating to lost property. It was stated that the respondent is subject to Regulation 42 of the Rail Safety (Offences) Regulation 2008, which imposes legal requirements on the respondent in relation to the manner in which lost property which is found on trains or public area is dealt with. There exists a high community expectation that the respondent will deal with lost property appropriately. Therefore a high level of trust is placed on a Customer Team Leader and that this trust is a fundamental and essential term of the contract of employment. A person who is guilty of being reckless as to the owner of property cannot meet the level of trust required of the role of Customer Service Team Leader. 32The respondent also argued that a Customer Service Team Leader is required to co-ordinate and monitor the performance, development, motivation, training and supervision of staff. Such a person must set an example to their staff 33The appellant argued that the relationship with the contract is tenuous and whilst Customer Service Team Leaders do have to safeguard customers lost property, it is not a major part of the duties of the appellant. Also the standard of behaviour under the Code of Conduct must be complied with by all employees, contractors and consultants, it does not require a higher test for managers. Also is the conduct complained of such gravity or importance as to indicate a rejection of the employment contract by the employee? They say not. 34The appellant pleaded guilty to one count of- Recklessly dealing with the proceeds of Crime. ( Section 193(B) 3 of the Crimes Act, 1900. 35In my view there would be an implied if not expressed term of the appellant's contract with the respondent that he act in an honest fashion in his dealings with the respondent's customers and or their goods. 36 It was expressed in the written submissions for the appellant that Customer Service Team Leaders do have to safeguard luggage/cloakroom/lost property in certain locations in accordance with the respondent policies. The appellant stated that at Central Station he is not required to operate within the luggage/cloakroom/ lost property office. This may be relevant whilst the appellant is based at Central, but what occurs if the work requirements change at Central Station or the appellant either seeks a transfer or is transferred by the respondent to a location where he is then required to be involved in the handling of lost property/luggage ? What is the situation where the appellant is required to look after lost property due to particular circumstances occurring on a day at Central Station ? Because of his conviction of a serious criminal offence, being reckless as to whether property was the proceeds of crime, is that incompatible with the duties of a Customer Service Team Leader? The respondent is bound by the provisions of section 8 of the Rail Safety Act, 2008 which imposes obligations on the respondent , one of which is that an employee is competent to undertake that work. The respondent stated that by terminating the appellant they were fulfilling their obligation under this act. 37It is my finding that the actions of the appellant were incompatible with his duties as a Customer Service Team Leader. It is my finding that the charge the appellant pleaded guilty has a direct connection to one of the duties of the position he held, that of the securing and holding of customer's property. It is my finding that the level of trust required by the respondent in the appellant to carry out all his duties does not exist. The actions of the appellant has caused serious damage to the relationship between his employer and himself. In my view there must exist such a degree of trust between the respondent and a Customer Service Team Leader, that every day tasks can be carried out without that person being subject to suspicion or concern. That is not the situation in this case. Order(s) 38I therefore dismiss the appeal against the termination of Mr Belal Elafchal. D.Ritchie Commissioner Amendments 07 May 2012 - Correction to attached Decision. Amended paragraphs: Decision 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: 07 May 2012