The Fair Work Commission (Commission) has awarded $10,000 to a dismissed general insurance manager who downloaded and stored hard core pornography, including footage of himself performing sex acts, on his work issued electronic devices.1

Providing employees with devices creates a minefield of risks for both employees and employers, especially in light of cloud technology and content sharing, for example:

  • employees risk inadvertently transferring personal, sensitive or potentially inappropriate content, such as pornography, between devices
  • employers may face difficulties terminating an employee for inappropriate device use if they have not clearly communicated what conduct is and is not acceptable.

Fair process was also a key issue in this decision. The Commission roundly criticised the employer and its legal representatives for their ‘severely flawed’ termination process, which, at first instance, relied on a ‘highly erroneous’ reason for terminating the employee.

What happened?

The employer is a small business in a country town, a Port Macquarie insurance broker with fewer than 11 staff. The employee’s time there, 14 months, was reportedly fraught, and coloured by interpersonal friction from early on.

On 27 January 2016, the employee was called into a meeting and dismissed on the spot. The basis for his dismissal was a clause in his contract which allowed his employment to be terminated by giving four weeks’ notice, or payment in lieu of this notice. No further reason was given, and the employee was paid out his 4 weeks’ notice.

The employer claimed to have issued the employee with verbal warnings regarding his performance and his conduct in the lead up to his dismissal. However, the employee said he did not recall these warnings, and the employer had no written records of them.

In its initial response to the Commission, the employer stood firm that the dismissal was solely on the basis of the contractual clause, a position which the Commission described as ‘manifestly invalid’. It was only later in the proceedings that the employer raised issues with the employee’s conduct and performance, including downloading and storing pornography, to justify the dismissal.

‘But you never told me not to…’ the importance of clear policy on appropriate device usage

The Commission was required to ‘go behind’ the employer’s ‘highly erroneous’ reliance purely on the contract as a reason for dismissal to determine whether there was, in fact, a valid reason to terminate the employee – despite any such reason not being communicated to the employee.

Before embarking on this exercise, the Commission cautioned that personal use of work issued devices ‘should be assessed carefully and in context’, noting the employer had not provided employees with any policy or guide regarding the appropriate use of their work issued laptops and mobile phones.

The Commission noted the ‘obvious difference’ between personal use of employer-supplied devices such as internet banking, compared to accessing and downloading pornography. The Commission acknowledged the latter ‘ordinarily … would constitute misconduct’ regardless of whether it occurred outside of work hours and outside of work premises.

However, as there was no evidence the employer had ‘promulgated any particular policy regarding the use of its equipment’, the Commission found downloading and storing pornography was not a valid reason for dismissal. The Commission also took into account that this conduct occurred only three times, and there was contested evidence a Director of the employer may have engaged in similar conduct.

The proof is in the process

As a small business, the employer was required to comply with the Small Business Fair Dismissal Code when dismissing the employee. Not only are employers required to have a valid reason for dismissal, but they must also go through a fair process, as prescribed by this Code.

The Commission identified the following flaws in the employer’s termination process:

  • the employee was not given a valid reason for his dismissal
  • the employee was not given an opportunity to respond to, or comment on, any reason for his dismissal
  • the employee was not able to bring a support person to the meeting in which he was dismissed
  • there was no evidence the employee had been warned that he was at risk of being dismissed due to his performance or conduct.

The entire basis for the termination, and the approach taken to it, were characterised by the Commission as ‘fundamentally misconceived’. There is no such thing as the American concept of employment ‘at will’ in Australia, at least for employees with access to the statutory unfair dismissal regime. Both a valid reason and procedural fairness are required to form a defensible termination. Whilst accessing and downloading pornography on employer-supplied devices may well provide a valid reason, a transparent, consistently-applied policy framework which is effectively communicated to employees is also needed, as is procedural fairness in dealing with alleged breaches. The vibe, or even the contract, is not sufficient.