Kevin Cooper v Australian Taxation Office [2014] FWC 7551 (U2013/15300) DEPUTY PRESIDENT LAWRENCE

In this matter an ATO employee was sacked due to his being convicted of two counts of indecency on a person who was under 16 years of age outside of Australia. At the time of the hearing the Applicant was in jail.

The ATO terminated the Applicant’s employment because he breached the APS Code of Conduct.

“The APS employee must at all times behave in a way that upholds the APS values and the integrity and good reputation of the APS”…and “that the APS has the highest ethical standards”.

The ATO submits that the Applicant was not dismissed because the imprisonment resulted in the termination of the employment contract by reason of its frustration.

The Applicant protested his innocence and intention to appeal the convictions (although no appeal had been lodged at the time of hearing). He also relied on a number of arguments, including that the convictions had no link to the employment relationship, the conduct occurred outside Australia and was in an exclusively private context.

Frustration of Contract

The DP found against the ATO on this point (therefore making providing him with jurisdiction to hear the matter under the unfair dismissal provisions, because:

“In the circumstances of this case, it seems to me that the submission must fail because the contract was, in fact, still in operation at the time of dismissal on 11 October 2013. The Applicant was suspended from duty on 21 December 2012. On 23 January 2013 he was advised of an internal investigation and accessed his leave. The suspension was re-confirmed in March 2013, after sentencing. The Applicant then cooperated, especially thorough his solicitors, in the investigation carried out by Roy Davey for the ATO. The Applicant did what he was required to do by the ATO, consistent with the contract. I find therefore that the contract of employment of the Applicant was not frustrated and was still on foot and capable of being performed at the time of the dismissal.”

Put simply, the Applicant was not incarcerated at the time of the dismissal, and so technically could still work.

Valid Reason

However when it came to the merits of the application, the SP found (in citing other precedents):

“A failure to comply with a lawful and reasonable policy is a breach of the fundamental term of the contract of employment that obliges employees to comply with the lawful and reasonable directions of the employer. In this way, a substantial and wilful breach of a policy will often, if not usually, constitute a “valid reason” for dismissal.”

The SP also drew the distinction between private and public employment, stating:

“It seems to me that the general approach of the Commission…needs to be applied so that the test is appropriate to the circumstances of the employment relationship. Private, for profit employment will be different to the school situation…In this case, public sector employment is under consideration.”


“The Applicant’s convictions were for a serious offence which was clearly unethical. I find that the Applicant was in breach of the Code of Conduct.

“I accept also that public sector employment has a special value. This is particularly so with an agency like the ATO which must maintain the confidence of the general public in dealing with their taxation and financial affairs.”

As such,

“Given the nature of the employment and the convictions in this case, the action taken to dismiss by the ATO, is in my view…

  • Convictions for such unethical actions caused serious damage to the employer/employee relationship.
  • The employer’s interests and reputation, as summarised in the Code, were potentially damaged.
  • The conduct was incompatible with the employee’s duty as an employee especially as his position involved supervision of other employees.”



The SP concluded:

“Having found that the Applicant’s convictions put him in breach of the Code, I find that the ATO’s action in carrying out a formal investigation and ultimately dismissing the Applicant was a reasonable response to a difficult situation. I find that, in the circumstances of the case, there was a valid reason for the dismissal of the Applicant.”


There appears to be three main points to taken away by this decision:

  1. The Applicant was technically employable at the time of the dismissal, so the “frustration” argument failed.
  2. The policies and codes of conduct carry great weight -including the words “at all times” imposing into the private life of the employee.
  3. (Apparently) there is a distinction between the conduct of a private sector and public sector employee.

Greg Reiffel Industrial Relations & Human Resources Consulting has been providing the following services to businesses for over 30 years:


  • General HR and IR advisory service.
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