Personal use of work mobile phones – what are the limits? Applicant v NBN Co Limited [2015] FWC 7412

Do you have a work provided phone? Do you use this phone for personal phone calls? If your answers are yes and yes, this blog post is a must read. In Applicant v NBN Co Limited [2015] FWC 7412 (NBN Co Case) an NBN Co employee was dismissed after the employee accumulated $22,630 worth of personal international calls made to numbers in India and failed to co-operate effectively in paying this money back. The employee’s unfair dismissal application failed. Most work places permit “reasonable personal use” of work provided phones and mobile phones - however, policies differ, and you should check the relevant policies at your workplace which will usually indicate whether you can use your phone for personal use and the limits of that personal use.

A.      The NBN Co Case - Facts

An NBN Co employee used his work provided phone to make personal calls to his family in India, incurring international call costs of $22,630 in the period May to September 2004. Over a period of nine months, NBN Co attempted to come to an agreement with the employee about the repayment of the money, holding a number of meetings with the employee and his representative over this time. On 25 June 2015 after the employee continued to refuse to come to an agreement, NBN Co terminated his employment.

B.      Was the employee’s termination an unfair dismissal?

Section 385 of the Fair Work Act 2009 lists the criteria that must be established for an unfair dismissal:

(a)  the person has been dismissed; and

(b)  the dismissal was harsh, unjust or unreasonable; and

(c)  the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d)  the dismissal was not a case of genuine redundancy.

In considering whether the dismissal was “harsh, unjust or unreasonable”, the FWC must take into account the criteria in s.387:

(a)  whether there was a valid reason for the dismissal related to the person's capacity or conduct (including its effect on the safety and welfare of other employees); and

(b)  whether the person was notified of that reason; and

                (c)  whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

                (d)  any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

                (e)  if the dismissal related to unsatisfactory performance by the person--whether the person had been warned about that unsatisfactory performance before the dismissal; and

                (f)  the degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

                (g)  the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

                (h)  any other matters that the FWC considers relevant.

 

NBN put forward two reasons which combined constituted a valid reason for dismissal:

1.       The employee’s excessive use of the phone in breach of policies; and

2.       The employee’s refusal to agree to a repayment plan.

Breach of policies

There were two relevant NBN Co policies:

1.       IT Equipment Policy

The IT Equipment Policy gave the employer the right to audit and review phone and data usage and if inappropriate use is identified the policy allows NBN to recover costs from the employee and commence disciplinary action including termination of employment. Accounts where the monthly call charge is greater than $75 are to be investigated under the policy. The employee was aware of this policy.

2.       Acceptable Use Guideline

The Guidelines permit reasonable personal use of mobile calling within Australia only.

The employee claimed he was not aware of the Acceptable Use Guideline at the relevant time, being the time he was making the personal international phone calls. While the employee was not provided with a copy of the Guideline at his induction:

·         there was nothing in the induction suggesting unlimited personal international calls was permitted; and

·         the IT Equipment Policy of which the employee was aware stated that use of work provided mobile phones will be monitored and if monthly call costs exceed $75, they will be investigated.

In these circumstances the employee should have taken steps to find out whether he could make personal international calls on the work provided phone and locate the relevant policy. The employee did not ask his manager about call costs or seek out the Guideline.

Deputy President Gooley also noted that NBN Co did not follow their own policies in monitoring phone usage. NBN Co did not review usage for all accounts where usage exceeded $75 as required by the IT Equipment Policy. The employee’s call usage was on average $8,000 - $12,000 per month, far beyond the $75 investigation threshold, yet it took months for the employer to review the account. Even when the issue was identified, the employee was not initially told the full extent of the money he owed. The employee was notified of about $7,500 worth of personal calls in September 2014, but it was not until later that a full investigation found $22,630 was owed and the employee was notified of this revised amount. Had the employee been aware of the matter sooner, he would have stopped making the personal international calls.

Refusal to agree to a repayment plan

Where a debt is owed to an employer and there is a legitimate basis for the debt to be disputed, the mere existence of the debt alone will not be a valid reason for dismissal. However, in this case, Deputy President Gooley held that there was no reasonable basis for the employee to dispute the debt, as the policies were incorporated into his employment contract and he had clearly breached the policies. It was unreasonable for him to refuse to enter into an agreement plan to repay the money, and this was a valid reason for dismissal.

The key to Deputy President Gooley’s decision was that NBN Co had managed the investigative procedure in accordance with procedural fairness, giving the employee several opportunities to come to an agreement for repayment.

NBN Co organised a number of meetings over a period of nine months to try and come to an agreement on a repayment plan. Over this time, the employee changed his stance several times, initially offering to repay the amount, repaying $7,500 and asking not to be required to repay the remainder, and finally retracting his offer to repay the amount. NBN Co sent a warning letter in February 2015 stating that the employee had breached NBN Co policies and that if the outstanding amount of $15,130 was not repaid, NBN Co would consider further disciplinary action including the likely termination of employment. On 11 June 2015, after a number of unsuccessful meetings between the employer and employee, NBN Co issued a show cause letter asking the employee to accept a proposed repayment plan of $200 per fortnight or for the employee to propose an alternative regular repayment, or NBN Co would consider further disciplinary action including termination of employment. A number of further meetings were held. On 25 June 2015 the employee and the employee’s representative attended a meeting where various proposals were discussed, by the employee would not move on his non-negotiable position that the final warning be revoked, and NBN Co terminated the employee’s employment. Section 387 directs attention to whether the applicant was given an opportunity to respond and was notified of reasons for dismissal. All of the steps NBN Co took in providing sufficient opportunities to come to an agreement were important in the refusal to come to a repayment plan being a valid reason for dismissal.

C.      Key points from the NBN Co Case

Employees

1.       You may have to take your own steps to access IT policies relevant to phone usage. Do not assume that you can use a work provided phone for personal use.

2.       One policy may direct your attention to another policy – make sure you seek out the second policy. In the NBN Co Case the employee was aware of the first policy which indicated there were restrictions on personal use of work provided mobile phones. The employee was aware of this first policy and should have sought out the second policy which described in more detail the boundaries of the personal use.

3.       If you are unsure about whether you can use your work phone for personal use or the extent to which you are permitted to use your phone for personal use, make sure you clarify your concerns with your manager prior to using your phone for personal use. In the NBN Co Case Deputy President Gooley stated “the Applicant should have made inquiries of his managers. Without express advice that a work provided phone can be used for both personal and local use and internal calls an employee cannot simply assume that such use is approved”.

Employers

1.       When providing mobile phones to employees, the employer should point out the relevant policies that apply and provide employees with access to these policies.

2.       It is important to ensure investigation and usage management practices in policies are complied with. In the NBN Co Case the IT Equipment Policy stated that phone usage will be investigated where call costs exceeded $75 per month. These investigations were not always conducted when the $75 trigger point was met.

3.       Successfully managing an employee who has potentially breached a policy by using their work provided phone for prohibited personal use may take months. An employee must be given an opportunity to respond to allegations and have a support person present at discussions relating to the dismissal. If there are reasonable alternatives to termination, these should be considered. 

4.       Ordinarily the fact an employee has a debt to the employer alone will not be sufficient to justify dismissal, especially where the employee has reasonable grounds to challenge the employee’s finding. Alternatives to dismissal may be available in these situations.

5.       Where an employee makes a formal grievance complaint about the investigative process, ensure the grievance complaint is considered and responded to prior to further action (such as termination of employment) is taken.