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Transferring two employees to different workplaces following an "extremely ugly" out-of-hours altercation was harsh, a commission has ruled, finding a demotion and $25k annual salary drop was more appropriate.

The NSW Police senior constables are both lockup keepers stationed at Boggabri police station, living in police-issued residences next door to each other, with their wives and children.

In October 2019, after drinking alcohol and watching the NRL grand final together at one of their houses, the employees' wives had an altercation, which led to the employees coming to physical blows. The fight continued over a "considerable period of time" and they both suffered injuries.

The employer investigated the incident, which involved paramedics and police attending the scene, and found the employees had breached its code of conduct...