[2014] FWC 7310

[2014] FWC 7310 [Note: An appeal pursuant to s.604 (C2014/7029) was lodged against this decision - refer to Full Bench decision dated 27 February 2015 [[2015] FWCFB 1033] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Sharp
v
BCS Infrastructure Support Pty Limited
(U2014/634)

VICE PRESIDENT CATANZARITI

SYDNEY, 15 OCTOBER 2014

Application for relief from unfair dismissal - employee dismissed for returning a positive drug test result - no impairment alleged - breach of employer’s policies - whether harsh, unjust or unfair - application dismissed.

[1] On 3 March 2014, an application pursuant to s.394 of the Fair Work Act 2009 (the Act) was lodged by Mr Owen Sharp (the Applicant).

[2] The matter was subject to an unsuccessful conciliation on 10 April 2014, and consequently was listed for hearing before me on 4 and 5 August 2014. At the hearing, the Applicant was represented by Ms L Saunders from the Australian Manufacturing Workers’ Union (AMWU) and BCS Infrastructure Support Pty Ltd (the Respondent) was represented by Mr P Rozen of Counsel. Mr Rozen’s appearance was not objected to by the Applicant, and having formed the view that the matter would proceed more efficiently if the Respondent was represented by a lawyer, permission was granted in accordance with s.596 of the Act.

[3] The Applicant filed written submissions and materials in the Fair Work Commission (the Commission) on 5 June 2014. The Respondent filed written submissions and materials in the Commission on 18 June 2014. Reply submissions and materials were filed by the Applicant on 25 July 2014.

[4] The Applicant gave evidence on his own behalf and called no further witnesses.

[5] The following witnesses gave evidence on behalf of the Respondent:

Mr Neal Hiland, Operations and Maintenance Manager, BCS Infrastructure Support Pty Ltd

Ms Christine Canfield, Group Human Resources/Occupational Health & Safety Manager, BCS Infrastructure Support Pty Ltd

Mr Jeffrey Barden, National Operations Manager, BCS Infrastructure Support Pty Ltd

Dr Angus Forbes, Medical Review Officer, Sonic Healthplus

Dr Somnuk Phonesouk, General Medical Practitioner, Sydney Airport Medical Centre

[6] I was greatly assisted by the provision of an agreed statement of facts by the parties. Both parties should be commended for their contribution to this statement as it allowed the hearing to proceed much more efficiently, having regard to the limited number of factual issues in dispute.

Background

[7] The Applicant was employed by the Respondent in November 2006. In April 2011, he was promoted to the position of team leader, and he remained in this position until his termination on 21 February 2014. The Applicant’s place of work was Sydney Airport, which is operated by Sydney Airport Corporation Limited (SACL). The work performed by the Applicant was the result of a contract between the Respondent and Qantas Airways Limited (Qantas) for the maintenance and servicing of equipment including carousels and aerobridges. The work performed by the Applicant was considered to constitute “Safety Sensitive Aviation Activities” (SSAA) for the purposes of the Civil Aviation Safety Regulations 1998.

[8] On 31 January 2014, SACL wrote to the Respondent requiring that all existing employees and sub-contractors of the Respondent who perform SSAA who had not yet been subjected to drug and alcohol testing must be tested no later than 21 February 2014.

[9] On Monday 10 February 2014, the Applicant reported for work at 6:00 AM and was informed at 10:00 AM by his supervisor, Mr Neal Hiland, that he was required to undertake a drug and alcohol test. The Applicant immediately informed Mr Hiland that he had taken marijuana the Saturday prior. While the exact terms of the conversation that ensued are disputed, it is common ground that Mr Hiland told the Applicant that he was required to undertake the test.

[10] At 3:10 PM on 10 February 2014, the Applicant provided a urine sample at the Sydney Airport Medical Centre. The test was overseen by Dr Phonesouk. The Applicant returned to work the remainder of his shift and also worked his rostered shift on the following day, 11 February 2014. Prior to the commencement of the Applicant’s shift on 12 February 2014, Mr Hiland was informed that the Applicant’s test had returned a non-negative result for drugs. Mr Hiland contacted the Applicant and informed him that he was stood down from duties pending receipt of a report from the Medical Review Officer.

[11] On 13 February 2014, Mr Hiland received a copy of the results of the confirmatory tests which showed that the Applicant had tested positive for cannabinoids at a level of 112µg/L. This result exceeded the permitted threshold of 15µg/L. The Applicant’s test results were then sent to Dr Angus Forbes, a registered Medical Review Officer. Dr Forbes reviewed the documents and confirmed that they indicated that the Applicant had tested positive for THC (the primary psychoactive ingredient in cannabis). Dr Forbes provided a report to the Respondent on 17 February 2014 finding that the Applicant had tested positive for cannabinoids and that he should be managed in accordance with the Respondent’s Drug and Alcohol Management Plan (DAMP).

[12] On 17 February 2014, the Applicant was sent a “show cause” letter. On 19 February 2014, the Applicant met with Mr Hiland and Ms Canfield of the Respondent. Geoff Wallace, an AMWU Organiser, attended the meeting as the Applicant’s support person. The Applicant was provided with a copy of Dr Forbe’s report but was not provided with a copy of the initial drug test results or the confirmatory drug test results. The Applicant was not advised of the level of THC detected in his sample. At this meeting the Applicant requested an opportunity to respond in writing, and the Respondent agreed. A further meeting was arranged for 21 February 2014.

[13] On 20 February 2014 the Applicant provided the Respondent with a written response. In his written response, the Applicant claimed that he was not a regular user of cannabis (or any other illegal substance) and that he had smoked a single joint that he had shared with close friends on the Saturday prior to his drug and alcohol test. The Applicant acknowledged that he had made “a serious mistake” but claimed that he did not feel impaired when he attended work and that he was happy to submit to a program of ongoing or random testing if he were given a second chance. The Applicant asked the Respondent to take into account his length of service at the company, his work record, his willingness to transfer to another worksite if necessary, his cooperation with the investigation process and his status as the primary breadwinner in his family.

[14] On 21 February 2014, at a further meeting between the Respondent and the Applicant, the Applicant’s employment was terminated by a letter of that date. The Applicant was paid out his accrued annual leave, his long service leave and four weeks’ pay in lieu of notice. The Applicant was not provided with a copy of the initial drug test results and the confirmatory drug test results until 10 April 2014.

The Applicant’s case

[15] The Applicant concedes that he has engaged in misconduct. However, Ms Saunders submitted on his behalf that his actions did not amount to serious misconduct and that termination was not justified in all of the circumstances of the case. Ms Saunders submitted that there were a number of mitigating factors that should be taken into account when considering the Applicant’s conduct, including:

The Applicant did not, and has never, knowingly used alcohol or illicit substances at work;

There is no suggestion that the Applicant was impaired by the cannabis in his system while at work, or that the Respondent suspected any impairment;

There is no suggestion or evidence to suggest that the Applicant is a habitual drug user;

The test results themselves do not indicate that the Applicant was impaired or remained affected by cannabis;

The Applicant has never previously tested non-negative for any prohibited substance during his employment with the Respondent;

The Applicant informed his supervisor that he could test positive prior to taking the test;

The Applicant complied with the requirement to provide a sample;

The Applicant has been honest and contrite and has never sought to deny or conceal his conduct;

Other employees of the Respondent who had returned non-negative samples were not terminated;

The Respondent’s policy did not advise employees that termination would result from returning a non-negative result, and in fact prefers alternative sanctions; and

The Respondent did not comply with its own DAMP in the manner in which the testing was carried out.

[16] The Applicant conceded that the returning a non-negative test result for a prohibited substance can form a valid reason for termination, but that of itself it was not automatically a valid reason, and that the surrounding circumstances of this case do not justify termination. Thus, the Applicant’s primary submission was that there was no valid reason for dismissal.

[17] Ms Saunders submitted for the Applicant that the Respondent’s DAMP did not require termination. It was not controversial between the parties that the Respondent’s DAMP did not mandate termination upon return of a non-negative test result. Nor was it controversial that the Respondent’s DAMP did not include a random testing regime. While the Applicant did not contend that the Respondent was not entitled to test the Applicant, it submitted that the policy framework was inadequate, and that in those circumstances termination was not justified.

[18] Ms Saunders also submitted that, despite what the Respondent’s assertion to the contrary in its letter of termination, the non-negative test result would not have had an impact on the Respondent’s ability to obtain and hold an Airport Security Identification Card (ASIC) which is a precondition of employment.

[19] Ms Saunders submitted that there was no reliable evidence to support the Respondent’s claim that the Applicant’s non-negative test result would affect the Respondent’s reputation in any significant way. Ms Saunders submitted that the Respondent was not obligated to share the Applicant’s test results with either Qantas or SACL, and therefore if there was damage to the Respondent’s reputation it was due to the Respondent’s choice to share the test results.

[20] Ms Saunders submitted that, in accordance with the definition in reg 1.07 of the Fair Work Regulations 2009, serious misconduct could only be made out where there was a serious and likely risk to health and safety or to the reputation, viability or profitability of the Respondent’s business. As there is no evidence that the Applicant was impaired, it was submitted that there was no serious and likely risk to health and safety, and any reputational damage was due to the Respondent’s actions in unnecessarily reporting the Applicant’s test results.

[21] It was also submitted that the Respondent was not entitled to take into account the Applicant’s out of hours conduct with respect to the taking of illegal drugs. Ms Saunders submitted that the Respondent was “in reality” taking into account the Applicant’s out of hours conduct, and that it was not entitled to do so in the circumstances.

[22] Ms Saunders also submitted that, even if there were a valid reason for dismissal, the dismissal was still harsh, unjust or unreasonable. This submission was made on the basis that there were procedural shortcomings in the way the Respondent conducted the termination. Ms Saunders submitted that the evidence showed that the Respondent had not put to the Applicant all of the reasons on which his termination was based, nor had it provided the Applicant with all of the relevant information, such as the reading of the level of cannabinoids found in his system.

[23] Finally, it was submitted that the dismissal was harsh based, inter alia, on the Applicant’s 10 years of service with the company, during which time no warnings about work performance or conduct were given to the Applicant.

The Respondent’s Case

[24] Mr Rozen submitted on behalf of the Respondent that its reasons for terminating the Applicant’s employment were sound, defensible and well founded. Mr Rozen submitted that the breach of a company policy may provide a valid reason for termination and that in circumstances where the policy is both lawful and reasonable and it had been made clear to employees that a breach is likely to result in termination, an employee who knowingly breaches the policy will have difficulty making out an argument that there is no valid reason for termination.¹

[25] It was submitted that the Applicant conceded in his Outline of Submissions that a breach of a company policy constitutes a valid reason for dismissal and that the Applicant was aware of the Respondent’s (and the Respondent’s clients, namely Qantas and SACL) policies in relation to drugs and alcohol, and the restrictions contained in these policies on attending work with drugs in his system. Mr Rozen submitted that the Applicant’s test result was almost eight times the threshold specified in the relevant policies.

[26] It was submitted that the Respondent’s DAMP provides that an employee who returns a positive test result will be subject to disciplinary action in accordance with the Respondent’s Disciplinary Policy. The Respondent’s Disciplinary Policy provided, it was submitted, that consumption or use of drugs or alcohol in breach of the Respondent’s or a clients’ DAMP is an act of serious misconduct.

[27] Mr Rozen submitted that the Applicant was not dismissed on the basis that he was impaired or may have been impaired while at work, but because he returned a positive test result that was a breach of its (and its clients’) DAMPs and the Respondent’s Code of Conduct. It was submitted that dismissal was a reasonable response in the circumstances pursuant to the Respondent’s Disciplinary Policy.

[28] Mr Rozen submitted that there were a number of factors that contributed to the decision to terminate the Applicant, including:

The level of cannabinoids revealed by the test was so high that it represented a prima facie serious threat to the safety of workers;

The Applicant’s conduct compromised the Respondent’s reputation in circumstances where the Respondent already held serious concerns about its relationship with Qantas;

Representations made by a Qantas representative to the Respondent that Qantas would not be comfortable with an employee who had tested positive for drugs remaining on site;

The high-risk nature of the Applicant’s workplace;

The Applicant’s role as a team-leader responsible for other employees; and

The risk of establishing a precedent with respect to testing positive for illegal substances if the Applicant was allowed to return to the workforce.

[29] Mr Rozen submitted that the Applicant was afforded procedural fairness, as he was notified of the reason for his dismissal and was given ample opportunity to respond. Mr Rozen submitted that the Respondent acted equitably in that two other employees who also tested positive for cannabis were also dismissed.

Consideration

[30] A dismissal is unfair if I am satisfied, on the evidence before me, that all of the circumstances set out in s.385 of the Act existed. Section 385 provides the following:

“385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

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

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

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”

[31] There was no argument that the Applicant had not been dismissed, and neither party sought to rely on ss.385(c)-(d). The dispute was confined, therefore, to whether or not the dismissal was harsh, unjust or unreasonable. The criteria that must be considered when determining whether the dismissal was harsh, unjust or unreasonable are set out at s.387 of the Act:

“387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC 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 the FWC considers relevant.”

[32] The ambit of the conduct that may fall within the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 465 by McHugh and Gummow JJ as follows:

“... 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.”

Was there a valid reason for dismissal relating to the Applicant’s capacity or conduct?

[33] The Respondent must have a valid reason for the dismissal of the Applicant, although it need not be the reason given to the Applicant at the time of the dismissal.² The reasons should be “sound, defensible and well founded”³ and should not be “capricious, fanciful, spiteful or prejudiced.”⁴ There is a distinction between capacity and conduct.⁵ In this matter, it was the conduct of the employee, not his capacity, that formed the basis of his termination.

[34] It is not the role of the Commission to “stand in the shoes of the employer and determine whether or not the decision made by the employer was a decision that would be made by the court.”⁶ However, the Commission must consider the entire factual matrix in determining whether an employee’s termination is for a valid reason.⁷

[35] I do not accept the Applicant’s submission that the Respondent took into account the Applicant’s out of hours conduct in an impermissible manner. I am satisfied on the basis of the evidence before me that the reason for Applicant’s dismissal was that he returned a confirmed positive test result whilst at work. While the Respondent had been informed by the Applicant that he had consumed cannabis on the weekend prior to the drug test, it was not this information that formed the basis of his termination. This is established by the evidence of Ms Canfield, Mr Hiland and the termination letter that was sent to the Applicant.

[36] The Applicant submitted that the Respondent was in error in asserting in its termination letter that the return of a positive test result would likely affect the Applicant’s ability to obtain an ASIC. Ms Canfield’s evidence in cross-examination revealed that there was scant basis for this assertion.⁸ However, even were the Respondent mistaken about the impact of the positive test result on the Applicant’s ability to obtain an ASIC, the Applicant’s positive test result provides a valid reason for dismissal in the circumstances.

[37] The Applicant also submitted that there was no evidence that the Applicant was suffering from impairment due to the consumption of drugs or alcohol, and no evidence that he had consumed drugs or alcohol on site. It was further submitted that there was no suggestion that the Applicant was a habitual drug user, and that the Applicant had never previously returned a non-negative result on a drug test. These are not issues that arise on the facts of this matter. The Respondent did not allege that the Applicant was suffering from impairment or that he was a habitual drug user. These issues have no relevance in considering whether or not there was a valid reason to terminate the Applicant in circumstances where such reasons had no bearing on the Applicant’s termination. To raise them at this stage merely serves to distract from the true issues in dispute.

[38] I find that there was a valid reason to terminate the Applicant relating to his conduct. While the mitigating circumstances submitted by the Applicant may go towards other factors to which I will now turn, they are not sufficient to negate the validity of the reason for the Applicant’s termination.

Was the Applicant notified of the reason for dismissal?

[39] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made,⁹ in explicit terms¹⁰ and in plain and clear terms.¹¹ In Crozier v Palazzo Corporation Pty Ltd¹² a Full Bench of the Australian Industrial Relations Commission dealing with similar provision of the Workplace Relations Act 1996 stated the following:

“As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.”13

[40] I am satisfied that the Applicant was notified of the reason for his dismissal. The Applicant gave evidence that he was informed of his non-negative test result on Wednesday 12 February 2014, and the Applicant was informed during the course of this conversation that he would be subject to a formal disciplinary process. On 17 February 2014 the Applicant was given a ‘show cause’ letter that clearly identified that the Respondent took was of the view that the matter was serious and that any disciplinary action taken could include termination of his employment.

[41] The Applicant contended that he was not informed of the level of THC found in his sample until after his termination. There was some conflicting evidence in this respect between the evidence of the Applicant and Dr Forbes. The Applicant contended in his written response to the Respondent of 20 February 2014¹⁴ that he had asked Dr Forbes what range his result fell in but was not told. Dr Forbes gave the following evidence in cross examination in relation to this issue:

“Is there a reason why you didn't advise him of the level?---No, I don't routinely advise people of the exact numbers. It's not particularly helpful in my experience and if they ask I'd be more than happy to tell them but it's extraneous information for the consultation usually.

All right. You've anticipated my next question which is did Mr Sharp ask you to tell him the level?---It's certainly not my recollection.

Okay. Based on your practice if he had asked you is there any reason why you wouldn't have told him?---None at all.”¹⁵

[42] In contrast, the Applicant’s oral evidence in relation to this issue was inconsistent and contradictory.¹⁶ I prefer Dr Forbes evidence in relation to this issue and find that, on the balance of probabilities, that the Applicant did not ask Dr Forbes about the level of THC found in his urine.

[43] It is, however, uncontroversial that the Respondent did not provide the Applicant with a copy of his test results at the disciplinary meeting on 19 February 2014 despite being requested to do so by the Applicant’s union representative Mr Geoff Wallace. However, given that the Applicant had already admitted to the use of cannabis and had been made aware that his test results had returned positive in breach of the Respondent’s DAMP, the exact level of THC in the Applicant’s sample was not a material concern.

[44] I am satisfied that the Applicant was appropriately notified of the reason for his dismissal.

Was the Applicant given an opportunity to respond?

[45] I am satisfied that the Applicant was given an appropriate opportunity to respond, in person at the meeting of 19 February 2014 and subsequently in writing.

Was the Applicant unreasonably refused a support person?

[46] The Applicant had the benefit of Mr Geoff Wallace as his support person at the meeting of 19 February 2014. There is no suggestion that he was unreasonably refused a support person.

Warnings regarding unsatisfactory performance

[47] The Respondent was not terminated on the basis of unsatisfactory performance. Nevertheless, the Applicant submitted that the Applicant’s performance was taken into account in making the decision to terminate his employment. The Applicant referred to the statement of Mr Hilland in which Mr Hilland gave evidence that in discussions about alternative outcomes to terminating the Applicant he said that “there was nothing exceptional about Owen’s recent work performance that would justify moving him to another site or retaining him in the Sydney Airport role.”¹⁷

[48] I do not accept that an inference can be drawn from this evidence that the Applicant’s work performance was a factor in the Respondent’s decision to terminate his employment, or that there was any need for the Respondent to provide the Applicant with a warning regarding unsatisfactory performance. Mr Hilland was expressing the view that there was nothing exceptional about the Applicant’s work performance. This is significantly different from having concerns about unsatisfactory work performance.

Size of employer’s enterprise and human resource expertise

[49] The Respondent is a large organisation with over 200 employees. I find that the Respondent’s size was not a relevant factor in this matter. The Respondent has dedicated human resources expertise and a relatively sophisticated set of procedures that applied to the Applicant’s dismissal.

Other relevant matters

Serious misconduct

[50] The Applicant submitted that the Respondent’s DAMP did not require the Respondent to terminate the Applicant and that the policy contemplates suspension and a return to work following drug and alcohol counselling. While the DAMP does not require the Respondent to terminate an employee who has returned a confirmed positive test result, it does allow the Respondent to do so. Paragraph 11 of the DAMP provides that “BCS will take disciplinary action against an SSAA employee who fails to comply with their responsibilities an obligations under the DAMP, including but not limited to... returning a confirmatory test result. BCS’s Disciplinary Policy and Guidelines set out the disciplinary options and processes for breaches of company policy and procedures, including the DAMP.”¹⁸

[51] The Respondent’s Code of Conduct sets out a number of examples of misconduct and serious misconduct.¹⁹ No reference is found in these examples to returning a confirmatory test result. Some of the examples of serious misconduct relate to the use of illicit drugs whilst on company premises and being at work whilst under the influence of drugs and/or alcohol. These are not allegations that formed the basis of the Applicant’s dismissal.

[52] The Respondent submitted that the Applicant’s conduct constituted serious misconduct justifying immediate dismissal. The Applicant submitted that his misconduct did not fall within any of the examples outlined in the Code of Conduct nor the meaning of “serious misconduct” as set out in reg 1.07 of the Fair Work Regulations 2009.

[53] Regulation 1.07 of the Fair Work Regulations 2009 provides as follows:

“1.07 Meaning of serious misconduct

(1) For the definition of serious misconduct in section 12 of the Act, serious misconduct has its ordinary meaning.

(2) For subregulation (1), conduct that is serious misconduct includes both of the following:

(a) wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment;

(b) conduct that causes serious and imminent risk to:

(i) the health or safety of a person; or

(ii) the reputation, viability or profitability of the employer’s business.

(3) For subregulation (1), conduct that is serious misconduct includes each of the following:

(a) the employee, in the course of the employee’s employment, engaging in:

(i) theft; or

(ii) fraud; or

(iii) assault;

(b) the employee being intoxicated at work;

(c) the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.

(4) Subregulation (3) does not apply if the employee is able to show that, in the circumstances, the conduct engaged in by the employee was not conduct that made employment in the period of notice unreasonable.

(5) For paragraph (3)(b), an employee is taken to be intoxicated if the employee’s faculties are, by reason of the employee being under the influence of intoxicating liquor or a drug (except a drug administered by, or taken in accordance with the directions of, a person lawfully authorised to administer the drug), so impaired that the employee is unfit to be entrusted with the employee’s duties or with any duty that the employee may be called upon to perform.”

[54] It is important to note that this is an inclusive definition, not an exhaustive one. It explicitly maintains the ‘ordinary meaning’ of the term. Judge Lucev of the Federal Circuit Court summarised this meaning as follows:

“To define “serious misconduct” by reference to its “ordinary meaning” as is done in reg.1.07(1) of Div.2 of Part 1-2 of Ch.1 of the FW Regulations is not of particular assistance in determining whether or not the conduct for which the employee has been terminated is serious misconduct disentitling an employee to the minimum period of notice prescribed under the NES. That is because, both historically and in more modern times, courts have been wary of defining the extent of “misconduct” which justifies dismissal, and where they have attempted the task have made it clear that the misconduct must be sufficiently “serious” as to warrant non-continuation of the contract between employer and employee. Thus, the “ordinary meaning” definition of “serious misconduct” adds little, if anything, to the content of the meaning of “serious misconduct”.

In Clouston & Co Limited v Corry it was observed that there “is no fixed rule of law defining the degree of misconduct which would justify dismissal”.

In Laws v London Chronicle (Indicator Newspapers) Ltd it was observed that:

“… if summary dismissal is claimed to be justifiable, the question must be whether the conduct complained of is such as to show the servant to have disregarded the essential conditions of the contract of service.

… one act of disobedience or misconduct can justify dismissal only if it is of a nature which goes to show (in effect) that the servant is repudiating the contract, or one of its essential conditions; and for that reason, therefore, I think that one finds in the passages which I have read that the disobedience must at least have the quality that it is “wilful”: it does (in other words) connote a deliberate flouting of the essential contractual conditions.”

In North v Television Corporation Ltd the Australian Industrial Court was called upon to consider the word “misconduct” as used in an industrial award covering journalists. In the joint judgment in North it was observed that:

“It is of assistance to consider the expression “misconduct” by reference to subject matter to which it is related and the context in which it appears. The subject matter is the termination by one party against the will of another of a continuing contract of employment on the ground of breach of one of the terms of the contract. And the context is such as to indicate that certain breaches of a non-serious nature, some of which would be within the connotation of misconduct, are not regarded as grounds for termination. In such a situation it is reasonable to interpret the expression “misconduct” as referring to conduct so seriously in breach of the contract that by standards of fairness and justice the employer should not be bound to continue the employment.

This situation would arise if there were conduct inconsistent with the fulfillment of the express or implied conditions of service. It is conduct of that kind which will justify dismissal at common law.”

It was also observed in North by a single judge that although the conduct of the journalist concerned was “reprehensible” it fell short of misconduct justifying summary dismissal because it was an isolated incident which occurred “under [the] considerable strain” of preparing for a nightly news bulletin.

In Gera v Commonwealth Bank of Australia Ltd the employee’s Australian Workplace Agreement provided for termination without pay in lieu of notice for misconduct if the misconduct was serious. In that case it was observed that:

“The use of the adjective “serious” imposes an additional requirement before the Bank can terminate employment without notice. Something more than mere misconduct is required.”

In Gera the Court went on to find that there was no doubt that the sexual or indecent assault of a fellow employee was serious misconduct warranting summary termination without payment in lieu of notice, as it constituted a fundamental breach of an employee’s duty, particularly where the employee was a senior employee and mentor to the employee who had been assaulted.”²⁰

(References omitted)

[55] In the circumstances of this case, I am satisfied that the Applicant’s conduct was sufficiently serious to constitute serious misconduct. While the Applicant gave evidence that he had not been explicitly trained in the Respondent’s DAMP, he conceded that he was aware of the policy. Further, the evidence of the Respondent shows that the Applicant had undertaken specific training in relation to the Qantas DAMP, which was in substantially similar terms to the Respondent’s DAMP.

[56] The Applicant was aware that the Respondent considered drug and alcohol use to be serious issues. This is evidenced by his attempt to dilute the test results by consuming large quantities of water immediately prior to his drug test.²¹ The nature of the work undertaken by the Applicant explains the seriousness with which the Respondent treats the use of drugs and alcohol. It is clear that safety is a significant concern for individuals performing work such as that the Applicant performed. Further, the fact that the work was undertaken at an airport would clearly heighten tensions around issues such as access to, use of and possession of illegal substances due to security concerns. Ms Canfield also pointed out in her oral evidence that the Applicant’s place of work was somewhat unique, in that the work was undertaken inside the client’s premises, and that due to the nature of the workplace, up to three different DAMPs applied to the Respondent’s employees.²² In these circumstances, it is clear that the Applicant’s conduct constituted serious misconduct within the ordinary meaning of the term.

[57] I also find that the Applicant’s conduct had the capacity to cause serious and imminent risk to the reputation, viability or profitability of the Respondent within the meaning of reg 1.07 of the Fair Work Regulations 2009. Given the background set out above, I am satisfied that a confirmed positive test result for illegal drug use by an employee would cause serious and imminent risk to the Respondent’s reputation. Contrary to the Applicant’s submissions, it is not necessary for the Respondent to prove that its reputation, viability or profitability was affected by the Applicant’s actions. It is sufficient that his conduct caused serious and imminent risk thereof. Given the highly sensitive nature of the work performed by the Respondent’s employees, it is reasonable to conclude that issues such as employees returning confirmed positive test results for illegal drugs could affect its reputation, particularly given the Respondent’s complex relationship with its clients.

[58] I do not accept the Applicant’s submissions that the risk to reputation was created by the Respondent by choosing to share the test results with its clients. I am not satisfied on the evidence before me that the Respondent was not obligated to share the Applicant’s test results with its clients. However, even if no obligation existed, the Respondent is entitled to conduct its relationship with its clients in the way that it sees fit. Should the Respondent choose to be open and transparent with its clients in relation to the implementation and results of its drug testing, it is entitled to do so. If this openness and transparency were to hurt its reputation, it could only be due to the actions of its employees.

Other relevant factors

[59] The Applicant submitted that the following factors were relevant to finding that his dismissal was harsh:

The sanction of termination being disproportionate to his conduct;

Sanctions issued to other employees of the Respondent for similar conduct;

The applicant’s length of service and work record;

The personal and economic circumstances of the Applicant.

[60] I have addressed the first of these factors above in my discussion of serious misconduct. In relation to the second, I am not satisfied that the Applicant has been treated harshly when compared to other employees of the Respondent. There was some evidence that other employees of the Respondent had been terminated at a similar time to the Applicant for returning non-negative test results. While there was some evidence to suggest that individuals who had returned non-negative results due to the consumption of prescribed medications had not been terminated, I am satisfied that the circumstances of the matter before me are sufficiently distinguishable that no harshness can be found.

[61] I have considered the applicant’s length of service, work record and his personal and economic circumstances and I am not satisfied that these factors negate the serious misconduct engaged in by the Applicant. I am not satisfied that the Applicant’s dismissal was harsh.

Full bench decision in Harbour City Ferries v Toms [2014] FWCFB 6249

[62] Subsequent to the hearing of this matter a Full Bench issued its decision in Harbour City Ferries v Toms [2014] FWCFB 6249. I allowed the parties leave to provide submissions on this decision. I have considered the submissions of both parties and the decision of the Full Bench in this matter. While it is of some relevance that the Full Bench was required to deal with a policy that was not dissimilar to the Respondent’s DAMP, every application must be judged on its own merits. While I acknowledge some factual similarities between the matters, the Full Bench decision has not had a significant impact on my decision in this matter.

Conclusion

[63] Having considered each of the matters specified in s.387 of the Act, I am not satisfied that the dismissal of the Applicant was harsh, unjust or unreasonable. Accordingly, I find that the Applicant’s dismissal was not unfair. An order will be issued with this decision dismissing the application.

VICE PRESIDENT

Appearances:

L Saunders of the Australian Manufacturing Workers’ Union for the Applicant.

P Rozen of Counsel for the Respondent.

Hearing details:

2014.

Sydney:

August 4, 5.

Final written submissions:

Applicant, 19 September 2014.

Respondent, 22 September 2014.

1 Woolworths Ltd t/as Safeway v Brown (2005) 145 IR 285.

2 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-378.

3 Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371, 373.

4 Ibid.

5 Annetta v Ansett Australia (2000) 98 IR 233; Print S6824.

6 Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681, 685.

7 Allied Express Transport Pty Ltd v Anderson (1998) 81 IR 410, 413.

8 Transcript, U2014/634, 4 August 2014, PN1469.

9 Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41].

10 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.

11 Previsic v Australian Quarantine Inspection Services Print Q3730.

12 (2000) 98 IR 137.

13 Ibid at 151.

14 Exhibit 2, Statement of Owen Sharp, Attachment E.

15 Transcript, U2014/634, 4 August 2014, PN1012–PN1014.

16 Ibid PN94–PN130.

17 Exhibit A, Statement of Neal William Charles Hiland, p.6.

18 Exhibit 2, Statement of Owen Sharp, Attachment A, p.14.

19 Exhibit 2, Statement of Owen Sharp, Attachment B, p.4.

20 Wintle v Ruc Cementation Mining Contractors Pty Ltd (No.3) [2013] FCCA 694, [97]–[92].

21 Exhibit 2, Statement of Owen Sharp, para. 27.

22 Transcript, U2014/634, 4 August 2014, PN1123.

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