[2017] FWC 3426

The attached document replaces the document previously issued with the above code on 5 July 2017.

Lisa Powell

Associate to Commissioner Bissett

Dated: 24 July 2017

[2017] FWC 3426 [Note: This decision has been quashed - refer to Full Bench decision dated 10 October 2017 [[2017] FWCFB 4738]
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009
s.394—Unfair dismissal

Jurgen Rust
v
Farstad Shipping (Indian Pacific) Pty Ltd T/A Farstad
(U2016/14464)

COMMISSIONER BISSETT

MELBOURNE, 5 JULY 2017

Application for relief from unfair dismissal – applicant unfairly dismissed – remedy – compensation ordered.

[1] Captain Jurgen Rust is a Master Mariner and was employed by Farstad Shipping (Indian Pacific) Pty Ltd T/A Farstad (Farstad) as such. A Master Mariner is the captain of any ship. As the ship’s Master Captain Rust was responsible for the overall management and safe navigation of the relevant vessel.

[2] In September 2016 Captain Rust was rostered off (he was working a five week on, 10 week off roster). He was contacted by the human resources area of Farstad and asked if he was willing to assist on the Far Sirius as a supernumerary to mentor the new Master. Captain Rust agreed to do so.

[3] Captain Rust flew to Karratha to commence his shift as mentor on the Far Sirius. The next morning, before being bussed to the Far Sirius Captain Rust, along with other crew members, was subject to a random alcohol test. Captain Rust failed the test in that his blood alcohol levels exceeded those mandated by the relevant Farstad policies and he was not allowed to board the bus to travel to the vessel. Captain Rust was subsequently provided with a show cause letter and, following an investigation, his employment was terminated on 15 November 2016 for serious misconduct.

[4] Captain Rust says that he has been unfairly dismissed.

The 2014 incident

[5] In 2014 Captain Rust was Master of the Far Scimitar. The Far Scimitar was normally crewed by a Master, three Deck Officers, three Engineering Officers and five Ratings, including a Cook. For anchor handling (AH) operations it normally had an additional Engineer and Deck Rating to provide adequate manning for AH operations. In February 2014 the Far Scimitar was engaged in a charter with respect to AH operations.

[6] Captain Rust says that, in preparing for the charter, he had some difficulties with the crew in relation to skill levels, willingness to engage in trials to streamline operations and test safety compliance or to alter work practices.

[7] Captain Rust introduced a system known as “2 x 2 manning”. He considered that such a system improved health and safety, facilitated a quicker execution of a particular operation and ensured the better arrangement of crew.

[8] On 22 March 2014 a Safety Committee Meeting was held on the vessel. The last topic at that meeting involved a prolonged discussion on the 2 x 2 manning arrangement with Tim Ribergaard, with the backing of other Ratings, seeking to reverse the decision to implement the arrangement. Captain Rust opposed the proposal and a heated discussion followed during which Mr Ribergaard apparently said to Captain Rust “you were a cunt when you first came here and you still are”. Mr Rust eventually agreed to a reversal to the working arrangement.

[9] Captain Rust says that during the evening’s watch on the bridge Mr X (who had been at the meeting referred to above) approached him and apologised personally for what Mr Ribergaard had called him.

[10] On 26 March 2014, following the birthing of the Far Scimitar at the Port of Dampier Captain Rust was informed that a letter of complaint had been received from the crew of the Far Scimitar. The following morning Captain Rust was relieved of his command and flew to Melbourne to meet with Captain Butt and other senior management of Farstad. He was advised at this meeting that Farstad would engage an external HR firm to investigate the incident. He was suspended during his period.

[11] On 9 April 2014 Captain Rust received an email from United HR Solutions. The email said:

[12] Captain Rust attended the interview and denied the allegation.

[13] On 4 June 2014 Captain Rust was provided with a copy of the investigation report of United HR Solutions. It found the allegation to be substantiated although also found that it was not substantiated that Captain Rust “acted in breach of his safety obligations…and behaved in a manner unbecoming of a Master…”

[14] On 13 June 2014 Captain Rust consulted his doctor and was diagnosed with depression. He was prescribed Pristiq, an anti-depressant medication.

[15] Following the investigation Captain Rust was directed, against his wishes, to re-join the Far Scimitar with the same crew on 30 July 2014. He did so and worked with Mr Ribergaard on a daily basis. Captain Rust says that this was difficult as Mr Ribergaard continued to be obstructive and intolerant of him.

[16] Captain Rust took the next swing off to deal with the “psychological consequences and stress experienced as a result of the suspension and the investigation.” He says that his treatment for depression continued until about November 2014 and in December 2014 he ceased taking medication for it.

[17] Captain Rust returned to the Far Scimitar in December 2014 and completed his duty on 19 January 2015 in Geraldton. He says that it was then, whilst waiting for flights home at a local hotel that Mr Ribergaard verbally abused him and lunged at him. Captain Rust says that Mr Ribergaard had to be physically restrained by others.

[18] Captain Rust was subsequently asked for, and provided, a report on the conduct of Mr Ribergaard with respect to this incident.

[19] In October 2015, at the invitation of Captain Hall, the General Manager Operations, Captain Rust put in writing his concerns about the absence of an effective resolution of his suspension and the investigation and report in relation to the March 2014 incident. He did not receive any response to his correspondence.

The 2016 incident

[20] As outlined above in 2016 Captain Rust was asked to be a supernumerary on the Far Sirius to mentor a new Master who had not undertaken the operation for which the Far Sirius had been engaged.

[21] On 5 October 2016 Captain Rust travelled from Brisbane to Perth to join the Far Sirius. On the flight he saw Mr X. He says on seeing Mr X he began to reflect on the events on the Far Scimitar of 2014. He was feeling anxious and noticed his heart rate “palpitating.” On arrival in Perth he spoke to Mr X and suggested they go to the Qantas Club and talk about the events on the Far Scimitar. During that conversation Mr X indicated that that there were no issues between the two of them and that Captain Rust had been “unfairly treated by the crew and company.”

[22] Captain Rust says he consumed two full strength beers during this discussion.

[23] On the flight to Karratha Captain Rust says he “continued to reflect on the events on the Far Scimitar and [how he] had been treated by Farstad.” He said that this made him feel restless and stressed and that he felt “alone and angry”. The flight arrived at Karratha at approximately 3.00 pm where Captain Rust transferred to his hotel. He says that he “continued to feel anxious and depressed while thinking about the conversation with Mr X and the surrounding events in 2014” and that his “levels of trepidation had escalated.”

[24] On checking into his room Captain Rust selected a beer to drink from the bar fridge in his room, thinking it might calm him down. Over the next four hours he consumed seven full strength bottles of beer. At 8.00 pm he met a colleague for dinner and had a full strength schooner of beer.

[25] Captain Rust says he went to bed at 9.00 pm because he was conscious of the possibility of being tested for alcohol the next morning.

[26] On 6 October 2016 at around 6.00 am Captain Rust arrived at the hotel restaurant for breakfast and was met by a contractor who advised that he had been selected for a random drug and alcohol screening. He had a quick coffee and then had a blood alcohol concentration (BAC) test.

[27] The test was performed at 6.15 am. Captain Rust registered a BAC of 0.047.

[28] A further test was carried out 15 minutes later and Captain Rust registered a BAC of 0.044.

[29] In the evening of 6 October 2016 Mr Christopher Homsey, Human Resources Director – Offshore for Farstad, had a discussion with Captain Rust where he says Captain Rust did not deny the readings from his two tests. Mr Homsey said that he asked Captain Rust what had happened and Captain Rust said that he had seen an Integrated Rating (IR). Mr Homsey asked if it was Mr Ribergaard (who had made the 2014 complaint) to which Captain Rust said no, it was another one. Mr Homsey asked Captain Rust if there had been an altercation to which Captain Rust said no, they had just clarified a few things.

[30] Whilst Captain Rust disagrees with Mr Homsey’s account of their conversation not much turns on this and I have not had regard to this conversation in making my findings.

[31] Captain Rust was advised that Farstad would repatriate him home.

Investigation

[32] On 6 October 2016 Mr Stuart Scott, Vice President Operations APAC for Farstad received advice that Captain Rust had exceeded the BAC level. Mr Scott asked Mr Homsey to investigate and confirm whether the applicable policies of Farstad had been breached by Captain Rust.

[33] On 11 October 2016 Captain Rust was advised in writing by Farstad (the show cause letter) that:

On 6th October 2016 you were required to undertake a breathalyser test by a third party contractor to determine your breath alcohol content (BAC).

As you are aware, Farstad’s policy is that your result must be 0.00 [sic] (being zero grams per 100 millilitres of blood) under this test.

I am advised that your initial test, conducted by accredited contractor J&K Nominees, was 0.047 (being 47 grams per 100 millilitres of blood) your confirmatory test was 0.044 (being 44 grams per 100 millilitres of blood).

I have been provided with the official test results that I consider conclusively demonstrates that you have breached Farstad’s Policies.

Consistent with Farstad’s values, policies and commitment to health and safety in the workplace and Client’s requirements, this conduct is considered serious misconduct that justifies the summary termination of your employment.

I invite you, within 7 days, to provide Farstad with any reason that you consider should be taken into account for the purposes of deciding whether to terminate your employment for serious misconduct. Farstad will provide you with confirmation of its decision as soon as possible.

[34] The letter was signed by Mr Scott on behalf of Mr Homsey.

[35] On 12 October 2016 Captain Rust provide Farstad with a medical certificate certifying him as unfit for work until 23 October 2016. Following further correspondence between them, Farstad extended Captain Rust’s period to reply until 27 October 2016.

[36] On 27 October 2017 the Australian Maritime Officers’ Union (AMOU) responded to Farstad on Captain Rust’s behalf. In that response the AMOU acknowledged that Captain Rust’s reading was above the cut off BAC level but set out a range of mitigating factors including:

[37] The AMOU argued that there was no justification for disciplinary action as Captain Rust did not intend to breach the policy and that the mitigating issues justified leniency. Further, it said that Captain Rust had served Farstad “in an exemplary and professional fashion for more than 16 years with no history of serious crew injuries or any other costly incidents on his watch.” It outlined the contribution of Captain Rust to improvements in safety performance, his willingness to take on additional duties, his contribution to improved administrative procedures and his willingness to train and assist other employees.

[38] The letter was forwarded to Mr Scott and it was agreed between him and Mr Homsey that Mr Homsey should meet with Captain Rust to provide him with an opportunity to say why his employment should not be terminated.

[39] On 9 November 2016 Captain Rust attended a meeting with Mr Homsey. Captain Rust was accompanied by his AMOU representative. The AMOU sent further correspondence to Farstad on 10 November 2016 in which it again pleaded that termination of employment was not appropriate.

[40] On 15 November Mr Scott met with Mr Homsey where they discussed:

[41] Following from this discussion Mr Scott took the decision to terminate Captain Rust’s employment.

[42] On 15 November 2016 Captain Rust received a letter of termination signed by Mr Homsey which stated:

In our letter dated 11 October 2016, Farstad advised you that it considered your conduct constituted serious misconduct and asked you to provide Farstad with any reasons that should be taken into account in determining whether to terminate your employment. We have considered the letter dated 27 October 2016 sent on your behalf and the matters you raised at our meeting, in reaching the decision outlined below.

Farstad remains of the view that your admitted breach of policy constitutes serious misconduct. In particular, your knowledge and understanding of; the Group-Fit for Work Policy and associated policies and procedures related to drugs and alcohol; Farstad’s safety values; the reasons for Farstad’s implementation and strong enforcement of random drug and alcohol testing; Farstad’s clients’ expectations of its management of drugs and alcohol; have been considered. Further, as person holding a senior position in Farstad’s seagoing workforce, your failure to abide by the policies has meant that Farstad has concluded your employment cannot continue.

Accordingly, I am advising you that Farstad is today terminating your employment for serious misconduct with immediate effect.

Farstad’s relevant policies

[43] The evidence of Mr Scott is that, as Master, Captain Rust had a statutory responsibility for the safety of the vessel, her crew and the marine environment. Whilst the Master may delegate responsibilities he remains accountable for the safety of the vessel and crew at all times.

Drug and Alcohol Policy (Offshore) 2

[44] Farstad’s Drug and Alcohol Policy (Offshore) (the Offshore policy) states that its objective is “to comply with the legal requirements and duty of care responsibilities, meet contractual needs, and most importantly protect Employees.” The Offshore policy is directed at creating a safe and healthy workplace; providing education, training and awareness, ensuring rehabilitation, amongst others.

[45] Strategies to minimise risk include:

(a) Prohibition on the consumption, soliciting or possession of alcohol and non-prescribed drugs on all Vessels and any base.

(b) Drug and alcohol testing during pre-employment, periodical medical, pre-contract, pre-swing, post incident, for cause and random/unannounced tests.

(c) Preventative and rehabilitation programs for Employees where no Employee will be discriminated against for undertaking such a program.

(d) Disciplinary action as outlined in this policy for any violation of this Policy.

[46] The policy outlines the acceptable levels for drugs and alcohol. The acceptable alcohol level is 0.02mg/100ml.

[47] The Offshore policy says, of pre-swing testing that:

The joining crew will be tested on crew change day.

[48] The Offshore policy also allows for random testing.

[49] With respect to prescription and over the counter drugs, the Offshore policy requires that:

38. Employees using prescribed drugs should ask their doctor or chemist what affects a drug or medication may have, and if there is a risk of it causing impairment. A doctor’s letter regarding the effect of a drug must be obtained outlining any limitation on normal duties and presented to Farstad. Farstad will maintain confidentiality. However, the Master of the Vessel must be informed.

39. All prescribed drugs brought on board a Vessel are required to be declared to the Master before signing on. In the case of a Master, they will need to declare this to the Ship Manager or equivalent before joining.

[50] The Offshore policy provides that a person returning a positive result “will be subject to disciplinary procedures which may include dismissal.”

Group - Fit for Work Policy 3

[51] The Group - Fit for Work Policy defines “[f]it for work” as meaning “a person is in a state to perform their assigned tasks competently and in a safe manner without impartment due to drug and/or alcohol use, physical injury or functional fitness.”

[52] The policy acknowledges that Farstad has a responsibility to “take reasonable steps to protect employees…in the workplace should they, or others, be under the influence of drugs and/or alcohol.” It achieves this by a “[z]ero tolerance to non-prescribed drugs and alcohol in the work site, meaning the Company will not accept any content of alcohol or drugs in breath, urine or blood” and through “[a] process for disciplinary action for violation of this Policy”.

Employee’s Code of Conduct (Offshore) 4

[53] The Code of Conduct requires seafarers to remain “capable at all times of performing any duty” required of him/her. It states that “there is a zero blood alcohol level requirement which means not exceeding a blood alcohol concentration of 0.02 grams per 100 millilitres at all times.”

[54] The Code provides that a breach, depending on the seriousness, may result in a warning, a reprimand or dismissal.

APAC Drug and Alcohol Testing and Searching Procedures 5

[55] The Preamble to the APAC Drug and Alcohol Testing and Searching Procedures states that:

Farstad Shipping APAC is committed to providing a safe and healthy work environment. As part of providing a safe and healthy work environment, Farstad aims to ensure that its employees and contractors (third party included) are fit for work, and that visitors to its worksites are safe and do not pose a threat to the safety of others.

Fit for work means a state of physical, mental and/or emotional health, which enables a person to perform their duties in a manner that does not carry a risk of endangering the health and safety of themselves or others… For the purpose of this Procedure, a person will not be fit for work where the prescribed drugs and alcohol limits referred to in this documents [sic] have been exceeded by that individual, unless otherwise described.

[56] The testing Procedure allows for random drug and alcohol testing. It provides that a minimum of 50% of a crew compliment plus one will be tested per visit.

[57] The testing procedure also allows for random testing on crew change days.

[58] The testing procedure provides that the return of a non-negative result “is regarded as serious misconduct which will result in disciplinary action that may include dismissal.”

[59] The testing procedure requires that employees ensure prescription or over the counter drugs is taken safely and is required to:

Captain Rust’s medical treatment

[60] During the 2014 incident Captain Rust was treated for depression. He was prescribed Pristiq. He said that he recovered and ceased taking the medication in December 2014.

[61] In July 2016 Captain Rust says he had a mental health review and Dr Ledbury placed him on a three month trial of an anti-depressant (Fluoxetine). He said the medication made him feel calmer and he did not require any other treatment from July 2016 to October 2016.

[62] In October 2016 Dr Chatfield wrote to Farstad and said that Captain Rust seeing (presumably) Mr X had caused Captain Rust anxiety and that he had since sought psychological support for depression and he required on-going treatment and antidepressants.

[63] Dr Chatfield gave evidence that:

[64] Dr James Wright is a Consultant Psychiatrist. He examined Captain Rust on 20 February 2017.

[65] Dr Wright agreed that the most common adverse reaction to the drug Pristiq include nausea, sometimes dizziness but not necessarily insomnia. He agreed that, as a general principle a person being treated with anti-depressants should be monitored and observed for any clinical worsening, suicidality and unusual changes in behaviour. He agreed that drinking could possibly cause a worsening of side effects of Pristiq.

[66] Dr Wright said he would be concerned if a patient on anti-depressants drank 10 full strength beers of an evening but more so because of the impairment it would have on the effectiveness of the treatment.

[67] Dr Wright says that Captain Rust had what appeared to be an adjustment disorder arising out of what Captain Rust considered to be unfair allegations in 2014. Whilst he had returned to work a “lingering bitterness” remained and a chance encounter with one of the parties to the 2014 incident caused a recurrence of his symptoms. This, he said, led Captain Rust to consume too much alcohol.

The workplace

[68] The code of conduct and policies in relation to drug and alcohol outlined above place the focus on prevention and safety in the workplace.

[69] There is no dispute that Captain Rust was required to be fit for work when he commenced work.

[70] I accept that “fit for work” implies compliance with the Drug and Alcohol Policy – that is, at what point in time was he required to be fit for work.

[71] There was disagreement as to when Captain Rust actually commenced work.

[72] Captain Rust was first tested for alcohol at 6.15 am, before breakfast and at the hotel where the crew were accommodated. His second test was at 6.30 am.

[73] The day the test was conducted was a crew changeover day.

[74] The uncontested evidence of Captain Rust is that the bus transporting the crew to the vessel would have left the hotel at about 7.00 am to go to the supply base (King Bay Supply Base at Dampier) which is approximately 27 kilometres and a 30 minute drive from the hotel. He says it takes approximately 15 to 30 minutes to get through security at the base. On this basis he says that he would expect to have finally entered the supply base at around 7.45 am to 8.00 am on the day he was tested. 6

[75] The evidence of Mr Homsey is that, whilst there is a policy with respect to testing procedures on board a vessel you cannot undertake crew change day testing on board the vessel as the idea is to prevent drugs and alcohol entering the workplace. In addition he said that Farstad has an obligation to ensure there are measures in place to stop drugs and alcohol entering the supply base. These obligations could not be met if the testing was conducted on board the vessel or after entering the supply base but before boarding the vessel.

[76] Mr Homsey also gave evidence that the relevant workplace (for the purposes of drug and alcohol testing) is the supply base and the vessel but also includes crew change activities because this is “not a non-company activity”. An employee must be fit to undertake his duties and this occurs when he first engages with his crew.

[77] Mr Scott’s evidence is that an employee must be fit for work when they are “embarked to go to join the vessel”. Mr Scott explained that embarking was the stage where the individual board the crew-change bus that would take them to the supply base where they would then board the vessel.

[78] Mr Scott also gave evidence that, as a salaried employee, the day of joining the vessel is a work day, from that day an employee is accruing leave (which declines when they are not rostered on to work) and it is expected that an employee is fit for work at this point.

Consideration

[79] At 6.15am when first tested Captain Rust had a BAC of 0.047. Fifteen minutes later the reading was 0.044. I have no evidence before me as to the rate at which alcohol may be metabolised by Captain Rust so that I could possibly know when he might have achieved a reading within the boundaries of the Drug and Alcohol Policy and other relevant polices.

[80] Although some refinement might need to be made to Farstad’s testing procedures and the time at which testing is carried out, I am satisfied that Captain Rust was tested in accordance with the policies of Farstad. Those policies allow for testing on crew change days. The day Captain Rust was tested was a crew change day.

[81] At the time Captain Rust was tested (at both 6.15 am and 6.30 am) he had a blood alcohol concentration in excess of the limits prescribed by Farstad and clearly set out in its policies. To this extent he was, at that time, in breach of policy.

[82] The policies require that Captain Rust be fit to undertake his assigned duties. Certainly Captain Rust could not have done so at the time of testing and there is a real question as to whether he would have been fit at the time he boarded the crew change bus (30 minutes after a 0.044 reading), arrived at the supply base or boarded the vessel.

[83] Whilst I am satisfied that, at least at the time of boarding the crew change bus, Captain Rust had commenced duties and, at this time at least, was required to comply with the drug and alcohol policy, I am also satisfied that Farstad was operating within its policy to test Captain Rust (and others) when they presented for breakfast on the crew change day.

[84] That Captain Rust was present on crew as a supernumerary is irrelevant to whether he was on duty or not or required to comply with policies or not. He was part of the crew of the Far Sirius. He was a Captain, he had responsibilities. I accept that I cannot know what Captain Rust’s BAC reading may have been at 7.00 am at the time of boarding the bus but this does not change that he was tested on crew change day and he failed to meet the policy requirements.

[85] Having found this I would observe (with no criticism) that it would appear the policies of Farstad require some clarity with respect to when duty does commence and the appropriate time for testing on crew change days (for example pre or post a meal) to ensure that testing occurs close to the commencement time as possible.

[86] This however does not help Captain Rust. His problems did not start because he was tested at 6.15am, they started the day and night before.

[87] On a broader level it would appear that Farstad failed to properly close off the 2014 incident. It did not properly convey any final decision to Captain Rust in 2014 or in 2015 when it sought further information from him. This is a failing on behalf of Farstad. It is not reasonable that an employee have such a matter not closed off and, in this case, it has had consequences.

Was captain Rust unfairly dismissed?

[88] I am satisfied that Captain Rust is protected from unfair dismissal. He has completed the minimum employment period and an enterprise agreement applies.

[89] Further, I am satisfied that his application was made within the statutory time period, the Small Business Fair Dismissal Code is not relevant and his dismissal was not a redundancy.

[90] The matter to determine, in deciding if he was unfairly dismissed, therefore is if his dismissal was harsh, unjust or unreasonable.

[91] Section 387 of the FW Act states:

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.

[92] I have considered each of these matters.

Section 387(a) - a valid reason for dismissal

[93] A reason for dismissal will be a valid reason if it is “sound, defensible or well-founded”. 7

[94] Captain Rust provided BAC readings which were in excess of the levels prescribed by Farstad and conveyed to employees in the various policies of Farstad.

[95] I am satisfied that the conduct of Captain Rust must be considered in context. The context with respect to this conduct of Captain Rust is that he was felling anxious and stressed because of his encounter with Mr X. It is not clear, however, why Mr X generated these feeling (he was, after all, the person who apologised for the language at least of Mr Ribergaard in the 2014 incident) but no evidence was adduced on this matter. I therefore accept Captain Rust’s evidence of the effect of the encounter. However, in having had this reaction there were a number of courses of action open to Captain Rust. He could have refrained from drinking, he could have contacted the relevant manager and advised he was not able to work due to ill health because of the anxiety or he could have advised the next day that he could not report for duty because he was unwell. He did none of these. Instead, on arrival in Karratha, he consumed another eight beers (taking his total for the day to 10) in circumstances where he knew he was required to report for work the next day, he was aware of the policy requirements of Farstad and knew he may be tested for drugs and alcohol.

[96] Captain Rust had a number of opportunities and plenty of time to decide what he would do. He was not in the circumstance where there was no time between seeing Mr X and attending for work.

[97] It must be decided whether, in these circumstances, Captain Rust’s conduct in having breached the policies of Farstad, presents a valid reason for dismissal.
[98] The policies do not mandate dismissal for a breach and do allow for some lesser penalty and for education and rehabilitation. That the policies allow for such is a relevant consideration although do not, on their own, abrogate from the seriousness of Captain Rust’s conduct.

[99] Captain Rust worked in a safety critical industry. He was about to embark on a sea-going vessel where he had duties to perform and could have been called on to perform all duties as Master if directed to. In such circumstances the gravity of his conduct cannot be ignored.

[100] Whilst it may be the case that a breach of a company policy does not provide a valid reason for dismissal, in this industry and in circumstances where Captain Rust was to board the vessel as a mentor that it was merely a breach of policy does not mean it does not provide a valid reason. To this extent I do not accept that the range of mitigating factors put to me by Captain Rust balance the seriousness of the policy breach.

[101] In these circumstances I am satisfied that Captain Rust’s conduct provides a valid reason for dismissal.

Section 387(b) - whether the person was notified of the reason

[102] I am satisfied that Captain Rust was provided with advice as to the reason for dismissal prior to the decision being taken to dismiss him from his employment.

[103] Whilst Mr Scott gave evidence that the default position for breach of policy is termination of employment I am satisfied that, in saying this, his intention was to convey that any request to an employee to “show cause” for a breach of policy will specify that the employee should show cause as to why their employment should not be terminated.

[104] Any response from the employee concerned is then considered prior to a final decision being made.

[105] In any event, in this case, Captain Rust was advised of the reason prior to a decision being taken to terminate his employment.

Section 387(c) - whether the person was given an opportunity to respond

[106] I am satisfied that Captain Rust was given an opportunity to respond to the reason prior to the decision being taken to terminate his employment. Captain Rust was invited to provide reasons as to why his employment should not be terminated. He took this opportunity (with a response being provided by his union representative). Further, he met with Mr Homsey prior to the decision being taken to dismiss him.

[107] I am satisfied that Mr Scott was the decision-maker in that he made the decision, following discussions with Mr Homsey, to terminate Captain Rust’s employment. I am satisfied that he made the decision to terminate Captain Rust’s employment after he saw the written reply from the AMOU on Captain Rust’s behalf and after he had a further discussion with Mr Homsey following the further meeting with Captain Rust.

Section 387(d) - unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal

[108] I am satisfied that Captain Rust was not unreasonably denied access to a support person.

Section 387(e) - warnings of unsatisfactory performance

[109] Captain Rust’s employment was not terminated for unsatisfactory performance. This criterion is therefore not relevant.

Sections 387 (f) & (g) - the degree to which the size of the employer’s enterprise or access to human resources specialist staff may impact on the procedures followed in effecting the dismissal

[110] Farstad is a large organisation which has dedicated human resources staff. These are no matters that would adversely impact on the procedures followed in effecting the dismissal.

Section 387 (h) - any other matters

[111] A number of additional matters were put to me for consideration.

[112] Captain Rust is 61 years old. He is the sole income earner for his family (his wife and himself).

[113] Support was expressed for Captain Rust in his capacity as a Master, in his methodical and exemplary approach to his job and his commitment to safety.

[114] Captain Rust has an exemplary record with Farstad. He has contributed to improved anchor handling procedures including installation and upgrade of safety management systems on a number of vessels, involved in the setup of the R-Folder system, and facilitated the development of the Anchor Handling Training Video which gained a Farstad safety award as well as a national Seacare’s award. Captain Rust has also served on the Farstad Senior Officers Steering Committee for a year. He has made himself available for additional duties and sought to provide assistance and training to subordinate officers.

[115] The 2014 incident was never fully resolved in Captain Rust’s mind. He was stood down (suspended) on 23 March 2014. He was made aware of the allegation against him on 9 April 2014. He received a copy of the final investigative report on 4 June 2014, some 10 weeks after the incident.

[116] It is apparent that the 2014 incident has never been closed off by Farstad management. Captain Rust has not been advised if further action is to be taken or the status of the investigation. He wrote to Captain Hall (at Hall’s invitation) in October 2015 about the stand down and investigation but again received no reply.

[117] Captain Rust was on anti-depressants from June 2014 (arising in part from the 2014 incident). He stopped taking these in December 2014. In July 2016, following a mental health review, he was placed on a three month trial of Fluoxetine. Captain Rust did not report to Farstad that he was taking these medications. This was a breach of the Offshore Drug and Alcohol Policy.

Was the dismissal harsh, unjust or unreasonable?

[118] There is an unfortunate chain of events that ended when Captain Rust consumed too much alcohol on 5 October 2016. It started with the failure of Farstad to properly close off the 2014 incident resulting in stress and anxiety for Captain Rust. At the same time as not providing Captain Rust with a decision as to what actions it intended to take in response to the report of the 2014 incident it placed him back into the same workplace in which the incident had occurred with the same crew, including Mr Ribergaard with who he continued to have conflict.

[119] Farstad again failed to close the matter off when Captain Rust wrote to Captain Hall about the matter in 2015. It is not clear what the intention of Captain Hall was in requesting the correspondence from Captain Rust but it does seem to have built up his hopes that the matter would be closed out only to again find that it was not.

[120] The trail ends with a chance encounter between Captain Rust and Mr X in Perth, the resultant increase in anxiety in Captain Rust and his decision to consume alcohol that day.

[121] In addition to these matters I have taken into account that Captain Rust was tested the second time at least 30 minutes before he was required to present to board the crew change bus. Whilst I accept that Captain Rust was aware he could be tested that morning it is not clear to me why he was tested at a time when he was not presenting for work (he was going to have breakfast) which surely occurred when he presented to board the crew-change bus. If it is that an employee can be tested at any time on a crew change day this does create the absurd situation where a person could be tested many hours before presenting to board the bus at 7.00 am.

[122] It is not apparent that any other disciplinary outcome was considered for Captain Rust. Whilst I accepted above that Mr Scott considered Captain Rust’s response prior to making the decision to dismiss him I am not convinced that he considered if rehabilitation (as is allowed under the Offshore Drug and Alcohol Policy) or any other penalty was a possibility. It appears that the consideration of penalty was binary – dismissal or not dismissal. In this respect the consideration was, in the circumstances, too narrow.

[123] I have also had regard to Captain Rust’s record and the references provided for him.

[124] I have considered Captain Rust’s apparent failure to advise Farstad of the medications he was taking. Whilst it is clear such medications should be reported, the limited evidence on this aspect of Farstad policies suggests it is observed more in the breach than otherwise. I accept the evidence of the doctors who appeared in the matter that the consumption of alcohol whilst on the medications is more likely to affect the effectiveness of the medication rather than have an adverse impact on Captain Rust’s ability to do his job. Having said this it would appear that education on the effect of medications at work and the purpose of reporting is required. Ultimately, I draw no adverse inferences from this matter.

[125] In Byrne v Australian Airlines Ltd 8 it was held that:

lt 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.

[126] Whilst I am satisfied that Captain Rust did engage in the conduct alleged – that is, he breached the requirements of the drug and alcohol policy, I am satisfied, on balance, that the decision to dismiss him was, in the circumstances harsh.

[127] My finding that the decision to dismiss Captain Rust was harsh should not be seen as any vindication of Captain Rust’s conduct. He is a very experienced Master. He has worked for Farstad for 16 years. Were it not for the failure of Farstad to close off the 2014 incident my findings may well have been different.

[128] Aside from some need to clarify when on crew change day testing may be done I have no criticism of Farstad or its policies or its commitment to ensuring compliance with those policies.

Conclusion

[129] I am therefore satisfied that Captain Rust has been unfairly dismissed.

Remedy

[130] Captain Rust seeks reinstatement.

[131] Farstad opposes reinstatement and says that it has lost trust and confidence in Captain Rust.

[132] It is the case that a loss of trust and confidence must be objectively assessed. It is also the case that loss of trust and confidence is a common reprise amongst employers when an employee is found to have been unfairly dismissed by the Commission and reinstatement is sought.

[133] In this case I am satisfied that Farstad has grounds to claim that it has lost trust and confidence in Captain Rust.

[134] Captain Rust breached a series of Farstad’s policy in relation to his blood alcohol concentration on 6 October 2016.

[135] It is apparent that Captain Rust has also, over time, failed to report to Farstad that he has been on medications reportable pursuant to Farstad’s policies.

[136] Captain Rust held a senior position within Farstad. He is a Master and Captain of a sea-going vessel that can be away for weeks at a time. He is responsible for the safety of the vessel and crew, pollution prevention and overall operation of the vessel. He works in a safety critical industry. In circumstances where Farstad must have confidence in its Masters I am satisfied, in these circumstances, that there are objective grounds on which Farstad has lost confidence in Captain Rust.

[137] In such circumstances I am satisfied that reinstatement is not appropriate.

Compensation

[138] Having found that reinstatement is not appropriate in the circumstances (s.390 of the FW Act) it is necessary to consider compensation.

[139] Section 392 of the FW Act details the determination of compensation. It states:

392 Remedy—compensation

Compensation

(1) 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.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

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

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

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

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

(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; and

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

(g) any other matter that the FWC considers relevant.

Misconduct reduces amount

(3) 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.

Shock, distress etc. disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.

[140] I accept that the parties have not had the opportunity to address me on compensation. I shall therefore issue directions for the filing of material relevant to those matters set out in s.392 of the FW Act.

Seal of the Fair Work Commission with member's signtaure.

COMMISSIONER

Appearances:

J. Kennedy for Mr Rust.

A Pollock of counsel for Farstad Shipping (Indian Pacific) Pty Ltd T/A Farstad.

Hearing details:

2017.

Melbourne:

March, 27, 28.

Brisbane:

May 19.

 1   Exhibit A4, attachment JR-7.

 2   Ibid, attachment JR5.

 3  Ibid, attachment JR4.

 4   Exhibit R2, attachment CH-2.

 5   Ibid, attachment CH-5.

 6   Exhibit A5, paragraph 4.

 7   Selvachandran v Peteron Plastics Pty Ltd, (1995) 62 IR 371.

 8   (1995) 185 CLR 410.

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