Note: Judicial review of this decision [HCA S5/2011] discontinued 4 August 2011.
Note: Judicial review of this decision 19 April 2011 [2011] FCAFC
54.
[2010] FWAFB 10089 |
FAIR WORK AUSTRALIA |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
VICE PRESIDENT LAWLER |
MELBOURNE, 24 DECEMBER 2010 |
Appeal against decision [2010] FWA 6750]] of Commissioner Macdonald at Sydney on 30 September 2010 in matter number U2010/6469.
DECISION OF VICE PRESIDENT LAWLER AND COMMISSIONER ROBERTS
[1] This is an application for permission to appeal and, if permission is granted, an appeal against a decision of Commissioner McDonald dismissing the appellant’s application for an unfair dismissal remedy. 1
The facts
[2] There is no challenge to the Commissioner’s findings of fact and it is convenient to set out the Commissioner’s summary of the facts:
“[12] The respondent is engaged in mining operations outside of Newcastle. The applicant was employed as a production employee and his duties mainly involved that of a shot firer - the firing of the shot to remove material in order to gain access to a coal seam.
[13] At the time of his termination, he had been working with water pumps. The mine is vast and requires de-watering where rain gathers in pools. The mine has about 20 pumps and a network of pipes which are used in the de-watering process.
[14] On 8 February 2010, the applicant commenced his shift at 7.00am. His role that day was to de-water the West Pit area. There was already a pump located within that body of water for the de-watering process. Repair work was required to be carried out on a pipe (poly pipe) connected to the pump. For the purpose of repair, two outside contractors were engaged.
[15] In order to carry out the pipe repair, a certain safety procedure is required by the contractors - water pump isolation by use of isolation locks.
[16] The water pump in question is about the size of a shipping container (see Ex 15) and was partly submerged in the water to be pumped out via the poly-piping connected to the water pump. The pump is diesel powered and the diesel engine is started by use of a battery. An isolator switch separates the battery from the rest of the pump. In order to carry out repair work, and for safety reasons, the isolator switch is switched from the “ON” position to “OFF”. The contractors then affix their own personal safety lock to a scissor clip which is affixed to the isolator in order to isolate the battery from the diesel engine. These safety locks prevent the pump from being switched on whilst any workers are carrying out work.
[17] Mr Jared Everett, supervisor of the blast and pump crews, deposed as to the relevant safety issue, that the pumps are capable of pumping water to a pressure of 750kPa being more than 100 pounds per square inch, and results in the pumping of about 180 litres per second. These pumps could potentially cause serious injuries or fatalities if the proper observance of safety procedures are not followed. The applicant disputed the foregoing pumping capacity and said the rate for the pump in question was 50 litres a second.
[18] After the safety locks (two) had been affixed by the two contractors, they began their repair work (welding) on the poly pipe. At the conclusion of that task, they left to attend another job (for about 10 minutes) within the coal mine area. The applicant was present throughout this time. After the contractors left the area (but without removing their locks), the applicant carried out work involving piping work and moving the pump further into the pooled water.
[19] The applicant left the scene and returned later, about one to two hours later. He relocated the water pump further again into the pooled water. (For present purposes, this water pump is designated as water pump number one.)
[20] The applicant drove from pump number one to the next pump (the inline pump) and turned it on. This inline pump is located on a higher level of ground to pump number one and it assists in powering the water along the pipeline (which is some 5 kms long) to the water outlet.
[21] The applicant drove back to pump number one via the length of the piping between the inline pump and pump number one. This distance travelled along the winding pipeline is about 500 metres, due to the contour of the ground. The actual distance, point to point, between the two water pumps is about 200 metres.
[22] The applicant, in driving along the length of the pipeline, was able to discern that no person was working on this length of pipeline. The evidence showed agreement that an observer, standing at either pump, could not see the entire length of this pipeline.
[23] The applicant arrived at water pump number one. He noted that the contractors had not returned but he knew that their job had been completed. He sought to turn on the pump but it did not start. He observed that the reason for the non-start was that the contractors’ safety isolation locks were still in place. The applicant removed those locks by prying open the scissor clips and turned on the pump. He assessed, he said, the situation and said there was no danger to any workers in removing the locks. The applicant left that area of work to look for, he said, the contractors.
[24] The contractors returned to the work area and saw that their personal safety locks had been removed and the pump turned on. They telephoned a Mr Barry Trudgett, job co-ordinator, who advised them to speak to the applicant (who had informed Mr Trudgett of the safety lock removals). They retrieved their locks from the applicant.”
[3] Section 387 of the Fair Work Act 2009 (FWA Act) specifies a series of matters which the Tribunal must consider in determining whether a dismissal was harsh, unjust or unreasonable. The Commissioner set out those matters and proceeded to consider each in turn. In relation to s.387(h), “any other matters that FWA considers relevant”, the Commissioner stated:
“[80] The factors to consider here are the applicant’s length of service (28 years); his unblemished employment in that long time; his hardworking attitude; he had worked in a safety critical job as shot firer for most of that 28 years; he had not breached a Golden Rule; his age (55 years); his financial and personal circumstances; prior to removing the contractors’ locks, he had traversed the length of the pipeline and could see that no one was working on the pipeline - just before he turned on pump number one; the applicant’s conduct in removing the locks was out of character; and he was remorseful.
[81] Having considered all of those matters, I am still of the view that the respondent had a valid reason for terminating the services of the applicant.”
[4] This was followed by the Commissioner’s conclusion:
“[82] In this case, I have considered two possible outcomes:
(a) the dismissal was unfair because of the remoteness of injury to any worker(s) owing to the applicants conduct in removing the contractors’ locks and
(b) the dismissal was not unfair because the applicant consciously breached a safety procedure in a working environment wherein assumptions about risk likelihood to another worker(s) is not acceptable.
Having considered all of the evidence, I have concluded that the dismissal was not unfair: that is, was not harsh, unjust or unreasonable.
[83] Accordingly, I decline to intervene in the decision of the respondent to dismiss the services of the applicant.”
Consideration
[5] This is an appeal against a discretionary decision. The principles governing appeals against discretionary decisions are those laid down by the High Court of Australia in House v The King 2 where it was held:
“The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.”
[6] Identification of error usually focuses on the matters referred to in this part of the passage. However, the passage continues (the second limb):
“It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.”
[7] The respondent rightly places the highest priority on safety. Central to the respondent’s safety procedures are what are referred to as the “Golden Rules”:
“1. Never work on equipment without first applying your personal isolation lock(s) as per the isolation procedures.
2. Never work above 1.8 metres without fall protection or fall prevention.
3. Never position yourself under a suspended load. In addition:
* For underground mines, never position yourself under an unsupported roof without falling object protection
* For open cut mines, never position yourself within 10 metres of the toe of highwalls, lowwalls or operating faces without falling object protection unless authorised to do so.
4. Never approach within 50 metres of operating heavy equipment in a light vehicle or on foot without making positive contact with the operator.
5. Never park heavy equipment in a manner that will allow an unplanned movement; ensure it is fundamentally stable.
6. Never work on electrical circuits above 32 volts AC or 110 volts DC before “testing for voltage”.
7. Never enter a Confined Space or Specified Restricted Area unless authorised to do so.”
[8] Mr Lawrence was dismissed for breaching Golden Rule 1. In fact, Mr Lawrence did not breach Golden Rule 1 as such but, rather, the isolation procedures to which Golden Rule 1 refers. Those isolation procedures appear in a policy that was in evidence before the Commissioner (Isolation Procedure).
[9] At the hearing before the Commissioner, the respondent relied not only on Mr Lawrence’s breach of its isolation policy in removing the contractors’ locks. It also relied on Mr Lawrence’s failure to report that breach: the policy require all breaches of safety procedures to be reported. While it is true that Mr Lawrence did not report himself, this cannot properly be seen as adding substantially to the seriousness of his misconduct. Human nature being what it is, it will be rare for an employee who has knowingly breached a safety procedure to voluntarily report that breach. This is not to dismiss the reporting obligation as unimportant. Rather, it suggests that a failure to report will accompany almost all intentional breaches so that this is not a proper basis for treating Mr Lawrence’s intentional breach as relatively worse than other intentional breaches.
[10] It is well established that a dismissal can be for a “valid reason” but may nevertheless be harsh, unjust or unreasonable.
[11] The leading statement of principle elucidating the meaning of the expression “harsh, unjust or unreasonable” is the statement in the judgment of McHugh and Gummow JJ in Byrne v Australian Airlines Ltd: 3
“It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”
[12] Section 387 of the FW Act provides:
“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA must take into account:
(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 FWA considers relevant.”
[13] The similarities between s.387 and equivalent provisions in successive iterations of the Workplace Relations Act 1996 mean that it ought be regarded as settled that s.387 requires a consideration of each of the matters specified in s.387. 4 A consideration of valid reason is required by s.387(a). The matters specified in s.387(b) - (h), including in particular “other matters that FWA considers relevant” as specified in s.387(h), while they may be relevant to a consideration of whether there was a valid reason for the dismissal, must be considered independently of any finding that there was a valid reason in determining whether the dismissal was “harsh, unjust or unreasonable”.
[14] The terms of paragraph [81] of the Commissioner’s decision indicate that he regarded the matters listed in paragraph [80], being the matters he considered pursuant to s.387(h), as relevant to whether or not there was a valid reason for the dismissal. It is not at all clear that the Commissioner in fact considered whether the matters specified in s.387(b) to (g) together with other relevant matters considered pursuant to s.387(h), rendered the termination harsh, unjust or unreasonable notwithstanding the existence of a valid reason. On one view, the last sentence of paragraph [82] may be seen as encompassing such a consideration. However, even giving the reasons a beneficial reading, the Commissioner erred in limiting his consideration to the two alternatives specified in (a) and (b) of paragraph [82]. Those were not the only two alternatives and, indeed, to the extent that the alternative in (a) represents an alternative favourable to Mr Lawrence it does not properly reflect the way in which Mr Lawrence’s case was put or the strengths of that case. In particular, the low risk presented by the breach of procedure was only one of a number of factors that were relevant to whether the termination was harsh.
[15] Moreover, the fact that the specification of those two outcomes was followed immediately by the last sentence of paragraph [82], strongly suggests that the ultimate determination of whether the termination was harsh, unjust or unreasonable was determined by the Commissioner confining himself to a choice between those two outcomes rather than by a consideration of whether the matters in s.387(b) to (g) together with other relevant matters considered pursuant to s.387(h), rendered the termination harsh, unjust or unreasonable notwithstanding the existence of a valid reason.
[16] The Isolation Procedure relates to “the isolation and management of hazardous energy sources on all plant and equipment within RTCA owned and managed operations” and provide for the system of locking described by the Commissioner. Clause 3.4.11 of the procedures states:
“3.4.11 Personal locks may never be removed other than by their owner, other than in the presence of and und eth supervision of the General Manager or his/her appointed nominee, and in accordance with a documented procedure.”
[17] It was this clause of the isolation procedure, and the clause requiring the reporting of any breach, that Mr Lawrence breached.
[18] In relation to breaches, the Isolation Procedure relevantly provides:
“3.4.15 All breaches of the Isolation System require an incident report and subsequent investigation. Breaches of the Isolation System may result in disciplinary action.”
(emphasis added)
[19] A powerpoint presentation on the Golden Rules, presented to employees (including Mr Lawrence) and relied upon by the employer, states:
“— Circumstances of any breach will be investigated.
(emphasis added)
[20] In other words the policy breached by Mr Lawrence contemplates that a breach will not necessarily result in disciplinary action, let alone dismissal. Moreover, even a breach of the Golden Rules does not automatically call for dismissal. It is not at all clear what it was about the circumstances of this case that distinguished it from other breaches of policy that would warrant a sanction less than dismissal.
[21] Objectively determined, this was a relevant consideration that should have been taken into account by the Commissioner pursuant to s.387(h). The Commissioner’s failure to do so involved error.
[22] Even if we are wrong in the identification of error we have just made, for reasons that will become apparent, we would regard the present appeal as one of those rare cases that fall within what we have called the second limb in House v R.
Permission to appeal
[23] Section 604(1) of the FW Act provides for appeals against decisions of single members of Fair Work Australia (FWA) but only with the permission of FWA. Section 604(2) provides:
“(2) Without limiting when FWA may grant permission, FWA must grant permission if FWA is satisfied that it is in the public interest to do so.
Note: Subsection (2) does not apply in relation to an application for an unfair dismissal (see section 400).”
[24] As indicated by the note, s.400 imposes an additional limitation on appeals against unfair dismissal decisions. Section 400(1) provides:
“(1) Despite subsection 604(2), FWA must not grant permission to appeal from a decision made by FWA under this Part unless FWA considers that it is in the public interest to do so.”
[25] The effect of s.604 and s.400 is that an appeal against an unfair dismissal decision can only proceed if FWA grants permission to appeal, such permission can only be granted if FWA considers that it is in the public interest to do so and once FWA has formed that opinion it must grant permission to appeal.
[26] In GlaxoSmithKline Australia Pty Ltd v Makin 5 a Full Bench of Fair Work Australia considered when it would be in the “public interest” to grant permission to appeal in accordance with s.400:
“[26] Appeals have lain on the ground that it is in the public interest that leave should be granted in the predecessors to the Act for decades. It has not been considered useful or appropriate to define the concept in other than the most general terms and we do not intend to do so. The expression ‘in the public interest’, when used in a statute, classically imports a discretionary value judgment to be made to be made by reference to undefined factual matters, confined only by the objects of the legislation in question. [Comalco v O’Connor (1995) 131 AR 657 at p.681 per Wilcox CJ & Keely J, citing O’Sullivan v Farrer (1989) 168 CLR 210]
[27] Although the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters, it seems to us that none of those elements is present in this case.”
(underline emphasis added)
[27] We respectfully endorse those observations. The preservation of public confidence in the administration of justice is a matter of deep public interest. That confidence tends to be undermined by decisions that are manifestly unjust. We agree that the public interest is engaged in a case where it is evident that a manifest injustice has been done such that where an appeal bench forms that view there is a public interest in a grant of permission to appeal.
[28] This is not to say that there will be a public interest in granting permission to appeal in any case to which s.400 applies where error is identified. To adopt that approach would effectively set the limitation in s.400 at nought and would frustrate the obvious intent of the legislature to limit appeals from unfair dismissal decisions. Moreover, it is not to say that there will be a public interest in granting permission to appeal merely because the appeal bench would have reached a different conclusion from the member at first instance. Again, such an approach would be at odds with the principles in House v R. Rather, we have in mind a case where the outcome is so at odds with what the Full Bench considers a proper outcome that the epithet “manifest injustice” can properly applied. Such a conclusion will only be reached in rare cases.
[29] In our view, this is such a case. For reasons which will become evident, we consider that the proper exercise of discretion at first instance in this case was, on the evidence before the Commissioner, so clearly in favour of a finding that the dismissal was harsh that the decision to dismiss Mr Lawrence’s application for an unfair dismissal remedy constitutes a manifest injustice that engages the public interest. We are satisfied that there is a public interest in grant of permission to appeal and grant that permission. The appeal then proceeds as a re-hearing.
Re-hearing
[30] Historically, equipment unexpectedly starting while it is being worked upon has been prominent cause of serious industrial injury or death. One of the key ways in which that risk is addressed is by the employer insisting that no work occur on any item of equipment or plant unless it has been isolated from its power source etc. That was the purpose of Golden Rule 1 and the associated Isolation Procedure.
[31] The breach of policy here, while certainly not trivial, was far from being at the most serious end of the scale. Mr Lawrence knew that the contractors had finished their repair and that, consequently, there was no reason why the locks should not be removed (albeit that this should have been done by the contractors in accordance with the isolation policy). If the contractors had returned in the time frame they indicated there was no question that after the line had been reconnected to the pump (a task that did not require the specialist expertise of the contractors) they would have removed the locks and Mr Lawrence would have been free to start the pump.
[32] The relevant risk in this case was a risk that a person working on the pump line would be injured by an unexpected flow of water under high pressure from an opening at which the person was working. Hypothetically, the actions of Mr Lawrence in removing the contractors’ locks in breach of the Isolation Procedures gave rise to such a risk. However, in the particular circumstances of this case, the safety risk posed by the actions of Mr Lawrence in removing the contractors’ locks in breach of the Isolation Procedure was, for all practical purposes, non-existent. Mr Lawrence had driven the relevant pump line only minutes before and there was no person in the vicinity of the line. Even if other work had been occurring on the relevant line (and it was not) then, in the ordinary course, Mr Lawrence would likely have been aware of it and, more importantly, there was an independent obligation on the person doing such work to again ensure that the pump was isolated with their own safety lock. Mr Lawrence knew that no other locks had been applied.
[33] Mr Lawrence did not accrue any advantage whatsoever to himself by removing the locks. His only motivation was to get the dewatering that the respondent needed to have occur underway as soon as possible.
[34] Mr Lawrence had been employed for 28 years. This is a very long period of service. He has devoted the vast majority of his working life to the respondent. He cannot start a new career.
[35] This very long period of service also needs to be considered in the context that, on the evidence before the Commissioner:
[36] Mr Lawrence had not found alternative employment at the time of the hearing before the Commissioner notwithstanding reasonable efforts to do so. At 55 years of the age, Mr Lawrence will almost inevitably find it difficult to secure alternative employment, let alone employment at the level of remuneration he was earning in his employment with the respondent. That difficulty is not only a function of his age. It is likely that any employer in the coal industry would be concerned to know why he has left his previous job and would likely be wary of engaging a person dismissed for a safety breach.
[37] Mr Lawrence was the primary breadwinner for his family. Given Mr Lawrence’s age and circumstances, the dismissal is likely to cause Mr Lawrence and his family serious hardship. In the longer term, his superannuation is likely to be adversely affected to a very substantial degree. It is no exaggeration to say that the dismissal of someone in Mr Lawrence’s circumstances has the potential to effectively ruin his life.
[38] We regard the unqualified dismissal of an exemplary employee with 28 years of service, an impeccable disciplinary record and an otherwise impeccable safety record for a policy breach the sort that occurred in this case - particularly when the policy itself contemplates that breaches will not necessarily lead to disciplinary action let alone dismissal and having regard to the personal consequences for the employee and his family - as manifestly harsh. We accept that the misconduct reasonably called for a disciplinary sanction and that a period - even an extended period - of suspension without pay may still have been within the acceptable range. 6 But in all the circumstances, unqualified dismissal was, in our view, manifestly harsh. On the rehearing we find that Mr Lawrence was unfairly dismissed within the meaning of s.385.
Remedy
[39] Section 390 deals with when FWA “may” order a remedy for unfair dismissal. There is no question that Mr Lawrence was protected from unfair dismissal (as required by s.390(1)(a)) and made an application under s.394 (as required by s.390(2)). We have found that he was unfairly dismissed (as required by s.390(1)(b)).
[40] Section 390(3) provides:
“(3) FWA must not order the payment of compensation to the person unless:
(a) FWA is satisfied that reinstatement of the person is inappropriate; and
(b) FWA considers an order for payment of compensation is appropriate in all the circumstances of the case.”
[41] We are not satisfied that reinstatement is inappropriate. On the contrary, we are satisfied that reinstatement is appropriate and should be ordered.
[42] Section 391 provides:
“391 Remedy—reinstatement etc.
Reinstatement
(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:
(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or
(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
(1A) If:
(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and
(b) that position, or an equivalent position, is a position with an associated entity of the employer;
the order under subsection (1) may be an order to the associated entity to:
(c) appoint the person to the position in which the person was employed immediately before the dismissal; or
(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
Order to maintain continuity
(2) If FWA makes an order under subsection (1) and considers it appropriate to do so, FWA may also make any order that FWA considers appropriate to maintain the following:
(a) the continuity of the person’s employment;
(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.
Order to restore lost pay
(3) If FWA makes an order under subsection (1) and considers it appropriate to do so, FWA may also make any order that FWA considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.
(4) In determining an amount for the purposes of an order under subsection (3), FWA must take into account:
(a) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for reinstatement; and
(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.”
[43] We consider it appropriate to make orders pursuant to s.391(1)(a) and s.391(2)(a) for reinstatement and continuity of employment.
[44] We also consider it appropriate to make an order pursuant to s.391(3). We are not in a position to make the assessment required by s.391(4) and, consequently, we will not make an order pursuant to s.391(3) at this time. However, we make the following observations. The respondent’s Golden Rules and Isolation Policy are rational and reasonable - and all the more so given the respondent’s statutory obligations in relation to occupational health and safety. Mr Lawrence engaged in misconduct that the respondent was entitled to treat seriously albeit that, for the reasons we have given, an unqualified dismissal was a sanction that was, in the all the circumstances, manifestly harsh. We think it appropriate that there be a deduction from the amount ordered pursuant to s.391(3) to reflect a material sanction for Mr Lawrence’s misconduct. 7 We have decided that there should be a deduction equivalent to three months’ salary (an amount in the order of $30,000) from the amount ultimately ordered. In this way the importance of the respondent’s policies will be vindicated and no other employee ought be able take any comfort from this decision that breaches of the Isolation Policy will do other than expose them to serious consequences. It ought be unnecessary to say that this is a case that, in terms of outcome, turns on its own particular facts.
[45] The matter will be referred to Commissioner Roberts to determine the proper quantum of an order pursuant to s.391(3) consistent with these reasons (should the parties be unable to agree the quantum between themselves) and to make that order.
[46] In summary, for the reasons we have given, we grant permission to appeal, allow the appeal, quash the decision of the Commissioner and will make orders in relation to remedy as indicated.
VICE PRESIDENT
DECISION OF SENIOR DEPUTY PRESIDENT O’CALLAGHAN
[47] I have had the opportunity to consider the decision of the majority in this matter. Whilst I agree with the grounds to the appeal set out in that decision, I respectfully disagree that permission to appeal should be granted and that the appeal should be upheld.
[48] I have set out the reasons for my conclusions in this respect.
[49] The starting point for my consideration must be the principles governing appeals against discretionary decisions established by the High Court in House v King 8 . I take no issue with the extent to which regard may be had to the broader expression of these principles in the following terms:
“The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.
....
It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.”
[50] In his decision, the Commissioner reaches a series of conclusions with respect to the circumstances of the incident which led to the termination of Mr Lawrence’s employment and the reason for this termination. The Commissioner states:
“[47] In the present case, the two contractors were carrying out welding work on water piping which was attached to a water pump (the size of a shipping container) and whose power source had been isolated by their safety procedure of placing their locks on to scissor clips which were then placed on the switch/isolator.
[48] The applicant’s conduct for which he was dismissed was the removal of the contractors’ safety locks. He was able to remove the locks by prying open the scissor clips, to which the locks were attached. It was the scissor clips, per se, which were attached to the isolator switch, rather than the locks themselves.
[49] As stated above, the termination letter advised that the applicant’s conduct was in breach of the respondent’s Isolation Procedure policy and its Golden Rules.
[50] The applicant certainly breached the Isolation Procedure by removing the locks as he was not the owner of the locks and did not otherwise comply with the other aspects of this policy for removal of a lock which is not your own.
[51] The respondent also said in its termination letter that the applicant had breached one of the respondent’s Golden Rules. These are a list of rules designed to protect employees and contractors from serious injury or fatality. Evidence was given that each Golden Rule is a reflection of a safety failure, somewhere in the world, and which has caused a fatality at a mine.
[52] The respondent claimed that the applicant had breached Golden Rule #1: “Never work on equipment without first applying your personal lock(s) in accordance with isolation procedures.”
[53] Mr Glenn Meyn (who recommended the applicant’s dismissal following the investigation), agreed under cross-examination that the applicant had not breached this Golden Rule, per se.
[54] Despite there being no breach, per se, of one of the Golden Rules of safety, it is still the case that the applicant breached (and he conceded he did so) the Isolation Procedure policy. The question then for myself is whether that breach of policy is such as to make the termination of the applicant’s employment, a valid reason. Case law makes it clear that in order for a reason for dismissal to be valid, that reason(s) must be sound, defensible or well founded and the reason(s) for termination must be defensible or justifiable on an objective analysis of the relevant facts.”
[51] Relative to the significance of safety issues, the Commissioner concluded:
“[59] From the foregoing account of safety features operating at the respondent’s coal mine site, I accept the respondent’s claim that safety and a safe working environment is an overriding priority. The applicant had 28 years services and is aware of the safety features referred to above. The applicant conceded that his conduct breached the Isolation Procedure because he removed personal locks that were not his own.”
[52] The Commissioner’s decision is phrased such that it is open to some conjecture. This is particularly the case with respect to the consideration of whether there was a valid reason for the termination of Mr Lawrence’s employment. Notwithstanding that the Commissioner assessed the significance of Mr Lawrence’s breach of the respondent’s policy by considering the possibility of reinstatement which is unusual and could have led him into error, I have concluded that he nevertheless addressed each of the criteria in s.387 of the Fair Work Act 2009 (the FW Act) and that he did so in a fashion which did not involve the adoption of extraneous or even irrelevant matters or did not mistake the facts.
[53] The Commissioner’s assessment of whether there was a valid reason for the termination of Mr Lawrence’s employment included consideration of the advice given by the respondent to its employees regarding breaches of its critical mandated safety rules known as the “Golden Rules” and, specifically, the isolation policy. The Commissioner noted the evidence of the Acting Manager, Mining, in the following terms:
“[58] Mr Meyn’s witness statement deposed that:
(a) There is an overriding priority of safety to all coal mining operations at MTW.
(b) He had statutory duties as Acting Manager in relation to the health and safety of employees under the Coal Mine Health and Safety Act 2002 (NSW) and Occupational Health and Safety Act 2000 (NSW).
(c) In 2004, the respondent implemented its Golden Rules safety system. These rules are a list of seven safety rules which are designed to protect employees and contractors from serious injury or death. Each rule arises from a safety incident within the respondent’s global operations and which has caused a fatality. Presentations are made to employees to make them aware or refresh them as to the content of the Golden Rules, their seriousness and purpose.
(d) The respondent provides a “Take 5” flip book (Ex 7) to each employee. Before completing any task on site, every employee must perform a “Take 5”. This involves opening the flip book and mentally checking (and recording) the task at hand and the safety issues associated with that task. On the inside cover of the flip book is a list of the Golden Rules.
(e) The respondent has a RTCA Isolation Standard which forms part of the Rio Tinto Group Health, Safety and Environment Policy. The RTCA Isolation Standard refers to isolation procedures: that is, isolating the power source from machinery or equipment before carrying out any work. The current version of the Isolation Standard was shown as a PowerPoint presentation to employees at MTW around August 2006. Reference has already been made in this Decision to paragraph 3.4.11 of the Isolation Standard which says in part: “Personal locks may never be removed other than by their owner,...”.
(f) As employees leave the car park at the Mount Thorley side of MTW, there is a sign which contains a large picture of a personal lock, next to which are the words: “HAVE YOU REMOVED YOUR LOCK?”, in large, capital lettering. Some employees at MTW have left the site having inadvertently left their personal locks secured to a machine. In those cases, the lock has not been removed and the employee has been called to return to the mine to remove their personal lock or the Isolation Standard has been followed and the General Manager has become involved.”
[54] The Commissioner acknowledged that Mr Lawrence was alleged to have breached a Golden Rule, but in fact breached the isolation policy. The Golden Rule at issue states:
“1. Never work on equipment without first applying your personal isolation lock(s) as per the isolation procedures
....”
[55] To the extent that the decision could be said to be in error in that a breach of the isolation policy is a lesser misdemeanour than a breach of a Golden Rule, it might equally be argued that the isolation policy must be read in concert with that Golden Rule because there would be no sense in having an isolation policy that required the application of isolation locks if there was a capacity for employees to remove these. I am unable to regard the Commissioner’s findings in this respect to represent an appealable error in that he was entitled, on the evidence before him, to form his views about the significance of the safety policy breach.
[56] Further, the Commissioner’s failure to find that the termination lacked a valid reason because the respondent’s policy indicated only, that disciplinary action may result from a breach of that policy did not involve appealable error. I consider that the Commissioner assessed the significance of the policy breach. The provision of a general statement in a policy which provides that a breach of the policy may be subject to disciplinary action can not preclude such a breach from being regarded as a valid reason for a termination of employment. Each circumstance must be assessed in its own right. The Commissioner did conduct such an assessment and his conclusion in this regard was reasonably open to him.
[57] With respect to whether there was a valid reason for the termination of Mr Lawrence’s employment the Commissioner concluded:
“[66] However, at another level of my deliberation, was the respondent’s case that this was all about maintaining and promoting a safe working environment. This was not a case where an employee had a lapse of concentration in safety procedure and because it was only a lapse was not dismissed - there was such evidence before myself. This was a case, the respondent put, in which the applicant had deliberately breached a safety procedure, and this breach raised the possibility of risk of injury to another worker(s). As to how unlikely, how remote that possibility of risk, was irrelevant, the respondent submitted.
[67] Having considered those two foregoing scenarios of deliberation, I have concluded that the respondent’s case is the correct scenario for adoption by myself.”
[58] The Commissioner continued to set out other related considerations which he had regard to in reaching this conclusion. He had open to him a conclusion that, because termination of employment was not identified as a mandatory consequence of a breach of the isolation policy, there was no valid reason for the termination of Mr Lawrence’s employment in these circumstances. However, that was a matter of discretion and the Commissioner clearly took the respondent’s overall commitment to safety into account, together with Mr Lawrence’s admission that he did breach the policy. He stated:
“[70] The other influencing factor is the assumption of risk factor and its relationship to the nature of the industry. A worker (employee or contractor) needs to be able to work in that risk concerned environment, knowing that every other worker will follow safety procedures. It is a mutual safety first working environment. Each worker depends on the other(s) for their safety. There is no room, in that particular working environment, for assumptions as to risk where another worker(s) is unaware as to another worker’s breach of safety procedures.”
[59] The Commissioner concludes his consideration of the factors in s.387 on the basis that:
“(h) any other matters that FWA considers relevant
[80] The factors to consider here are the applicant’s length of service (28 years); his unblemished employment in that long time; his hardworking attitude; he had worked in a safety critical job as shot firer for most of that 28 years; he had not breached a Golden Rule; his age (55 years); his financial and personal circumstances; prior to removing the contractors’ locks, he had traversed the length of the pipeline and could see that no one was working on the pipeline - just before he turned on pump number one; the applicant’s conduct in removing the locks was out of character; and he was remorseful.
[81] Having considered all of those matters, I am still of the view that the respondent had a valid reason for terminating the services of the applicant.
CONCLUSION
[82] In this case, I have considered two possible outcomes:
(a) the dismissal was unfair because of the remoteness of injury to any worker(s) owing to the applicants conduct in removing the contractors’ locks and
(b) the dismissal was not unfair because the applicant consciously breached a safety procedure in a working environment wherein assumptions about risk likelihood to another worker(s) is not acceptable.
Having considered all of the evidence, I have concluded that the dismissal was not unfair: that is, was not harsh, unjust or unreasonable.”
[60] These paragraphs are phrased so that they are open to multiple constructions. However, I have adopted the position that paragraph 81 should be taken as indicating that, despite consideration of all of the factors specified in s.387, the Commissioner concluded that the significance of the valid reason consideration is such that the termination of Mr Lawrence’s employment should not be considered unfair. In the overall context of the decision, I am unable to conclude that paragraph 82 should be read as indicating that the Commissioner’s consideration was inherently limited to only these two identified outcomes. This paragraph occurs after the Commissioner comprehensively addressed the circumstances of the termination of Mr Lawrence’s employment in the context of the factors set out in s.387. I cannot agree, that, read in the context of the overall decision, these paragraphs constitute appealable error.
[61] In these respects, I may have arrived at a different conclusion to the Commissioner but do not consider that his decision, which was clearly influenced by the respondent’s obligations and commitment to mining safety, reflected the application of erroneous principles, or the adoption of extraneous or irrelevant matters, that it clearly mistook the facts or did not take into account the material considerations.
[62] I am unable to conclude that the second limb of the principles set out in House v King assumed relevance in this matter as the Commissioner set out comprehensively the reasons upon which he reached his conclusion.
[63] Even if the Commissioner’s decision is read such that his conclusion constitutes an error, in restricting consideration of his conclusion to only two possible outcomes, permission to appeal can only be granted if the requirements of the FW Act are satisfied.
[64] Section 604(2) states:
“604 Appeal of decisions
....
(2) Without limiting when FWA may grant permission, FWA must grant permission if FWA is satisfied that it is in the public interest to do so.”
[65] Section 400(1) states:
“400 Appeal rights
(1) Despite subsection 604(2), FWA must not grant permission to appeal from a decision made by FWA under this Part unless FWA considers that it is in the public interest to do so.
(2) Despite subsection 604(1), an appeal from a decision made by FWA in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact.”
[66] In GlaxoSmithKline Australia Pty Ltd v Makin 9 a Full Bench considered the public interest in the context of section 400 in the following terms:
“[26] Appeals have lain on the ground that it is in the public interest that leave should be granted in the predecessors to the Act for decades. It has not been considered useful or appropriate to define the concept in other than the most general terms and we do not intend to do so. The expression ‘in the public interest’, when used in a statute, classically imports a discretionary value judgment to be made to be made by reference to undefined factual matters, confined only by the objects of the legislation in question. [Comalco v O’Connor (1995) 131 AR 657 at p.681 per Wilcox CJ & Keely J, citing O’Sullivan v Farrer (1989) 168 CLR 210]
[27] Although the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters, it seems to us that none of those elements is present in this case.”
(underline emphasis added)
[67] I have adopted this approach such that I consider that the conclusion the Commissioner reached was reasonably open to him and cannot be described as manifesting an injustice or as counter intuitive or representing a disharmonious application of legal principles.
[68] In terms of s400(2) the decision did not involve a significant error of fact.
[69] The respondent operates under a strict legislative safety regime. Mining is an inherently dangerous activity. Whilst Mr Lawrence did have an impeccable work history, his actions contravened safety rules which were clearly intended to avoid subjective employer assessments. Both the respondent and its employees were entitled to insist these rules were consistently applied. Indeed, Mr Lawrence’s long history of employment indicates that he should have known better than to have breached a rule such as this.
[70] Clearly, alternative conclusions than that reached by the Commissioner may be available but again this does not activate the public interest.
[71] In Byrne v Australian Airlines Ltd: 10 the High Court addressed the meaning of the expression “harsh, unjust or unreasonable”. I have considered the extent to which, if there is error in the conclusion reached by the Commissioner, the application of that High Court approach requires that the public interest be activated.
[72] In this respect, the termination of Mr Lawrence’s employment after 28 years service has the potential to be regarded as harsh. The harshness of a dismissal is a contextual consideration in light of the seriousness of the conduct or performance as alleged and it should be weighed cautiously. This is because most dismissal decisions have a harsh effect on the employee concerned. The harshness of a dismissal need not turn on the duration of employment alone as other factors may be important. That said, if a consideration of the harsh impact of a dismissal overrode consideration of all of the factors set out in s.387 of the FW Act, it would have the effect that the vast majority of applications made under s.394 would need to be upheld. Had the Commissioner not considered Mr Lawrence’s service and his age in his review of the factors in s.387, the public interest may well have been invoked but the Commissioner reached a conclusion having considered all the relevant factors and that conclusion was open to him.
[73] Consequently, in the circumstances of this matter I would refuse to grant permission to appeal.
SENIOR DEPUTY PRESIDENT
Appearances:
A. Slevin, of Counsel, for L.D. Lawrence.
Y. Shariff, of Counsel, for Coal & Allied Mining Services Pty Ltd.
Hearing details:
2010.
Sydney:
November 24.
2 (1936) 55 CLR 499 at 504-5.
3 (1995) 185 CLR 410 at p 465-6.
4 Edwards v Giudice (2000) 169 ALR 89 at 92-3 per Moore J; P & O Catering Services Pty Ltd v Kezich (Print S5158) at para [14] - [15] per Giudice J, Ross VP and Gregor C; King v Freshmore (Print S4213) at [20] per Ross VP, Williams SDP and Hingley C.
6 We recognise that some employers may operate under statutory agreements that may not provide for suspension as a disciplinary option. An employer is not ‘obliged’ to dismiss an employee without prospect of reemployment when the other available disciplinary options are thought to be inadequate. An outcome equivalent to suspension without pay can usually be achieved in a practical sense by dismissing an employee but agreeing with the employee at the time of the dismissal to reengage the employee at the end of the period of “suspension” with continuity of employment, also perhaps on condition that the employee agrees not to receive a payout of their entitlements.
7 We regard such a deduction as within the discretion conferred by s.392(3).
8 (1936) 55 CLR 499.
10 (1995) 185 CLR 410 at p 465-6.
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