Express law No. 29

11 October 2005

Footy tipping and breaches of the Code of Conduct

In
a recent appeal decision a Full Bench of the AIRC held
that the termination of employment of an APS employee
who cheated in the workplace football tipping competition
was not harsh, unjust or unreasonable.

In overturning
the Commission's decision at first
instance, the Full Bench considered that because of the
employee's actions there was a legitimate basis for
the agency to conclude that the requisite relationship
of trust no longer existed. The Full Bench also found that
the employee's actions had a direct and significant
connection to his work.

Cunningham v Australian Bureau of
Statistics

Australian Industrial Relations Commission,
10 October 2005, Justice Giudice, President, Senior Deputy
President
Watson, Commissioner Simmonds, PR963720

Background

Mr Cunningham worked as an EL1 in the IT area
of the Australian Bureau of Statistics (ABS). His employment
was terminated
for breaches of the APS Code of Conduct (s 13(1), (10)
and (11)) arising out of changes he made to his tips in
football tipping competitions in rounds 19 and 21 of the
2004 AFL season. The changes were made to tips after the 'close-off' of
the round and after the results of the games were known.
Mr Cunningham was able to make the changes to his tips
because he was the administrator of the football tipping
database. The tips changed were from losing to winning
tips, and in respect of one competition, also the margins
for the results. In making the changes Mr Cunningham made
a small financial gain.

In deciding that there had been
breaches of the Code of Conduct and that the appropriate
sanction was termination,
ABS concluded that:

  • the underlying
    conduct by Mr Cunningham involved him improperly exploiting
    his position to obtain a benefit or advantage,
    being tipping money contributed by his work colleagues
  • when called upon to explain his actions Mr Cunningham
    offered a series of explanations that were knowingly
    false and
    misleading
  • at no stage had Mr Cunningham
    acknowledged any dishonesty on his part (either in
    relation to his underlying conduct
    or in relation to the false and misleading explanations
    proffered by him)
  • the dishonesty and
    self-interest which inhered in Mr Cunningham's
    underlying conduct, combined with the dishonesty which
    inhered in the false and misleading explanations that
    he proffered, inflicted serious damage upon the relationship
    of trust and confidence with ABS.

Mr Cunningham applied
for relief from the AIRC in respect of the termination
of his employment on the ground that
the termination was harsh, unjust or unreasonable.

Decision
at first instance

Commissioner Eames found that there had
not been a valid reason for the termination of Mr Cunningham's
employment and ordered reinstatement.

The main reasons leading
to the Commissioner's conclusions
were:

  • footy tipping is not work related
  • ABS had not demonstrated that the manipulation of
    footy tips had any detrimental impact on the community
    or the
    government
  • no detailed personal
    or business information was accessed, released or affected
    in any way
  • Mr Cunningham was remorseful
  • Mr
    Cunningham could have been demoted to a lower position
    within ABS.

Decision of the Full Bench

In allowing the appeal the Full
Bench found that Commissioner Eames erred in finding that
there was no valid reason
for the termination of employment. The Full Bench went
on to
make findings on the unfair dismissal application itself.
The Full Bench did not agree with Commissioner's
Eames' finding for the following reasons:

The Full Bench stated that the evidence was 'unshaken
before the Commissioner or before us' that Mr
Cunningham had deliberately cheated by changing his
tips after the
results of games were known.

Having
regard to the nature of ABS's functions and
the importance of confidentiality in relation to the
data ABS collected and deals with, trust was a critical
element
in the employment relationship, particularly at the
management level. There was a legitimate basis for
ABS to conclude
that the requisite level of trust no longer existed.

On any view, Mr Cunningham's conduct involved
multiple breaches of the rules of the tipping competition,
resulted
in gain for him at the expense of other tippers and
involved a breach of the trust reposed in those given
system administration
privileges.

In considering the requirements under s
170CG(3) of the WR Act the Full Bench found, as did Commissioner
Eames,
that a proper Code of Conduct investigation had been
undertaken; that a high standard in termination procedures
would be
expected given that ABS is a Government authority of
some size and significance and that it could find no
serious
flaw in the procedures adopted.

In looking at other
relevant matters the Full Bench rejected Commissioner Eames' reliance
upon Mr Cunningham's
remorse. The Full Bench took particular note of the
failure by Mr Cunningham to, at any time, admit changes
to Round
19 or changes made on a Sunday in Round 21 after games
had been played, and that Mr Cunningham accepted winnings
in the competitions. The Full Bench stated at [24]:

In
the circumstances his expressions of remorse and his
apologies do not weigh heavily in his favour. The
totality
of this conduct, viewed objectively, justifies
[ABS's]
loss of confidence in [Mr Cunningham].

The Full Bench
also disagreed with Commissioner Eames that footy tipping
had no connection to Mr Cunningham's
work. The Full Bench stated that there was a 'direct
and significant' relationship to work because:

  • other participants in the competition were for the
    most part, co-workers
  • Mr Cunningham
    was an assistant director within ABS and it was the
    system administrator privileges he had by
    virtue of his position that enabled him to access and
    alter his
    tips.

In concluding that the termination was not harsh,
unjust or unreasonable, the Full Bench made the observation
that had Mr Cunningham 'made an early and frank
disclosure of all the alterations our view might have
been different'.

Implications for clients

  • The Full Bench decision reinforces the line of authority
    that where an employee, in providing explanations
    for the misconduct, attempts to place a benign face
    on their actions,
    the employer can take that subsequent conduct
    into account in deciding whether to terminate the employment:
    McIndoe
    (PR901846) and Post (PR906776).
  • Where an employer wishes to establish a loss of trust
    and confidence as a significant reason for termination
    it is important that evidence be adduced which establishes
    the
    basis for the particular need for trust and confidence
    in a employee.
  • Where the misconduct
    is not a part of the employee's
    duties, the relationship to work can still be established
    by leading evidence to demonstrate a connection between
    the nature of the conduct and the employee's
    duties.

AGS acted as solicitor and counsel for the
Australian Bureau of Statistics in
the original proceeding and the appeal.

For further information please contact:

Benjamin Dubé
Senior Executive Lawyer
T 02 6253 7412 F 02 6253 7381
ben.dube@ags.gov.au

Important: The material in Express
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on the matter may be prepared by AGS. The material
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matter. Please contact AGS before any action or decision
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