| [2016] FWCFB 1540 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
VICE PRESIDENT WATSON |
|
Appeal against the decisions [2015] FWC 2724 and [2015] FWC 5699 and order PR570978 of Commissioner Booth at Brisbane on 7 May 2015, 18 August 2015 and 19 August 2015 in matter number U2014/10098 – Whether termination of employment harsh, unjust or unreasonable – Whether valid reason for dismissal – Dismissal related to alleged misconduct – Fair Work Act 2009, ss. 604, 394 and 387.
Introduction
[1] These matters concern an application for permission to appeal and an appeal against decisions and an order of Commissioner Booth handed down on 7 May, 18 August and 19 August 2015. The decisions of the Commissioner concerned an unfair dismissal application made by Jason Schmidt on 17 June 2014 under s.394 of the Fair Work Act 2009 (the Act) in relation to the termination of his employment by BHP Coal Pty Ltd T/A BMA (BHP Coal). The Commissioner found that while there was a valid reason to dismiss Mr Schmidt, the termination was harsh and unjust. The Commissioner made an order for compensation amounting to $42,846.90.
[2] Permission to appeal was granted on transcript at the conclusion of the hearing before the Full Bench held on 27 October 2015 and the matters were listed for hearing in relation to the appeal on 14 December 2015. In a decision issued by this Full Bench on 5 January 2016, we granted permission to appeal, allowed the appeal and quashed the decisions and order of the Commissioner. 1
[3] We considered that Mr Schmidt’s application should be determined by this Full Bench based on the evidence adduced before the Commissioner and the matter was listed to hear submissions from the parties on the determination of the matter. The question we need to consider is whether Mr Schmidt’s termination was harsh, unjust or unreasonable having regard to the criteria contained in s.387 of the Act.
[4] At the hearing of the matter on 23 February 2016, Mr B. Rauf of counsel, with Ms E. Mayr, appeared on behalf of BHP Coal and Mr R. Reitano of counsel, with Mr J. Kennedy, appeared on behalf of Mr Schmidt.
Background
[5] We adopt generally Commissioner Booth’s summary of the background to this matter. It is extracted below:
“Factual Background
[4] Mr Schmidt lives in Dysart in central Queensland has worked in various departments at the Mine.
[5] He worked in his current role from about 2011 onwards until his termination. Prior to 2008 he was a member of the Mine’s rescue team at Saraji but resigned for personal circumstances, in particular, carer responsibilities.
[6] Prior to the incident in May 2014, Mr Schmidt had been on a Step 3 Final Warning which included advice that dismissal may result from any further act of misconduct. BHP Coal submits that in considering its decision about the appropriate action for the incident of 8 May 2014 it had regard to previous formal records of disciplinary action.
Earlier Warnings
[7] Mr Schmidt was subject to 2 warnings in December 2013. These were Step 2 and 3 Warnings concerning Mr Schmidt’s conduct. The Step 2 Warning was on 17 December 2013 which related to not advising the BHP Coal that he would not be returning to work that day after he had approved leave. Mr Schmidt says that BHP Coal should have known he would not be returning given that he had gone home after an incident that required him to change his clothing. BHP Coal says that it expected him back at work.
[8] The Step 3 Warning arose from his late arrival for work 2 days later, on 19 December. Mr Schmidt says that he was counselled about the lateness but at no time was he warned about his failure to notify that he had arrived late. BHP Coal says that it was about both the lateness and the lack of notification.
[9] Mr Schmidt disputed these incidents at the time but took no other action to dispute them formally.
[10] Additionally, Mr Schmidt had been counselled prior to the warning but BHP Coal indicated that it had not taken these matters into account in dismissing him.
The fuel tank incident - 8 May 2014
[11] On 8 May Mr Schmidt was assigned the task of using the Track Dozer 72 to move a skid fuel tank. He completed the task at approximately 8:30am.
[12] About half an hour later at 9.00am 2 other employees working in the same crew, Mr Keune and Mr Meaney, observed leaking fuel. Mr Keune came and spoke to Mr Schmidt and raised with him that they had noticed diesel leaking from the tank. He enquired from Mr Schmidt as to whether he had bumped it.
[13] Mr Schmidt indicated he didn’t think he had. The 2 other operators requested that he have a look at it.
[14] As requested Mr Schmidt then looked at the damage and decided it could have occurred while he was towing the tank.
[15] Mr Schmidt then returned to his dozer and attempted to use the two-way to contact his Supervisor, Mr Steve Marshall about the damage. He was unable to contact the Supervisor either by two-way or using his mobile phone while at the bottom of the pit.
[16] At 9:29 am Mr Schmidt, who had by this time left the pit, texted using a mobile phone for a number stored in his phone as ‘Car 21’. Mr Schmidt stated that he named this number ‘Car 21’ because that was the call-sign on site for the supervisor for pump and earthworks.
[17] The message said (verbatim):
“Forgot to tell got pyso appointment at 11:20 I’ll keep working if you want there a small fuel leak around gauge on pod puppy’s will tell you about it.”
(pyso refers to physio and puppys is a misspelling of ‘pumpys’ which is the nickname for the pump crew)
[18] However the number stored by Mr Schmidt as ‘Car 21’ was an old mobile number which had not been used by Mr Marshall since March 2014.
[19] On that day, Mr Schmidt made several other attempts to get in touch with Mr Marshall and then the Superintendent, Mr Glenn Fox. Ultimately he did so, but at no time when Mr Schmidt contacted Mr Marshall or Mr Fox did he raise the fuel tank incident, although other work matters were discussed. It was not until later that day when the pump operators advised of the leak that Mr Marshall became aware of it.
[20] Later in the shift, at a meeting the Step-up Supervisor, Mr Dave Farley, requested a statement from Mr Schmidt concerning the fuel tank incident.
[21] Mr Schmidt explained that he had sent the text message. Mr Marshall indicated he had not received it.
[22] Further meetings were held with Mr Schmidt on 11, 14 and 15 May.
[23] On 23 May Mr Schmidt was issued with a show cause letter identifying the following:-
[24] As a result of this investigation BHP Coal concluded that Mr Schmidt’s actions on 8 May constituted misconduct. Further that he acted in an unsafe manner and failed to notify his Supervisor of the damage within a reasonable time frame. They found specific breaches of various standards and values of BHP Coal. The letter noted that Mr Schmidt is currently subject to a Step 3 Final Warning. Further given the seriousness of the findings disciplinary action may include termination.
[25] Mr Schmidt was invited to provide a written response and did so. The response accepted it is likely that he caused the damage to the tank and explained that the content of the text message was not meant to avoid accountability but to confirm with his Supervisor that he would be informed of the issue later in the day by the pump crew. He explained the reason why he concluded it was unnecessary to secure the site. The letter also raised a willingness to undertake any further training or retraining that BHP Coal felt would assist.
[26] On 6 June BHP Coal terminated Mr Schmidt’s employment.”
Relevant Legislation
[6] The task of the Commission in this matter is to determine whether the termination is properly described as harsh, unjust or unreasonable. The Commission is required to apply the terms of s.387 of the Act in considering that question. Section 387 states that:
“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.”
[7] It is well established that the obligation to take into account factors, as far as they are relevant, requires findings of fact and the decision maker to have regard to those facts as matters of significance in the overall decision-making process. 2 Importantly, as the wording of the legislation makes clear, the ultimate question is whether the dismissal was harsh, unjust or unreasonable. As was said by McHugh and Gummow JJ in Byrne and Frew v Australian Airlines Limited.3
“128. Clause 11 (b) is aimed at the situation where the termination of employment brought about by the dismissal, rather than the steps leading up to the dismissal, or lack of them, is harsh, unjust or unreasonable.
…
130. That is not to say that the steps taken, or not taken, before termination may not in a given case be relevant to consideration of whether the state of affairs that was produced was harsh. unjust or unreasonable. Thus, it has been said that a decision which is the product of unfair procedures may be arbitrary, irrational or unreasonable. But the question under cl 11 (a) is whether, in all the circumstances, the termination of employment disobeyed the injunction that it not be harsh, unjust or unreasonable. That is not answered by imposing a disjunction between procedure and substance. It is important that matters not be decided simply by looking to the first issue before there is seen to be any need to enter upon the second.”
[8] The criteria for assessing fairness, although not exhaustive, are clearly intended by the legislature to guide the decision as to the overall finding of fairness of the dismissal and are essential to the notion of ensuring that there is “a fair go all round”. This is particularly important in relation to safety issues because the employer has obligations to ensure the safety of its employees, and commitment and adherence to safety standards is an essential obligation of employees – especially in inherently dangerous workplaces. The notion of a fair go all round in relation to breaches of safety procedures needs to consider the employer’s obligations and the need to enforce safety standards to ensure safe work practices are applied generally at the workplace.
[9] It is also well established that an assessment of whether a dismissal is harsh, unjust or unreasonable does not involve the Commission member putting themselves in the shoes of the employer and determining what he or she would have done in the circumstances 4. Findings of fact need to be made in relation to the specified criteria and other relevant factors. An overall assessment then needs to be made in relation to the statutory test of whether the dismissal is harsh, unjust or unreasonable. The task is not to review specific elements of the employment history to determine whether a discrete element may be unfair or unjustified.
[10] We will consider each of the matters in s.387 in turn.
Valid Reason
[11] Mr Schmidt was dismissed for misconduct comprising the following:
● While operating a dozer, he reversed into a fuel tank and damaged the fuel gauge (the collision).
● Mr Schmidt failed to notify the supervisor about the collision and the damage immediately after the incident occurred (the failure to notify).
● Mr Schmidt failed to secure and preserve the scene after the collision occurred (the failure to secure and preserve).
● The context of a Step 3 Final Warning.
[12] BHP Coal found that this conduct involved the following breaches:
[13] The BHP Coal decision-maker, Glen Fox, gave the following evidence about the significance of these matters:
(a) It was clear that the damage to the fuel tank had been brought to Mr Schmidt's attention at some time before 9.00am on 8 May 2014. The information collected in the investigation indicated that Mr Schmidt had a number of opportunities after this notify his supervisor of the damage, including when:
(i) He spoke to Mr Marshall on the two-way radio at the Mine at approximately 9.40am;
(ii) He spoke to both myself and Mr Marshall at approximately 10.50am;
(iii) He was picked up by Mr Marshall in a light vehicle at 2.00pm and taken to the crib hut; and
(iv) He was at the crib hut for approximately 30 minutes with Mr Marshall from 2.00pm – 2.30pm.
(b) It is a responsibility of all operators at the Mine to report incidents to their supervisors. Supervisors have a duty to ensure the safety of all operators in their crews at the Mine and cannot discharge this duty effectively if they are not informed of incidents as soon as practicable after they occur. The incident which occurred on 8 May 2014 was a serious incident in that it involved leaking fuel which had the potential to create a serious hazard for Mr Schmidt and other operators at the Mine. In addition, it was not appropriate for Mr Schmidt to make the decision that it was not necessary to preserve the scene of the incident. Any decision regarding how the scene of the incident was to be treated was that of his supervisor. Supervisors are trained to assess safety situations and must follow certain procedures at the Mine. For example, supervisors are required to report certain incidents involving contact between pieces of equipment to the Mines Inspectorate. They are also required to conduct drug and alcohol tests of anyone involved in an incident. By failing to report the incident, Mr Schmidt was preventing Mr Marshall for discharging his duties in respect of the Mine's safety and health management system.
(c) I was of the view that Mr Schmidt had not made a genuine effort to contact Mr Marshall after the incident. This was also compounded by Mr Schmidt's previous behaviour over the last 12 months where he had received a number of verbal warnings and a Step 3 for failing to communicate effectively with his supervisors. I was very concerned about the pattern of behaviour and was not confident in his ability to operate in a safe and effective manner at the Mine.
(d) I was also concerned that Mr Schmidt was not aware of the damage to the fuel tank. This is because Mr Schmidt would had have to have unchained the tank after he had delivered the tank to its final position. It seemed to my mind that an operator who was aware of their surroundings and taking due care would have:
(v) been aware when reversing the dozer that the dozer would have been in close proximity to the tank; and
(vi) would have checked the tank, as a matter of course, following the completion of such a task.
(e) In addition, as a dozer operator I was aware that Mr Schmidt was trained in and had relevant tickets to operate a dozer and was familiar with the Conduct Wheeled Dozer Operations Manual (Dozer Manual). When leaving a dozer the Dozer Manual requires operators to conduct a walk around inspection of the vehicle, report incidents and secure and preserve incident scenes. I formed the view that Mr Schmidt had not complied with the requirements of the Dozer Manual and had not conducted the task of towing the tank and unchaining it with care and attention.
[14] The nature of Mr Schmidt’s employment in an operating coal mine required close attention to safety issues and strict compliance with safety procedures. The evidence before the Commission establishes on the balance of probabilities that the collision occurred and that Mr Schmidt was responsible for the collision. There was no evidence of a leak prior to the tank being moved. Evidence of the collision suggests that the dozer caused the damage. White paint flecks were on the bumper bar of the wheel dozer matching the height and damage to the fuel tank. There was a structural dent on the header tank. The leak was a fresh leak at the time it was detected and inspected. Mr Schmidt was the only operator of the dozer who moved the fuel tank. In our view, it was highly unlikely that the operator of machinery would have been unaware of this type of contact. If unaware of the contact Mr Schmidt was not applying the necessary level of care and attention.
[15] We are satisfied on the evidence that Mr Schmidt did not take immediate action to deal with the resultant fuel leak. His explanation that he was not aware of the collision and could not be expected to deal with the situation is inconsistent with the requisite level of care and attention in operating machinery of this type.
[16] Further, the attempts to notify his supervisor were unsuccessful and in our view lacked the necessary level of candour and diligence. Mr Schmidt had opportunities to notify his supervisor directly and honestly and he did not effectively communicate the incident. Proper management of safety requires honest communication to those responsible for the safety of the mining operations.
[17] In our view, there is no doubt that there was a valid reason for termination relating to Mr Schmidt’s conduct – including its effect on the safety and welfare of employees. This is not merely a situation of an insignificant accident. In our view, the management of the situation and communication of the incident are at least as important as the accident itself. In combination, Mr Schmidt’s conduct was entirely inappropriate. The evidence before the Commission establishes that the conduct was a sound, defensible and well-founded reason for dismissal.
Notification of the Reason
[18] BHP Coal met with Mr Schmidt on 15 and 16 May 2014 to discuss the 8 May incident. After the second meeting he was provided with a letter suspending him on pay pending further investigations. After completing further investigations BHP Coal provided Mr Schmidt with a “Show Cause letter” dated 23 May 2014 that set out its findings regarding the 8 May incident, indicated the breaches it considered had occurred and said that disciplinary action including termination of employment was being considered. The letter said that the company will consider Mr Schmidt’s responses, relevant information obtained during the investigation and Mr Schmidt’s employment history including his Step 3 Final Written Warning.
[19] The termination letter dated 6 June 2014 also clearly articulated the conduct, findings and breaches relied upon to base its decision and said as follows:
“On 23 May 2014, you were requested to provide a response as to why you employment should not be terminated. I have taken into account your response, as well as the seriousness of the incident, your verbal and written responses during the investigation, and your employment history with BMA in determining the appropriate disciplinary action.
Your actions have been deemed a significant departure from those expected of you as an employee at BMA Saraji Mine and, given that you are currently subject to a Step 3 – Final Written Warning, I have determined that it is appropriate to terminate your employment with the Company effective immediately.”
[20] We find that Mr Schmidt was notified of the reasons for his dismissal.
Opportunity to Respond
[21] The process of issuing a show cause letter that set out the findings and breaches established in its investigation, including the meetings conducted with Mr Schmidt, allowed Mr Schmidt to respond to the prospect that his employment would be terminated as a result of his conduct on 8 May 2014. Mr Schmidt provided a three page response on 29 May 2014. We find that Mr Schmidt was given the opportunity to respond to the dismissal reasons by virtue of the investigation and show cause process.
Unreasonable opportunity to allow a support person
[22] Apart from the first meeting between Mr Fox, Mr Marshall and Mr Schmidt, where a support person had not been organised in advance and an alternative delegate was relieved from work in order to provide Mr Schmidt with support, there was no impediment on Mr Schmidt to arrange a support person of his choice to assist him in the investigation and disciplinary process.
Warnings and employer resources
[23] Mr Schmidt had been warned about his performance on a number of previous occasions and was under a Step 3 Final Written Warning at the time of his dismissal. The relevant incidents were different from the incidents on 8 May 2014, but nevertheless involved compliance with company policies. BHP Coal can be expected to have established fair disciplinary procedures given its size and resources.
Other matters
[24] We have considered whether the action of dismissal was disproportionate to the conduct found to have occurred. We are not persuaded that the conduct is insignificant or of little consequence as contended on behalf of Mr Schmidt. The seriousness of the conduct is amply demonstrated in the findings and breaches established by the company. We have considered the other matters raised by the parties including the impact of termination on Mr Schmidt.
Conclusions
[25] In all of the circumstances we are not of the view that the termination of Mr Schmidt’s employment was harsh, unjust or unreasonable. He was dismissed for a valid reason after a process that gave him an opportunity to respond to the allegations regarding his conduct. Dismissal was not disproportionate to the conduct that occurred in the light of the paramount issue of safety and his employment history. Mr Schmidt’s unfair dismissal application is therefore dismissed.
VICE PRESIDENT
Appearances:
Mr B. Rauf of counsel, with Ms E. Mayr, on behalf of BHP Coal.
Mr R. Reitano of counsel, with Mr J. Kennedy, on behalf of Mr Schmidt.
Hearing details:
2016.
Sydney – Video Link to Brisbane.
23 February.
Final written submissions:
BHP Coal on 2 February 2016 and in reply on 16 February 2016.
Mr Schmidt on 2 February 2016 and in reply on 16 February 2016.
2 ALH Group Pty Ltd trading as the Royal Exchange Hotel v Mulhall (2002) 117 IR 357 [51]. See also Smith v Moore Paragon Australia Ltd (PR915674) at [92]; Edwards v Giudice (1999) 94 FCR 561 [6]‒[7].
3 [1995] HCA 24.
4 Per Moore J in Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681, at 685: I should, however, make plain - and this has been made plain in many cases decided by this court- that it is not the court's function 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 but rather it is for the court to assess whether the employer had a valid reason connected with the employee's capacity or conduct, and in these proceedings I have concluded it did.
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