This month we deal with an extremely interesting decision of the Fair Work Commission where despite best practice investigation there was a ruling against the employer.  Our key message is this should not detract from an employer seeking to follow best practice in allegations of serious misconduct.

Sydney Trains has been ordered to reinstate an employee who was dismissed following allegations that he kissed a 13-year-old child on the neck at the same time as he hugged her.

In this case, the employee was originally terminated after the allegations were substantiated by an independent, external investigation, and after the employee was found guilty, by the Local Court of NSW, of assault and sexually touching a child between 10 and 16 years of age.

However, after the employee’s dismissal, but before the Fair Work Commission could hold a hearing in response to his unfair dismissal application, the employee successfully appealed the verdict to the District Court of NSW and was found not guilty of the charges.  In the Fair Work Commission matter, Deputy President Easton ultimately sided with the District Court and found that Sydney Trains had failed to substantiate the most serious part of the allegations (being that the employee kissed the child during the hug).  Accordingly, the employee was found to have been unfairly dismissed.

It must be noted that the decision was handed down on 14 October 2022 and may yet be the subject of an appeal by Sydney Trains.  As at the date of publication, Aitken Legal is not aware as to whether such an appeal has been filed.

The facts

The employee had an unblemished employment history with Sydney Trains, working for the employer for almost 10 years and progressing through a number of positions, from cleaner to Station Duty Manager.  The Commission heard evidence that he was an “excellent employee” who went out of his way to perform his duties to a high standard.

The incident in question occurred in March 2021, after the employee had interactions with a young female high school student during the preceding four months.  Those interactions started with an incident where the employee helped the student when she was being harassed by a male passenger.  The Commission heard evidence that the employee offered the student support, contacted her parents and waited with her until her parents arrived. Following that incident, the employee and student would exchange pleasantries at the station on occasion.

In March 2021, an incident occurred where the student approached the employee and the pair hugged for two seconds.  This interaction was captured on CCTV footage.  Critically in this case, the student subsequently alleged that the employee kissed her on the neck during the hug.  The employee denied the claim.  Whether the alleged kiss is apparent in the CCTV footage was the subject of differing opinions throughout this matter.

Timeline

The student subsequently made a report to the police and, following investigations by NSW Police, the employee was charged two days later.  Sydney Trains suspended the employee with pay from March 2021.  Sydney Trains then obtained the evidence which NSW Police had gathered, and appointed an external investigator to consider that material, together with the CCTV footage.  The investigation ultimately substantiated the student’s claims, but Sydney Trains put the disciplinary process on hold in October 2021, whilst they waited for the outcome of the criminal matter before the Local Court.

Following the Local Court decision in December 2021, where he was found guilty of the conduct, the employee made a request in January 2022 that he be allowed to access unpaid leave while he contested the Local Court verdict in the District Court.  Sydney Trains denied the request and terminated his employment at the end of January 2022.

The employee made an application to the Fair Work Commission alleging unfair dismissal shortly after, but the unfair dismissal case was not heard until late July and early August 2022, and after the District Court had overturned the guilty verdicts in May 2022.

Valid reason for dismissal

Sydney Trains relied on two reasons for dismissing the employee:

• that the employee kissed the student on the neck; and
• even if the employee did not kiss the student, he hugged the student.

In delivering his decision, Deputy President Easton explained that the Commission must determine whether the conduct occurred and what it involved, and not merely assess whether the employer believed on reasonable grounds, after sufficient enquiry, that the employee had engaged in the misconduct.  The Deputy President acknowledged that in the context of his employment, and putting aside the criminal proceedings, if the employee was found to have kissed the student on her neck, then “his career at Sydney Trains is finished and his case must lose.”

On assessing the evidence before him, which was the same evidence considered by Sydney Trains’ investigator and the Local and District Courts, Deputy President Easton formed the same view as the District Court and found that the employee did not kiss the student on the neck.  It was held, however, that the uncontested fact that the employee hugged the student was misconduct that constituted a valid reason for dismissal.

DP Easton acknowledged that at the time Sydney Trains dismissed the employee, he was convicted of a serious crime, and their own investigation had also substantiated the allegations.  DP Easton acknowledged that the FWC “should not lightly interfere with Sydney Trains’ decision”.  The Deputy President also stated:

“It is also important to recognise the dilemma faced by Sydney Trains at the time it decided to terminate [the employee’s] employment. By December 2021 [the employee] had been convicted of a serious child-related offence. [The employee] had lodged an appeal in relation to the conviction but Sydney Trains’ external investigator, and Ms Clark [Sydney Trains’ Head of Service Experience], and the decision maker and a Local Court Magistrate had all formed the view that [the employee] did in fact kiss the student on the neck.

 The child protection element in this situation, and the conviction at first instance in the Local Court, combine to make Sydney Trains’ decision eminently understandable.”

Even with those elements considered, DP Easton found the employee was unfairly dismissed.  DP Easton found that those elements could not displace that the Commission was required to satisfy itself as to whether the misconduct occurred, and that he could not do so on the evidence.

DP Easton found the termination, although for a valid reason, was harsh in respect of the ‘hugging’ finding.  Further, based on the employee’s exemplary employment record, DP Easton was satisfied that reinstatement was appropriate.  The parties were asked to make further submissions on the nature and location of that reinstatement.

What should Sydney Trains have done differently?

In weighing the accepted valid reason for dismissal against the employee’s length of service, exemplary record and the history of “satisfactory if not commendable” dealings with the student, Deputy President Easton found it was harsh and/or unreasonable to dismiss the employee without a prior warning.

While the Deputy President ultimately found it was unreasonable to have dismissed the employee given the District Court appeal, somewhat circuitously, he did accept that it was reasonable to refuse the employee’s request to remain on unpaid leave pending the outcome of the District Court proceedings.

Key takeaways

This decision will understandably leave employers unclear as to exactly what is ‘best practice’ in circumstances where employee misconduct is substantiated by the employer’s investigations, but where it is also the subject of ongoing criminal proceedings.  What it does make clear, is that employers need to act carefully in responding to and investigating instances of serious misconduct. Even when that conduct is the subject of concurrent criminal proceedings, the employer must satisfy itself that the misconduct occurred, and not merely rely on the outcome of the criminal matter.  An employer must also be aware that evidence will be examined by the Fair Work Commission and must be prepared to justify the evidence and assessments of it.

Indeed, even where a ‘best practice’ process is followed, as Sydney Trains did here, the Fair Work Commission might form a different view.  While perhaps leaving employers in an uncertain position, that should not detract from following best practice.