[2013] FWC 4213

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

George Szentpaly
v
Basin Sands Logistics Pty Ltd
(U2013/6871)

COMMISSIONER GREGORY

MELBOURNE, 16 OCTOBER 2013

Application for relief from unfair dismissal.

Introduction

[1] Mr George Szentpaly was first employed by Basin Sands Logistics Pty Ltd (BSL) in September 2007. BSL provides labour and equipment to Bemax Resources Pty Ltd at the Ginko and Snapper mine sites situated in the southwest corner of New South Wales. Mr Szentpaly worked for BSL for almost 6½ years in various roles. For the past 3 years he was primarily employed driving a loader and at the time of his dismissal was working 12 hour shifts on a 10 days on/5 days off roster. Due to the isolated location of the mine sites Mr Szentpaly stayed in company provided accommodation during his days on, and travelled back to his home at Mildura during his days off.

[2] On 7 February 2013 Mr Szentpaly commenced his rostered 12 hour night shift at the Ginko mine site. After carting loads to various stockpiles he said he found the hydraulic ride control on the loader was not operating correctly, causing the bucket to drop without warning. He decided to turn the ride control off which, in turn, made the ride very bumpy. He said this problem was exacerbated by the air inflated driver’s seat in the loader gradually deflating every 15 to 20 minutes.

[3] Mr Szentpaly said after a period of operation he decided the loader was unsafe and in accordance with appropriate safety procedures stopped work and parked the loader. He said this occurred at approximately 11:30pm, 5½ hours into his normal 12 hour shift. Before leaving the loader he said he filled out the pre-start book, noting the problems he had experienced. He then returned to the crib room at the mine site and remained there for the next 6½ hours until the normal 6am shift finish time. He said he did not inform his Supervisor about the problems he had encountered as he is not on site during the night shift. He said he did, however, inform a Bemax employee who was working at the mine site that evening by two way radio from the loader.

[4] Just prior to commencing his next shift the following evening Mr Szentpaly said he was spoken to by BSL manager, Mr David Wilson. He said Mr Wilson questioned him about the limited amount of material carted on the previous shift and Mr Szentpaly told him about the problems he had encountered with the loader. He said Mr Wilson asked him why he had not told the mechanics working in the workshop at the mine site that evening. He then commenced his shift, but drove the loader slowly because of ongoing problems with its operation. He said he experienced similar problems on the next shift and the rough ride was causing damage to his lower back. This situation persisted during his next shift the following evening and at 1:30am that night he had “had enough”. He again parked the loader, stopped work, and headed back to the camp. On arrival he telephoned Mr Roger Dahlitz, the shift supervisor, and told him he was upset and needed to return to Mildura. He presumed Mr Dahlitz was aware of the problems with the loader through the entries on the pre-start sheets he had filled out, and through his discussions with David Wilson. The following day he visited his GP and received a medical certificate stating he was currently unfit for work which he subsequently provided to BSL.

[5] Three days later Mr Szentpaly was contacted by Mr John Burgess from BSL and asked whether he was at home. Mr Burgess then arrived at his home in Mildura with Mr Colin Wilson and handed him a letter indicating his employment with BSL was terminated:

“Based on a recent review of your workplace performance.” 1

The letter continued to refer to various incidents, complaints and previous warnings provided to Mr Szentpaly and concluded by noting:

“You have failed to meet specific goals and targets and therefore Basin Sands Logistics Management issue you with this Employment Termination Letter with immediate effect.” 2

[6] Mr Szentpaly submits he is unsure of the reasons for his termination. He says BSL had previously responded to the events of 7 February by giving him a final warning. He says he was not told of the reason for his termination prior to any meeting and not provided with any opportunity to respond to those reasons, or to have a support person present in any such discussion. He said the only previous warning he had received concerned a collision earlier this year, but he disputed being at fault in relation to that incident. He also submits BSL is a large organisation with dedicated HR expertise and should not be excused for not following correct procedures in carrying out the termination.

The Issue to be Determined

[7] Was Mr Szentpaly unfairly dismissed on the basis that his dismissal was harsh, unjust or unreasonable, taking into account the matters in section 387 of the Fair Work Act 2009 (Cth) (the Act) the Commission must have regard to?

The Evidence

[8] Mr Szentpaly was the only witness called in support of his application and his evidence has been referred to, in part, in the Introduction. In cross-examination Mr Szentpaly acknowledged he had been spoken to in August 2012 about issues to do with his work performance. He admitted then he may occasionally have “nodded off” whilst at work. He also acknowledged he had been challenged in September 2012 about the tonnage he had been transporting, and been provided with an opportunity to respond to those claims, but to date had not done so because he was still waiting for an appropriate opportunity. Mr Szentpaly also acknowledged he had received a document headed “Official Final Written Warning,” following a collision at the worksite earlier this year, but did not agree with the content of the letter and believed he had done nothing wrong.

[9] He also acknowledged that on the evening of 7 February 2013, when he stopped driving the loader he did not report to the nurse on site, or to the mechanics in the workshop, and did not attempt to make contact with the Supervisor on duty. He thought the Supervisor would be asleep and didn’t want to disturb him. However, he said at the shift changeover the following morning he told another employee, Andrew Mackie, who drove the loader during the day shift, about the problems associated with its operation.

[10] Mr Szentpaly also admitted in cross-examination that details on his timesheet about the defects in the vehicle’s operation were only written on the timesheet he kept for his own personal records, but were not written on the copy he provided to BSL. He also admitted he had not followed the normal tagout/lockout procedure when a safety issue arose on a piece of equipment. He also admitted that when completing the pre-start safety sheets he had not made reference to the defective bucket on the loader and he had ticked “okay to use.” He also acknowledged he had said nothing to the mechanics on site about the problems with the loader, even though he remained in the crib room for the balance of his shift only 20 metres from where that workshop was located.

[11] He also could not recall receiving a letter from BSL in June 2010, or having a discussion at that time with BSL management representatives about leaving the worksite early without prior permission or notification.

[12] BSL provided witness evidence from six witnesses in response to the application. Andrew Mackie is also employed by BSL as a plant operator and has been in that role since January 2012. He also works a 12 hour shift on the basis of a roster involving 10 days on/5 days off. From 7 to 11 February 2013 he was working on the day shift driving the same loader Mr Szentpaly was operating at night. He indicated he was aware of the issues to do with the bucket dropping and the seat on the loader deflating, but both issues could be easily rectified and dealt with, and he did not consider them to be a safety issue. He also had no recollection of Mr Szentpaly saying to him at the change of shifts that the loader was unsafe.

[13] Mr Roger Dahlitz has worked for BSL since June 2011 and is currently employed as a leading hand and relief Shift Supervisor. In February 2013 he was responsible for overseeing the work of Mr Szentpaly. He recalls being contacted by him at around 9pm on the evening of 7 February 2013 to discuss an operational issue, but had no further contact for the rest of that shift. He said Supervisors on shift are on call at all times, and Mr Szentpaly had not said at any time that there was a safety or operational issue to do with the loader. He also indicated in his examination in chief that it was not unusual to receive calls from employees during the night shift. In addition, Mr Szentpaly did not tell him he had parked the loader at 11:30pm on the evening of 7 February and spent the balance of his shift in the crib room. However, he did acknowledge in cross-examination that the pre-start worksheets submitted by Mr Szentpaly on 8 February did make some reference to problems with the loader.

[14] Mr David Wilson is employed by BSL as its Civil Superintendent and oversees all mine site operations at both the Ginko and Snapper mine sites. On 8 February 2013, following a contractors meeting that morning, he questioned Mr Szentpaly about why so little material was moved that night and was told the loader was playing up. However, Mr Szentpaly did not tell him he had parked the loader at 11:30pm and spent the remainder of his shift in the crib room.

[15] Mr Wilson also said the loader had been serviced in the previous month and he had driven it since without being aware of the issues raised by Mr Szentpaly about its operation. He also indicated that, regardless, they were relatively minor issues and easily rectified. He also said the correct protocol if a safety or operational issue existed was to notify the immediate Supervisor, who was always on call during the night shift. If a machine was believed to be unsafe it should be parked and tagged and the issue reported. Mr Wilson also confirmed the BSL workshop was open at night and any issue to do with the operation of the loader should have been made known to the mechanics.

[16] Mr Wilson said after due investigation he came to a decision on 15 February that Mr Szentpaly’s employment should be terminated. He subsequently arranged for this to be communicated to him at his home in Mildura, simply to avoid Mr Szentpaly having to make a three-hour return trip to the mine site. He also indicated in cross examination that he took the decision to terminate Mr Szentpaly based on a review of his past performance, and the issues that occurred on the evening of 7 February. He also said it may have been appropriate to take Mr Szentpaly through those issues and to consider his response, but he did not do so largely because Mr Szentpaly was absent from the mine site at the time. He also said he told Mr Szentpaly he would receive a written warning, but if further investigation warranted further action that outcome could also result.

[17] Mr David Chase has been employed by BSL since 2009 as a shift supervisor. He attended the meeting in August 2012 when Mr Szentpaly was questioned about why his “figures are down.” 3 He indicated that while Mr Szentpaly questioned the validity of those figures he did acknowledge, “Occasionally I nod off.”4 He also indicated in his examination in chief that the operation of the loader was a vital part of the mine site operation in terms of keeping it running and when a machine was not operating it was critical to be informed about that situation so a replacement could be put in place.

[18] Mr Neil Lihou has been employed by BSL as its Safety Officer since November 2010. He was present at the meeting in August 2012, referred to by David Chase, and confirmed what he had said about what occurred. He also indicated Mr Szentpaly had not told him at any stage that he had been hurt while driving the loader.

The Submissions

[19] Mr Szentpaly submits there was no valid reason for his termination, and the only way the events of 7 February could constitute poor performance was if the decision he made to stop driving the loader could be construed in that way. He submits he stopped operating the loader because it was unsafe but, even if this explanation was not accepted, at worst his decision to was “a bad call or misjudgement” 5 and did not warrant his termination. He also dismisses the issues raised with him in August/September 2012 about his work performance because in his words, “the employer never got his side of the story.”6 He also dismisses the other issues that had been raised previously about timesheet irregularities and safety and protocol breaches.

[20] Mr Szentpaly also submits the only reason given to him at the time of his termination related to his actions on the evening of 7 February. He also submits the only occasion when he was given any opportunity to respond to the issues related to his capacity and conduct were in the conversation with Mr Wilson prior to him commencing his night shift on 8 February. However, that was not a formal meeting with prior notice given of the issues to be raised and an adequate opportunity afforded to provide a considered response. There was also no opportunity provided to have a support person present in any such discussions, and there were “no prior warnings of relevance” 7 provided to him.

[21] Mr Szentpaly also submits BSL is a large business with dedicated HR expertise and the size of the business provides no reason or explanation as to why appropriate procedures were not followed. In summary, Mr Szentpaly submits his dismissal was harsh, particularly given his age and future job prospects; it was unjust because there was no valid reason, and it was unreasonable because he was not given proper opportunity to respond to the issues that led BSL to terminate his employment. He also submits it is only able to rely on the issues to do with poor performance as valid reason for termination, given that prior to the hearing it chose not to indicate it would be relying on other matters, despite having adequate time to do so.

[22] BSL submits there are five separate and related reasons as to why Mr Szentpaly’s dismissal cannot be considered to be unfair. They include:

“ the applicant’s improbable excuse for stopping the loader,

• the applicant’s demonstrated dishonesty,



• the procedural fairness extended to the applicant,



• the evidence of grave breaches of safety protocol, and



• the evidence of unsatisfactory work performances.” 8

In its submission those reasons not only concern his work performance, but go to various breaches of protocol only revealed during the course of the proceedings.

[23] In terms of the “improbable excuse for stopping the loader” 9 BSL’s submissions highlight Mr Szentpaly’s actions or inaction in response to that situation. He spent the remaining part of the shift in the crib room and then returned to camp. He did not need to see a nurse or doctor. He made no attempt to notify either the mechanics or his Supervisor on duty that evening as to the condition of the loader, or his actions in parking it and remaining in the crib room for the balance of the shift. It also notes in this context his failure to tagout/lockout the loader given his safety concerns, and his notations in the pre-start safety checks, which noted some problems, but ultimately concluded the loader was safe to use.

[24] In terms of his alleged “demonstrated dishonesty” 10 BSL points to his lack of recollection about previous events and the issues to do with completion of his timesheets. In terms of procedural fairness it submits his breaches of safety protocol outweigh any procedural deficiencies and he was, in any case, already on a notice as to his performance and conduct generally.

[25] BSL submits in conclusion that Mr Szentpaly’s serious breaches of operating and safety protocols, and the evidence establishing his poor work performance in regard to the events on the evening of 7 February, are sufficient to establish that a valid reason exists for his termination.

Consideration

[26] Section 385 of the Act states that a person has been unfairly dismissed if the Fair Work Commission is satisfied:

“(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.” 11

[27] In the present matter Mr Szentpaly submits his dismissal was harsh, unjust or unreasonable. In considering whether a dismissal is harsh, unjust or unreasonable the Act requires the Commission to take into account the factors set out in s.387 of the Act. The obligations imposed by s.387 are also clear and well understood. They were simply stated by a Full Bench of Fair Work Australia, as the Tribunal was then known, in the matter of L. Sayer v. Melsteel Pty Ltd 12 in the following terms:

“Where the applicant does present a case, in the ordinary course each of the criteria in s.387 which is capable of being relevant on the facts emerging at the hearing must be taken into account.” 13

[28] The decision of the High Court in Byrne & Frew v Australian Airlines Ltd 14 is often cited as to the meaning of harsh, unjust or unreasonable when Murphy and Gummow JJ held:

“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.” 15

[29] Against this background I now turn to consider the circumstances of the present matter and whether Mr Szentpaly’s dismissal was harsh, unjust or unreasonable given the considerations in section 387 (a) to (h) I must have regard to.

(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);

[30] The existence or not of a “valid reason” is invariably an important issue in any unfair dismissal application and often determinative. In the often cited decision of Parmalat Food Products Pty Ltd v Kasian Wililo 16 a Full Bench of the Commission made the following statement about the importance of “valid reason.”

“The existence of a valid reason is a very important consideration in any unfair dismissal case. The absence of a valid reason will almost invariably render the termination unfair. The finding of a valid reason is a very important consideration in establishing the fairness of a termination.” 17

[31] The question of what is required to constitute “valid reason” was also considered in the matter of Selvachandran v Peteron Plastics Pty Ltd 18. It was decided under a previous statutory scheme, but is still relevant in the present context. At page 373 Northrop J held:

“In its context in s 170DE(1), the adjective `valid' should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s170DE(1). At the same time the reason must be valid in the context of the employee's capacity or conduct or based upon the operational requirements of the employer's business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. the provisions must `be applied in a practical, commonsense way to ensure that' the employer and employee are each treated fairly...” 19

[32] It is also clear the reason must be objectively valid. It is not sufficient that the employer believes it had a valid reason for termination. This was emphasised in the Full Bench decision handed down by this Tribunal’s predecessor in the matter of Rode v. Burwood Mitsubishi 20 at paragraph 19 where the Full Bench held:

“....the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason.” 21

[33] Previous decisions of the Commission have also established that “valid reason” is not to be limited by importing a test requiring justification to repudiate the employment contract; rather the test is simply whether the behaviour or performance gave rise to a valid reason for the employee’s termination. I now turn to consider whether a “valid reason” exists that is solid, defensible and well founded and can be justified on an objective analysis of the relevant facts.

[34] Mr Szentpaly submits his actions and behaviour during his shift on the evening of 7 February 2013 can be justified and explained by the safety issues resulting from the defective operation of the loader. As a consequence his decision to park the loader and stop work less than halfway through his shift provides no basis and no “valid reason” to justify his termination.

[35] Mr Szentpaly’s evidence detailed at length the significance of those issues. However, much of the other evidence in the proceedings provided a contrary view. David Wilson was not aware of the issues experienced by Mr Szentpaly when he drove the loader after it had been serviced and repaired in the previous month. Andrew Mackie drove the loader on the alternating day shift with Mr Szentpaly. His evidence pointed to some problems with its operation, but indicated these could be easily rectified, and did not constitute the significant safety concerns Mr Szentpaly claims to have experienced.

[36] Mr Szentpaly’s subsequent actions also appear not to be logically or consequentially consistent with the existence of the significant safety concerns he says he experienced. His actions, or inaction, have been dealt with at length in the evidence and submissions. They include the following matters.

• Mr Szentpaly made no attempt to contact his Supervisor to inform him of his decision to park the loader in circumstances where I am satisfied he should have been well aware of and alert to the consequences of not moving the required amount of material during the course of his shift. This was despite the fact his Supervisor was on call at all times, and Mr Szentpaly had made contact with him on other occasions, including earlier that evening.



• Mr Szentpaly failed to inform the BSL mechanics who were working in a workshop only 20 metres away from the crib room where he sat for 6½ hours during the remainder of his shift. No adequate explanation was provided for his inaction in this regard.



• His apparent failure to convey to his day shift counterpart, Andrew Mackie, in any meaningful way his concerns about the safety issues and their impact when the two men met at the change of shift on the morning of 8 February.



• His failure to follow the tagout/lockout procedure employees were trained in when confronted with an operational safety issue associated with a piece of defective equipment at the mine site.



• The fact he made no attempt to seek treatment for the injuries he claimed to have sustained.



• The fact he marked the pre-start safety sheets “okay to use,” when describing the condition of the loader, despite noting some concerns about problems associated with its operation.



• The issue with his timesheets and the fact the only timesheet notations which went to any detail about the issues he claimed to have encountered were noted on the timesheet records he apparently kept for his own purposes, rather than those submitted to his employer.

[37] I find, in conclusion, that almost without exception the evidence about Mr Szentpaly’s actions, and what transpired following his decision to stop driving the loader, fail to lend support to his evidence about the significance of the safety issues he claims were associated with its operation, and their impact on him. This creates, at the very least, some doubt about whether those safety concerns existed at all, and whether there was some other reason why he stopped working that night, less than halfway through his rostered shift.

[38] In fact, the only way Mr Szentpaly’s actions came to be known in full detail were through the evidence provided in these proceedings. When previously asked by the mines Civil Superintendent about why so little material had been moved Mr Szentpaly made reference to problems associated with the operation of the loader, but chose not to tell him he had actually parked it and stopped work. Again, if he had legitimate safety concerns it can be presumed he would at least at this point in his discussion with Mr Wilson have taken the opportunity to explain what had actually happened and why.

[39] I am also satisfied Mr Szentpaly must have been aware of the significance for BSL of his failure to move the amount of material expected of him during his shift. I accept the evidence is equivocal as to whether he had actually been warned on previous occasions, by BSL, about similar issues and the consequences of that failure. However, I am satisfied he had certainly been involved in discussions about these issues and should have been aware of the significance of not doing what was expected of him.

[40] On balance I am satisfied there are grounds to doubt the validity of the reasons advanced by Mr Szentpaly for his decision to park the loader. I am also satisfied the consequences of his failure to do what was expected of him during the shift were significant for BSL, and for its contractual relationship with Bemax. In all the circumstances BSL may well have had a valid reason to dismiss Mr Szentpaly. However, as referred to at a later point in this decision I am not satisfied BSL’s investigation of what occurred enabled it to actually be in a position to establish, at the time it made the decision to terminate Mr Szentpaly’s employment, whether it had a “valid reason” or not. This occurred because that process of investigation did not involve, in particular, a detailed exploration with Mr Szentpaly about what actually occurred. Much of that detail has only been revealed by the evidence in these proceedings.

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

[41] Mr Szentpaly was notified of the reason for his termination in the letter provided to him by hand at his home in Mildura on 15 February 2013. The letter referred to what had occurred on 7 February in regard to his limited output during that shift. It also made reference to a range of previous issues concerning his work performance, dating back to 26 October 2007.

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

[42] The evidence indicates David Wilson, the Civil Superintendent in charge of the mine sites, was primarily responsible for investigating what occurred, and for the decision to terminate Mr Szentpaly. He did approach Mr Szentpaly and have an informal discussion with him about what happened, just prior to Mr Szentpaly starting his shift the following evening. This was prompted by concerns raised by Bemax in a contractors meeting that morning. However, this appears to have been an impromptu discussion, rather than one in which Mr Szentpaly was put on notice about the issues of concern and provided with a considered opportunity to respond. It is acknowledged that the fact there were no further direct discussions with Mr Szentpaly was, in part, because three days later he left the mine site unexpectedly and subsequently commenced a period of a sick leave. Nevertheless, I am satisfied there was no discussion with him which, for example, foreshadowed the possibility of his termination, and gave him the opportunity to respond, before that decision was taken. I am satisfied BSL was deficient in terms of what might be expected in this regard.

(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;

[43] There was no evidence of any such refusal but, at the same time, for the reasons indicated above there was also no such discussion convened by BSL.

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

[44] Mr Szentpaly was told by David Wilson in the discussions prior to commencing his shift on 8 February that his actions warranted at least a formal warning and, pending further investigation, perhaps something more significant. The termination letter provided to him also referred to previous warnings, although the validity of those warnings in each case was disputed by Mr Szentpaly. He failed to recall the warning letter provided to him in 2010; he claimed to have figures that refuted the performance issue raised with him in 2012, and said he was not at fault in regard to a collision earlier this year that was also referred to.

(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;

[45] Sub paragraphs (f) and (g) are both dealt with at this point. I am satisfied BSL is a relatively large employer and has a dedicated HR specialist. Accordingly, the size of the business or the lack of any HR expertise are not factors which provide any reason or explanation for any deficiencies in the processes involved in Mr Szentpaly’s termination.

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

[46] Mr Szentpaly’s age and the difficulty of finding work elsewhere were referred to in this context. It was suggested, in particular, his age meant he was more susceptible to injury as a result of the deficiencies associated with the operation of the loader, although I consider these submissions to be inconclusive.

[47] Having considered the submissions and evidence and each of the considerations in section 387 of the Act I am satisfied, on balance, Mr Szentpaly was unfairly dismissed. I have come to this decision, in particular, because of what can be described as the lack of procedural fairness in the processes involved in effecting his termination. Termination of an employee’s employment is a significant issue at any time. Before such action is taken the current legislative framework expects an employee will be provided with the opportunity to respond to the reasons for that proposed decision. The Act also anticipates that in any such discussion an employee will be assisted through those processes by having the opportunity to have a support person present if he/she wishes. As indicated, had these processes been gone through they may, in fact, have revealed the existence of a “valid reason” for termination by actually getting to the detail of what occurred. However, Mr Szentpaly was not provided with those opportunities. I am accordingly satisfied, given the considerations in section 387, that his termination was unfair. Having come to that conclusion I now turn to consider what remedy is appropriate.

[48] Mr Szentpaly seeks reinstatement. His submissions acknowledge the need for trust and confidence to exist in an employment relationship but argue the necessary level of trust and confidence has not been diminished to an extent that reinstatement is not a viable option. BSL submits, on the other hand, there has been an irreparable breakdown of trust and confidence and reinstatement would be an inappropriate remedy. Both parties made reference to the decision in Perkins v Grace Worldwide (Aust.) Pty Ltd 22, where the Court held:

“Each case must be decided on its own merits. There may be cases where any ripple on the surface of the employment relationship will destroy its viability. For example the life of the employer, or some other person or persons, might depend on the reliability of the terminated employee, and the employer has a reasonable doubt about that reliability. There may be a case where there is a question about the discretion of an employee who is required to handle highly confidential information. But those are relatively uncommon situations. In most cases, the employment relationship is capable of withstanding some friction and doubts. Trust and confidence are concepts of degree. It is rare for any human being to have total trust in another. What is important in the employment relationship is that there be sufficient trust to make the relationship viable and productive. Whether that standard is reached in any particular case must depend upon the circumstances of the particular case. And in assessing that question, it is appropriate to consider the rationality of any attitude taken by a party.” 23

[49] BSL made reference to various factors which, in its submission, mean there has been an irretrievable breakdown in trust and confidence in the employment relationship. Those matters included, in summary:

• Mr Szentpaly’s credibility and a character in a general sense.



• Concerns about whether he could be trusted to perform his job in a timely and appropriate manner.



• Concern about the safety and welfare of Mr Szentpaly and other employees.



• Concerns about the ongoing relationship between BSL and Bemax as a result of Mr Szentpaly’s actions and behaviour.



• Finally, concern about the impact of the job upon Mr Szentpaly’s health and welfare.

[50] I am satisfied in the circumstances of this particular matter, based on the plain and ordinary meaning of the words “trust” and “confidence,” that reinstatement is not an appropriate remedy. The work Mr Szentpaly performed involves the operation of a large vehicle at an isolated location at night. The working environment is characterised by limited direct supervision, with an onus on the individual employee to work as directed in a safe and efficient manner over an extended 12 hour shift. I am satisfied the events of 7 February and what followed have done much to throw doubt on his ability and commitment to work in that way. In addition, even if it is accepted that legitimate safety issues were associated with the operation of the loader on the evening of 7 February, Mr Szentpaly’s response to that situation was, at the very least, not in accordance with established safety protocols. He was also less than forthcoming in revealing to his employer what actually occurred. As indicated, what actually transpired on that evening was only discovered through the evidence adduced in these proceedings, rather than by way of any information or explanation volunteered or provided by Mr Szentpaly.

[51] The discrepancies in Mr Szentplay’s timesheet records also do not assist him in this context. Timesheet entries he purported to rely upon were, in fact, apparently those he kept for his own records and not representative of the timesheet records he provided to BSL.

[52] In all the circumstances, and particularly because of the significance of the issues associated with safety at an isolated work location with limited supervision and the operation of large mechanical equipment, I am satisfied reinstatement is inappropriate because of the lack of trust and confidence BSL has in Mr Szentpaly to perform and do the job in the manner expected. I therefore turn to consider whether an order for payment of compensation is appropriate.

[53] Section 392(1) of the Act provides:

“An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.” 24

[54] Section 392(2) continues to list a set of criteria I must take account of in determining any order for payment of compensation. I now turn to consider these criteria in terms of what, if any, compensation is appropriate to be paid to Mr Szentpaly.

(a) the effect of the order on the viability of the employer’s enterprise;

[55] There were no submissions made or evidence provided suggesting an order for compensation would impact on the viability of the “employer’s enterprise.” I am satisfied this is not a relevant consideration in this matter.

(b) the length of the person’s service with the employer;

[56] Mr Szentpaly was employed by BSL for approximately 5½ years at the time of his dismissal. This is a significant period of service with one employer, although it is obviously not uncommon to find employees with significantly longer periods of service. Mr Szentpaly had not, for example, gained an entitlement to long service leave as a result of his service with BSL.

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed;

[57] It is always a matter of speculation about how much longer an employee would likely be employed and how much remuneration they could be expected to earn, if not for their dismissal. Mr Szentpaly was 55 years of age at the time he was dismissed and could quite clearly, on one view, have continued in employment with BSL for several more years. Conversely, there have been some work performance issues. There is also some suggestion that the stress and anxiety associated with the work was having an impact. Mr Szentpaly was, in fact, off work at the time of his dismissal because of issues of this nature. As indicated, it is always difficult to estimate with any precision the amount of remuneration a person would likely have received if not for their dismissal. However, it is reasonable to assume Mr Szentpaly could have been employed for at least another 12 months, if not longer, if not for his dismissal. His gross salary at the time of his termination was $1453.11 per week.

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal;

[58] I am satisfied Mr Szentpaly has attempted to mitigate the loss suffered as a result of his dismissal. He has been able to find work as a night depot manager at a trucking company, although he was out of work for 15 weeks after his dismissal from BSL before commencing in that role. The evidence indicated his gross earnings in this new job fluctuate but are, on average around $950 per week. He also earned an amount of $560 doing some limited casual work.

(e) 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 compensation;

[59] As indicated, Mr Szentpaly has been able to find other employment. However, his earnings are approximately $500 per week less than what he was paid when working at BSL. He also received four weeks pay in lieu of notice when terminated by the BSL, being an amount of $5842.50.

(f) the amount of any income reasonably likely to be earned by the person during the period between the making of the order for compensation and the actual compensation;

[60] It is understood Mr Szentpaly remains in ongoing employment and there are no further considerations relevant in the context of this criteria.

(g) any other matters that FWC considers relevant.

[61] In this context of Mr Szentpaly submitted that there are a very limited number of similar employment opportunities available in the local area.

[62] Section 392(3) of the Act continues to indicate:

“If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.” 25

[63] I consider that it is appropriate to consider whether these provisions are relevant in the current matter. The Act does not contain a definition of misconduct (although serious misconduct is defined in the regulations.). The 4th edition of the LexisNexis Concise Australian Legal Dictionary defines misconduct in the following terms:

“Wrongful, improper, or unlawful conduct, motivated by deliberate purpose or by obstinate indifference to the consequences of one’s acts. Misconduct may involve gross negligence, or a deliberate departure from accepted standards so as to portray indifference and an abuse of privileges.” 26

[64] In the decision of Tabro Meat Pty Ltd v Heffernan 27 a Full Bench of the Commission considered whether the Commissioner at first instance erred in not reducing an amount of compensation awarded on the basis of the employee’s misconduct. The Full Bench subsequently considered it was appropriate to make a deduction because the reasons for dismissal involved a health and safety breach and the Applicant involved in swearing at the Managing Director. The details of what occurred on 7 February in the present matter have been described at length in this decision. The decision by Mr Szentpaly to park the vehicle and stop work at 11:30pm that night was at the very least questionable. His subsequent behaviour or inaction was not in accordance with what would be expected in such circumstances and was, in my view, inconsistent with what he says occurred. I am satisfied his behaviour in this context amounted to misconduct, at least in regard to his failure to disclose what occurred, and did contribute to the decision to terminate his employment. I am accordingly satisfied it is appropriate under section 392(3) of the Act to reduce any amount of compensation by 20%.

[65] In determining an amount to be ordered in lieu of reinstatement I have also adopted the approach in Sprigg 28 and note that there is no specific approach to be applied. It is a matter instead of considering all the circumstances of the matter. I am satisfied Mr Szentpaly likely could have continued in employment with BSL for a reasonable period of time, even though there are some doubts about his capacity or preparedness to continue in the job. Given that situation I am prepared to accept that the starting point for considering any order for compensation should be the maximum amount available, being the equivalent of 26 weeks pay. Mr Szentpaly received 4 weeks pay in lieu of notice and concedes in his submission that this amount should be deducted from any amount awarded. That deduction, being an amount of $5,812.44, will be made.

[66] As indicated, I also consider the total amount of any compensation should be reduced by 20% given Mr Szentpaly’s misconduct contributed to the decision to terminate his employment. I am also satisfied Mr Szentpaly made reasonable attempts to mitigate his lost earnings by attempting to find work elsewhere. He has subsequently been able to find other employment, although he did not commence in this job until 27 May, 15 weeks after his dismissal by BSL. He was, accordingly, only in this employment for 11 weeks out of the 26 weeks that followed his termination by BSL. I consider it appropriate to deduct those earnings during that 11 week period, being on average $950 per week or a total of $10,450 from the total amount to be awarded. A further amount of $526 and from some casual work should also be deducted.

[67] I also believe it appropriate to reduce the total amount for contingencies, particularly those associated with the vagaries of his likely future earnings, and the fact an amount of compensation will be received as a lump sum payment. Based on relevant authorities I consider a figure of 15% is appropriate in this context.

[68] Given all the circumstances I am satisfied it is appropriate to make an order for compensation in the sum of $7,769.41. That amount is to attract whatever taxation is required by law. It should be paid within 21 days of the date of this decision.

Appearances:

Mr L. Anderson of Maloney Anderson appeared on behalf of the Applicant.

Mr S. Pararajasingham and Mrs K. Keady of Buckworth Keady appeared on behalf of the Respondent.

Hearing details:

2013.

Mildura:

25 and 26 June.

Final written submissions:

The Respondent filed their final written submissions on

The Applicant filed final submissions in reply on