Three Australia Post workers dismissed in 2010 for distributing porn over the corporation's IT system have won reinstatement and compensation, but with their back-pay discounted substantially for misconduct.

Fair Work Commission Vice President Michael Lawler said he was not satisfied that "anything has occurred" that rendered reinstating the three inappropriate — "on the contrary" (see Related Article).

All were suffering "a continuing financial disadvantage as a result of the termination", he said.

"I am not persuaded that the existence of a recruitment freeze and the present staffing situation at the Dandenong Letter centre (DLC) should prevent reinstatement of the employees.

"I am not persuaded that the additional emails discovered in relation to one of the [workers] after the decision to terminate changes the analysis in relation to that [worker]."

While Australia Post argued it had lost trust and confidence in the three, the vice president noted that the head of the Dandenong Letter Centre (DLC) gave evidence that he believed it was extremely unlikely any would ever again breach the company's IT porn policies. "I find accordingly," he said.

Vice President Lawler did not require Australia Post to restore the workers to the precise roles they performed when sacked, only to the classification they held at the time.

In rejecting the corporation's submission for lower classification levels, he said the employees were "out of pocket to the tune of many tens of thousands of dollars" and it was not appropriate to "impose a further disadvantage on them".

He also ordered Australia Post to maintain the workers' continuity of service, except for annual and long service leave purposes (although he recognised his order effectively restored any partial long service leave accrual not paid out at the time of termination).

When it came to compensation, however, the vice president said that, consistent with the decision of the full bench majority who remitted the matter to him to determine remedy (see below), it wasn't appropriate to order full back-pay.

"In particular, there must be a substantial discount for misconduct for each," he said, adding that a further discount was necessary to reflect other matters the majority raised.

The vice president discounted by 75% the $200,000-plus each worker would have received since December 2010 if not for their sacking, after subtracting any subsequent earnings and the payments they received on dismissal. This left them with $30,083, $12,096 and $25,442.

"I consider that a discount of 75% on the calculated loss is appropriate to reflect both the misconduct and the inappropriateness, in the peculiar circumstances of this case, of holding Australia Post liable for the whole of the very long period that the course of the unfair dismissal applications have taken thus far," he said.

"The quantification of an appropriate discount referable to each of those components is necessarily impressionistic and does not admit of precise quantification. It seems to me that the figures I have arrived at strike an appropriate balance given the findings and reasons of the majority of the Full Bench."

Australia Post argued that the closure of the employees' beneficial superannuation scheme was an obstacle to reinstatement, but Vice President Lawler said he was not satisfied that the resultant complexities were enough of a reason — "either alone or in combination with other factors" — for them not to get their jobs back.

Workers caught by new filter

Australia Post sacked the three Victorians in 2010 after a new software filter it installed detected that a large number of employees had been distributing pornographic material, including some supervisors and managers.

It disciplined 40, with the three at the centre of the case among those subsequently sacked.

Commissioner John Lewin in November 2011 found the dismissal of one of the three unfair. All appealed the decision, as did Australia Post.

In August this year, a full bench majority — Vice President Lawler and Commissioner Anna Cribb — rejected the "zero tolerance" approach the corporation had taken and found the dismissal of all three unfair. Senior Deputy President Jonathan Hamberger in a dissenting ruling upheld Commissioner Lewin's original finding.

Australia Post has challenged the ruling in the Federal Court, with Justice Michelle Gordon expected to hear the matter before Christmas.

The full bench majority's reasons included that most of the material was "softcore pornography and no more salacious than material that might be viewed on free to air television almost any night of the week", with only a small amount "hardcore".

The majority said the three workers all had substantial periods of satisfactory service — over 17, 13 and 11 years respectively - and Commissioner Lewin had failed to properly take into account the culture of tolerance that existed at the centre before the new software filter was installed, and that the material was sent to "willing recipients".

B, C and D v Australian Postal Corporation [2013] FWC 9293 (26 November 2013)