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[Extract from Queensland Government Industrial Gazette, Dated 18 April 2008, Vol. 187, No. 14, pages 230-265]

QUEENSLAND INDUSTRIAL RELATIONS COMMISSION

Vocational Education, Training and Employment Act 2000 - s. 230 - appeal to industrial commission against council

Ergon Energy Corporation Limited AND Training and Employment Recognition Council (AT/2008/2)

COMMISSIONER ASBURY 11 April 2008

Appeal against decision of Training and Employment Recognition Council refusing to cancel training contract - Nature of appeal - s. 74(11) Serious misconduct - s. 70 Misconduct - Apprentice convicted on serious criminal charges - Conduct outside working hours - Finding that conduct justifying cancellation of a training contract must touch or impact on the employment relationship - Finding that there is not a sufficient relationship between the apprentice's conduct outside working hours and employment to justify cancellation of the training contract - Appeal dismissed.

DECISION

1. Background

On 10 January 2006 a registered training contract between Ergon Energy Corporation Limited (Ergon) and Timothy John Perry commenced. On 26 January 2006, Mr Perry and a number of his friends, using an air rifle, shot at a number of Aboriginal people and people they believed to be of Aboriginal descent. Two of these people suffered physical injury and others were severely traumatised.

On or around 10 February 2006, Ergon became aware of Mr Perry's involvement and after corresponding with Mr Perry and meeting with him and his parents, a decision was made that Mr Perry's employment would not be terminated, and that the outcome of Court proceedings would be awaited. However, Mr Perry was warned that if his involvement in the incident was substantiated, it would be relied upon by Ergon as grounds to cancel his training contract and terminate his employment. Mr Perry subsequently pleaded guilty to and was convicted of a number of serious offences, and on 26 October 2007, was sentenced to nine months' imprisonment, to be served under an Intensive Correction Order.

On 16 November 2007, after further correspondence and meetings with Mr Perry, Ergon gave Mr Perry a Suspension Notice under s. 64(2) of the Vocational Education, Training and Employment Act 2000 (the Act) and forwarded a letter seeking the cancellation of Mr Perry's training contract to the Director-General of the Department of Education, Training and the Arts. In that letter, Ergon contended that now that it had the full facts of the incident of 26 January 2006, it had decided that it could not reasonably continue Mr Perry's training or engagement. The grounds upon which Ergon sought cancellation were that Mr Perry had committed serious misconduct such that his training contract should be cancelled under s. 64 of the Act or that Mr Perry had committed misconduct and that his training contract should be cancelled under s. 71 of the Act.

Ergon's application for cancellation of Mr Perry's training contract was dealt with by the Training and Employment Recognition Council (the Training Council). After causing interviews to be conducted with Mr Perry and a number of representatives of Ergon, and considering material put to it by the parties to the training contract, on 5 December 2007 the Training Council issued a Show Cause Notice under s. 25 of the Vocational Education, Training and Employment Regulation 2000, stating that its proposed action was not to cancel Mr Perry's training contract, and inviting the parties to provide any further information or documents or oral submissions as to why that action should not be taken. Ergon corresponded with the Training Council on 20 December 2007, maintaining its position that the contract should be cancelled and setting out its arguments in this regard. In a decision of 24 December 2007, the Training Council decided not to cancel Mr Perry's training contract.

On 3 January 2008, Ergon appealed to the Queensland Industrial Relations Commission (QIRC) against the decision of the Training Council under s. 230 of the Act. The grounds of the appeal were that the Training Council incorrectly formed the view that Mr Perry's conduct did not constitute grounds for the cancellation of his training contract and that the Training Council incorrectly formed the view that it was not unreasonable in the circumstances for Ergon to continue to train Mr Perry and that the Training Council incorrectly exercised its discretion under the Act not to cancel the contract. Ergon sought the setting aside of the decision not to cancel the contract and that the contract be cancelled with effect from 16 November 2007.

2. Nature of an appeal under s. 230 of the Act

In the appeal proceedings before the QIRC, Ergon sought to bring evidence from a number of witnesses which had not been put before the Training Council at first instance or which sought to elaborate upon material put to the Training 2

Council. This was opposed by the first respondent in the appeal, the Training Council, and the second respondent, The Electrical Trades Union of Employees, Queensland Branch (ETU) on behalf of Mr Perry. Those parties argued that the QIRC in the appeal should not receive evidence which could reasonably have been put before the Training Council at first instance, and that if this evidence was received, it should be given less weight than evidence on the original record as considered by the Training Council.

It was contended for Ergon that there was no restriction on the ability of the QIRC to receive new or further evidence, and an appeal under s. 230 of the Act was essentially a fresh hearing, where the QIRC is required to consider the record of evidence before the Training Council and any additional evidence brought by the parties in the appeal. It was also submitted that there should be no prejudice to a party on the grounds that new or further evidence could reasonably have been put before the Training Council at first instance. Further, it was submitted for Ergon that there was no requirement for the QIRC to find error in the decision of the Training Council before deciding to exercise any of the powers on the appeal in s. 233 of the Act.

I accept the submission for Ergon on both points. In Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission and Others (2000) 203 CLR 194 at 222-223 Justice Kirby said that:

"Appeal, as such, was unknown to the common law. It was a creature of statute. It is not possible to adopt any hard and fast or universal approach to the process called 'appeal' in a particular statute.".

His Honour went on to note that the term "appeal" encompasses different litigious processes and that no fewer than six forms of a procedure called an "appeal" have been identified: Turnbull v New South Wales Medical Board (1976) 2 NSWLR 281 at 297 Per Glass JA. Further, his Honour said (at 223) that:

"In every case where the issue is that of the duty and function of an appellate court or tribunal, the only safe starting point is a careful examination of the language and context of the statutory provisions affording the appellate right, together with a consideration of the powers enjoyed by, and duties imposed on, the body to which the appeal lies.".

In Turnbull (supra) Glass JA noted that the various forms of appeal have few unifying characteristics. Among those forms are what his Honour described (at 297-298) as appeals from a judge by way of a rehearing and appeals involving a hearing de novo.

"In the former type of appeal a power to hear fresh evidence is often expressly conferred and may also be implied in the absence of an express provision. If errors of law or wrong findings of fact have occurred below, the appellant court will try the case again on the evidence used in the court below, together with such additional evidence as it thinks fit to receive. Since the appeal will be decided in the light of the circumstances that then exist, changes in the law will be regarded. In the latter type of appeal all the issues must be retried. The party succeeding below enjoys no advantage, and must, if it can, win the case a second time.".

His Honour also noted that in the case of Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1975) 2 NSWLR 174, it had been held that an appeal to the District Court from a decision of the Board was a hearing de novo notwithstanding that the legislation providing for the appeal stated that it was an appeal by way of rehearing. His Honour went on to state (at 299) that:

"The canon of construction prevailed over the statutory description. I take it, therefore, to be settled doctrine, which this court ought to apply, that, when an appeal is brought to a court against an administrative decision, it conducts a hearing de novo.".

In Allesch v Maunz (2000) 203 CLR 172 at 180, in their joint judgement Justices Gaudron, McHugh, Gummow and Hayne, observed that a critical difference between an appeal by way of rehearing and a hearing de novo is that, in the former case, the powers of the appellate court are exercisable only where the appellant can demonstrate that, having regard to all of the evidence now before the appellate court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error: CDJ v VAJ (1998) 197 CLR 172 at 201-202. Their Honours went on to state that this was so unless in the case of an appeal by way of rehearing, there was a statutory provision indicating that the powers may be exercised regardless of whether or not there is such an error: Re Coldham; Ex parte Brideson [No. 2] (1990) 170 CLR 267.

In that case, Justices Deane, Gaudron and McHugh considered the nature of an appeal under s. 88F of the then Conciliation and Arbitration Act 1904, noting that the section in question empowered the Australian Industrial Relations Commission on an appeal from a decision of the Industrial Registrar, to make such order as it thinks fit and to take further evidence for the purposes of an appeal under the section. These provisions were said to be strong indications that the appeal given by s. 88F was by way of rehearing, and that there was nothing to suggest that evidence which might be received was limited to events which occurred at the date of the Registrar's decision. Their Honours concluded that: 3

"[t]he Commission was bound to make its own decision on the evidence before it, including evidence of events which occurred after the Registrar's decision.".

Further, it was held that the QIRC was not required to find an error on the part of the Registrar, but could reach its own decision on the basis of evidence, including evidence of events which had occurred after the Registrar's decision. It should also be noted that CDJ v VAJ (supra) dealt with the admission of evidence in an appeal when there had been a hearing in a court below at which such evidence could reasonably have been called.

In the case presently before the QIRC the relevant provisions are found in Chapter 8 Part 2 of the Act. By virtue of s. 230 a person aggrieved by certain decisions may appeal to the QIRC. Relevantly those decisions include a decision of the Training Council to cancel or refuse to cancel a registered training contract under section 63, 64 or 66. Section 232 of the Act provides as follows:

"Nature of appeal

(1) An appeal to the industrial commission is by way of rehearing on the record. (2) However, the commission may hear evidence afresh, or hear additional evidence, if the commission considers it appropriate to effectively dispose of the appeal.".

In the Explanatory Memorandum to the Training and Employment Bill 2000 in relation to s. 232, the following appears:

"Nature of appeal

Clause 232 provides that an appeal to the Industrial Relations Commission is heard by way of rehearing. In addition the Commission must keep a record of the rehearing.

If the Industrial Relations Commission considers it appropriate, it may hear the evidence on the decision afresh and hear new evidence not previously considered by the Training Recognition Council.".

An appeal to the QIRC from a decision of the Training Council is not an appeal from a decision of an administrative body, to an administrative tribunal. Neither is it an appeal from a decision of an administrative body to a court. However by s. 255 of the Industrial Relations Act 1999 the QIRC is a court of record. In an appeal under s. 230, the QIRC has similar powers to those considered in Re Coldham (supra). There is nothing to indicate that the QIRC is required to find that there is an error in the decision of the Training Council subject to appeal, before deciding to exercise any of the powers under s. 233. While those powers do not include the power to make any decision that the QIRC thinks fit, the QIRC does have broad powers including the power to impose a new decision or to amend the decision of the Training Council. Thus while s. 232 refers to an appeal being by way of rehearing, it is strongly arguable that such an appeal is more in the nature of a hearing de novo than a rehearing in the strict sense.

In my view the following considerations apply to an appeal under s. 232 of the Act:

 the QIRC must make its own decision on the basis of the evidence before it;  before making its own decision the QIRC is not required to find that there was any error on the part of the Training Council in the decision subject to appeal or the processes by which that decision was made;  evidence to be considered by the QIRC in deciding an appeal includes the material which was considered by the Training Council at first instance or new evidence of events or circumstances which occurred after the decision of the Training Council or evidence which could have been put to the Training Council but was not;  the QIRC may also hear afresh, evidence which was before the Training Council;  the question of whether the QIRC hears evidence on the decision afresh or hears new evidence not previously considered by the Training Council is a discretionary matter;  in any decision about whether that discretion should be exercised, case law dealing with leave being granted by a court on appeal, to adduce evidence which could reasonably have been put before a court at first instance, is not relevant because the proceedings at first instance are administrative in nature.

3. The evidence before the Training Council

The record of evidence before the Training Council was extensive and comprised 14 documents, many with attachments. I have considered all of this material in reaching my decision on this appeal.

3.1 The training contract

Timothy John Perry was born on 29 April 1988. Mr Perry was employed by Ergon under a registered training contract (Registration Number 200636052) in the apprenticeship of Electrotechnology Systems Electrician. The contract commenced on 10 January 2006 and had a nominal completion date of 8 January 2010. Mr Perry was enrolled in the qualification of UTE31199 Certificate III in Electrotechnology Systems. Under that contract Ergon agreed to a number of matters, including that it would employ and train Mr Perry as an apprentice Electrotechnology (ET) Systems 4

Electrician. Mr Perry agreed to a number of matters including that he would attend work, follow Ergon's lawful instructions and work towards achieving that qualification. (Refer Document 1).

Upon commencing employment Mr Perry received induction training on 10 and 11 January 2006, and in particular was given presentations and information on the following Ergon policies and procedures:

1. Code of Conduct and Out of Hours Conduct; 2. Workplace Health and Safety and ZIP Training; 3. Culture, Values and Behaviours; and 4. Equal Employment Opportunity Policy.

Ergon maintained that Mr Perry had confirmed at a meeting with Ergon on 14 February 2006, that he had received this training and that at 26 January 2006 he had a broad understanding of Ergon's expectations of employees both within and outside working hours.

Ergon's Out of Hours Conduct Policy was tendered without objection (Exhibit 8) and relevantly provides as follows:

"While all Ergon Energy employees have a right to privacy, criminal or otherwise inappropriate conduct occurring outside of the workplace and negatively impacting on Ergon Energy may result in disciplinary action or a requirement that the particular private conduct cease.

Examples of such conduct include, but are not limited to:

 Criminal offences involving stealing, or other dishonesty regarding cash or goods;  Violence, harassment or discrimination towards other Ergon Energy employees that occurs outside of the workplace and not during working hours.

Disciplinary action may be taken where the conduct of the employee outside the workplace:

 Brings Ergon Energy into disrepute;  Damages the interests of Ergon Energy;  Is incompatible with the employee's duty of good faith to Ergon Energy;  Damages the relationship between Ergon Energy and the employee or other employees.".

At 26 January 2006 13 working days had elapsed since the commencement of Mr Perry's training contract.

3.2 The events of 26 January 2006

The appellant and the first and second respondent provided numerous summaries of the events of 26 January 2006. In my view, the best sources of evidence in relation to the events are Mr Perry's police statement (Document 3) given on that date and the sentencing remarks of His Honour Judge Searles in the District Court on 26 October 2007 (Document 7). Relevant points emerging from Mr Perry's police statement may be summarised as follows:

On 21 January 2006 Mr Perry borrowed a "slug gun" from a friend with whom he had been staying and took it to his father's home, who locked the gun in a cupboard. On 25 January 2006, Mr Perry put the gun into his car and took it to the beach house of the person he had borrowed it from. Mr Perry and his friends took turns shooting the gun at a coke can and a plastic chair. On the morning of 26 January 2006 Mr Perry put the gun into his car and drove with a friend to Yeppoon. After meeting with more friends, the group returned to Rockhampton. After dropping some of the group to a home in Rockhampton, Mr Perry took the gun from the boot of his car and got into the front passenger seat of his car, placing the gun down the side of the seat. There was a steel container holding slugs in the centre console of the car. A male friend drove Mr Perry's car with Mr Perry remaining in the front passenger seat.

Another male friend, Mr Nitz, drove a second car with two males and one female as passengers. The two cars were driven around Rockhampton for about fifteen minutes, before stopping near a park in Alma Street. Mr Nitz said to Mr Perry: "What do you reckon", to which Mr Perry responded by saying: "I will have a go". As the car drove slowly past a group of Aboriginal persons sitting in the park, Mr Perry aimed the gun above the group and fired it. The two cars pulled up in the same place in Alma Street, and Mr Nitz asked whether he could have a go. Mr Perry told him he could have the gun and handed it to Mr Nitz along with the container of slugs for the gun. The two cars then drove past the park again. Mr Perry was not sure whether Mr Nitz fired the gun at the group of Aboriginal persons again, but they came running at Mr Nitz's car throwing rocks. The two cars continued to drive around with Mr Nitz firing the gun at two Aboriginal girls walking their push bikes along the street, and a male riding a push bike. Mr Perry said that he heard a slug hit the male person's bike and Mr Nitz yelled at the male person: "you black cunt.".

Mr Perry stayed in his vehicle with another person driving, and followed Mr Nitz's car. There were three young persons whom Mr Perry described as "kids" riding push bikes. Mr Perry saw Mr Nitz's car slow down and when he looked back 5 one of the "kids" was holding his ribs. About ten minutes later, Mr Nitz told Mr Perry and other persons who had been in the vehicles, that he thought that he had hit the "kid". Mr Perry said that because of what had happened to the kid, he had told the group that he was taking the gun back to his friend's house. Mr Perry did this and then returned to Mr Nitz's house where police were waiting.

On 15 October 2006 (according to an article on the front page of "The Morning Bulletin" of 16 October attached to Document 3), Mr Perry and others involved in the incident pleaded guilty to the following charges:

 two counts of going armed in public so as to cause fear;  attempted unlawful wounding; and  two counts of assault occasioning bodily harm with circumstances of aggravation (See also Document 7).

On 26 October 2007 Mr Perry was sentenced to two periods of nine months and one period of six months' imprisonment, to be served concurrently, with all terms to be served under an Intensive Correction Order.

In his sentencing remarks on 26 October 2007 (Document 7), Judge Searles made the following remarks to all of the convicted persons:

"Your conduct took place on the 26th of January 2006, Australia Day, and involved premeditated planning of an abhorrent scheme to drive around Rockhampton to find Aboriginal people to shoot at with a dangerous weapon, namely an air rifle. No-one familiar with weapons would doubt the injuries that such a weapon could cause and is capable of inflicting. The fact that it was of a lower calibre than other weapons does not, to my mind, lessen its capacity to harm.

Whatever may have been your disposition prior to the offences and since the offences, it is beyond doubt in my mind that you were a party to a racially motivated 35 to 40 minute campaign of aggression against innocent victims chosen by reference to their racial origin. Two were shot and another narrowly missed being shot, due only to Mr Nitz's inaccurate shooting.

But for the fact that there were no Aboriginal people in two other parks, that is Central Park and Bencke Park. I am quite satisfied more people would have been victims that day.

Your first victim was a group of 10 Aboriginal people enjoying themselves, as they are entitled to do, in a park and that group included a baby. Perry pointed the rifle in the air towards them and fired. One can well imagine the horror and fear felt by the group and the fact that rifle was pointed above their heads and not at them does not, in my view, lessen the trauma of seeing someone with a weapon pointed in their direction. Having said that I accept that there was no intention to shoot them.

The next act in this cowardly saga was to shoot at a young Aboriginal boy who had alighted from his bicycle to care for an injured bird on the road. He was [shot] at by Nitz but the slug missed and hit his bike, with the ping being heard in the car. The departing gesture for that innocent boy was a finger from Nitz and the abuse, 'fucking coons.'

Your next victim, Brenton Brown, who with two of his other friends was going about his business with his BMX bike. He suffered a serious injury requiring surgery and four days in hospital. The wound required 14 staples to close it and he now carries a scar which he will carry forever. The fact that it transpired that Brenton was not an Aboriginal boy does not, to my mind, moderate the racial motivation of the conduct.

The rampage continued then when you passed two young Aboriginal girls walking along Richardson Road. You drove past them and then did a U-turn to return to shoot one of them. Nitz shot one Christina Query in the back, in her left shoulder blade, which resulted, thankfully in a minor physical injury only. However, her trauma of being shot in a Rockhampton street whilst going about her business cannot be overstated. Her spontaneous reaction was to yell an obscenity to the shooter, to be met again by Mr Nitz saying, 'black cunts' and the occupants of his car, McPherson, Warwick-Day and Nitz then drove off laughing.

We can be thankful that neither Brenton nor Christina were hit in the eye which could have resulted in permanent injury to them. That then gives a brief account of this sorry affair. It frankly beggars belief that such conduct could occur on a Rockhampton street in 2007. It is more reminiscent of Selma Alabama in the USA in the 1950s and 1960s when dark people were hounded like animals.

It has a particular abhorrent feature further in that it occurred on our national day when Australians pause to reflect on the achievements made by the nation. This conduct is and was the antithesis of what Australia Day stands for. The other unfathomable feature of this revolting conduct is that all of you come from good homes whose families are decent law abiding people and loving parents. Further there is no suggestion of alcohol or illicit drugs which may have driven this conduct. So to my mind it is truly a mind-boggling scenario.". 6

His Honour Judge Searles made the following remarks in sentencing Mr Perry:

"Mr Perry, stand up. Mr Perry, you were the person who supplied the firearm for this saga and you had been firing it a few days previously, so you again, as with Mr Nitz, were aware of its potential for harm. You fired the first shot into the air. I accept there was no intention to physically harm the people in the park, but I have spoken already of the shock they must have experienced in having anyone shoot anywhere near them.

You gave the gun to Nitz, well knowing the capacity of that weapon, and you kept driving, positioning, following Nitz's car during the whole episode.

By way of mitigation, you are still a man of young age. You entered an early plea and cooperated with the authorities. You have no previous [offences] and you have no subsequent offences since these events. You are in employment, and as I have said, I accept that you were there, you shot the rifle on the day to scare the people in the park rather than to hit them.

I also acknowledge that at some point towards the end of the debacle, you expressed the view that Nitz had taken things too far.

You come from a decent family. You have had a good upbringing, as have all of your co-defendants, which makes it all the more difficult for me and all the more mysterious. I accept that you are remorseful.

You have the benefit of references, first of all from Mr Anstey of Ergon who expresses your testament to your willingness to learn and your good rapport with other employees. Mr Scott Cage, deputy principal of Glenmore High, said you were an exemplary student, and I have read the many awards that you accomplished during school.".

In relation to the sentences imposed on the group, his Honour said:

"I have found it particularly difficult overnight and this morning from early hours to impose the sentences on young people that I have been duty bound to do, whether or not an ICO is imposed. The sentences were warranted by the conduct. As I have said throughout the sentencing, all of you come from decent law-abiding families and all you yourselves are otherwise of unblemished character.

The true test of character will now be how you accept your punishment, and thereafter get on with your lives. I hope this interlude will, in years to come, be seen as an aberration in an otherwise unblemished life you will lead, and I just leave you with these words: Most problems in life are opportunities in disguise. Thank you.".

The sentences imposed were as follows (in the order they appear in the sentencing remarks):

 Mr Nitz the "main offender" was sentenced to six months' imprisonment on count one, six months' imprisonment on count two, eighteen months' imprisonment on count three and two years' imprisonment on each of counts four and five, with all sentences to be served concurrently. Mr Nitz is to be released on parole on 19 June 2008.  The "least culpable" offender was sentenced to six months' imprisonment to be served by Intensive Correction Order.  The driver of Mr Nitz's vehicle was sentenced to six months' imprisonment on each of counts one, two and three, and nine months on each of counts four and five, to be served concurrently and under an Intensive Correction Order.  As previously stated, Mr Perry was sentenced to nine months' imprisonment on count one, six months' imprisonment on count two and nine months' imprisonment on counts three, four and five, to be served concurrently and under an Intensive Correction Order.  The driver of Mr Perry's vehicle was sentenced to six months' imprisonment on each of counts one, two and three and nine months' imprisonment on each of counts four and five, to be served concurrently and under an Intensive Correction Order.

3.3 Actions taken by Ergon in relation to Mr Perry's involvement in the incident

Mr Perry's father wrote to Ergon advising that Mr Perry would not be available for work until 1 February 2006 (Exhibit 3). The letter is undated, but I assume that it was received before 1 February 2006. The letter states that Mr Perry was a member of a group of young people who performed a stupid prank, which had gone terribly wrong. It also states that Mr Perry had been charged by the police but had not been alleged to have hurt anybody and was in the wrong place at the wrong time.

According to a letter written to the Director-General, Department of Education, Training and the Arts on 17 November 2007 (Document 3), Ergon became aware of Mr Perry's involvement in this matter, on 10 February 2006. On that date, a letter was forwarded to Mr Perry outlining the allegations and Ergon's concerns about them, and requesting that Mr Perry attend a meeting with representatives of the Company to respond to the allegations (Attachment to Document 7

3). The letter warned Mr Perry that a potential outcome was disciplinary action including the possible termination of his employment.

Mr Perry attended a meeting with representatives of Ergon on 14 February 2006. Mr Perry did not make any statement at the meeting on the grounds that he had been advised not to do so by his solicitor. Mr Perry also declined to provide a copy of his police statement, again on advice from his solicitor. Mr Perry's parents also attended the meeting and made a number of statements relating to Mr Perry's involvement in the shootings, to the effect that Mr Perry was not a ringleader and had good defences to the charges.

Following that meeting Mr Perry received a first and final warning letter dated 17 March 2006 (Exhibit 2) stating that Ergon viewed the matter seriously and that Mr Perry's alleged conduct, if substantiated, was a breach of Ergon's policies and procedures (particularly its Code of Conduct) and serious misconduct justifying the cancellation of Mr Perry's training contract and termination of his employment. Further, Ergon drew Mr Perry's attention to its view that his involvement in the incident would cast into question his ability to work with Aboriginal colleagues and provide service to Aboriginal clients, particularly considering the publicity the matter had received and was likely to continue to receive.

The letter went on to state that while Ergon would be within its rights to terminate his employment immediately, judgment would be reserved while the Court process proceeded. The letter also stated that if evidence came out during or prior to the hearing which substantiated Mr Perry's involvement in the incident, Ergon reserved its rights to rely upon it as grounds for cancellation of Mr Perry's training contract and termination of his employment. Further, the letter stated that at the meeting of 14 February 2006, Mr Perry's parents had maintained that Mr Perry was not one of the ringleaders and that he had strong arguments to put before the court in relation to criminal proceedings. This letter was countersigned by Mr Perry and his father.

A document entitled Contract Detail Report with Notes (Document 2 at page 35) indicates that on 27 February 2006 Mr Toomey on behalf of Ergon, contacted the Department of Education, Training and the Arts seeking advice about Mr Perry's contract as Mr Perry had been charged with a criminal offence. That Report (at page 36) also indicates that on 6 April 2006 Mr Harris from Ergon contacted the Department, and advised a Field Officer that Ergon wanted to extend Mr Perry's probationary period by 180 days as Mr Perry had been charged with a criminal offence and may be jailed. On the same day an application was filed by Ergon seeking such an extension. The Report further indicates (at page 35) that on 19 April 2006 a Field Officer on behalf of the Department advised Mr Harris that an extension of 87 days, until 5 May 2006 had been approved. The notes also record that Mr Harris was told that Ergon could apply for a further extension but would need to provide detailed reasons and options for the extension. There is no indication that a further extension was sought by Ergon. The name of the contact person for the workplace in which Mr Perry was employed, as indicated at point 37 on Mr Perry's training contract (Document 1) is Peter Harris.

Mr Perry continued to work for Ergon. A reference was provided for Mr Perry dated 15 October 2007 by Mr Anstey, Substations Operations Supervisor, in the following terms:

"To Whom it May Concern

I have known Tim Perry since he started his Electrical Apprenticeship on the 10 January 2006. During this time he has been dependable, arrives at work on time and always willing to lend a hand.

Tim is organised, willing to learn and has a good rapport with other employees of all ages. His communication skills both written and verbal are of high quality.

I am aware of Tim's circumstances, but I can say that we have had no issues or problems with him during the periods he has worked in our section.

Sincerely

Jeffrey Anstey Substations Operations Supervisor Ergon Energy Rockhampton.".

The reference was provided on Ergon's letterhead and was referred to by his Honour Judge Searles in his sentencing remarks. On 16 October 2007, at the time Mr Perry and others involved in the incident were sentenced, their photographs and names were published on the front page of a Rockhampton newspaper "The Morning Bulletin". The article which ran over to page 3, was headlined "Guilty: Racist shooters own up" and stated that:

"Almost two years ago five teens set out on a drive-by shooting spree across Rockhampton. They allegedly hatched a plan to 'go shoot niggers in the park' and drove around in two cars with an air-rifle on Australia Day last year. 8

Yesterday they owned up to their actions. They will know their fate within two weeks.

During yesterday's proceedings in Rockhampton District Court the five teenagers sat quietly in the court room dock.

Their only requirement was to utter the plea of guilty.

Hayden John Nitz, Scott Warwick-Day, Troy Zornig, Shane Matthew McPherson and Timothy John Perry, all 18, pleaded guilty to one count of unlawful attempted wounding, two of assault occasioning bodily harm with circumstances of aggravation and two of going armed in public to cause fear.

The charges had been downgraded from four counts of intent to cause grievous bodily harm and two of unlawful wounding.

A court previously heard the day started out as a day at the beach for eight friends.

It ended when a number of people were shot at including a 13 year old mixed race boy and a 15 year old Aboriginal girl.

One of the injuries resulted in broken skin. Surgery was required to extract the pellet.

The friends allegedly drove to the southside park, surrounded by Alma/Bolsover/Williams streets, pointed the gun out the window and shot.

They then drove to North Rockhampton after failing to locate people in city parks, and shot at the girl in Alexandra Street before shooting the girl in Wilmington Street.

The Court previously heard that they then planned a 'cover-up story' and stashed the gun at Gracemere.

Judge David Searles adjourned legal submissions and sentencing to a date to be set but within the next two weeks.".

The photograph of Mr Perry appearing in the newspaper is a head shot, approximately the size of photographs which appear on passports. In the photograph Mr Perry is wearing sunglasses of a wraparound style, and his clothing does not bear Ergon's logo.

On 7 November 2007, a further letter was sent to Mr Perry under the signature of Mr John Cass, General Manager, Operating Support Services for Ergon, setting out a number of allegations about Mr Perry's sentence, his guilty plea and the issues of racism involved in his conduct. The letter stated Mr Perry's conduct, in light of the concluded Court processes, was of serious concern to Ergon, and seriously cast into question Mr Perry's ability to work with Aboriginal colleagues and to provide service to Aboriginal clients, particularly in light of the media publication of Mr Perry's identity. Mr Perry was required to attend a meeting on 9 November 2007 with Mr Cass and Ms Janene Hutchinson, Regional Human Resources Manager, to respond to the allegations and was informed that a potential outcome was the cancellation of his training contract and the termination of his employment. Mr Perry was also required to provide copies of statements he had made to police or to the Court to Ms Hutchison at or prior to that meeting.

Mr Perry responded in a letter received by Ergon on 9 November 2007 (Document 3) expressing his remorse for the incident, agreeing that he had breached Ergon policies and procedures and thanking Ergon for the opportunity to maintain his employment over the past 22 months. Mr Perry stated in his letter that he had never been involved in any conflict with another person whether indigenous or not and that the incident was totally out of character, as he had participated in sporting and social activities with indigenous persons. Mr Perry also stated that he had always followed Ergon's policies and procedures since the incident and had developed numerous friendships and working relationships with all of the colleagues he had worked with. Further, Mr Perry said that he had not had any problems with colleagues or the general public including while performing customer service. Mr Perry said that because his identity had been published in the media he would carry out his duties above and beyond what was expected. In concluding, Mr Perry said:

"The fact that Ergon Energy has given me the opportunity to maintain my employment has been the rock that has kept me going, and during the past 22 months I have come to realise that my job is one of the most important things in my life. It is my greatest wish to continue with my apprenticeship as I believe I am, and always will be an asset to Ergon and you have my assurance that I will be a reliable and trustworthy employee. I would like to thank Ergon Energy for the support I have received to this day and during this period I have tried my best to keep Ergon Energy's name away from media attention.".

On 9 November 2007, Mr Perry also attended a meeting with Mr Cass and Ms Hutchinson. On 15 November 2007 further correspondence was forwarded to Mr Perry requesting his attendance at a meeting on 16 November 2007 and 9 informing him that he would be provided with the outcome of the executive management decision about his response to the "show cause" letter of 7 November 2007. Mr Perry attended a meeting with Ergon representatives on 16 November 2007 and was given a letter setting out the detail and background of his involvement in the incident on 26 January 2006, and informing Mr Perry that:

 his employment with Ergon was immediately suspended;  Ergon would apply to the Training Council for cancellation of his employment contract; and  he would remain suspended without pay until the application was determined.

There was some issue as to whether Ergon had correctly notified the Training Council of the suspension of Mr Perry as required by s. 64(b) of the Act. However, the suspension notice was dealt with on the basis that Ergon had intended to comply, but that this would not preclude the matter being raised by any party if there was an appeal to the QIRC. This issue was not raised in the appeal by any party.

3.4 The application for cancellation of Mr Perry's training contract

By letter dated 16 November 2007 to the Director-General of the Department of Educating, Training and the Arts (Document 3), Ergon applied to cancel Mr Perry's training contract. In the application for cancellation, Ergon set out its understanding of the background and the events of 26 January 2006 and included a number of matters of which it was satisfied (Document 3 page 2). At points 1 and 4, it is stated that Mr Perry and his friends were involved in an altercation with persons of indigenous descent on New Year's Eve 2005. At point 4 it is also stated that the formation of a common purpose by Mr Perry and his friends to shoot pellets from an air rifle at or near persons of indigenous descent, was motivated by the altercation on New Year's Eve. In point 6 it is stated that: "In his vehicle, Mr Perry followed as Mr Nitz's vehicle drove back to the park, and subsequently around Rockhampton...".

Ergon's application for the cancellation (Document 3) of Mr Perry's training contract was based on the contentions that:

 Mr Perry has committed serious misconduct such that his employment should be terminated under s. 64 of the Act; and  Mr Perry has committed misconduct and his employment should be terminated under s. 70 of the Act.

According to Ergon, Mr Perry had committed serious misconduct because he had pleaded guilty to, among other things, two charges of assault occasioning bodily harm with circumstances of aggravation. It was not relevant that the assault did not occur at work, because s. 64 of the Act does not limit assault in this way. It was contended that Mr Perry had engaged in reckless, violent and racist behaviour, and that the shootings were inexcusable to both Ergon and the general public. As a result it was not reasonable for Ergon to continue to train Mr Perry. Further, the nature of the incident and its heavy media coverage was said to pose such a significant risk of damage to Ergon's reputation and standing from further potential publicity, and to severely undermine Mr Perry's ability to work with Aboriginal colleagues and Aboriginal customers, so that Ergon had no choice but to seek the cancellation of his contract and the termination of his employment.

Ergon also submitted to the Training Council that if it was to find that Mr Perry's behaviour did not amount to serious misconduct, it was submitted by Ergon that his behaviour amounts to misconduct. Mr Perry had confirmed that during his induction he had been given presentation of Ergon's policies and procedures including those dealing with Code of Conduct and Out of Hours Conduct and had a broad understanding of Ergon's expectations of employees within and outside working hours. Mr Perry's conduct had breached those policies and procedures by bringing Ergon into disrepute and damaging its interests. Continuing to employ Mr Perry in circumstances where he will have contact with Aboriginal employees and customers, in light of his racially motivated acts and convictions, also carries significant risk of potential further damage to reputation. It was also submitted that the abhorrent nature of the incident is incompatible with Mr Perry's duty of good faith to Ergon and had damaged his relationship with Ergon. Mr Perry's conduct also had the potential to damage his relationship with other employees.

As part of the processes prescribed under the Act and Regulations for considering such an application, officers of the Department conducted interviews with Mr Cass and Ms Hutchinson (Document 10) and with Mr Perry (Document 11). The record of interview with Mr Cass and Ms Hutchinson on 26 November 2007, contains numerous handwritten alterations made by Mr Cass. It is initialled by all parties who were present. That record indicates that Mr Cass was asked questions about what effect Mr Perry's conduct or the publicity about it, had on the workplace. Mr Cass responded by saying that there had been no effect to date, but that Ergon was concerned about possible future issues.

When asked about damage Ergon had suffered, the record of interview indicates that Mr Cass said that Rockhampton was a small town, and that it was not unrealistic for people to know that Mr Perry worked for Ergon. Ergon was trying to attract more persons of Aboriginal and Torres Strait Island descent and while there had been no complaint from such persons to date, this did not mean that there would not be issues in the future or that there would be no impact on Ergon's ability to attract such employees. When asked whether Mr Perry's conduct had caused damage to Ergon's 10 business reputation, Mr Cass said that Ergon is an "employer of choice" and a great place to work, and that Mr Perry's conduct may impact on those things. While there had been no cause for Ergon to take disciplinary action against Mr Perry since the shooting events were dealt with, Mr Cass said that this was understandable as the conditions of the first and final warning had been explained to Mr Perry, and he was subject to legal action.

Mr Cass pointed to the comments in Judge Searles' sentencing remarks about Ergon and said that Ergon had been mentioned in the court proceedings. Mr Cass also pointed to Ergon's Code of Conduct and Out of Hours Policy and maintained that Mr Perry's conduct had breached these. Further, Mr Cass maintained that there had been misrepresentation at a meeting with Mr Perry and his parents, about the level of Mr Perry's involvement in the shootings, and that this had damaged the relationship between Mr Perry and the Company. Mr Cass also stated on a number of occasions that if the true extent of Mr Perry's involvement in the shootings had been known at the outset, his employment would have been terminated during the probationary period.

On 29 November 2007 an interview was conducted with Mr Perry. The record of interview of that meeting (Document 11) indicates that Mr Craig Giddins, an organiser with the ETU was also present with Mr Perry for part of the interview. During the interview, Ergon's allegations were put to Mr Perry. In relation to the allegation that Mr Perry and his friends had been involved in an altercation with Aboriginal people on New Year's Eve 2005, Mr Perry denied that this had occurred and the following exchange appears:

"BM [Brad Mufford - Senior Field Officer Rockhampton] - Ergon have claimed that on New Years' Eve 2005, you and your friends were involved in an altercation with people of indigenous descent, however, in your statement to Ergon in response to their letter to you dated 7 November 2007 you claim that at no time in your life have you ever been involved in any conflict against another person whether they are indigenous or not. Could you please explain the apparent contradiction in these statements?

TP [Timothy Perry] - that had nothing to do with it, it wasn't just us. I didn't really have anything to do with it. I told them that, but I thought it would help if anything. Fights broke out, we were just there, I didn't throw any punches.". (Document 11).

Mr Perry conceded that he did have the air rifle and did not have a licence for it, as he did not believe that a licence was required. Mr Perry also conceded that he was aware of the damage the air rifle could cause, having shot at a coke can and a plastic chair the day before. The incident had not been planned, but had just happened. Mr Perry maintained that contrary to the allegation made by Ergon that he had driven his vehicle to the park, he had not been driving. Mr Perry stated that he had fired the air rifle above the heads of people sitting in the park, and had then given the air rifle to Mr Nitz. Mr Perry agreed that he saw Mr Nitz shoot a young Aboriginal boy who had alighted from his bicycle to care for an injured bird, but had not seen Mr Nitz shoot at any other persons. Mr Perry also agreed that he supplied the air rifle and fired the first shot above a group of Aboriginal persons in a park, but denied he had driven the car.

Mr Perry said in response to questions during the interview, that he had worked with clients of Ergon since being charged, including indigenous clients. Mr Perry had not worked with indigenous employees of Ergon. Mr Perry also said that none of the persons shot at during the incident were Ergon employees; he had not been in an Ergon vehicle; or wearing Ergon clothing. Mr Perry also agreed that he had attended a course on 10 January 2006, in relation to Ergon's Code of Conduct. Mr Perry said he had attended this course on the first day he started work for Ergon. In relation to the allegation that Ergon had been misled about the extent of his involvement in the incident, Mr Perry said that he had not told Mr Cass that he was not involved in the incident, but had said that he could not talk about it because he had contacted a solicitor. After the incident, Mr Perry had attended counselling as requested by Ergon. Mr Perry said that there had been no difficulty caused by these events in relation to his ability to perform work for Ergon or to work with or for indigenous persons. In response to a question about what he would do if indigenous persons objected to him working at their houses, Mr Perry said that he would try to sort it out, and agreed that he would contact his supervisor. Mr Perry said that he enjoyed his job and that he would be lost if his training contract was cancelled.

The Contract Detail Report Notes (Document 2 page 29) indicate that on 4 December 2007 a field officer of the Department contacted Queensland Corrective Services in Rockhampton to ask about the flexibility in relation to Mr Perry's Intensive Correction Order. According to the Notes, Mr Yule of Queensland Corrective Services said that if Mr Perry was required to work out of town he could report to a correctional officer wherever he was located. In response to a question about the implications of Mr Perry being required to work overtime on weekends, Mr Yule said that Queensland Corrective Services was very flexible and would allow Mr Perry to do the time when it was easier for him. Mr Yule also said that the main concern was that Mr Perry was working, because he would be less likely to offend again.

4. The Decision of the Training and Employment Recognition Council

In a Show Cause Notice issued under Regulation 25 of the Act, dated 5 December 2007 (Document 12), Ergon and Mr Perry were informed that the Training Council proposed not to cancel the training contract and set out the grounds upon which this proposed action was based. Essentially the grounds upon which the Training Council proposed not to 11 cancel the training contract were that Mr Perry had not engaged in serious misconduct and it was not unreasonable for Ergon to continue his training, because the conduct occurred out of working hours and there was no clear connection between the conduct and Mr Perry's employment. Further, the conduct had not caused and was unlikely to cause serious damage to the employment relationship, it had not damaged Ergon's interests and was not incompatible with the fulfilment of Mr Perry's duty to Ergon. In relation to misconduct, the Training Council believed that Mr Perry had not failed to carry out a reasonable and lawful instruction and his conduct had not caused serious damage or risk of serious damage to the employer's business or business reputation. The notice stated that should Ergon wish to do so they could provide information or documents as to why the proposed action should not be taken.

Ergon sent a letter to the Training Council dated 20 December 2007 (Document 14) providing additional comment in response to the Show Cause Notice. Ergon maintained that the definition of serious misconduct in the Act did not require an assault to occur during working hours or have a connection to employment. An assault, no matter when it occurs, is serious misconduct. Ergon also maintained that the abhorrent nature of Mr Perry's conduct was such that it had destroyed the necessary relationship of trust and confidence between Mr Perry and Ergon, and Ergon did not wish to continue the relationship with Mr Perry. While the Training Council argued that no damage had been done to Ergon's reputation, such damage was highly likely at some point in the future if Mr Perry's engagement was continued, as media attention will focus on why that is the case, and why Aboriginal customers and staff are required to deal with the perpetrator of such an abhorrent and racist act. The continuation of Mr Perry's employment would also be likely to damage relationships between Ergon and Aboriginal customers and staff.

Ergon asserted that the facts outlined by the Training Council in the Show Cause Notice understated the severity of Mr Perry's behaviour, by omitting to mention that:

 Mr Perry engaged in pre-planned violence;  that this pre-planned violence was racial in nature;  that this plan was formulated in concert some time to it being implemented - it was not spur of the moment;  that Mr Perry's lawyer would have instructed him to plead guilty to attempted unlawful wounding and the two counts of assault occasioning bodily harm, not on a legal technicality, but because Mr Perry was in fact guilty of those charges; and  that Mr Perry was an active participant and a party to Mr Nitz's racist shooting, he was not merely aware that it happened.

Ergon also contended that it had not terminated Mr Perry's employment during his probationary period because of the misrepresentations of Mr Perry and his parents about his involvement in the shootings. Contrary to the misrepresentation that Mr Perry was not one of the ringleaders and had good defences to put before Court, the reality was that Mr Perry was one of the most heavily involved perpetrators second only to Mr Nitz (who was jailed) and had no defence. The representations had been acknowledged by Mr Perry and his father when they signed a letter from Ergon to Mr Perry dated 17 March 2006, setting them out. As well as recording the representations, the letter set out the seriousness with which Ergon viewed the allegations and the likelihood of termination if Mr Perry's involvement turned out to be as alleged. Mr Perry and his father had acknowledged and agreed to the contents of that letter.

By committing serious misconduct of such magnitude, Mr Perry had automatically damaged his relationship with Ergon, and if that relationship was not damaged, Ergon would not have applied to cancel his training contract. Ergon also said that it had a responsibility to protect its employees, customers and the public from violence committed by its workers, and pointed out that employers who have not terminated violent employees have been found to be liable for the employee's subsequent violent actions, even where such violence did not occur in the workplace. It was also submitted that the Training Council could not conclude that there had been no issue with Mr Perry working with Aboriginal customers and staff, simply because no-one had voiced objection. It may be a significant area of concern and the topic of wider community discussion, without any complaint having been made to Ergon. Further, the fact that there had been no complaint to date did not mean that there would not be one in the future, as Aboriginal staff and customers who may not be aware of Mr Perry's involvement in the shootings could become aware of that involvement in the future, and complain about having to deal with Mr Perry.

In conclusion, the following statement was made:

"If Ergon Energy is compelled to continue to engage Mr Perry, it is highly likely if not inevitable, that at some point community or media attention will turn to his ongoing engagement and the events of Australia Day 2006. The question will then justifiably be asked why Ergon Energy continued to employ Mr Perry in light of his conduct, especially considering its status [as] a government owned corporation, its professed support of the Aboriginal and Torres Strait Islander community and the requirement of his role that he interact with Aboriginal customers and staff.".

By way of an information notice issued on 24 December 2007, the Training Council decided not to cancel the training contract between Mr Perry and Ergon. In addition to the reasons set out in the Show Cause Notice, the Training Council concluded that the submissions of Ergon in response to that Notice were not consistent with the Explanatory 12

Notes for the Training and Employment Bill 2000, in relation to s. 64 (serious misconduct) and relevant case law about an employer's right to extend supervision over the private actions of its employees. The Training Council also concluded in relation to Ergon's contention that Mr Perry had engaged in misconduct under s. 70, that in response to the Show Cause Notice, Ergon had only provided speculation as to any negative impact or damage to its business or business reputation. Ergon had not provided any evidence of any risk of damage, or actual damage, to its business or business reputation in the period of one year and eleven months since the incident occurred.

5. Additional Evidence in the appeal to the Commission

In the appeal to the QIRC, Ergon sought leave to adduce new and additional evidence to that which was before the Training Council at first instance. For the reasons outlined above, leave was granted and evidence was received from the following persons:

 John Andrew CASS, Acting General Manager of Operational Support Services;  Anthony James MURRAY, Group Manager, Corporate Communications for Ergon; and  Andrew YEATMAN, Aboriginal and Torres Strait Islander Employment and Support Officer,

5.1 Evidence of Mr Cass

Mr Cass said that in his experience within the business community in Rockhampton, Ergon was seen as an arm of Government, notwithstanding that the organisation is a corporation. Ergon apprentices in Central Queensland are rostered over the various activities performed by the Company. A generic roster for Systems Electricians apprentices tendered through Mr Cass (Exhibit 1) shows that if Mr Perry remains with Ergon, he will spend three months in year three with the Customer Support Group doing some electrical inspections, connecting services to houses and doing maintenance on the distribution network. Mr Perry would also spend three months in year three of his apprenticeship working with the Substations Group throughout Central Queensland in areas such as Rockhampton, Dysart, Longreach and Biloela.

During year three approximately 60% of Mr Perry's time would be spent working away from home during the week and returning at weekends. Occasionally Mr Perry would work away from home for two week periods. Mr Perry would also undergo off-the-job training at TAFE and would rotate to an external electrical contractor which could require him to perform domestic, commercial or industrial work. In the fourth year, Mr Perry would work in Customer Services for a three month period; Network Design for a one month period; Substations for a three month period and Electrical Testing for a three month period.

Electrical testing would require Mr Perry to work at substations. Mr Perry may also spend some time with the metering group as part of Electrical Testing, although this did not appear on the generic roster, and performing commissioning of new metering sites for commercial and industrial customers and possibly metre checking in domestic residences. Out of town work would be performed with the Substation Operations Group and may require Mr Perry to stay in places such as Emerald, Dysart, Clermont, Barcaldine and Biloela. On a number of placements Mr Perry would interact with customers, particularly Customer Services and in the metering group when working in electrical testing. During the time Mr Perry was working with an external electrical contractor, he could have contact with customers, depending on who were the contractor's clients. Ergon had no control over the work performed by electrical contractors while apprentices were placed with them. While working in the Substations Group Mr Perry would rarely have contact with customers and similarly in Network Design there would not be much customer contact. In the third and fourth years of his apprenticeship, Mr Perry could also be involved in connecting services to houses while working with the Customer Services Group. Mr Perry could also be involved in going into customers' properties to check switchboards or to supply and fault find. Mr Perry could also be required to work in streets and public parks in Rockhampton and surrounding areas.

Customer service teams comprise three employees, generally a tradesperson, a linesperson and an apprentice. Network maintenance teams could comprise six to ten employees. Electrical inspections were undertaken in teams of two persons comprising a fitter/mechanic and an apprentice. Teams working in substations could comprise three to six employees and testing teams comprised two to three persons including an apprentice. Apprentices always work with tradespersons while out. There are 700 to 800 employees of Ergon within the Rockhampton area. Mr Cass did not have precise knowledge about how many of those employees were of Aboriginal or Torres Strait Island descent. New employees are given an option to tick a box on a form to advise Ergon whether they are of Aboriginal or Torres Strait Island descent, but it is not compulsory for employees to provide this information. It is Mr Cass' belief that there are persons of Aboriginal or Torres Strait Island descent working for Ergon in the Rockhampton area, and that there are approximately 15 such persons. One of Ergon's trainers, who would have delivered training to Mr Perry is of Aboriginal or Torres Strait Island descent. There is no practical measure that Ergon could use to quarantine Mr Perry from persons of Aboriginal or Torres Strait Island descent.

In relation to the shootings on 26 January 2006, Mr Cass said that he could recall publicity about the incident in the print media and on television at the time the incident occurred and people concerned were charged. There was follow- up publicity at the time of the trial. Mr Cass said that he was aware of these matters being discussed in the workplace 13 and that Mr Perry has some notoriety given that his photograph appeared on the front page of the newspaper. In response to the question whether issues had been raised with him about Mr Perry's future in Ergon's workforce, Mr Cass said:

"I've had a number of discussions where individuals have asked me where the process was up to. I've had a number of discussions with employee representatives or union delegates from the local unions as well as some of the more regional picture as to what - where the process is up to and their thoughts around that.".

Mr Cass became aware of Mr Perry's involvement in the shootings early in February and attended an interview with Mr Perry and his parents. Mr Perry had indicated that he could not give much information about the event based on the legal advice that he had been provided. Mr Perry also declined, on the basis of legal advice, to provide his police statement and told Mr Cass that he did not have access to the statements of the other persons involved in the incident. Mr Perry's parents had indicated that he was in the wrong place at the wrong time, had done something stupid and was not one of the ringleaders. Mr Perry's parents had also stated that he had a number of good defences and would probably be found not guilty. Mr Cass also attended a second meeting with Mr Perry and his parents, where they had been handed a letter setting out that Mr Perry's employment would be continued subject to certain conditions. Mr Cass said that these conditions had been understood by Mr Perry and his parents, and that they had signed the letter to indicate their acceptance of them. When asked was there any dissent on Mr Perry's part to the condition that if he was ultimately found to have been substantially involved Ergon would act to terminate his employment, Mr Cass said: "No. At that ...stage they were just pleased that Tim was going to continue his employment". There had been no feedback from Mr Perry about lack of agreement with the contents of the letter. Mr Cass said that in terms of the facts as he knew them at the time, based on media reports, he had decided to give Mr Perry the benefit of letting justice take its course.

Some time later, Mr Anstey approached Mr Cass in relation to Mr Anstey providing a reference for Mr Perry. Mr Anstey emailed a copy of the proposed reference to Mr Cass, who told Mr Anstey that it would be okay to submit it. The document sent to Mr Cass was not on Ergon letterhead, and Mr Cass only became aware that it had been submitted on Ergon letterhead after Mr Perry's sentencing. Under Ergon's policies and procedures, decisions about termination of particular employees are made by the Executive General Manager and the Chief Operating Officer (the Executive). Mr Cass had put forward three options, one of which was that Mr Perry would remain in his role with Ergon. Mr Cass had recommended to the Executive that Mr Perry would continue in his role as an apprentice with Ergon. At the point he had made this recommendation, Mr Cass had considered the responses provided by Mr Perry at the show cause meeting on 9 November 2007, media reports and Mr Perry's police statement provided at that meeting.

After discussing Mr Cass' recommendation, the Executive decided to seek cancellation of Mr Perry's training contract. Mr Cass had been a party to those discussions. After the decision was taken to seek cancellation of Mr Perry's training contract, Mr Cass had obtained further information, in particular the transcript of the sentencing remarks of Judge Searles (Document 7), which provided more detail about the incident itself, the involvement of Mr Perry and the other offenders, and a fair bit of information about the victims and the outcomes for them. This additional information changed Mr Cass' view. In particular, Mr Cass understood more about the interaction between Mr Perry and the others involved in the incident; there had been no alcohol or drugs; Mr Perry had understood the damage that the air rifle would cause; and more importantly the impact on the victims. Mr Cass said in his evidence that after reading the sentencing report he became more aligned with the decision to terminate Mr Perry's employment. Mr Cass had also considered that this additional information was very much at odds with what had been portrayed in the meeting with Mr Perry and his parents in February 2006. This had caused Mr Cass to form the view that he could not rely on Mr Perry's representations and that he had been misled.

According to Mr Cass, trust is an important matter, particularly in circumstances where employees are working away from home in substations, and are not being supervised after hours. Ergon needed to have a high level of trust that individuals were abiding by its policies with respect to out of hours conduct. Mr Cass also said that he had concerns based on his understanding that the trigger to the events of 26 January 2006 was an altercation between Mr Perry and his friends and persons of Aboriginal descent. It was not uncommon for Ergon employees working out of town to have interactions with local persons, and Mr Cass was concerned about what Mr Perry's reaction would be if a similar situation occurred while he was out of town working for Ergon. Mr Cass said that Mr Perry's involvement in the shootings posed a risk for Ergon's external reputation, because it was the sort of incident that was brought up from time to time. The incident was likely to be brought up if there was a future similar incident. Rockhampton is quite a small town, and it would be easy for linkages to be made between Ergon and Mr Perry.

In relation to representations set out in the letter from Mr Perry dated 9 November 2007 about being a reliable and trustworthy employee, Mr Cass said that based on previous representations made by Mr Perry he would be reluctant to rely on that promise. In particular Mr Cass would be concerned about significant matters such as Mr Perry's ability to be honest in reporting safety incidents and assisting with investigations of such incidents.

Under cross-examination by Mr McColm for the Training Council, it was put to Mr Cass that a search of the Training Council's records indicated that Ergon did not currently have any apprentices employed in the Rockhampton area who indicated that they are of Aboriginal or Torres Strait Island descent. Mr Cass said he would have no idea about who had 14 identified themselves in this way. In response to the proposition that it was unlikely that Mr Perry would interact with any of the fifteen Ergon employees who are of Aboriginal or Torres Strait Island descent, Mr Cass said that it was difficult for Ergon to know exactly how many indigenous employees it had. It was also put to Mr Cass that Mr Perry had stated in the interview with Field Officers from the Department on 29 November 2007 that he had worked with indigenous clients. Mr Cass was asked whether he was aware of any complaints about Mr Perry and said that he had received no specific or formal complaints from indigenous clients or fellow workers. Mr Cass maintained that there may well be complaints in the future depending on individuals and on Mr Perry's actions in the future.

Mr Cass said that he was not aware of any media reports about the incident between February 2006 and October 2007 when Mr Perry and the other offenders were sentenced. Mr Cass was also not aware of any media reports on the matter between October 2007 and the present. When asked what evidence he had that there would be any further reports in the media, Mr Cass said that if there were other incidents that occurred in Rockhampton, then the incident involving Mr Perry had notoriety and would be mentioned. According to Mr Cass it was also likely that Ergon would be roped in to such reports if Mr Perry was identified as an employee of Ergon.

It was put to Mr Cass that if there was media publicity in the future, linking Mr Perry to Ergon, the company could simply point to the fact that they had disciplined Mr Perry, he had been suspended and an application for the termination of his training contract had been refused. Mr Cass said that this might be a response that Ergon could use, but he did not know whether it would be reasonable and the best outcome. Mr Cass maintained that the fact that Ergon had not had formal complaints about Mr Perry did not preclude that people are already making decisions about Ergon as an employer of choice. Ergon's status as an employer of choice is dependent on a range of matters including wages, conditions of employment, training and development opportunities, whether employees are treated with respect in the workplace and whether equal employment opportunities are in place. It was put to Mr Cass that Mr Perry was a young man who did a terrible thing, confessed to it, was punished by the courts and was now trying to put his life back together. In response to the proposition that Ergon could be seen as an employer of choice by assisting Mr Perry to do this, Mr Cass said that Ergon also had to consider the impact on other employees who might not be overt with their concerns about Mr Perry's continued employment with Ergon.

When asked how the actions of Mr Perry on 26 January 2006 had negatively impacted on Ergon, Mr Cass said that there is a risk of future media coverage impacting on Ergon; there is a risk associated with interaction between Mr Perry and other employees; and a risk associated with interaction between Mr Perry and the general community. When asked how Mr Perry's conduct had damaged the relationship between Mr Perry and Ergon, Mr Cass said that the fact that Ergon was in proceedings before the QIRC seeking the cancellation of Mr Perry's training contract had damaged the relationship.

Under cross-examination by Ms Inglis on behalf of Mr Perry, Mr Cass said that he was aware that Mr Perry had been asked to go to counselling and he had done so. Mr Cass had not been advised as to the success or otherwise of the counselling or whether the counsellor believed that further counselling was necessary.

In re-examination, Mr Cass said that before reading the sentencing report of Judge Searles, he had not been aware that there was a racist element involved in the shootings and had been incorrectly told by a colleague who attended the sentencing proceedings that Judge Searles had said that the conduct was not racially motivated. Mr Cass also said that in obtaining the signature of Mr Perry and his father on the letter dated 17 November 2006, Ergon had intended to create essentially a deed with Mr Perry and his parents, so that if the representations made about Mr Perry's involvement were not true, Mr Perry had agreed to cancel his training contract without recourse.

5.2 Evidence of Mr Murray

Mr Murray is the head of a team responsible for communicating and engaging with Ergon's internal and external stakeholders. The streams of activity for which Mr Murray is responsible are media and community relations; internal communication; stakeholder and government relations and strategic priorities and projects. Prior to joining Ergon Mr Murray had extensive media experience in journalism, public relations, corporate communication and marketing, commencing his career as a journalist in 1966. Mr Murray has a Diploma in Journalism from the University of Queensland, achieved metropolitan A grade status as a journalist and is a Fellow of the Public Relations Institute of Australia.

According to Mr Murray, corporate reputation is extremely important for Ergon, and damage to Ergon's reputation would mean that it would operate less effectively in the manner that it does both internally and externally. Authenticity is fundamental to the concept of reputation, and Ergon's reputation would erode rapidly if the values it was seeking to project and espouse were not underpinned by a genuine commitment to the values and attributes that it would seek to promote and advance about itself. Ergon has invested significant resources into building a robust reputation and brand, and this is an important activity for the organisation. As part of those resources there is a program within Ergon known as "employer of choice". This program drives engagement with Ergon's strategy of attracting and retaining skilled staff in a tight labour market. In such a labour market, prospective employees will look not only at the occupations within an organisation, but also the values that an organisation supports and sustains. Employees are not only interested in doing a particular job, but doing a particular job in an organisation whose culture and values they relate to and respect. 15

There is also a diversity strategy within Ergon, which relates to the company making it comfortable for a range of people from diverse backgrounds to operate effectively in the organisation and to relate to and progress the organisation, so that Ergon could take advantage of the range of skills that people of diverse backgrounds may have. Part of that diversity strategy is directed to attracting persons of Aboriginal and Torres Strait Island descent to take up employment with Ergon. As Ergon operates throughout the State, it is important that its employees can move freely throughout regional Queensland in an environment where there is customer trust and confidence. This is particularly the case when Ergon employees are working in emergency situations. Ergon adopts a strategy of being visible and actively committed to regional communities through sponsorships, facilitating contributions from customers to organisations such as the Royal Flying Doctor Service, and promoting attributes within communities such as safety and environmental consciousness. Strategies aligned with encouraging indigenous persons to take up employment include taking advantage of Ergon's sponsorship of the North Queensland Cowboys to make a video on healthy lifestyle choices for young indigenous people in remote communities; taking a group of apprentices (the Torres Strait Flames) from Thursday Island to participate in State-level competition where they ultimately represented Queensland at a national level; supporting a rugby league carnival for young indigenous persons and facilitating players from sponsored rugby league teams to conduct coaching clinics for indigenous people. A number of copies of in-house newsletters were tendered through Mr Murray (Exhibit 4) to indicate communication strategies by which Ergon engages with indigenous employees.

Ergon has gone through a consultative process with staff to identify what values are important to them and to define them as "Ergon Energy spirit values" - success through professionalism, integrity, respect, innovation and team work. Measures to promote these values include posters and other similar material; role modelling through stories about individuals who exemplify those values; and a performance review process for each employee which includes a discussion between each employee and his or her supervisor about the behaviours they are going to exhibit to demonstrate that they are living the Ergon Energy spirit values. This indicates to employees that the values are not simply lip service, but values that every employee is expected to live.

Mr Murray said that public perception of Ergon is shaped fundamentally by the behaviour of the organisation as observed and experienced by employees and stakeholders. Employees of Ergon influence the image the organisation portrays to those outside by virtue of wearing uniforms and driving around in badged vehicles. Ergon through its broad range of activities is large and visible. The activities of employees, whether they are at work or away from the work place, are also pertinent to the reputation of Ergon. The public profile of Ergon in the Rockhampton region is high and overwhelmingly positive and such a reputation is extremely important to Ergon. This was graphically illustrated in 2006 when customers who were impacted by Cyclone Larry co-operated with Ergon to conserve electricity and were supportive of Ergon staff working to restore power supplies. It was also the case that during that time when there was massive disruption to power supplies, Ergon experienced only 2% media negatives. Similarly, customers in Cloncurry responded to requests to reduce power usage while one of two generators supplying the area failed, resulting in the town being able to operate without having to resort to load shedding.

This high level of trust is fragile, and can be destroyed easily. This is particularly so when, as in Ergon's case, the product produced by the company is intangible. The public scrutinise and monitor Ergon and its workforce, particularly as Ergon is a badged and ubiquitous organisation. The community is not reticent about making its views known from a consumer or stakeholder perspective, and the media as self-appointed critics of society and monitors of organisations such as Ergon consider it their role to be a watchdog. If members of the community bring matters to the attention of the media, it is quite ready and able to pick up those matters and run with them. Ergon is more likely to be subject to public scrutiny because it is a government owned corporation and as people tend to perceive that such corporations exhibit qualities that reflect the Government of the day, this provides the media with another opportunity to have a go at the Government. Further, the fact that Ergon provides an essential service to the community and is a necessary partner in community developments increases the level of scrutiny to which Ergon is subject.

The Corporate Communications team headed by Mr Murray is also involved in the function of identifying and mitigating reputation risk. Its role in this regard is to look at a range of issues that come to the attention of the organisation via its stakeholders or customers. The team is part of the process that identifies issues which may emerge from time to time. Where issues are noticed by others, they are brought to the attention of Mr Murray's group, and they participate in the kind of actions that may mitigate that risk. Mr Murray's team also monitors all print, television and the new media on a daily basis.

Mr Murray said that he is familiar with the facts relating to the issue of Mr Perry's apprenticeship. It is Mr Murray's professional opinion that if Mr Perry's apprenticeship continues, reputation risk would be converted into reputation damage. It would be unthinkable for Ergon, if it is serious about maintaining its reputation, to knowingly continue to provide sanctuary for someone who exhibits the kind of behaviour engaged in by Mr Perry. That behaviour runs counter to Ergon's professed values, its indigenous employment strategy and its diversity strategy. To be consistent with the application of its values, and to make a clear statement and commit itself to values which staff can readily understand, Ergon has no choice but to seek not to continue with Mr Perry's employment. It would also be unreasonable from a management perspective to ask a team to work alongside an employee who has exhibited such 16 violent and unpredictable behaviour and put at risk the investment and commitment that Ergon has made to its values and to driving behaviour that matches its professed qualities.

Further, the continued employment of Mr Perry would put Ergon at risk with respect to its reputation externally. It was Mr Murray's view that the media would find the fact that Ergon was continuing to employ Mr Perry a matter of significant interest. The Australia Day shootings were a matter of significant and widespread interest, not only in the Rockhampton media, but on a national level. The media interest could be tracked in parallel with the court appearances of Mr Perry and other persons charged. If Mr Perry's continuing employment were to come to the attention of the media, there would be a whole new dimension to the story. The story had violence and racism, and there was plenty of information about it on the public record. Where the story would get an additional lift-off would be the fact of a government owned corporation providing sanction and shelter for an individual who had exhibited this kind of behaviour. The probability of that happening is very high and it provides an opportunity for a range of media to revisit the issue and have "a crack" at the Government of the day at the same time. It would be easy for a journalist, provided with a tip-off that Mr Perry was working as an apprentice for Ergon, to work up a story. For example, an aggrieved employee could provide some detail about their feelings about having to continue to work with Mr Perry. Journalists have access to libraries of materials which can be brought out at short notice. It would also be easy to develop a story by going back to the victims to get an account of their suffering and current circumstances, and asking them to comment on how they felt about the person who shot them being given sanctuary by a major employer and getting on with life as normal. A journalist could also approach an indigenous household to seek comment on how they would feel with Mr Perry accessing their home to perform work for Ergon.

Mr Murray said that the probability of this happening is high, because it would be surprising in a workforce of 4,000 where the organisation internally places such emphasis on its values and authenticity, not to find some aggrieved employee who was offended by Ergon's apparent inconsistency of approach. It would be highly likely that such an aggrieved employee would go to the media of their own volition. Mr Murray also said that the fact that Ergon had taken steps to bring Mr Perry's apprenticeship to an end but had been overruled by the Training Council would not mitigate the risk to Ergon. It would likely strengthen the media interests in the story if Ergon had been instructed by an agent of the government of the day to pursue this piece of action. It may marginally help Ergon's position, but would just provide another dimension for the media to fan the flame of the story.

Mr Murray was asked whether, if the story broke, he would have difficulty in getting the media to add the ingredient that Mr Perry was only continuing in employment because Ergon were overruled by the Training Council and said in response that if he was a journalist writing that story, it would be a surprise that the Training Council had overruled Ergon and directed that Mr Perry continue to be employed, and would be core ingredient in the story. Ergon would suffer from the debate if it in any way indicated that it supported the continuing employment of Mr Perry.

Under cross-examination by Mr McColm, Mr Murray said that he was not surprised that in the Rockhampton and Central Queensland regions, Ergon did not employ any indigenous apprentices and only employed two indigenous trainees, and that this was one of the reasons for Ergon launching an indigenous employment strategy. Mr Murray agreed that Ergon was not mentioned in any of the media reports about the shootings, and said that this was fortunate. Mr Murray was asked what damage could be caused to Ergon by continuing to employ a young person who got involved in a terrible crime, admitted it, pleaded guilty, was punished by a court and was now trying to put it right. In response to this question Mr Murray said that it should be understood that Mr Perry had joined an employer that set the bar high on behavioural standards. While Mr Perry may say that he wants to mend his ways, it is a matter of considering the interests of Mr Perry who has not been with the organisation for very long, against the rights of a workforce of 4,000 and the kind of workplace they have chosen to be attracted to and stay in.

In response to the proposition that the media would be unlikely to hound a young man who had just started the third year of his apprenticeship, Mr Murray said that the media would hound all those who have been associated with that position such as Ergon. Mr Murray said that the glare of the media spotlight would also be on the Training Council for supporting that kind of position and the media would probably also be after the Queensland Government which provides the umbrella over both organisations. Mr Murray also said that if he was still working in the media he could write a quite amazing piece about "what was the Apprenticeship Council thinking of to put the interests of the average behaviour of one miscreant ahead of the rights of 4000 members of Ergon Energy's workforce and cause them discomfort and undermine the values of the organisation. It'd be a very easy story to write.".

In response to the proposition that the ultimate decision would be made in the QIRC, and that would be something the media would take into consideration, Mr Murray said that this would just broaden the canvas on which the media could make social commentary, and would not cause Ergon to escape from the kind of issues where members of the workforce or the community would have concerns. The reality would be that the organisation employs an individual who exhibited that kind of behaviour. Mr Murray said that he was not aware that there had been no complaints about Mr Perry since he had been charged back in January 2006. Mr Murray also said that he had expressed his opinions to certain persons within Ergon about Mr Perry's continued employment. However, he had not done so to his knowledge, in relation to the formal processes associated with Ergon's application to the Training Council for cancellation of Mr Perry's training contract. 17

Mr Murray was asked why he thought that Mr Perry would be linked to Ergon in future, given that this had not occurred to date. In response, Mr Murray said that there is a big difference between the current situation where those who are aware that Mr Perry works for Ergon are also aware that there is a process underway where Mr Perry's employment may end. In the current state of play it would be unlikely that Mr Perry would be connected to Ergon as it would depend on a member of the public drawing a link between Mr Perry's photograph in the newspaper some time ago, and Ergon. The likelihood of someone drawing that link in the current state of play is not high. However, Mr Murray maintained that this could be transformed overnight if the matter was escalated in the manner outlined in his evidence. The most likely scenario under which the matter could escalate was through an employee of Ergon concerned that Mr Perry was also an employee of the Company. The story could also be escalated by a change such as Ergon being required to continue to employ Mr Perry. This could attract comment and criticism of the Training Council and the QIRC. However, in such a scenario the media would be likely to expand the story rather than to expunge Ergon. In response to the proposition by Ms Inglis that other Ergon employees could take comfort from the fact that Mr Perry had attended counselling and had satisfactorily completed that counselling, Mr Murray said that the fact that an employee may have attended counselling is a matter treated by Ergon as confidential, and employees would not necessarily be aware that a co-worker had attended counselling.

In response to a question from the QIRC, Mr Murray said that Ergon's continuing employment of Mr Perry could be seen as support by Ergon for his rehabilitation, and that support for staff is one of Ergon's standards. However, the problem in Mr Perry's case is that the position of other staff and Ergon's duty of care to them, also had to be considered. There was also a question of whether Ergon could be confident in relation to Mr Perry and comfortable with saying to other staff that they could feel safe in an environment where they were working with a person who had exhibited the kind of behaviour exhibited by Mr Perry. Mr Murray said that views can be polarised and there were often circumstances where people had been punished and rehabilitated, but the question had to be asked: "what about the victim, how do they feel about it?". In Mr Perry's case, the rights of the rest of Ergon's workforce also had to be considered. Mr Murray said that he could not offer an opinion about the propensity for Mr Perry to re-offend or engage in another kind of behaviour, but the perception of this is of concern to him in his role, as is the perception that Mr Perry engaged in the conduct in the first place.

Mr Murray reiterated the importance of Ergon's good reputation to all stakeholders including customers. This enabled Ergon to move freely around the community in good times and in times of disasters such as cyclones, floods and major breakdowns, and for the community to have confidence that Ergon staff would behave appropriately in all such circumstances. This confidence also meant that customers would believe what the organisation told them and asked of them in an environment which might be necessary to prevent load-shedding. It was also important that when customers called Ergon to discuss confidential matters such as their credit history, power supply or when they are at home or not at home, that they have complete confidence that the organisation will treat that information with respect and employees will behave appropriately towards them.

In relation to any counselling that Mr Perry may have received, Mr Murray said that Ergon maintained strict confidentiality with respect to such matters, and the opinion of a counsellor in terms of its expression to the organisation, would be on a confidential basis conveyed to the human resources manager who is responsible for managing the case. Mr Murray also said in response to a question from the QIRC, that there was a general policy within Ergon that media enquiries should be directed to appropriate management representatives, and this was communicated to staff as part of their induction to the organisation. However, there are some matters of emotion and conscience and deep feeling that caused people to go to the media from time to time to express a view.

5.3 Evidence of Mr Yeatman

Mr Yeatman has held the position of Aboriginal and Torres Strait Islander Employment and Support Officer from 29 October 2007. Mr Yeatman is of Aboriginal descent and grew up at Yarrabah, a discreet Aboriginal community 32 kilometres south-east of Cairns. Mr Yeatman is currently employed to seek sustainable employment opportunities for indigenous Australians. His formal qualifications include a Bachelor of Applied Science in Indigenous Community Management and Development and Mr Yeatman intends to advance his qualifications through obtaining a Masters Degree in Sociology. Mr Yeatman has extensive experience in indigenous development having worked for a variety of organisations providing services to indigenous persons. Mr Yeatman outlined in his statement of evidence (Exhibit 6) the considerable effort Ergon has put in over the past few years to enhancing relationships and formulating innovative strategies that support indigenous people obtaining employment with the organisation and help them to develop a career path free from harassment, vilification and discrimination. Mr Yeatman also outlined programs Ergon has implemented in order to attract indigenous people to the organisation.

As part of these measures, Ergon has signed a memorandum of understanding with the Department of Education, Employment and Workplace Relations making Ergon a Corporate Leader in Indigenous Employment. In order to achieve this status, Ergon must show that it meets certain criteria and has a demonstrated ability to cater to indigenous employment. Currently only 67 organisations throughout Australia have satisfied these criteria. The benefits to Ergon of its status as a Corporate Leader in Indigenous Employment is that it demonstrates to Government bodies and to corporate Australia a commitment to indigenous employment making it easier to obtain assistance to establish support 18 mechanisms and to obtain assistance in this regard. An increase in Ergon's ability to employ indigenous Australians has many benefits, including that it assists Ergon Energy's Cultural Heritage Team to negotiate and liaise with traditional land owners when Ergon seeks to undertake construction based capital and minor works projects on culturally sensitive sites.

Initiatives recently undertaken by Ergon aimed at increasing the number of Aboriginal employees include sponsorships of indigenous organisations; training in cultural awareness throughout the organisation and establishment of an indigenous employment program. In relation to the potential for damage to be caused to Ergon from the continued employment of Mr Perry, Mr Yeatman made the following points:

 Mr Perry's involvement in the shootings on Australia Day 2006 is highly offensive and totally unacceptable to Mr Yeatman as an Aboriginal person, and other members of the Aboriginal community would have similar views;  news travels quickly throughout the indigenous community by word of mouth, and while it may not be well known among the indigenous community that Mr Perry is an employee of Ergon, if Mr Perry was identified as such that fact would become very well known among the Aboriginal community in Rockhampton and become a source of concern to them;  the indigenous community is very protective of its children and the fact that the events on Australia Day 2006 involved shooting at or near children would be of particular concern;  any distinction between the various levels of involvement of the individuals who engaged in the shootings would likely be lost on the Aboriginal community and all those involved would be perceived as being the perpetrators. This would be reinforced by the fact that all those involved were convicted of criminal offences;  in the eyes of the indigenous community, Ergon is identified with the State Government, and as a result, Mr Perry's ongoing employment will be perceived by the community as ongoing employment by the Government, heightening feelings of distrust the community may have as a consequence of continuing employment; and  because of Ergon's standing as a major employer in regional Queensland including Rockhampton, Ergon's actions will be heavily monitored and scrutinised by the indigenous and wider community, particularly given Ergon's sponsorship of the North Queensland Cowboys and the Brisbane Broncos.

Mr Yeatman said that if the indigenous community became aware that Ergon continued to employ Mr Perry, they would be very offended and could be hostile to Ergon, damaging the relationship and trust Ergon had built with the indigenous community. It would also reduce the number of indigenous people applying for employment with Ergon, result in the company being labelled as racist, and the possibility that hostility towards Ergon would be directed at its employees. Ergon had invested considerable time and effort to build relationships of trust with the indigenous community, and this has assisted the Queensland Government to also build such relationships. Individual members of the indigenous community are unlikely to delve into the minute detail of Mr Perry's involvement in the shootings, in particular whether or not Mr Perry was the main offender, or why Ergon is continuing his employment. The fact that Ergon may be compelled to continue Mr Perry's employment by law, and that Ergon has no control over the situation, is likely to be lost on members of the indigenous community.

According to Mr Yeatman, members of the indigenous community in Rockhampton will identify Mr Perry as a participant in a violent racist act towards indigenous people and children, and that regardless Ergon, and effectively the Queensland Government, continues to employ Mr Perry. Indigenous people will perceive that despite Ergon's statements about wanting to work with and support the indigenous community, Ergon supports racists and cannot be trusted. Mr Yeatmen also said that any hearing in relation to the cancellation of Mr Perry's training contact could not be heard in Rockhampton, as word of the hearing may reach the local indigenous community and they may arrive at the hearing and cause a scene.

Under cross-examination by Mr McColm for the Training Council, Mr Yeatman said he was not surprised that of 314 apprentices employed by Ergon in Queensland, only 9 had indicated they were of indigenous descent, and that of 80 apprentices in the Rockhampton area, none had indicated they were of indigenous descent. Mr Yeatman said that the reason he had been employed was not to increase numbers of indigenous employees but to ensure that fair and equal opportunities were provided for such employees. When asked about what authority he had to speak on behalf of the indigenous community of Rockhampton and its surrounding areas, Mr Yeatman said that his sister-in-law is from Cherbourg and that through this connection he was connected to the indigenous community in Rockhampton. Mr Yeatman also said that he had not sought authority form the elders of the indigenous community in Rockhampton to speak on their behalf in these proceedings. Mr Yeatman agreed that the indigenous community generally has a strong sense of justice, and if the community believed that someone had been subject to a fair trial with a fair outcome, then it would be prepared to move on. Mr Yeatman said that he was not fully aware that Mr Perry had been convicted by the Court in Rockhampton for his part in the offences and had received a nine month suspended sentence. In relation to his concern that it might become known among the indigenous community that Mr Perry is employed by Ergon, Mr Yeatman said that Mr Perry could be identified by a group of indigenous people who might see him in an Ergon uniform. A member of such a group could 19 recognise Mr Perry's face from a newspaper article or might have actually seen the incident on 26 January 2006. Mr Yeatman said it was very feasible that Mr Perry's face could be identified by indigenous people even though the newspaper photograph of Mr Perry showed him wearing civilian clothing and dark sunglasses, and because of long experience of dealing with vilification and racial hatred making it difficult for persons of indigenous descent to let those things go. Mr Yeatman maintained that the indigenous community would still take offence at Ergon continuing to employ Mr Perry, notwithstanding the fact that Mr Perry had been punished by the Court in Rockhampton, had been disciplined by Ergon and that Ergon had sought to cancel his training contract but had been rejected by the Training Council. Mr Yeatman maintained that the indigenous community would believe that Mr Perry should also lose his job and if he did not they would believe that it was a Government joke.

Under cross-examination by Ms Inglis, Mr Yeatman said that he had been to Rockhampton on two occasions since he started work with Ergon. In early November 2007 Mr Yeatman had conducted a team meeting or a "meet and greet" with human resource people. In December 2007, Mr Yeatman had conducted meetings with approximately eight indigenous members of staff at two depots. The staff Mr Yeatman met in depots had been aware of the incident in January 2006 and had mentioned it to Mr Yeatman. As Mr Yeatman was new to the organisation he had not wanted to get bogged down in the incident. The staff who mentioned the incident to Mr Yeatman were aware that a member of Ergon's staff had been involved in it, but had not made a complaint to Mr Yeatman about this. Mr Yeatman was asked why, if his evidence about news travelling fast in the indigenous community was correct, the information about Mr Perry being employed by Ergon had not gone through the Rockhampton community. Mr Yeatman said that it was his understanding that there was a Code of Conduct requiring professional ethics to be maintained at work. Mr Yeatman said he was not aware of Ergon providing cross-cultural awareness training to Mr Perry after the incident.

In re-examination, Mr Yeatman said that at least two or three of the indigenous employees he had met with at Ergon depots in December 2006 had raised the shooting incident with him, and had been aware that a co-worker had been involved in the incident.

6. Submissions

6.1 The Submissions for Ergon

In its written submission (Exhibit A) Ergon contended that Mr Perry engaged in serious misconduct as defined by s. 64 of the Act and as such, it is unreasonable that Ergon should be required to continue his training. The plain and apparent meaning of s. 64(10) of the Act is that only limbs (d)(i), (ii) and (iii) are required to take place at work, while limbs (a), (b) and (c) are not. The definition of "serious misconduct" in s. 64(10) is clear and unambiguous and neither requires nor leaves any room for inference of Parliament's intent, other than from the words themselves. In any event, even if s. 64(10)(b) was, contrary to Ergon's position, to be read subject to the qualification that the assault occurred in connection with work, the nature of the uncontested and convicted conduct of Mr Perry meets that requirement. According to Ergon's submission that conduct was:

 an assault of a particularly abhorrent nature;  involved a pre-meditated and planned course by Mr Perry;  in conjunction with a group of co-offenders, but with Mr Perry being a ringleader and the second worst offender;  motivated by revenge for alleged acts by indigenous people against not Mr Perry, but people known to him;  racist in both motivation and selection of victims - in the words of sentencing Judge Searles;  against victims unrelated to the alleged act being revenged other than by presumed race;  with the knowledge of the significant harm the weapon he supplied would inflict; and  either without regard to or with confidence of avoiding the apparent legal and public consequences.

Ergon submitted that this conduct satisfied any necessary connection to work as it impacted on the trust and confidence between Ergon and Mr Perry and created a significant risk of substantial and widespread media coverage of Ergon being an assault of such a nature that it was readily apparent at the time that it would attract publicity which could reflect on Ergon. The conduct of Mr Perry created a significant risk of damage to Ergon's reputation with external parties and internal stakeholders and to Ergon's investment in remaining an employer of choice. Further, Mr Perry's conduct created a significant risk of damaging Ergon's profile and relationships within the indigenous community which Ergon has invested considerable time and resources into building and improving. Mr Perry's conduct had also created a significant risk of damage to the environment within Ergon of being welcoming of indigenous employees and its ability to attract and retain indigenous employees.

Mr Perry's conduct was inconsistent with the standards of behaviour Ergon expects of its employees which Ergon has invested considerable time and resources into clearly articulating and publicising. It was also submitted that Mr Perry's conduct showed he had character traits and a proclivity for violence and poor judgement, directly relevant to his daily interaction with others, both at work and not at work. Mr Perry's conduct also called into question his suitability to be employed in a position of trust and confidence where he was required to regularly work out in the community away 20 from home, and when out of hours away from home, with minimal or no supervision. Mr Perry's conduct showed he is racist; will resort to violence and take violent revenge where neither the alleged act being revenged was against him personally and the chosen victims of the revenge have no connection to the act being revenged other than being of the same race as the alleged perpetrators.

Ergon does not accept that none of the risks of Mr Perry's conduct have been realised merely because a formal complaint has not and may never be made. The very nature of damage to reputation, profile and perception is that it is intangible and difficult to measure, and may not manifest itself in material form for some time if at all, and may never be capable of being conclusively attributed to the appropriate cause. Establishing whether risk of damage has materialised as actual damage to Ergon is unnecessary for the conclusion that Mr Perry's conduct was connected to work. At the time the conduct was committed, the risks and impact on Ergon were foreseeable consequences and accordingly the conduct was relevant to Mr Perry's work and employment. The risks and impact were foreseeable generally, and particularly foreseeable to Mr Perry who was aware of Ergon's policies and procedures, especially Ergon's Out of Hours Conduct Policy. It is not in dispute that Mr Perry committed assault and so has committed serious misconduct.

In the circumstances it is unreasonable for Ergon to continue training Mr Perry. There is uncontested evidence before the QIRC that Ergon has lost trust and confidence in Mr Perry to work in remote areas with minimal supervision which will be the case out of hours when Mr Perry works away from home and to report to and deal honestly with Ergon, particularly in matters of serious importance or where there may be consequences for Mr Perry's employment. There is also uncontested evidence that if Mr Perry's apprenticeship continues he will be required to work with a large number of work groups and employees, including indigenous employees, in remote areas with minimal supervision, and in people's homes or otherwise with members of the public. Further, Mr Perry will be required to undergo training away from Ergon's workplace for extended periods with large numbers of people from diverse backgrounds, who could include indigenous trainees. Not all of these will be employed by the appellant. It is unreasonable in all of these circumstances for Ergon and its managers to be expected to manage, supervise and control Mr Perry's behaviour, given his known history of racism, violence and willingness to take revenge. In addition, Ergon neither has authority nor reasonably could be expected to exercise it if it did, to control the actions of the training provider or trainees not employed by Ergon.

It was submitted by Ergon that there was uncontested evidence before the QIRC in relation to the following matters if Mr Perry's apprenticeship was continued:

 the considerable time and resources devoted by Ergon to maintaining and raising its profile in the general community and the unacceptable risk to Ergon's reputation;  risk to Ergon's reputation among its internal stakeholders;  risk of widespread and substantial negative media coverage;  risk to Ergon's investment in being an employer of choice;  damage to Ergon's profile and relationships within the indigenous community; and  damage to Ergon's ability to attract and retain indigenous employees.

The fulfilment of any of these risks would have a direct and significant impact on the ability of Ergon to discharge its functions and responsibilities to the Queensland Government, its customers, the community and its employees and attract and retain desired employees in a tight labour market, particularly indigenous employees. There is also uncontested evidence before the QIRC that Ergon as a matter of business strategy requires a very high standard of behaviour from its employees and that it has invested considerable time and resources into clearly articulating and publishing a certain values system to its employees and stakeholders. It is unreasonable to require Ergon to continue to employ a person who has acted in such gross contravention of the standards that Ergon requires its employees to maintain.

It was further submitted that it is not relevant that the character traits of Mr Perry outlined in the submission for Ergon exist in out of work conduct, as these traits would, as a matter of course, affect all aspects of Mr Perry's actions including his work and work relationships. It is not relevant that Mr Perry has not engaged in any further racist or violent conduct since 26 January 2006, as he has been on bail, the subject of criminal proceedings and potential disciplinary action by Ergon or under an Intensive Correction Order. Those conditions moderating Mr Perry's behaviour would cease well before the conclusion of the training contract.

It was pointed out that the Act contemplates the cancellation of a training contract to prevent the risk of damage (s. 70(b)(v)) and the concept of risk is based on supposition as the word itself refers to an event that has not happened. The only way that evidence may be led on the existence of risk, is for appropriately qualified experts to provide an opinion on its existence and an assessment of that risk. Ergon had provided evidence from appropriately qualified experts, and this had not been contested through the provision of an alternative expert opinion by the respondents to the appeal. The suggestion that Ergon could protect itself by responding to publicity over the continuation of Mr Perry's apprenticeship by blaming the Training Council or the QIRC is ill-conceived, as it would be unreasonable for Ergon to 21 have to take this action, and there is uncontested expert evidence that it would be of marginal benefit, and in the case of the indigenous community a distinction unlikely to be appreciated or given any value.

The submission by the Training Council that Mr Perry had been employed for 22 months without any damage being suffered by Ergon should also be rejected as it materially misrepresented the chronology of the matter. Although Mr Perry committed the offences on 26 January 2006, neither Ergon nor its employees or the public truly understood Mr Perry's involvement in the matter until he pleaded guilty and was ultimately sentenced on 26 October 2007. Mr Perry was suspended by Ergon 21 days later on 16 November 2007 and during those 21 days spent only nine days as an active member of Ergon's workforce. After this time, Mr Perry commenced TAFE training until his suspension on 16 November 2007. This submission also ignored the likelihood that Ergon suffered reputation damage both internally and externally regardless of whether an official complaint was lodged and the uncontested evidence of Mr Yeatman that Mr Perry's behaviour was of concern to its indigenous employees who raised the issue as one of concern, even after Mr Perry had been suspended for a month. Given the evidence of Mr Yeatman that there were approximately eight indigenous employees interviewed, and that between two and six of those employees raised Mr Perry's conduct without being prompted, and given the total number of indigenous employees in Rockhampton, it is possible that one of these employees was an indigenous person employed as a trainer who may be rostered to provide training to Mr Perry.

The submission also ignores Ergon's uncontested expert evidence that there is a high probability that it will receive negative media coverage because of the incident and that it is lucky not to have received such coverage already. Further, it was submitted that the evidence does not support a finding that the media coverage to date is a reliable indication that Ergon will not be involved in media coverage in the future. It was also submitted that Ergon's business is not limited to "selling" electricity to its customers. It must also maintain a supply of electricity which requires an efficient workforce and trust from its customers, such that Ergon's staff are able to work in people's homes and in emergency situations with support and without hindrance, and that Ergon's customers co-operate with its requests during emergency situations.

It was also submitted that Mr Perry had engaged in misconduct as defined in s. 70 of the Act and that this allows the QIRC to cancel his training contract. Mr Perry had committed misconduct under both limbs in s. 70 of the Act by failing to carry out a reasonable and lawful instruction consistent with his obligations under the training contract (s.70(a)(i)), and by causing serious damage and risk of such damage to Ergon's business or business reputation (s. 70(b) (v)). On commencing employment with Ergon, Mr Perry was required to comply with its policy about Out of Hours Conduct which reflected Ergon's reasonable and lawful instructions to Mr Perry in relation to such conduct. The policy extends to behaviour which may bring Ergon into disrepute or damage its interests or damage Ergon's relationship with Mr Perry or other employees. The focus and purpose of the policy is to prohibit conduct outside work, and it is illogical for the policy to be interpreted so as to limit Ergon so that it was unable to take action until conduct had materialised into damage. On 26 January 2006 Mr Perry breached that policy by engaging in conduct that brought Ergon into disrepute.

The nature of reputation damage is such that Ergon may never have evidence of actual damage but Ergon reasonably believes that such damage has been suffered. In particular this damage is apparent from the evidence of Mr Cass that comments have been made regarding the incident, people involved in the incident and Ergon's continued employment of Mr Perry and from the evidence of Mr Yeatman of concerns raised by indigenous employees. Mr Perry had breached the Out of Hours Conduct Policy by engaging in conduct that had, and still has, the real and identifiable potential to damage Ergon's reputation and interests, as outlined in the uncontested and expert evidence which Ergon had placed before the QIRC.

It was also submitted that Mr Perry had breached his duty of good faith to Ergon by engaging in conduct which was so abhorrent and so likely to gain media attention, that it was reasonably foreseeable that it would give rise to significant risk of harm to Ergon's interests. Engaging in such conduct itself was a breach of Mr Perry's good faith to Ergon regardless of whether the consequent harm ever eventuated. At the interview of 14 February 2006, Mr Perry misrepresented the situation to Ergon by knowingly allowing his parents to make misrepresentations on his behalf without correction. As Mr Perry was under the age of 18 at the time, his parents were acting on his behalf as his guardians, and he is accordingly responsible for any misrepresentations made by them. The first and final warning letter dated 17 March 2006 and signed by Mr Perry and his guardian, after being given an opportunity to consider its contents, expressly confirmed their agreement with the contents of that letter. The letter said that Mr Perry's parents had stated that he was not a ringleader and had strong arguments to put before the Court in the criminal proceedings.

The spirit of that letter was that if Mr Perry was ultimately found guilty or his representations turned out to be false, then his training contract would be terminated. According to Ergon's submissions, in making this agreement, Mr Perry induced Ergon to waive its right to unilaterally terminate Mr Perry's contract during his probation period. By opposing Ergon's application for cancellation, and being an active party in the matter, Mr Perry has failed to observe the spirit and the letter of this agreement. This is a material break in Mr Perry's duty of good faith to Ergon. 22

In oral submissions, Mr Murdoch for Ergon pointed to Mr Perry's letter to Ergon received on 9 November 2007, responding to Ergon's letter of 7 November 2007 contending that Mr Perry had breached policy and procedures, where Mr Perry stated:

"I realise that I have breached Ergon Energy's policies and procedures and at the time this occurred I was only in the third week of my apprenticeship.".

It was contended that this statement was in fact an admission and should be treated by the QIRC as such, so that the QIRC would approach the present case on the basis that this point was not in issue. Further, Mr Perry should not be allowed to recant from that admission and any attempt on the part of his representative to do so in the current proceedings should be seen as inconsistent with the earlier statement.

In relation to the nature of the appeal it was submitted that the QIRC should hear the matter afresh, giving consideration to the material which was before the Training Council at first instance, and the evidence called by Ergon in the present proceedings. If an error was needed in order for the QIRC to overturn the decision of the Training Council then error was apparent in a number of areas. In particular, the decision maker had proceeded on the erroneous basis that serious misconduct required an element of connection to work. It was also contended that the decision maker had not been rigorous in assessing the evidence, on the basis that the decision set out all the statements in Mr Perry's letter received by Ergon on 9 November 2007, other than Mr Perry's admission that he had breached Ergon's policies and procedures. It was also submitted that the suggestion by the Training Council and the ETU for Mr Perry, that the QIRC should regard Ergon's case adversely because matters had been put to the QIRC which had not been put to the Training Council at first instance, should be rejected. It was the role of the QIRC in the appeal to decide the matter on the basis of the record currently before the QIRC, and consideration of when material was placed on the record are entirely irrelevant. The QIRC was also urged to give weight to the evidence of the witnesses for Ergon on the basis that their honesty had not been called into question during cross-examination, and no evidence had been led in rebuttal.

In relation to the substance of the appeal, it was contended that the submissions of the Training Council and the ETU attempted to square away Mr Perry's conduct and to focus attention away from its racist nature. Mr Perry had shown that he was capable of planning with others racist attacks utilising firearms and motor vehicles and a group of persons to perpetrate them. The shutters could not be pulled down on this conduct on the basis that Mr Perry was not wearing an Ergon uniform at the time and that the incident occurred outside of working hours. Mr Perry brings himself to work, with his strengths and weaknesses, his attitudes, prejudices, biases and proclivities. It is artificial for it to be put to the QIRC that because the event occurred out of hours that there is no connection to the workplace. It was submitted that cases dealing with unfair dismissal legislation were of no assistance in the current proceedings. If principles could be extracted from those cases, the facts in Mr Perry's case were such that Mr Perry himself is the connection with the workplace. By his conduct, Mr Perry went from being an employee whose presence in the workplace is unlikely to attract unwarranted attention to an employee whose presence post conviction is likely to attract considerable adverse attention. Further, Mr Perry's conduct is incompatible with his duty as an employee.

It was also submitted that until Mr Perry was sentenced on 26 October 2007, Ergon did not know what involvement Mr Perry had in the incident. Until that point, it could not be said that Ergon was giving sanctuary to a convicted racist. From that date everything changed, and Mr Perry was tagged for what he is and for what he had done. The submission of the ETU to the effect that Mr Yeatman had not considered the fact that a number of indigenous employees had raised the issue of Mr Perry's conduct as being of any significance should also be rejected as this proposition had not been put to Mr Yeatman in cross-examination. In relation to the reference provided to Mr Perry by Mr Anstey of Ergon, Mr Murdoch said that Mr Cass had not known that the reference was to be provided on Ergon letterhead when he approved the wording, and the fact that a supervisor provided a reference as a private individual does not prejudice the rights of the organisation.

In relation to the reference to s. 83 of the Industrial Relations Act 1999 in the Explanatory Notes for the Training and Employment Bill 2000, in relation to s. 64, Mr Murdoch pointed out that s. 83 of the Industrial Relations Act 1999 deals with cases where an employee can be dismissed without being provided with notice or payment in lieu. Thus the cross- reference to s. 83 of the Industrial Relations Act 1999 is not relevant to the question of whether or not it is fair or unfair for an employer to dismiss an employee in certain circumstances. It was submitted that it is completely misplaced to use that cross-reference as a means of importing into s. 64 of the Vocational Education, Training and Employment Act 2000, an at work element. It was also submitted that in relation to the concept of "risk" in s. 70 (b)(v) of the Act, there are two limbs - serious damage or risk of serious damage - and one is not entitled to blur together actual damage and risk of damage. It is fallacious to argue that there is no risk because evidence of damage cannot be produced.

6.2 Submissions for the Training and Employment Recognition Council

In its written submissions (Exhibit B) the Training Council said that it does not support the actions of Mr Perry and his friends on 26 January 2006, and agrees with the comments of Judge Searles that those actions were "premeditated", "racially motivated", "cowardly" and "revolting". However, the Training Council contends that this case is not about the action that should be taken against Mr Perry for his conduct on 26 January 2006, but rather is about whether 23

Mr Perry should have his training contract cancelled and lose his job with Ergon. For that to happen, Ergon must be able to show that there is a significant detriment to it in keeping him employed. The basis of the Training Council's decision to refuse Ergon's application for the cancellation of Mr Perry's training contract is that there is a considerable body of case law to support the proposition that it is only in exceptional circumstances that the employer has the right to extend any supervision over the private activities of employees and for it to do so the employee's conduct must be such that viewed objectively, it is:

 likely to cause serious damage to the relationship between the employer and the employee;  likely to damage the employer's interests; or  is incompatible with the employee's duty as an employee.

In its application to the Training Council for the cancellation of Mr Perry's training contract, Ergon alleges that Mr Perry's conduct is in breach of Ergon's Out of Hours Conduct Policy because the media attention to the incidents brought Ergon into disrepute and damaged its interests and continues to employ Mr Perry in circumstances where he will have contact with Aboriginal employees and customers in light of his racially motivated acts and convictions and also carries significant risk of potential further damage to Ergon's reputation. After considering Ergon's submissions and other material it was considered by the Training Council that Ergon had not provided any evidence or reasons of the future likelihood of the media publishing a report that negatively reflects on Ergon for continuing to employ Mr Perry or that Aboriginal staff or customers would be offended at having contact with Mr Perry in circumstances where he has been punished by the courts and there has been no complaints about Mr Perry in the 22 months since he was charged and the charges published in the media.

It was submitted that Ergon had misapplied the provisions of the Act relating to serious misconduct by maintaining that any employee who commits serious misconduct has broken their employment contract with the employer. According to the Training Council's submission, it does not automatically follow that if an employee commits serious misconduct that they have fundamentally broken their employment contract. This position is supported by case law. In this regard, the Training Council referred to the Explanatory Notes for the Training and Employment Bill 2000, in relation to s. 64 which state:

"This clause is intended to address the same concept contained in section 83 of the Industrial Relations Act 1999, which provides for the immediate termination of employment by an employer for gross misconduct of an employee.".

It was submitted for the Training Council that as the stated intention of s. 64 relates to termination of employment of apprentices and trainees, the case law in relation to limitations on the employer's right to extend control over the private activities of employees, is relevant. In this regard, reference was made to principles established in a number of cases. In Applicant and Respondent (Print R1221) 1 February 1999 a Full Bench of the Australian Industrial Relations Commission (McBean SDP, Duncan DP and Deegan C) held that it is only in exceptional circumstances that an employer has the right to extend any supervision over the private activities of employees and that the company's policies did not extend to the conduct of a dismissed employee who engaged in sexual activity with another employee during a stop-over in an overseas country, in accommodation arranged and paid for by the employer. In Johnson v Department of Justice and Attorney-General (2005) 180 QGIG 934-942, Commissioner Blades held that the employer's Code of Conduct did not apply to all situations away from the workplace in question, and that conduct outside work was not serious enough for the employer to interfere. In reaching this decision, Commissioner Blades said that he was not satisfied that the conduct reflected seriously and adversely on the employer and that in light of the employee's contrition, dismissal was disproportionate to the totality of the conduct. In that case Commissioner Blades also referred to the case of Smith v The Christ Church Press Limited (2001) 1 NZLR 407 where the Court said that there must be a clear relationship between the conduct and the employment, and that it is not so much where the conduct occurs, but rather its impact or potential impact on the employer's business. This might be:

"...because the employer's business may be damaged in some way; because the conduct is incompatible with the proper discharge of the employee's duties; because it impacts upon the employer's obligations to other employees; or for any other reason it undermines the trust and confidence necessary between employer and employee.".

The Training Council also referred to the decision of Vice President Ross of the Australian Industrial Relations Commission in Rose v Telstra (Print Q9292) 4 December 1998, where after extensively considering case law in relation to out of hours conduct, his Honour held that in certain circumstances an employee's employment may be validly terminated for such conduct, but those circumstances are limited. To justify termination for out of hours conduct:

 the conduct must be such that viewed objectively, it is likely to cause serious damage to the relationship between the employer and the employee; or  the conduct damages the employer's interests; or  the conduct is incompatible with the employee's duty as an employee. 24

His Honour also held that 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. Further, his Honour referred to the case of McManus v Scott- Charlton (1996) 140 ALR 625 at 636 where Justice Finn held that it was lawful for an employer to give an employee a direction to prevent the repetition of privately engaged in sexual harassment of a co-worker where the harassment was a consequence of the employment relationship and had and continued to have substantial and adverse effects on workplace relations because of the proximity of the harasser and the harassed person in the workplace.

Applying this case law, the Training Council held at first instance that Mr Perry was not guilty of serious misconduct because when viewed objectively his conduct was not such as is:

 likely to cause serious damage to the employment relationship between the employer and the employee; or  likely to damage the employer's interests; or  incompatible with Mr Perry's duty as an employee.

This approach was said to be consistent with Ergon's Out of Hours Conduct Policy. The Training Council submitted that if the QIRC was to find against it on this issue, then the training contract should not be cancelled in any event, because Ergon had not established that it would be unreasonable to require it to continue training Mr Perry, because:

 the offence to which Mr Perry pleaded guilty occurred outside of working hours and there was no clear connection between Mr Perry's conduct and his employment with Ergon;  Mr Perry's conduct has not caused and is unlikely to cause serious damage to the employer's interests; and  the out of hours conduct is not incompatible with the fulfilment of Mr Perry's duty to Ergon.

The Training Council also submitted that Mr Perry had not engaged in misconduct as defined in s. 70(a)(i)(B) or s. 70(b)(v) of the Act, because Mr Perry has not failed to carry out a reasonable and lawful instruction given by Ergon that is consistent with his obligations under the training contract and his conduct has not caused serious damage or risk of serious damage to Ergon's business or business reputation. In particular, Ergon's Out of Hours Conduct Policy requires Ergon to demonstrate that Mr Perry's conduct either:

 brought Ergon into disrepute;  damaged Ergon's interests;  is incompatible with Mr Perry's duty of good faith to Ergon; or  damaged the relationship between Ergon and Mr Perry or other employees.

It was also submitted that damage to the relationship between Ergon and Mr Perry must refer to the employment relationship and not an interpersonal relationship. The Training Council at first instance was justified in finding that there was no evidence of risk of damage or actual damage to Ergon's business or business reputation, and any negative impact was speculative.

In relation to the additional evidence placed before the QIRC by Ergon, the Training Council made the following submissions. There was no reference to Ergon in any of the newspaper articles, only to Mr Perry. Mr Perry's photograph was published in the Rockhampton Morning Bulletin on 17 and 26 October 2007. The same photograph appeared on both occasions, and in that photograph Mr Perry is dressed in civilian clothing and wearing wraparound sunglasses. It is therefore unlikely that any person would now be able to positively identify Mr Perry if he appeared in their home wearing Ergon work clothing. It was also submitted by the Training Council that there was nothing in the evidence of the three witnesses for Ergon that would convince the QIRC that, viewed objectively, if Ergon was to continue to employ Mr Perry that any of the required elements of damage would be caused.

In oral submissions for the Training Council Mr McColm said that the Training Council's view about any admission by Mr Perry that he had breached Ergon's policies had to be viewed in light of the fact that Mr Perry was a 17 year old man under pressure at the time, who wrote a letter to Ergon agreeing that he had breached its policies. When those policies were considered, the Training Council's view was that in order for a breach of the policy to have occurred, the conduct must have a significant negative effect on Ergon. The position taken by the Training Council was that Ergon had not established any significant detriment suffered by it as a result of Mr Perry's conduct, or that there was a significant risk of further damage in the future. In relation to the statements made to Ergon by Mr Perry's parents, it was submitted that there was no evidence that Mr Perry's parents were representing Mr Perry at the meeting where the statements were made. Mr Perry had been invited to attend the meeting with his support person or representative, and there was nothing to indicate that his parents were there in a representative capacity. Rather they had been present as support persons.

Mr McColm also referred to the computer printout from the Training Council's files (Document 2) which indicated that on 19 April 2006 Ergon had requested an extension of Mr Perry's probationary period and an extension had been approved until 5 July 2006. No further extension had been sought by Ergon. It was also submitted that Mr Perry's exposure to Ergon's policies had been limited to induction training on the day he commenced employment. In the time following the incident, Mr Perry had worked without incident and had, according to Mr Anstey's reference, a good 25 rapport with colleagues. Given Mr Perry's stated remorse for his behaviour, there is no reason to believe that he would not continue to work in accordance with Ergon's policies and procedures. Given that Mr Perry had been severely dealt with by the court as a result of his conduct, it is likely that there will be no further problems with Mr Perry.

In relation to Mr Yeatman's evidence, Mr McColm submitted that the QIRC should have regard to the fact that Mr Yeatman is not from Rockhampton, and had not spoken to the elders or leaders of the Rockhampton indigenous community to ascertain their views about whether or not they accepted that Mr Perry had been punished. Further, there was no mention in Mr Yeatman's evidence of complaints being made about Mr Perry continuing to work for Ergon. The evidence was simply that some indigenous employees had mentioned the incident to Mr Yeatman. Further, there was no evidence from Mr Cass about any concerns in this regard being raised with him. Mr Murray's evidence about the likely risk to Ergon if Mr Perry continued in employment was that in the current state of play, it was unlikely that Mr Perry would be recognised by persons who may have seen his photograph in the local newspaper in connection with the offences, so that any link could be made between Mr Perry and Ergon. Mr Murray's evidence had also been that the link between Mr Perry and Ergon could be made if there was a similar incident in the future, or if a dissatisfied employee made a complaint about the continuation of Mr Perry's employment.

In response to the submission that Ergon had been induced to waive its rights to terminate Mr Perry's employment because of misrepresentations by his parents, Mr McColm said that the letter signed by Mr Perry and his parents simply stated that if evidence came out to substantiate Mr Perry's involvement in the incident then Ergon reserved its right to rely upon it as grounds for cancellation of his training contract. While Ergon was within its rights to make such an application, Mr McColm submitted that it was a long bow to take from this, an agreement on the part of Mr Perry to the cancellation of his training contract.

6.3 Submissions of the ETU

The ETU for Mr Perry in its written submissions (Exhibit C) said that the proceedings before the QIRC are not the appropriate forum to judge Mr Perry's conduct on 26 January 2006. That conduct could be labelled abhorrent, racist, offensive or any number of similar adjectives. However, Mr Perry's conduct had been judged in another place and in another jurisdiction. Mr Perry has been convicted and continues to pay the penalty for his behaviour in accordance with the decision of the trial judge handed down on 26 October 2007. The role of the QIRC is to determine whether there is sufficient cause in the behaviour of Mr Perry to warrant the interference of the QIRC in the refusal of the Training Council to cancel Mr Perry's training contract in accordance with the relevant provisions of the Act.

In relation to Ergon's contention that it had lost trust in Mr Perry, it was submitted that the basis of this was statements made by Mr Perry's parents at a meeting with Ergon in February 2006. According to the ETU, Mr Perry acted on legal advice not to provide information and his parents gave an account of the incident, not Mr Perry, as he was under 18 at the time of the meeting. It was submitted that Ergon did not rely on this ground of alleged breach of trust or dishonesty in its suspension notice, or in its application to cancel Mr Perry's training contract. Ergon should not be able to now rely on that ground after the event to support an appeal to the QIRC.

In relation to the question of whether it is unreasonable to require Ergon to continue to train Mr Perry, the ETU submitted that guidance could be found in cases decided by the QIRC and the Australian Industrial Relations Commission on the extent to which after hours conduct can be drawn within the sphere of the employer's interest. In this regard, reference was made to the decision of Vice President Ross in Rose v Telstra (supra) and it was submitted that the conduct must be of such gravity or importance as to indicate a rejection or repudiation of the employment contract by the employee. Absent such consideration, the employer has no right to control or regulate an employee's out of hours conduct. It was submitted that in finding that Mr Rose's conduct lacked the requisite connection to his employment, Vice President Ross took into account that:

 the events took place outside of working hours;  neither of the men involved was wearing a Telstra uniform;  neither of the men was on call;  nothing in the local newspaper had identified the employee charged in relation to the incident as a Telstra employee;  there was no evidence to show that the owner of the hotel where the incident took place held Telstra responsible for the conduct of its employees on that occasion; and  there was no evidence to suggest that any public perception of Telstra was damaged or that it was in any way discredited.

In relation to the case of McManus v Scott-Charlton (1991) 9 VIR 310 at 314, Vice President Ross noted that it is important to recognise that the lawfulness of the direction given by the employer was dependent on the fact that the employee's out of hours conduct had a demonstrated, substantial and adverse effect on the employer's business. Similarly, an assault by an off-duty railway employee against another railway employee while the latter was on duty, was an offence which vitally affected the management and conduct of the employer's business. The relevant connection to the employment may depend on the position held by the employee: 26

 a drink driving charge to a taxi driver or fraud to a bank employee: (Hussein v Westpac Banking Corporation (1995) 59 IR 103); or  the conduct of a police officer found loitering on the grounds of a girls school wearing only his underpants was found to affect his status as a police officer in the discharge of his duties and in his relations with the public: (Henry v Ryan (1963) Tas SR 90).

It was submitted that Mr Perry's actions on 26 January 2006 did not have the relevant connection to his employment necessary to satisfy this test. His actions were unrelated to his work as an apprentice with Ergon. There was no involvement of co-workers, and the conduct did not take place in working time. Mr Perry's conduct did not occur as a consequence of the relationship between him and any co-workers. As an apprentice electrician, Mr Perry was not a public face of Ergon and was not in a position which would, of itself, establish a relevant connection between his position as an employee and the behaviour.

In the present case there had not been a breakdown in the employment relationship. Mr Perry has continued to work for Ergon for a further two years after the incident in question and the evidence is that there has been no threat to workplace harmony. Whilst the ETU does not condone Mr Perry's conduct, the issue to be determined is not the morality of his actions, but whether it is unreasonable in the circumstances for Ergon to continue to train Mr Perry. It was submitted that there is no evidence before the QIRC as to why it would be unreasonable to have Mr Perry continue in the workplace. There is no evidence that Mr Perry, apart from this one incident, was anything other than a good employee. This is apparent from the reference provided by Mr Anstey, Ergon's Substations Operations Supervisor in Rockhampton. Since January 2006, Mr Perry has continued to work for Ergon for almost two years without any incident, including three months in customer service, when Mr Perry worked in the homes of Ergon's customers. Mr Cass was not aware of any complaints from indigenous clients about Mr Perry being in their home doing work and was not aware of any indigenous employee who had been required to work with Mr Perry during that period. Mr Yeatman said that several indigenous employees had mentioned that the January 2006 incident involved an Ergon employee but did not complain to him about the fact. If any issue was to arise in relation to Mr Perry's employment, either from a fellow employee or a client, it would have done so at the time of the incident.

When asked about the basis of his belief that that there may be complaints of this nature in the future, Mr Cass qualified his personal opinion saying it would depend on Mr Perry's actions in the future. There was no evidence that Mr Perry is likely to engage in inappropriate behaviour in the future, and to the contrary, evidence shows that Mr Perry took advantage of counselling that was offered to him around race issues. It was also submitted that in terms of public relations, there is no evidence of any damage to Ergon's business or its reputation. The conduct engaged in by Mr Perry took place on a public holiday; Mr Perry was not wearing clothing bearing an Ergon logo; he was not driving or travelling in an Ergon vehicle; and while his name and photograph appeared in the media, at no stage was it reported that he was employed by Ergon.

Mr Murray's evidence was about possible scenarios and was couched in terms of if the media was to get involved in the story again, and Mr Murray speculated about the likelihood of this happening. There was no evidence of any actual contact by reporters. The evidence also established that media interest in the story concentrated around two points: immediately following the incident and the point at which Mr Perry and others involved were sentenced. The ETU also submitted that if Ergon's Out of Hours Conduct Policy was a reasonable and lawful policy for the purposes of s. 70(a)(i) (B) of the Act, then Mr Perry's conduct on 26 January 2006 did not breach the policy. The policy is couched in terms of damage rather than risk, and there is no evidence of actual damage in Mr Perry's case. It is also clear from the terms of the policy that the nature of the conduct embraced by it is of a type directly related to the workplace and to Ergon. This is apparent from the fact that examples of conduct set out in the policy refer to violence towards other Ergon employees that occurs outside the workplace, and the factors to be taken into account by Ergon in determining the nature of disciplinary action for breach of the policy include factors that are connected to the employment relationship. In Mr Perry's case, there is no connection between his conduct on 26 January 2006, and the employment relationship.

The ETU submitted that for the same reasons, Mr Perry had not engaged in misconduct pursuant to s. 70(a)(i) of the Act. In relation to Mr Yeatman's evidence it was submitted that when indigenous employees spoke to him about the involvement of an Ergon employee in the incident of 26 January 2006, Mr Yeatman had said he did not want to get bogged down in that issue. According to the ETU, this made it clear that in the overall scheme of attracting and retaining Aboriginal employees, there were more important barriers to deal with than an event which occurred two years earlier. It was further submitted that as the person charged with seeking sustainable employment opportunities for indigenous persons within Ergon, it is reasonable to assume that Mr Yeatman would have taken the matter further if he considered that it was a matter of deep concern for either current or potential employees. Mr Yeatman's evidence was also that he had not had any complaints about the matter and it had not spread throughout the community because Ergon employees are bound by a code of conduct and professional ethics at work. It was submitted that on this basis, the risk of Ergon being linked with the matter by way of an Ergon employee of Aboriginal or Torres Strait Island descent who had taken offence, would seem to be very low. 27

It was also submitted that Ergon is effectively a monopoly, and a customer who is upset with Ergon cannot decide that they want another company to supply power, unless the customer is a large and significant one, so that it is commercially viable for another contestable retailer. This would exclude domestic customers and small to medium business customers from leaving Ergon.

In oral submissions, Ms Inglis for the ETU pointed to the fact that at the time the offence was committed, Mr Perry was a 17 year old person who had been employed by Ergon for only a few weeks. He had received instruction about Ergon's Out of Hours Conduct Policy on the day he commenced employment and was probably bombarded with information as one tends to be on the first day of a new job. Some weeks later, as he engaged in grossly inappropriate behaviour, the last thing on Mr Perry's mind would have been whether the behaviour would attract publicity and reflect adversely on his employer. It was also submitted by Ms Inglis that there was nothing to suggest that Mr Perry's behaviour on 26 January 2006 was a permanent part of his character. Documentation in the record provided by the Training Council indicated that Mr Perry was sorry for his actions and had apologised to Ergon. Mr Perry had also assured Ergon that he would be a good employee in future. Mr Perry's remorse was also noted in the sentencing report of Judge Searles, along with the comment that Mr Perry's conduct on 26 January 2006 was out of character. It was also likely that the incident and everything that flowed from it had been a major wake-up call for Mr Perry and that his conduct on 26 January 2006 would not be repeated.

7. Relevant Provisions of the Act

The provisions of the Act relevant to the issues in dispute in the appeal are as follows:

"64 Suspension and cancellation for serious misconduct

(1) This section applies if - (a) an apprentice or trainee who is a party to a training contract engages in serious misconduct; and (b) because of the misconduct, the employer of the apprentice or trainee decides it is unreasonable to continue to train the apprentice or trainee at that time.

(2) The employer may immediately suspend the training contract by - (a) telling the apprentice or trainee the contract is suspended; or (b) giving the apprentice or trainee a suspension notice.

(3) If the employer suspends the contract under subsection (2)(a), the employer must, within 1 working day after the suspension, give the apprentice or trainee a suspension notice.

(4) If the employer suspends the contract, the employer must - (a) within 1 working day after the suspension, notify the council of the suspension; and (b) within 5 working days after the suspension, give the council a copy of the suspension notice.

(5) If the suspension notice states that the employer proposes to apply for cancellation of the contract - (a) the employer is taken to have applied for the cancellation by giving the council a copy of the suspension notice; and (b) the apprentice or trainee is taken to be stood down from employment without pay until the council decides the application.

(6) If the suspension notice does not state that the employer proposes to apply for cancellation of the contract, the apprentice or trainee is taken to be stood down from employment without pay for - (a) if the suspension notice states a period for which the apprentice or trainee is suspended of not longer than 1 working day - the stated period; or (b) otherwise - 1 working day.

(7) The council must promptly - (a) by fair procedures prescribed under a regulation- (i) for an application for cancellation of a contract - decide the application; or (ii) for a suspension notice that does not state that the employer proposes to apply for cancellation of the contract - confirm or refuse to confirm the suspension; and (b) give the employer and the apprentice or trainee an information notice for its decision.

(8) The council may cancel the contract only if - (a) it is satisfied the employer gave the apprentice or trainee a suspension notice as required under subsection(2)(b) or (3); and (b) the council reasonably believes - (i) the apprentice or trainee engaged in the serious misconduct; and (ii) it is unreasonable in the circumstances for the employer to continue the training. 28

(9) However, subsection (10) applies if - (a) having told the apprentice or trainee of the suspension under subsection (2)(a), the employer fails to give the apprentice or trainee a suspension notice as required under subsection (3); or (b) the employer fails to notify the council of the suspension as required under subsection (4)(a); or (c) the employer fails to give the council a copy of the suspension notice as required under subsection (4)(b); or (d) for a suspension notice that states that the employer proposes to apply for cancellation of the contract-the council, or the commission on appeal, refuses to cancel the contract; or (e) for a suspension notice that does not state that the employer proposes to apply for cancellation of the contract-the council, or the commission on appeal, refuses to confirm the suspension.

(10) The suspension is taken not to have happened and the employer must immediately - (a) resume training the apprentice or trainee; and (b) reimburse the apprentice or trainee for wages lost during the period the apprentice or trainee was stood down from employment without pay.

Maximum penalty - 50 penalty units.

(11) In this section - dangerous event see the Workplace Health and Safety Act 1995, schedule 3.10 serious bodily injury see the Workplace Health and Safety Act 1995, schedule 3.11 serious misconduct means any of the following- (a) theft; (b) assault; (c) fraud; (d) at work - (i) being under the influence of liquor or a drug; or (ii) causing an imminent risk of serious bodily injury or work caused illness or a dangerous event happening; or (iii) behaving in a way that is inconsistent with the continuation of a registered training contract. suspension notice means a notice - (a) stating, or (if the apprentice or trainee was told of the suspension under subsection (2)(a)) confirming, that the apprentice or trainee is suspended; and (b) stating the grounds for the suspension; and (c) stating whether the employer proposes to apply for cancellation of the contract. work caused illness see Workplace Health and Safety Act 1995, schedule 3.12.".

"70 Definition for div 5 In this division - misconduct, for a party to a registered training contract, means - (a) if the party is an employer or an apprentice or trainee - (i) the party fails to carry out a reasonable and lawful instruction that is consistent with the party's obligations under the contract given by - (A) if the party is the employer - the council; or (B) if the party is an apprentice or trainee - the council, the apprentice's or trainee's employer, the employer's agent or employee or the supervising registered training organisation for the apprentice or trainee; or (ii) the party does not - (A) keep a training record prescribed under a regulation to be kept by the party; or (B) when requested by another party to the contract, produce the record for the party's inspection; or (iii) the party has been convicted of an offence against this Act; or (b) if the party is an apprentice or trainee - (i) the party is absent from the party's employer's service without the employer's consent, unless the absence is authorised under this Act or the Industrial Relations Act 1999; or (ii) the party is absent from training required under the party's training plan to be provided by the party's supervising registered training organisation without the organisation's consent; or (iii) the party does not participate in training provided under the party's training plan; or (iv) the party fails, because of the party's deliberate neglect or default, to make reasonable progress in training provided under the party's training plan; or (v) the party causes serious damage, or risk of serious damage, to the party's employer's business or business reputation. 29

71 Discipline

(1) This section applies if the council reasonably believes a party to a registered training contract - (a) has contravened this Act or the contract; or (b) has engaged in misconduct. (2) The council may make any of the following orders - (a) an order reprimanding the party; (b) an order directing the party - (i) to pay the chief executive an amount of not more than 4 penalty units; or (ii) to comply with the contract; (c) if the party contravening the contract or engaging in the misconduct is the apprentice or trainee - an order suspending the contract for a period no longer than 30 days; (d) if an order has not been made under paragraph (b)(ii) or (c) - an order cancelling the contract. (3) The council - (a) may make an order under subsection (2) only by fair procedures prescribed under a regulation; and (b) must give the parties an information notice of its decision on the order. (4) If the contract is suspended, the apprentice or trainee who is a party to the contract is taken to be stood down from employment without pay for the suspension period. (5) If the contract is cancelled, section 78 applies and, subject to that section, the employment of the apprentice or trainee is taken to be terminated. (6) If an order under subsection (2)(b)(i) directs a party to pay an amount to the chief executive, the order may direct that - (a) the party pay the amount directly or by instalments over a stated period; or (b) if the party is an apprentice or trainee - despite the Industrial Relations Act 1999, section 391,13 the apprentice's or trainee's employer deduct the amount directly or by instalments over a stated period from the apprentice's or trainee's wages and pay it. (7) A person must not contravene an order made under subsection (2)(b), (c) or (d).

Maximum penalty for subsection (7) - 50 penalty units.".

8. Issues for Determination

The issues for determination in this case are as follows. Pursuant to s. 64 of the Act:

 Has Mr Perry engaged in serious misconduct as defined in s. 64(11) of the Act?  If Mr Perry has engaged in serious misconduct, is it unreasonable for Ergon to be required to continue to train Mr Perry?

If Mr Perry has not engaged in serious misconduct as defined in s. 64(11) of the Act, then:

 Has Mr Perry engaged in misconduct as defined in s. 70(a)(i)(B) of the Act or s. 70(b)(v) of the Act?  If Mr Perry has engaged in misconduct, should his training contract be cancelled pursuant to s. 71(2)(d) of the Act?

This matter is before the QIRC pursuant to an appeal by Ergon under s. 230 of the Act, against a decision of the Training Council, which decided that Mr Perry had not engaged in serious misconduct and that it was not unreasonable for Ergon to be required to continue to train Mr Perry, and that Mr Perry had not engaged in misconduct such that his training contract should be cancelled. For the reasons set out above, the QIRC is required in the appeal to decide these issues afresh, having regard to the record which was before the Training Council at first instance, and the additional evidence brought in the appeal. There is no requirement for an error to be found before the powers under s. 233 are exercised.

9. Conclusions

I accept the submission of Ergon, that there is nothing in s. 64(11) of the Act which requires that theft, assault or fraud must occur at work, in order to constitute serious misconduct. However, I do not accept that the fact that Mr Perry pleaded guilty to and was convicted of serious assault, automatically constitutes serious misconduct for the purposes of that section. I am also of the view that conduct outside of working hours, such as assault must have a connection with employment or impact the employment relationship in some way, in order to come within the definition of serious misconduct in s. 64(11) of the Act.

The employment relationship underpins the existence of a training contract. I can see no basis for finding that an employment relationship may be terminated for serious misconduct which does not touch on that relationship or impact it in any way. Section 64 is triggered where an apprentice or trainee engages in serious misconduct, and because of the misconduct, the employer decides it is unreasonable to continue to train the apprentice or trainee at that time. The 30 section allows the employer in such circumstances, to suspend the training contract, and therefore suspend the apprentice or trainee from employment without pay, and apply for the cancellation of the training contract. By virtue of s. 78 of the Act, the effect of cancellation of a training contract is termination of the apprentice or trainee's employment.

The Explanatory Notes for the Training and Employment Bill 2000 make it clear that s. 64 enables an employer to immediately suspend an apprentice for conduct which, if the Industrial Relations Act 1999 applied, would disentitle an employee to notice on termination of employment, or payment in lieu. Accordingly, case law dealing with the question of the circumstances in which such conduct will justify dismissal, is relevant to a consideration of whether an apprentice or trainee has engaged in serious misconduct for the purpose of s. 64 of the Act such that the employer can seek the cancellation of the apprentice or trainee's training contract through suspension without pay, and an application to the Training Council.

Where the employer takes such a step, the Training Council is required to decide the application for cancellation. In order to decide to cancel the training contract, the Training Council must reasonably believe that the apprentice or trainee has engaged in serious misconduct, and that it is unreasonable in the circumstances for the employer to continue the training. The Training Council could not find that it was unreasonable for the employer to continue training without first finding that the apprentice or trainee had engaged in serious misconduct. The Training Council may also find that it is not unreasonable in certain circumstances for an employer to continue training an apprentice or trainee, even where that apprentice or trainee has engaged in serious misconduct. The requirements are inter-related in that misconduct may be found to be serious, because the nature of the misconduct makes it unreasonable for the employer to continue the training. However, such cases will involve circumstances where the conduct touches on or impacts the employment relationship. It could not be unreasonable for an employer to continue training an apprentice or trainee, and by extension to continue an employment relationship, when conduct had no impact or did not touch upon the employment relationship.

The authorities in relation to when an employee may be validly terminated because of conduct outside work, are extensively dealt with in the decision of his Honour Vice President Ross in Rose v Telstra (supra) and summarised as follows:

 the conduct must be such that viewed objectively, it is likely to cause serious damage to the relationship between the employer and the employee; or  the conduct damages the employer's interest; or  the conduct is incompatible with the employee's duty as an employee.

His Honour also stated that 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.

Mr Perry engaged in criminal acts which were racist and abhorrent. Mr Perry was convicted on his own plea, and punished for his role in those acts by the imposition of a nine month sentence of imprisonment to be served by an Intensive Correction Order. Notwithstanding that Mr Perry's sentence was imposed by way of an Intensive Correction Order, the sentencing Judge acknowledged the severity of the sentence saying that he found it difficult to impose the sentence on Mr Perry and the other offenders but that he had been duty bound to do. It is not the role of Ergon as his employer, the Training Council or the QIRC to punish Mr Perry again for the same criminal act. For that conduct to attract the additional sanction of cancellation of Mr Perry's training contract and termination of employment, the criminal act must impact or touch in some way upon the contract of employment or the employment relationship between Mr Perry and Ergon so that it is damaged or it can objectively be said that Mr Perry has rejected or repudiated or rejected its terms. The impact of the conduct must be relevant to the employment relationship. It is not enough that the employer simply disapproves of the conduct. As Lawrence DP said in HEF of Australia v Western Hospital ((1991) 4 VIR 310 at 324:

"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 or she 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.".

This passage was cited with approval by Vice President Ross in Rose v Telstra (supra) and by Judicial Registrar Staindl in Ismet Hussein v Westpac Banking Corporation (1995) IRCA 147 (30 March 1995). In the latter case, an employee of Westpac Banking Corporation pleaded guilty to a number of charges including a charge of obtaining property by deception, relating to fraudulent use of an ANZ bank card. The Judicial Registrar expressed the view that an appropriate test is whether the conduct has a relevant connection to employment - for example a drink driving conviction occurring outside working hours would not be relevant to the employment of most people, but would be of 31 critical relevance to a truck or taxi driver. Judicial Registrar Staindl also cited the authors E I Sykes and H J Glasbeek, who summarised the position in Labour Law in Australia, Butterworths, Sydney 1972 at page 71, as follows:

"In relation to criminal or quasi-criminal offences, it appears that commission of one of these at the place of work is enough. Where, however the criminal offence is in respect of an act which is committed away from the place of work and not in the hours of duty, it appears that the crucial test is whether the criminal conduct touches the course of duties of the workman or his abilities in relation to such duties.".

The two questions posed by Judicial Registrar Staindl in that case were whether Mr Hussein did the things alleged against him, and whether the action had any relevant connection to the performance of his duties as an employee. The Judicial Registrar concluded that Mr Hussein was in a position of responsibility and trust, where he handled money and transactions for the bank's customers and assisted them in this regard. Because of Mr Hussein's conduct the bank could no longer rely on his honesty or trust him to perform his duties. This established a relevant connection between Mr Hussein's criminal convictions and his employment so that the bank was able to rely on them as constituting a valid reason for the termination of his employment. There is also authority for the proposition that distress or discomfort on the part of other employees about the after hours conduct of a co-worker may justify termination of employment: Carly Streeter v Telstra (Print PR980356) Per Acton SDP and Cartwright SDP.

I can see no basis for holding that s. 64 of the Act should be interpreted so that criminal conduct outside of working hours automatically constitutes grounds for cancellation of a training contract on grounds of serious misconduct. In order to constitute serious misconduct for the purposes of cancellation of a training contract and the resulting termination of the employment relationship which underpins such a contract, the conduct must touch on or impact on the employment relationship in some way, which on an objective basis, is relevant to the duties of the employee or the ability of the employee to perform those duties. There is nothing in Ergon's Policy in relation to Out of Hours Conduct to indicate that it should be interpreted in any way contrary to these established principles.

In respect of each of the grounds advanced by Ergon as justification for the cancellation of Mr Perry's training contract, I have reached the following conclusions. I am unable to be reasonably satisfied that viewed objectively, Mr Perry's conduct has or is likely to cause damage to his employment relationship with Ergon such that the cancellation of his training contract and the termination of his employment is justified. The fact that Mr Perry engaged in a criminal act and was convicted of a number of offences in connection with that act, is not of itself sufficient to lead to the cancellation of his training contract and the termination of his employment. There was no connection between the actual assault said by Ergon to constitute serious misconduct on the part of Mr Perry, and his employment. The events occurred outside of working hours. Mr Perry did not assault any employee of Ergon. There is no evidence that any of the persons assaulted were customers of Ergon. Mr Perry was not driving an Ergon vehicle or wearing work clothing.

I do not accept Ergon's arguments that there is a significant risk of widespread and substantial media coverage if Mr Perry remains in its employment, and that this risk satisfies any necessary connection to work. To date there has been no mention of Ergon in the media in connection with Mr Perry or the events of 26 January 2006. Ergon was not named as Mr Perry's employer in any of the media coverage associated with the incident. The only mention of Ergon was made in the sentencing remarks of his Honour Judge Searles, because Mr Perry's supervisor gave Mr Perry a reference. This was not picked up by the media and appears only on the transcript of his Honour's sentencing remarks. Mr Murray's evidence in relation to future risks associated with media coverage was extensive and I have considered it carefully. In my view, when that evidence is analysed the risks of future media coverage involving Ergon centre on the likelihood of one of the following events occurring:

 one or more of Mr Perry's co-workers will become disgruntled or concerned at the fact he remains in employment and will inform the media of this; or  a customer of Ergon will recognise Mr Perry from past media coverage and inform the media of his continued employment.

The most likely scenario and the highest risk, according to Mr Murray's evidence, is that a co-worker will report Mr Perry's continued employment with Ergon to the media. While I accept that this is a risk, I am of the view that it is mitigated by a number of factors. Ergon has a Code of Conduct which precludes individual employees from making media comments in relation to matters affecting the company or from disseminating information about internal company matters throughout the Rockhampton community. Mr Yeatman was aware of this aspect of Ergon's Code of Conduct and said in his evidence that it might be the reason why employees who raised the issue of Mr Perry's employment with him in November and December 2006 had not spread this information through the Rockhampton community.

Given the response of Ergon to Mr Perry's alleged breach of its Code of Conduct, and the evidence in this appeal, I have no doubt that Ergon is well equipped to deal with any employee who breaches Ergon's Code of Conduct by reporting an internal matter to the media. It is also clear that Ergon has a highly experienced team of professionals, headed by Mr Murray, who would be more than capable of managing any media interest in Mr Perry's continued employment with Ergon, in the event that such interest arose. I am also of the view that it is highly unlikely that a customer of Ergon 32 would recognise Mr Perry from the newspaper photographs which appeared in the Rockhampton media. I am unable to accept the contention advanced through Mr Cass' evidence that some other incident of a similar nature to the incident of 26 January 2006 may take place in Rockhampton in the future, and reignite media interest in Mr Perry and as a result lead to adverse media comment about his continued employment by Ergon. This scenario is so unlikely and is hypothetical to the extent that it does not provide a relevant link between Mr Perry's conduct on 26 January 2006 and his employment, such that Mr Perry's training contract should be cancelled.

I do not accept that it was readily apparent to Mr Perry on 26 January 2006 that any impact on Ergon of his conduct was a reasonably foreseeable consequence. At that time Mr Perry was 17 years of age, and did not turn 18 until three months later. Mr Perry had commenced employment on 10 January 2006 and had been at work for a total of 13 days. He had undergone induction training on 10 and 11 January 2006, including information about Ergon's policy in relation to Out of Hours Conduct. In light of Mr Perry's age and his very brief exposure to Ergon's workplace culture, it is more probable than not, as Ms Inglis submitted, that damaging Ergon and its interests did not enter Mr Perry's mind on 26 January 2006.

I am also unable to accept that Mr Perry's conduct of 26 January 2006 is connected to his employment on the basis that it indicates that he will take violent revenge where neither the alleged act being revenged is against him personally and the chosen victims have no connection to the act other than being of the same race as the alleged perpetrators. In my view, Ergon's management has drawn conclusions about Mr Perry's future conduct on the basis of conclusions about the incident on 26 January 2006 which are misconceived and are not supported by the evidence. Ergon contended to the Training Council and in the QIRC that Mr Perry's conduct was an act of revenge for an altercation on New Year's Eve 2005, between his friends and a number of persons of Aboriginal descent. On the basis of this allegation, Ergon attempted to paint Mr Perry as a person who could very well engage in such conduct in the future while working away from home, causing risk to Ergon and danger to his co-workers. Ergon's view about Mr Perry's involvement in the incident was also coloured by its belief that he was driving one of the vehicles at all relevant times.

These conclusions are not supported by the evidence. Mr Perry was not driving one of the vehicles. He was a passenger, albeit in his own vehicle. Although this does not lessen the seriousness of Mr Perry's conduct, it is a matter referred to in a negative context, on a number of occasions in Ergon's statements about Mr Perry's involvement in the incident, and it is factually wrong. Further, and more importantly, there is no evidence that the conduct of Mr Perry and the other offenders on 26 January 2006, was motivated by revenge for an earlier altercation with indigenous persons. His Honour Judge Searles could find no explanation for the conduct and made remarks to that effect in sentencing Mr Perry, stating that his involvement was mysterious. His Honour also noted that Mr Perry had not intended to cause physical harm and was remorseful in relation to his conduct. Further his Honour noted that at some point towards the end of the incident Mr Perry expressed the view that Mr Nitz had taken the matter too far. There is no mention in his Honour's remarks of any aspect of revenge. In his letter to Ergon received on 9 November 2007, Mr Perry stated that he had never been involved in any conflict with another person, whether indigenous or not, and that the incident was out of character. Mr Perry also pointed to his participation in sporting and social activities with indigenous persons. In his interview with a representative of the Training Council on 29 November 2007, Mr Perry denied that there had been such an altercation.

There is insufficient evidence that Mr Perry's conduct on 26 January 2006 was motivated by revenge, and as a result, there is an insufficient basis for the conclusions that Ergon drew about the likelihood of future conduct on the part of Mr Perry. I do not accept that this concern on the part of Ergon is reasonable. I also do not accept that it provides the necessary connection to employment so that Mr Perry can be said to have engaged in serious misconduct such that his training contract should be cancelled. For the same reasons, I am unable to accept that concerns about Mr Perry's future conduct make it unreasonable for Ergon to continue to train Mr Perry.

Mr Perry is a third year apprentice. As such he is subject to supervision at all times. Mr Perry is not required to work alone and will not be required to do so for the remainder of his apprenticeship. This will be the case when Mr Perry is working for Ergon and when he is on rotation and working for an electrical contractor. There is evidence that Mr Perry acknowledges that his involvement in the incident on 26 January 2006 and his identification in the media would require him to carry out his duties in future above and beyond what is expected of him, and that he will be motivated to be reliable and trustworthy by his strong desire to maintain his apprenticeship with Ergon. I can see no basis for concluding that Mr Perry has a proclivity to engage in such conduct and will do so again.

Mr Perry has worked for Ergon without incident for 22 months since 26 January 2006. I do not accept Ergon's argument that Mr Perry's behaviour has been moderated during that time because he had been charged with a number of criminal offences; was on bail; has been subject to a final warning from Ergon and is currently under an Intensive Correction Order. It is just as likely that Mr Perry's conduct has been moderated during this time because of his stated desire to maintain his employment with Ergon, the importance to him of doing so, and because, as Ms Inglis submitted, he has had "a wake-up call". Having been suspended from his employment without pay since November 2007, and faced with the prospect of the cancellation of his training contract, will also undoubtedly have brought home to Mr Perry the repercussions of any further conduct of the type he engaged in on 26 January 2006. 33

It is also the case that Mr Perry was provided with a reference by one of his supervisors. That reference, dated 15 October 2007, gives testament to a number of positive aspects of Mr Perry's conduct and work performance. It also states that the writer is aware of Mr Perry's circumstances. Mr Cass approved that reference. Regardless of whether the version approved by Mr Cass was on Ergon letterhead or not, it was under the signature of Ergon's Substations Operations Supervisor and goes to Mr Perry's personal as well as professional behaviour.

I do not accept that Mr Perry's conduct has caused internal damage to Ergon. There is no evidence of any employee making a complaint about Mr Perry and his continued employment with Ergon in the time period between when the incident occurred and the date of the hearing of this appeal. Mr Cass' evidence establishes no more than that a number of people have made comments to him about Mr Perry's involvement in the incident. Mr Cass' evidence was of discussions that are typical in such circumstances about the identities of those involved and their families. Mr Yeatman did not include reference to any of the comments made to him by indigenous employees of Ergon in his evidence in chief. The fact that such comments had been made at all emerged only in cross-examination. Mr Yeatman was not aware of the detail of Mr Perry's involvement in the incident on 26 January 2006. There is no evidence that Mr Yeatman reported the comments made to him, to any other manager within Ergon or even construed the comments as complaints. Given Mr Yeatman's position in Ergon and the role he was employed to play, it is more probable than not that if he viewed the comments as being of any concern or significance, he would have taken them further.

There is no evidence of actual embarrassment or distress on the part of Mr Perry's co-workers at having to work with Mr Perry. There is no evidence that Ergon is experiencing any additional difficulty in a tight labour market with attracting employees, over and above what it would have experienced in any event. There is evidence that Ergon has a relatively low number of employees who have indicated that they are of Aboriginal or Torres Strait Island descent, however there is no evidence that this is in any way connected to Mr Perry's employment. There is also little evidence that Mr Perry's continued employment will impact negatively on Ergon's ability to attract and retain employees including those of Aboriginal and Torres Strait Island descent or that it will impact negatively on Ergon being viewed as an employer of choice.

There is no evidence that Mr Perry's conduct brought Ergon into disrepute or damaged its interests with respect to its customers or potential employees. I accept that Ergon has a very strong and substantial reputation in the community and that it has worked long and hard to achieve this. However, I do not accept that this reputation is likely to be impacted in any way by the fact that Ergon is continuing to employ a person who has committed a crime for which he has been punished, and is seeking to get on with his life and rehabilitate himself.

It is also relevant in any consideration of whether it is reasonable for Ergon to continue training Mr Perry, to balance the possibility of future concerns on the part of Mr Perry's co-workers about Mr Perry remaining in Ergon's employment, with the likely impact on Mr Perry if his training contract is cancelled and his employment terminated. It was noted by Judge Searles in his sentencing remarks that Mr Perry was in employment and had a favourable reference from his employer. According to the record of evidence before the Training Council, an officer of Queensland Corrective Services expressed the view that it was important that Mr Perry was working because he would be less likely to offend again. In the absence of evidence about negative impacts of continuing Mr Perry's training contract, and in light of the evidence of negative impacts if it is cancelled, it is not unreasonable that Ergon is required to continue to train Mr Perry.

I am also unable to accept that Mr Perry engaged in misrepresentation at the meeting with Ergon on 14 February 2006. Mr Perry made no representations at all, other than to state, as he was entitled to do, that he would not discuss his involvement in the incident on the basis of legal advice. There is no evidence that Mr Perry was represented by his parents or that they were making statements on his behalf. At the time of this meeting Mr Perry was 17 years of age, and to say the least, Mr Perry was in serious trouble. In these circumstances, sitting silently while his parents made comments is behaviour that is understandable. Quite simply, regardless of the contents of the letter, or Mr Cass' view that it operated almost as a deed, Mr Perry or his parents could not reach an agreement with Ergon to cancel his training contract. Any cancellation could only have been in the manner allowed under the Act. In any event, if Ergon intended the letter signed by Mr Perry and his parents to operate in this way, and to rely on that letter in the manner contended for in these proceedings, then it was not drafted accordingly. When the terms of that letter are considered, it is apparent that the letter simply acknowledges that Ergon would rely on Mr Perry's involvement in the incident as grounds to apply for the cancellation of his training contract, in the event that his involvement was substantiated. Ergon did not require the agreement of Mr Perry or his parents to seek cancellation of Mr Perry's training contract on this or any other ground.

I accept that Ergon did not act during Mr Perry's probationary period to terminate his employment. However, it is also apparent from the record of evidence before the Training Council that at least by 27 February 2006 a representative of Ergon was seeking information about extending Mr Perry's probationary period on the basis that he had been charged with a criminal offence. On 6 April 2006, Mr Harris from Ergon sought an extension of the probationary period of 180 days on the basis that Mr Perry had been charged with a criminal offence and may be jailed. If Mr Cass did not know of the possibility that Mr Perry would be jailed, at least one person in Ergon with authority to contact the Training Council on Ergon's behalf and seek an extension of Mr Perry's probationary period, did know of such a possibility. I am unable to accept that the statement in Mr Perry's letter to Ergon received on 9 February 2006, to the effect that he did breach Ergon's policies, is an admission by which Mr Perry should be bound, so that his training contract can be 34 cancelled for serious misconduct. The statement is made by a 17 year old, in a letter pleading with Ergon for his training contract to be continued and his employment maintained.

For the reasons set out above, I do not consider that Mr Perry's conduct has the requisite connection with his employment and his ability to work in accordance with his contract of employment, to constitute a breach of Ergon's Policy in relation to Out of Hours Conduct. I also do not consider that Mr Perry's conduct has brought Ergon into disrepute or damaged its reputation, or is incompatible with his duty of good faith to Ergon or has damaged the relationship between Mr Perry and Ergon or its other employees such that the Code of Conduct has been breached.

On balance, I am unable to be reasonably satisfied that Mr Perry has engaged in serious misconduct as defined in s. 64(11) of the Act, and that it is not reasonable for Ergon to continue to train him. I am also unable to be reasonably satisfied that Mr Perry has engaged in misconduct, as defined in s. 70 of the Act. There is nothing in s. 70 of the Act to indicate that it should be construed so that conduct outside of working hours can constitute misconduct when it has no relationship to and does not impact on the employment relationship. Mr Perry's conduct on 26 January 2006 did not breach Ergon's Policy in relation to Out of Hours Conduct so that it could be said that he failed to carry out a reasonable and proper direction that was consistent with his obligations under the contract. This is because although Mr Perry's conduct was criminal, it did not touch on or impact the employment relationship between Mr Perry and Ergon to the requisite level. While Mr Perry's conduct may have caused risk of damage, for the reasons outlined above, that risk is not in my view serious enough to constitute misconduct for the purposes of s. 70 so that Mr Perry's training contract could be cancelled under s. 71 of the Act.

Mr Perry has been severely punished under the criminal justice system for his role in what was abhorrent and racist conduct. It is not the role of Ergon, the Training Council or the QIRC to punish Mr Perry again for that crime. Mr Perry has been suspended without pay since 16 November 2007. For at least part of that period, Mr Perry has been injured and covered by certificates from a medical practitioner indicating that he is unable to work. It is doubtful that Mr Perry has accrued sufficient sick leave to cover the period of his incapacity and accordingly will not receive back payment for the entire period of his suspension, notwithstanding the outcome of this appeal.

As his Honour Judge Searles told Mr Perry, the true test of his character will be how he accepts his punishment and gets on with his life. Mr Perry's stated intention in all of his statements about his future with Ergon, indicate his desire to do this. In all of the circumstances, it is not unreasonable that Ergon continues to train Mr Perry.

The appeal is dismissed. I order accordingly.

I.C. ASBURY, Commissioner.

Hearing Details: Appearances: 2008 24 and 29 January Mr J.E. Murdoch, SC instructed by Deacons Lawyers on behalf 2009 4, 5 and 14 February of the appellant. Mr R. McColm on behalf of the Training and Employment Released: 11 April 2008 Recognition Council. Ms K. Inglis of The Electrical Trades Union of Employees, Queensland on behalf of Timothy John Perry.

Government Printer, Queensland The State of Queensland 2008.

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