The Fair Work Commission recently held that without a clear and understood policy in place restricting use of work equipment to 'work-related activities', accessing inappropriate material on such devices does not provide a valid reason for dismissal. Interestingly, in considering this, the commission stated that if the conduct occurred in breach of a workplace policy, the employee could expect to be disciplined or even dismissed – regardless of whether it occurred within or outside of the ordinary hours of work.

This serves as a timely reminder for employers to be aware of what policies they have in place and to understand their importance.

Allan Croft v Smarter Insurance Brokers Pty Ltd [2016] FWC 6859

Mr Croft was employed by Smarter Insurance Brokers Pty Ltd as General Insurance Manager for a period of just over a year. During Mr Croft's employment there were performance and conduct issues, later described by a director as stemming from a personality clash.

On the afternoon of 27 January 2016, Mr Croft was summoned to a meeting with one of the directors of the employer, in which Mr Croft's employment was terminated. It was later revealed that prior to the termination meeting, and based on legal advice which the commission was highly critical of, the directors had decided to dismiss Mr Croft.

The dismissal was not for performance issues, but relied on clause 21 of Mr Croft's employment agreement. Clause 21 provided that the employer may terminate the employment upon giving four weeks' notice, or payment in lieu, of which the directors elected to pay Mr Croft an amount equivalent to four weeks' wages in lieu of notice.

Discovery of conduct subsequent to termination

Reliance upon clause 21 in Mr Croft's employment agreement was deemed an invalid reason for dismissal. The commission was then required to "go behind" the invalid reason to determine whether any conduct of Mr Croft, including conduct discovered subsequent to termination, could provide a valid reason for his dismissal.


It was found that Mr Croft had accessed, downloaded and/or stored hard-core pornography on the mobile phone and laptop computer provided and owned by his employer on three occasions. The material included videos of Mr Croft performing a sex act. Mr Croft stated he was probably on a lunch break walking the streets of Port Macquarie accessing the hard-core pornography, thus he argued outside of work hours and work premises.

In applying a contextual analysis of Mr Croft's actions, the commission stated that, unless an employee worked in the sex industry, it would be difficult to justify the accessing, storing and or downloading of hard-core pornography as proper, work-related use of the employer's equipment. As such this conduct would be considered misconduct.

However, in this case the employer had not promulgated any particular policy confining the use of its equipment to work-related activities. This was a crucial omission as the commission stated that:

'if such conduct occurred in breach of a clearly stated and understood policy of the employer, an employee could expect to be disciplined or even dismissed for deliberately accessing, downloading and/or storing hard core pornographic material on the employer's equipment, whether such conduct occurred within or outside of the ordinary hours of work. [48]'

Without a policy preventing such use, the commission held accessing the pornographic material on work equipment did not provide a valid reason for termination. In addition to the lack of policy in place, there was also a question as to whether the directors of the employer also participated in accessing, downloading and disseminating hard-core pornography, thus further weakening the pornography as a valid reason for Mr Croft's dismissal.

Remedy awarded

The commission held that there was no valid reason for the dismissal of Mr Croft and it was procedurally deficient, such that the employer did not deal with Mr Croft's dismissal in 'any fundamentally fair manner'.

The remedy awarded to Mr Croft took into account his conduct and that his employment would have terminated in any case if the employer had not erroneously relied upon clause 21 of the employment agreement.

Mr Croft was awarded AUD10,000 in compensation which was approximately eight weeks' pay.

Key points to take away

  • Engaging experienced employment law practitioners can limit an employer's exposure to claims and, ultimately, any damages awarded.
  • Employers should review policies in relation to work provided equipment to ensure it defines the use permitted.
  • Conduct which may be considered 'outside of work' will not be if in breach of a policy and on employer-owned equipment.
  • Employers must be mindful that there is no contractual right to dismiss which operates to exclude the provisions of the Fair Work Act 2009 (Cth).