[2017] FWC 6666
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.394—Unfair dismissal

Sean Lewer
v
Inco Ships T/A Inco Ships Pty Ltd
(U2017/6877)

COMMISSIONER GREGORY

MELBOURNE, 12 DECEMBER 2017

Application for an unfair dismissal remedy.

Introduction

[1] Mr Sean Lewer commenced employment with Inco Ships T/A Inco Ships Pty Ltd (“Inco Ships”) as an Integrated Rating in the early part of last year and was subsequently offered a full-time role in April 2017, which he accepted. Inco Ships carries out bunkering services on behalf of Viva Energy Australia (“Viva Energy”) at the ports of Melbourne and Geelong. Mr Lewer worked primarily on the ICS Allegiance, a tanker vessel involved in refuelling other vessels. However, on 23 May 2017 Inco Ships was informed by a representative of Viva Energy that Mr Lewer had arrived at the Geelong refinery jetty gatehouse at around 10.15 p.m. in an intoxicated state and had sought to gain access to the ICS Allegiance, which was still moored at the jetty. However, his attempts to gain access were prevented by the security officers at the gatehouse entrance. They are employed by a security company engaged by the Viva Energy.

[2] Mr Lewer was then stood down while an investigation took place into what had occurred. He was subsequently terminated on 16 June following the conclusion of that investigation. He subsequently lodged an unfair dismissal application under s.394 of the Fair Work Act 2009 (Cth) (“the Act”). This decision deals with that application.

[3] Mr Kristian Bolwell from the Maritime Union of Australia (“the MUA”) appeared on behalf of Mr Lewer. Ms Susan Zeitz from Zeitz Workplace Lawyers was granted permission to appear on behalf of Inco Ships under s.596(2)(b) of the Act as it would be unfair not to because Inco Ships was otherwise unable to represent itself effectively.

The Issue to be Determined

[4] Section 385 of the Act provides that a person has been unfairly dismissed if the Commission is satisfied “the dismissal was harsh, unjust or unreasonable.” Section 387 continues to require that the Commission must take into account the following matters in determining whether the dismissal was “harsh, unjust or unreasonable.” It 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.” 1

[5] The Commission is therefore now required to determine whether Mr Lewer’s dismissal was “harsh, unjust or unreasonable” taking into account the matters in s.387.

The Submissions and Evidence

Mr Sean Lewer

[6] Mr Lewer commenced employment with Inco Ships in January 2016 as a casual relief Integrated Rating working on board the ICS Allegiance, a tanker vessel that operates in Port Phillip Bay. He was subsequently offered a permanent role on 26 April 2017, which he accepted. He also referred to a rating assessment, dated May 2016, which indicates high-performance in all areas of competency assessed.

[7] The incident that ultimately led to his dismissal is detailed in his witness statement under the heading “My conduct after work on 22 May 2017”2 He also indicated that he continues to endorse the statement previously prepared on his behalf by the MUA that was provided to the Human Resources Manager at Inco Ships. It is contained in Attachment SL6 to his witness statement and the relevant extracts are set out below.

“1. After work on 22 May 201[sic], Mr Lewer left the ship he had been working on; attended the pub; and while at the pub consumed a number of beers and ate pizza for dinner.

2. When he returned to the wharf gatehouse to gain access to the ship to collect his personal belongings Mr Lewer was refused access to the wharf by a gatehouse security officer. Accordingly Mr Lewer was not able to access the ship to collect his personal belongings, and go home.

3. Mr Lewer is dealing with a number of personal issues including some difficulties with his partner’s pregnancy, and that he is the sole carer for his father who has cancer.

4. Given that his personal belongings were on the ship including his house keys Mr Lewer became upset that he could not access the ship, however Mr Lewer believes that he was not aggressive towards the gatehouse security officer.

5. Mr Lewer also attempted to contact the MUA Ship Delegate to collect his personal belongings, however the battery for his phone died.

6. After he was refused entry to the wharf Mr David Suleiman, MUA Ship Delegate, arrived at the gatehouse and arranged for Mr Lewer to go home in a taxi.

7. The next day, 23 May 2017, Mr Lewer returned to the site for work however he was anxious, and had not slept well the night causing him to arrange for a relief employee to work his shift.

8. In his response Mr Lewer has also included a letter from Hunterlink which states that he commenced counselling on 24 May 2017 to deal with his personal issues.

9. Mr Lewer apologised profusely for his behavior both to the security officers, and the Company.

10. Mr Lewer also offered to do anything else required of him to remain employed with the Company.” 3

[8] Mr Lewer also indicated in his witness statement that he was not wearing clothing or a uniform at the time that drew attention to the fact he was an employee of Inco Ships, and the only people who were aware of what occurred were the two security guards, another colleague from the ship who eventually put him in a taxi, and the video camera control operator. He also understands that the incident occurred on property owned by the Port of Geelong.

[9] On 16 June 2017 Mr Lewer received a letter from Inco Ships advising that “Inco has determined that you have breached your employment obligations and engaged in misconduct and therefore that your employment will be terminated with effect from the date of this correspondence.” 4 Mr Lewer refers particularly to the following conclusions set out in the letter:

“1. You presented at the gate house in an intoxicated state seeking access to the ship.

2. When you are advised that an escort was required because of your intoxicated state you became aggressive in your demeanour towards a security officers including:

a. Attempting to remove safety glasses from one of the security officers.

b. Demanding that the gate be unlocked.

3. You presented at the gate house with the intention of returning to the vessel to sleep when you had no reason to be at the ship until the commencement of your next shift.

4. When asked about this matter you have not been truthful about your reason for attempting to return to the ship and your conduct.” 5

[10] Mr Lewer indicates in response that the allegation about him returning to sleep on the ship was never put to him in the investigation but, in any case, it was not uncommon for crew members to sleep on the ship, and cabins were provided for this purpose. He estimated that he had slept on board on around 25 – 30 occasions during his employment with Inco Ships. In addition, he had not been shown how his behaviour was in breach of any company policies. He had also not seen the CCTV footage of the incident, or the statements provided by the two security officers. His witness statement indicated in conclusion, “I am deeply ashamed about the incident and I wish to return to my job that I love and to provide a good income and standard of living for my new family.” 6

[11] Mr Lewer also indicated in his examination in chief that he had returned to the ship with the intention of sleeping on board, because the ship had made an unscheduled trip to Geelong and his car was in Melbourne. He acknowledged that he should have been more open about this in the investigation, but was stressed at the time and concerned about the possibility of losing his job. He also said he had endeavoured to be truthful in the responses he provided as part of the investigation, but he “was obviously intoxicated at the time and that’s inhibited a clear recollection of all the events.” 7

[12] He indicated in cross examination he was aware the vessel was a “dry ship” and the standard for alcohol on board was zero. He also acknowledged that it would have been a serious matter if he had been allowed through the security gates in an intoxicated state, and would potentially have placed others at risk.

[13] He also indicated in cross examination that he was aware he could have asked for a cab voucher to get home after concluding his shift, but did not because he was conflicted about whether to go home or to stay on board the ship. He also acknowledged that he had said in the investigation that he returned to the vessel to collect some personal belongings, but did not actually collect them, or arrange for them to be collected, before leaving the dock site that evening.

[14] Mr Lewer’s submissions in support of the application rely, in summary, on four grounds. Firstly, that there is no valid reason to substantiate the decision to terminate his employment. The decision in Rose v Telstra 8 (Rose) which involved “out of hours” conduct, is relied on, in particular, in support of this submission. Mr Lewis submits that after an extensive review of the relevant authorities, and the historical development of the contract of employment, the decision deals authoritatively with the circumstances in which out of hours conduct might justify an employee’s termination.

[15] The first of those circumstances is that the conduct must be such that, when viewed objectively, it is likely to cause serious damage to the relationship between the employer and the employee. He submits in response that there is no evidence that serious damage occurred and, for example, it was not considered necessary to call the police, and any upset caused to the security officers can be dealt with by way of an explanation or apology being provided.

[16] The second set of circumstances identified in the decision in Rose is that the conduct must have damaged the employer’s interests. Mr Lewer again submits that there is no evidence of this, and Inco Ships continues to operate at the Port as it has done previously.

[17] The third set of circumstances identified in the decision in Rose is that the conduct is incompatible with the employee’s duty as an employee. He again submits that this has not been made out, and there is no evidence of him having failed to obey a lawful or reasonable direction. He also makes reference to the decisions in Elafchal v Rail Corporation of New South Wales9 Ergon Energy v Training and Employment Recognition Council;10 Farnhill v Australian Business Academy Pty Ltd;11 and Keenan v Leighton Boral Amey NSW Pty Ltd12 in support of this submission.

[18] He continues to submit that in each of these decisions the Commission was required to give consideration to the relationship or nexus between the out of hours conduct and the employee’s duty as an employee, and whether the conduct was incompatible with that duty. It is submitted in response that those decisions make clear that Mr Lewer’s conduct in being drunk or intoxicated while off duty was not sufficiently incompatible with his employment as a seafarer, and there was therefore no valid reason for his termination. Inco Ships’ action in terminating his employment was instead disproportionate with the gravity of the misconduct involved.

[19] It is next submitted that Mr Lewer did not actually breach any of Inco Ships’s policies because he did not actually gain access to the refinery jetty area or to the vessel, if only because of the actions of the security officers, despite his persistent efforts to do so.

[20] The third ground relied upon is the failure to put the allegations relied upon to Mr Lewer in the investigation process. This particularly concerns the conclusions about his conduct set out in the letter of termination. The decisions in Slavin v Horizon Holdings Pty Ltd 13 and Barclay v Nylex Corporation Pty Ltd14 are relied upon, in particular, in support of these submissions.

[21] The final ground relates to Mr Lewer’s personal circumstances. He has a young family and is experiencing financial difficulties at this time, given that he is not working and his partner is currently on maternity leave. It is submitted in this context that the decision can be considered to be harsh.

Inco Ships – the Submissions and Evidence

Ms Cassandra Konnecke

[22] Ms Cassandra Konnecke is the Human Resources Manager at Inco Ships. Her witness statement details the induction and other training Mr Lewer has undertaken, including that concerning its policies to do with alcohol and drugs. This was provided by both Inco Ships and Viva Energy, and her statement attached signed acknowledgements by Mr Lewer indicating he had completed the requisite training and was aware of the respective drug and alcohol policies. Ms Konnecke also said the policy was updated in September last year and this was communicated to all crew members at the time. Her witness statement again attached various documents confirming this had occurred.

[23] Ms Konnecke said Mr Lewer had also been named previously in a workplace bullying application lodged with the Fair Work Commission as a person alleged to have been engaged in bullying conduct towards another employee. However, no formal finding had been made in that matter and he was given the benefit of the doubt, providing he did not engage in similar behaviour again in the future.

[24] Ms Konnecke first became aware of what occurred on the evening of 22 May 2017 on the following day when she was contacted by an employee from Viva Energy and given a copy of the incident report prepared by the security guards at the gatehouse on the previous evening. Inco Ships had also been advised on the morning of 23 May that Mr Lewer had called in sick, and the ICS Allegiance eventually sailed that day with one Integrated Rating short. Ms Konnecke said she then informed the relevant MUA organiser that an investigation would now have to be carried out. She also attempted to make contact with Mr Lewer by telephone but was unsuccessful, and sent him an email instead indicating he was stood down from duty while the investigation took place.

[25] Ms Konnecke said she was then contacted by Mr Lewer on the following day, 24 May 2017, and he provided the following explanation. He had gone to a hotel at the end of his shift with another employee and had dinner. He had also consumed some drinks, although “not that many,” 15 and estimated perhaps four. She asked why he attempted to return to the ship and he said he needed to collect some personal items. He denied he had intended to return to the ship in order to stay on board. She also told him the report she had received suggested his behaviour towards the security officers had been inappropriate. He asked for details and she read the report to him. It stated that “he was acting in an aggressive and intimidatory manner, that he didn’t leave when he was told by the security guards that he was intoxicated, that they had to get someone to escort him, that it had escalated and he had started interfering with their security glasses and asking them what they were going to do about it.”16 She said he responded by indicating that his behaviour was out of character and he was prepared to apologise. He also said he was not on duty at the time.

[26] Ms Konnecke said she then decided that a formal explanation would be needed and informed the MUA of this decision. A formal request for an explanation was then made and an explanation provided on Mr Lewer’s behalf by the MUA on 30 May 2017. It indicated, for the first time, that his behaviour had been influenced by some personal issues he was dealing with, and that the personal belongings he wanted to collect included his house keys. A further explanation was also provided by Mr David Suleiman, who was the MUA delegate on board the ship at that time.

[27] Ms Konnecke said she did not necessarily accept the explanation provided as it contained a number of inconsistencies. In addition, Mr Suleiman’s response did not make any reference to any request to collect his house keys, or the need to obtain some personal belongings from the ship.

[28] Ms Konnecke then contacted Viva Energy to obtain copies of any security reports and CCTV footage that might be available. It took approximately two weeks for this to be provided. It indicated that Mr Lewer had threatened to jump the security gate, and had not made any reference to wanting to obtain some personal belongings from the ship. He had also attempted to remove the safety glasses from one of the security officers on several occasions. She also said Mr Lewer could have asked the employees on board the ship to get his personal belongings and bring them to him, but there was no suggestion they had been asked to do this. Ms Konnecke said she concluded at this point that Mr Lewer had not told the truth about these matters, and it had been his intention to return to the ship in order to sleep on board. This was in contravention of Inco Ships’ policy that employees were not permitted on board after having consumed alcohol. It was also in breach of a requirement of Viva Energy that no employee is to be on its premises while under the influence of alcohol or drugs.

[29] Ms Konnecke said she was particularly concerned that in endeavouring to gain access to the ship Mr Lewer was attempting, while under the influence of alcohol, to walk through the jetty and refinery area, and then up the gangway and onto the vessel. She was also confused about his apparent concern for his partner and her pregnancy, given he was much closer to his home in Jan Juc when his shift finished in Geelong than he would normally be when the vessel berthed in Melbourne. Ms Konnecke concluded that Mr Lewer had demonstrated by his conduct and his subsequent explanations that he could not be trusted to be truthful, and he had sought to misconstrue what occurred on the evening of 22 May. She had also taken into account the earlier issue of workplace bullying, which also involved allegations of inappropriate behaviour. She decided in conclusion that it was appropriate for his employment to be terminated, and provided him with a letter of termination.

[30] Ms Konnecke also acknowledged in cross-examination that Mr Lewer had received positive comments from his Master in his earlier performance reviews. She also indicated that taxi vouchers were provided to employees at the end of a shift if travel and fatigue was an issue. She indicated in response to a question from the Commission that these decisions would ultimately be made by the Master on a case-by-case basis. She also acknowledged that employees were able to sleep on board the ship if they were happy to do so and permission had been granted by the Master. However, this was not permitted in circumstances where an employee had consumed alcohol, and she was not aware that any such request had been made on this occasion by Mr Lewer. She also acknowledged that he did not actually gain access to the refinery jetty, or to the ship, despite his protracted and prolonged attempts to do so.

[31] Inco Ships continues to submit that Mr Lewer was dismissed on grounds of misconduct following an investigation into what had occurred. It took into account various considerations in terms of deciding whether there was a valid reason for dismissal. Firstly, it considered the seriousness of the incident and in this context identified the following matters:

“i. Behaving in a manner towards security officers that created a risk to their health and safety;

ii. Attempting to return to the workplace (located in a secured access area) while under the influence of alcohol when he was off duty and had no lawful reason for returning to the workplace;

iii. Attempting to access the wharf area whilst intoxicated created a risk to his personal health and safety;

iv. Refusing to leave the area;

v. Continuing to consume alcohol in a location or adjacent to a location that is alcohol free;

vi. Behaving in a confrontational manner towards security guards;

vii. Attempting to return to the workplace and use it for accommodation purposes in breach of company policy; and

viii. Failing to answer honestly when questioned about the incident.” 17

[32] Secondly, it submits that both it and Viva Energy have comprehensive and clearly understood policies in place about being on site after having consumed alcohol, and the consequences of breaching those policies, including termination of employment. It also provided details of the training and instruction Mr Lewer had received about these policies.

[33] The final consideration involved whether the incident was isolated or recurring in nature, and while it was isolated in terms of alcohol consumption, his bullying and intimidatory conduct had been the subject of previous allegations, and Mr Lewer had been warned about this behaviour.

[34] Inco Ships continues to submit that the misconduct, the explanations provided by Mr Lewer, and his lack of honesty, were all taken into account in terms of the decision that was finally made. It submits that, in all the circumstances, termination of employment was proportionate given the nature of the conduct involved. His conduct also had the potential to put other employees at risk.

[35] Inco Ships also submits that the evidence makes clear that Mr Lewer was notified about the reasons for his dismissal, and was provided with a detailed explanation about the nature of the investigation carried out. He was also aware of the potential seriousness of the matter, given he was stood down while the investigation took place. The submissions also detailed the opportunities provided to him to respond to the allegations made about his conduct and behaviour.

[36] Inco Ships also acknowledges that it is only in limited circumstances that an employer has a right to respond to behaviour and conduct that occurs while an employee is off duty. However, it submits Mr Lewer’s conduct on the night of 22 May was sufficiently connected to his employment, and the employment relationship, for the following reasons:

“a. The incident occurred at the site where he usually works;

b. The site is not public property and is in an area controlled and monitored by operators including the Respondent and Viva and others;

c. The incident occurred only approximately 4 hours after the end of his shift at that site;

d. The incident involved security guards with whom he has had contact and would be required to continue to work with had his employment not ended;

e. The Applicant was attempting to use his status as an employee with access rights to the site whilst under the influence of alcohol; and

f. The Applicant was attempting to return to the workplace for an improper purpose being to use the workplace for overnight accommodation” 18

[37] It also refers to the decision in Rose and submits that the evidence establishes that there was a sufficient link between the behaviour involved and the damage to the employment relationship. In its submission Mr Lewer’s behaviour was incompatible with his duty as an employee, and was in clear breach of the expected standards of behaviour and conduct. It also had the potential to impact upon the contract that Inco Ships has with Viva Energy that contains certain obligations that Inco Ships and its employees are required to comply with. Mr Lewer had also completed all of the required induction processes, including those required by Viva Energy, and was well aware of what they involved, including the requirement to not be on the premises controlled by Viva Energy, or on the vessel, while under the influence of drugs or alcohol.

[38] It continues to emphasise that the nature of its business operations means that it is not able to tolerate a “three strikes and you’re out” approach to behavioural issues, and employees were aware of this. Its business operations involve the loading and transporting of fuel by bunker barge and then the refuelling of other vessels. It also emphasises the inherent risks associated with attempting to access the refinery jetty area and its ships in an intoxicated state, particularly at night time, including the self-evident risk of falling into the water.

[39] It also emphasises that Mr Lewer failed to provide a consistent account of what occurred, and why he acted as he did. He instead provided varying accounts at different times, despite being provided with the opportunity to “come clean.” In its submission this has inevitably compounded the seriousness of his behaviour. It submits, in summary, that he behaved in a manner toward the security officers that created a risk to health and safety; he attempted to enter the refinery jetty area while intoxicated, again creating a risk to his personal health and safety; and he then failed to provide honest responses when asked about what had occurred. It submits that he was less than honest because he was well aware that he was not to be on board the ship after having consumed alcohol, and instead made up the story about going back to the ship to obtain some personal belongings in an attempt to provide a more acceptable explanation for his behaviour. It submits, in conclusion, that he has demonstrated by his behaviour and conduct that he is not a person Inco Ships can now trust to act in an appropriate manner.

[40] It relies, in particular, on the first and the third of the propositions stated in the decision in Rose. It submits, firstly, that the conduct, when viewed objectively, has caused serious damage to its relationship with Mr Lewer. Secondly, his conduct was incompatible with his duty as an employee. It also submits that this was not an incident that was remote from the workplace. Mr Lewer was instead attempting to access the refinery jetty area controlled by Viva Energy, and then the ship; both areas that employees are not permitted to access after having consumed alcohol. It submits as a consequence that Mr Lewer has demonstrated that he was prepared to be “wilfully reckless” 19 in regard to his conduct in a manner directly related to his employment.

[41] It also submits that his behaviour toward the security officers was inappropriate and confronting. It was also prolonged, given Mr Lewer was at the gate for around 40 minutes before finally leaving. It acknowledges that the security officers did not deem it necessary to call the police. However, the female guard, who was initially at the gate on her own when Mr Lewer arrived, did subsequently contact another guard, who was also working at the Port on that evening, who then came to the gatehouse to provide additional assistance.

[42] Inco Ships also emphasises that this matter does not involve a long-standing employee with an unblemished record. It instead concerns someone who has only been employed as a casual employee for just over 12 months, and been made permanent one week prior to the incident in question occurring. In addition, Mr Lewer had already received a warning about conduct of a different kind. In its submission “termination of his employment was an appropriate and measured response given the gravity of the conduct, the potential gravity of the consequences had he gained access in breach of the occupational health and safety provisions and the failure to be candid.” 20

[43] Inco Ships also rejects the suggestion that the significance of what occurred is diminished by the fact that Mr Lewer was not actually able to gain access to the jetty or the vessel. Despite not being able to gain access he has nevertheless, in its submission, demonstrated that he was prepared to act recklessly and had “attempted to embrace an unacceptable risk.” 21

[44] It continues to submit that regardless of the outcome reinstatement is not an appropriate remedy. It would, firstly, send a message to other employees that inappropriate behaviour, and breaches of its health and safety policies, are not sufficiently serious to result in termination of employment. In addition, it has lost confidence in Mr Lewer and his ability to behave appropriately in the future. He had also demonstrated that he was not prepared to be candid and honest at all times. It submits in these circumstances that if the Commission were to find his dismissal was harsh, unjust or unreasonable then compensation could be the only available remedy.

Consideration

[45] As indicated at the outset in determining an unfair dismissal application the Commission must take into account the various considerations in s.387 in deciding whether Mr Lewer’s dismissal was “harsh, unjust or unreasonable.”

[46] An explanation about the type of conduct that might be encompassed within the phrase “harsh, unjust or unreasonable” is contained in the decision in Byrne & Frew v Australian Airlines Ltd 22 when McHugh and Gummow JJ stated 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.” 23

[47] The decision of the Full Bench of Fair Work Australia in L. Sayer v Melsteel Pty Ltd 24 also provides guidance about the Commission’s role in regard to each of the considerations in s.387. It concluded:

“Where the applicant does present a case, in the ordinary course each of the criteria in s.387 which is capable of being relevant on the facts emerging at the hearing must be taken into account.” 25

[48] I now turn to deal with each of the considerations in s.387 and those authorities that are relevant to the determination of this matter.

(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);

[49] In considering whether there was a “valid reason” in all the circumstances of this matter I have again had regard to various relevant authorities who have considered what is required to establish that a valid reason for dismissal exists.

[50] The judgement of Northrop J in Selvachandran v Peteron Plastics Pty Ltd 26 is often referred to in considering what constitutes a “valid reason.” His Honour came to the following conclusion:

“The reasons of an employer for terminating the employment of an employee are solely within the knowledge of the employer. The employer may state a reason but that reason need not be the actual reason nor need it be the only reason. This is the rationale for the onus of proof provisions contained in s 170EDA.

Section 170DE(1) refers to ‘‘a valid reason, or valid reasons’’, but the Act does not give a meaning to those phrases or the adjective ‘‘valid’’. A reference to dictionaries shows that the word ‘‘valid’’ has a number of different meanings depending on the context in which it is used. In the Shorter Oxford Dictionary, the relevant meaning given is: ‘‘2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value.’’ In the Macquarie Dictionary the relevant meaning is ‘‘sound, just, or well founded; a valid reason’’

In its context in s 170DE(1), the adjective ‘valid’ should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s 170DE(1). At the same time the reason must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must ‘be applied in a practical, commonsense way to ensure that’ the employer and employee are each treated fairly…” 27

[51] In Parmalat Food Products Pty Ltd v Wililo 28 the Full Bench concluded that:

“The existence of a valid reason is a very important consideration in any unfair dismissal case. The absence of a valid reason will almost invariably render the termination unfair. The finding of a valid reason is a very important consideration in establishing the fairness of a termination. Having found a valid reason for termination amounting to serious misconduct and compliance with the statutory requirements for procedural fairness it would only be if significant mitigating factors are present that a conclusion of harshness is open.” 29

[52] The Full Bench majority in B, C and D v Australian Postal Corporation T/A Australia Post 30 (“Australian Postal Corporation”) also provided a useful summary of the approach to be taken by the Commission in weighing the various factors to be considered:

“Reaching an overall determination of whether a given dismissal was “harsh, unjust or unreasonable” notwithstanding the existence of a “valid reason” involves a weighing process. The Commission is required to consider all of the circumstances of the case, having particular regard to the matters specified in s.387, and then weigh:

(i) the gravity of the misconduct and other circumstances weighing in favour of the dismissal not being harsh, unjust or unreasonable;

against

(ii) the mitigating circumstances and other relevant matters that may properly be brought to account as weighing against a finding that dismissal was a fair and proportionate response to the particular misconduct.” 31

[53] It follows from these authorities that a “valid reason” is one that is “sound, defensible, and well founded,” as opposed to one that is capricious, spiteful or prejudiced. It must also be valid in the context of both the employee’s capacity or conduct and the operational requirements of the business. In addition, the test must be applied in a practical, common sense way to ensure the parties are treated fairly in circumstances where each has rights and privileges, but duties and obligations as well. As the decision of the Full Bench in Australian Postal Corporation also makes clear consideration of “valid reason” inevitably involves weighing various considerations, including the conduct involved and any mitigating or other relevant matters.

[54] In the context of this matter it is obviously also necessary to have regard to the fact that Mr Lewer was not actually on duty at the time of the incident that ultimately led to his dismissal. Both parties have acknowledged that the decision in Rose is a relevant authority in terms of the circumstances that should be found to exist before an employee’s out of hours conduct can be said to provide a valid reason for his/her employment being terminated. In that matter Vice President Ross, as he was then, extensively reviewed the circumstances in which an employee’s conduct outside of working hours might provide a valid reason for termination. After reviewing the changing nature of the legal basis of the employment relationship he concluded, “The modern law of employment has its basis on contract not status. An employee’s behaviour outside of working hours will only have an impact on their employment to the extent that it can be said to breach an express or implied term of his or her contract of employment.” 32

[55] He then continued to review various previous decisions involving out of hours conduct. He observed by way of example that “… conviction of a criminal offence, of itself, is not sufficient to warrant termination. The misconduct in question must have a relevant connection to the employment.” 33 However, he continued to state that a criminal conviction may provide a valid reason for termination, noting the case of a bank employee convicted of credit card fraud. In that matter it was held that there was a sufficient connection between the employee’s role at the bank and the nature of his criminal conviction.

[56] Ross VP then continued to set out the circumstances in which an employee’s employment may be validly terminated due to out of hours conduct, noting that “… such circumstances are limited.” 34 Both parties have already made reference to these extracts from the decision in Rose but they are restated now for the sake of clarity.

“It is clear that in certain circumstances an employee’s employment may be validly terminated because of out of hours conduct. But such circumstances are limited,:

  the conduct must be such that, viewed objectively, it is likely to cause serious damage to the relationship between the employer and employee; or

  the conduct damages the employer’s interests; or

  the conduct is incompatible with the employee’s duty as an employee.” 35

[57] Ross VP then continued to review a series of further decisions dealing with out of hours behaviour, before concluding, “In each of the cases referred to there was a clear connection between the employee’s out of hours conduct and their employment. The conduct was incompatible with the employee’s duty as an employee or was likely to cause serious damage to the employment relationship.” 36 I have sought to apply the approach identified in the decision in Rose, together with the principles established in the decisions referred to earlier, to the determination of this matter.

[58] Inco Ships submits that in all the circumstances it had a valid reason to dismiss Mr Lewer. It relies on what occurred on the evening of 22 May 2017, together with Mr Lewer’s subsequent explanations about what occurred, and his previous employment record. Mr Lewer submits, in response, that the “punishment does not fit the crime,” and Inco Ships’ actions were disproportionate in all the circumstances.

[59] The events of the evening of 22 May are in large part agreed upon. The ICS Allegiance unexpectedly returned to the Port of Geelong at the conclusion of Mr Lewer’s shift on that day. He lives at Jan Juc, which is located to the south west of Geelong, and meant he was only around 30 minutes from home, whereas his normal travel time from the Port of Melbourne to home would be around 90 minutes, depending upon traffic volumes. However, it also meant his car was still in Melbourne. Mr Lewer states that he was uncertain at this point as to what was his best option in terms of whether to go straight home, or take another option. For whatever reason he decided to have dinner at a nearby hotel with another crew member. During the course of the evening he consumed a number of drinks, estimated by him to be around four or five, although he was uncertain as to exactly how many. However, he claims to have little recollection of what subsequently occurred that evening. He also called in sick on the following day. These circumstances might suggest he consumed more alcohol than he acknowledges or recalls.

[60] Mr Lewer then returned to the Port, where the ICS Allegiance was berthed, sometime after 10 p.m. and attempted to gain access to the ship. He was prevented from doing so by the security officers at the gatehouse at the entrance to the refinery jetty area. Their subsequent incident report indicates he was refused entry because he was intoxicated. A number of things can be said about what occurred on that evening. Firstly, Mr Lewer was clearly reluctant to take “no” for an answer from the security officers, given he was at the gatehouse for around 40 minutes before finally leaving in a taxi. During this time he repeatedly badgered them to allow him access to the refinery jetty area. He also acted in an aggressive manner to the extent that he attempted to dislodge the glasses of one security officer. He also attempted to scale the security fence. His behaviour was also enough to cause the lone female security officer, who was at the gate when he first arrived, to call for support from another security officer who was working in another part of the Port on that evening. The security staff are engaged by Viva Energy, who control the refinery jetty area and the associated fuel facilities. It is apparent that Mr Lewer’s behaviour had the potential to create repercussions in terms of the relationship between Inco Ships and Viva Energy. However, it is also acknowledged that there is no evidence that this relationship was actually impacted in any way.

[61] The most significant concern that Inco Ships has about Mr Lewer’s conduct was that he was attempting to gain access to the refinery jetty area, and to the ship, while clearly in an intoxicated state. This was, firstly, in breach of the explicit policies that both Viva Energy and Inco Ships have in place about zero levels of alcohol consumption for any employee who is in the refinery jetty area or on board a vessel. This was not disputed and it was acknowledged that the existence of these policies was known and understood by Mr Lewer. The witness evidence of Ms Konnecke, for example, attached signed acknowledgements from him confirming he had been informed about and was aware of their existence.

[62] The evidence also makes clear that these policies were in place for good reason and were intended to be strictly observed. The ICS Allegiance is a tanker vessel involved in berthing at the refinery facility and bunkering fuel, which is then used to refuel other vessels. In addition, there are clearly self-evident risks in being on a jetty or on board ship while under the influence of alcohol or drugs. The risks of slips or falls in these circumstances, as well as other potential eventualities, could have potentially dire consequences.

[63] I am satisfied, in conclusion, that the evidence makes clear that Mr Lewer was clearly attempting to act in breach of these policies in his efforts to access the refinery jetty and the ship, but was only prevented from doing so by the persistent actions of the security officers in the gatehouse.

[64] Inco Ships submits that the gravity of Mr Lewer’s actions were compounded by his responses when asked in the days that followed to provide an explanation about what occurred. He initially sought to justify and provide an explanation for his actions on the basis that he needed to return to the vessel to retrieve some personal belongings, including his house keys, before heading home. However, he subsequently acknowledged that this was not true, and he was attempting to return to the ship to sleep overnight in one of the cabins before commencing his next shift on the following day. Mr Lewer was not able to explain why he initially sought to mislead Inco Ships in this way. However, I am satisfied that it is reasonable to assume, based on the evidence, that he was endeavouring to limit the scope of his misconduct in attempting to gain access to the jetty area in an intoxicated state by attempting to make out that he was only wanting to gain access to the vessel to collect some personal belongings, but was not actually intending to remain on board the vessel overnight.

[65] Inco Ships submits that his failure to “come clean” about why he actually returned to the ship compounded his conduct, and has further diminished its ability to have trust and confidence that he will act in accordance with its policies in the future. Its concerns in this regard can be understood. As indicated already Mr Lewer says he was confused and uncertain about what to do after his shift unexpectedly finished at the Port of Geelong. His car was in Melbourne and he was uncertain about whether to go straight home or whether to travel back to Melbourne in a bus provided by Inco Ships in order to collect his car. The option of sleeping on board the vessel was also apparently a possibility, providing the permission of the Master was first obtained, although there is no evidence that Mr Lewer had sought such permission on this occasion. However, for whatever reason he decided to go to a nearby hotel for dinner with another crew member from the vessel. Having made that decision Mr Lewer should have ruled out any intention of returning to the Port or to the ship that evening. Unfortunately, he did not. He then compounded his behaviour by being less than honest in the explanations he subsequently provided about his real intentions in returning to the Port.

[66] It is, of course, also necessary to have regard to the fact that on the evening of 22 May Mr Lewer was off duty, and whether there was therefore a sufficient connection between what occurred and his employment. The first thing that can be said in response is that the incident was not entirely divorced from his workplace, unlike the circumstances often involved in typical “off duty” cases. In this case Mr Lewer was attempting to return to his place of work, albeit at a time when he was off duty. To this extent the circumstances involved in this matter can be contrasted, for example, with those involved in Rose where the employees were staying in accommodation provided at their employer’s expense, but their off duty antics were not in any way physically connected to their workplace. The circumstances involved in the present matter are different in that Mr Lewer’s off duty conduct involved him trying to return to his place of work. The connection between his out of hours conduct and his employment is therefore much more direct.

[67] In this context I am also satisfied that it is reasonable to expect that any employee would understand that the same standards apply in regard to the consumption of alcohol and access to the refinery jetty and the ship, regardless of whether the employee was on duty or off duty. The rationale for having a policy in place that provides that employees are not to access the refinery jetty or vessel after having consumed alcohol is the same in both circumstances. It is obviously designed to protect the individual, and to prevent them endangering others. In a potentially dangerous environment the justification for that policy, and the expectation that it will be adhered to at all times, is not diminished or removed simply because an employee is off duty.

[68] As indicated already the decision in Rose has considered the circumstances in which an employee may be validly terminated because of their out of hours conduct. The conduct must, firstly, be such that when viewed objectively it is likely to cause serious damage to the relationship between the employer and employee. I am satisfied that Mr Lewer’s conduct, when viewed objectively, has caused serious damage to his relationship with his employer. He attempted to act in evident breach of an explicit policy of his employer. He was less than frank when asked what his intentions were when acting as he did. Inco Ships has indicated in its evidence and submissions that this has seriously impacted on its ability to have trust and faith in Mr Lewer acting appropriately in the future. I am satisfied that this is an entirely understandable reaction in all the circumstances.

[69] The second of the circumstances referred to in Rose is that the conduct damages the employer’s interests. There is no evidence in response that Mr Lewer’s conduct damaged the interests of Inco Ships, although I am satisfied that it had the potential to do so, particularly given his actions involving the security officers. However, the police were not called on the evening in question and Mr Lewer appears to have been fortunate in that the security officers at the gatehouse appear to have been extremely patient in dealing with the situation, given that it involved prolonged and at times aggressive behaviour. The incident also occurred in a relatively quiet location and does not appear to have attracted any broader attention. In addition, Viva Energy does not appear to have considered it necessary to do anything further in response in terms of its relationship with Inco Ships.

[70] The final set of circumstances referred to in the decision in Rose are whether the conduct involved is incompatible with the employee’s duty as an employee. The matters referred to previously are again relevant in this context. Mr Lewer attempted to act in contravention of an explicit policy of his employer. He was also acting in contravention of the policy of the business that controls the refinery jetty facility. The evidence indicates he was aware of these policies. He then attempted to mislead his employer when asked to explain his actions. I am satisfied in response that his conduct in all the circumstances was clearly incompatible with his duty as an employee.

[71] Mr Lewer also submits that while he was attempting to gain access to the ship in an intoxicated state he was actually prevented from doing so. Therefore, he has not actually breached any policy, and this should be taken into account in considering whether Inco Ships had a valid reason for his dismissal. It is acknowledged that he did not gain access to either the refinery jetty or the ICS Allegiance. However, he made it very clear over an extended period of time that this was his intention, and his attempts to act in accordance with this intention were ultimately only prevented by the actions of the security officers at the gatehouse.

[72] I am not satisfied in response that these circumstances provide any justification to diminish the significance of his actions. Mr Lewer clearly intended to act in breach of a policy that Inco Ships had in place in regard to drugs and alcohol, but was prevented from doing so by the actions of a third party. It is his intention to act in breach of its policies that caused Inco Ships to lose confidence and trust in him behaving appropriately in the future. The fact that he was prevented from carrying out that intention, despite his prolonged attempts to do so, does not diminish its loss of confidence and trust in him.

[73] Mr Lewer also submits that while he acknowledges he acted inappropriately his dismissal was a disproportionate response and some lesser sanction was instead appropriate. He has referred to previous Commission decisions in support of this submission. I have also had regard to those decisions. However, I have also had particular regard to the circumstances involved in this matter. I have already indicated that the evidence makes clear that Mr Lewer was in an intoxicated state on the evening of 22 May when he attempted to gain access to the refinery jetty and to the ICS Allegiance. In doing so he aggressively harassed two security offices for around 40 minutes. The area that he was attempting to gain access to is acknowledged to be a potentially dangerous environment where strict standards and policies are in place for good reason. He has then sought to misrepresent his intentions when asked to explain his behaviour. This has occurred in circumstances where Mr Lewer has only been employed for a relatively short period of time and has already, in that time, received a warning about acting inappropriately towards another employee.

[74] It is acknowledged that the circumstances do not involve allegations of serious assault or theft, or other instances where the behaviour has been found to be completely incompatible with the employment relationship. However, I am satisfied that the extent of the damage to the employment relationship involving, in particular, the breakdown in trust and the loss of faith in the ability of Mr Lewer to act appropriately in the future was sufficient to justify his dismissal.

[75] I have also considered the question of his dismissal being a disproportionate response by considering what other responses might have been appropriate. The obvious other possible option would have been a first and final warning. However, this option needs to be viewed in terms of what it implies, and what message it would deliver to other employees. I am satisfied that it would, firstly, appear to imply that the various conduct engaged in by Mr Lewer was on the one hand unacceptable, but not entirely incompatible with an ongoing employment relationship. Secondly, it suggests that while Inco Ships expects its health and safety policies to be adhered to employees will be given a second chance in circumstances where their intention is to act in breach of those policies. In this context it is accepted that in some circumstances there might be mitigating circumstances to be taken into account if the breach is relatively minor, and the potential consequences of the breach are limited and remote. However, Mr Lewer was attempting to gain access to a refinery jetty at night. He then intended to board the ICS Allegiance, which was moored at the jetty, by means of the gangplank, and to then remain on board for the rest of the evening, all the while in an intoxicated state.

[76] It is hardly surprising that Inco Ships has a zero tolerance for alcohol in this work setting. It is also inevitable that breaches of such policies will be viewed more seriously when the potential risks are greater. The provision of a first and final warning in this context would also send a message to other employees that while Inco Ships expects that its health and safety policies will be observed, employees will be given a second chance if they are not. I am satisfied, in conclusion, that Inco Ships was entitled to conclude that simply providing Mr Lewer with a warning in circumstances where he had acted in breach of its health and safety policies, and was then then prepared to be less than frank when attempting to explain or justify his behaviour, was not a proportionate response. I have also had regard to the fact that this was not the first time Mr Lewer had acted inappropriately in what was a relatively short period of employment. He had previously been the subject of a workplace bullying claim. While Inco Ships acknowledges no formal finding was ever made in that matter his behaviour was considered sufficient enough to warrant him being given a warning.

[77] I am satisfied, in conclusion, that in all the circumstances of this matter Inco Ships had a valid reason to dismiss Mr Lewer that was sound, defensible and well founded, particularly given the nature of both the conduct involved and the operational requirements of Inco Ships’ business.

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

[78] This is not at issue. Mr Lewer was informed in a letter from Ms Konnecke dated 16 June 2017 that his employment was terminated with effect from the date of the letter. The letter set out the reasons why Inco Ships had made this decision.

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

[79] Inco Ships contacted Mr Lewer on the afternoon of 23 May 2017 to discuss what had occurred on the previous evening. It then advised him that an investigation was going to be carried out. The MUA provided a response on behalf that Mr Lewer as part of that investigation process.

(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;

[80] Inco Ships contacted the MUA as soon as it had decided to carry out a more formal investigation into what had occurred on the evening of 22 May. As indicated above it also provided a response on behalf of Mr Lewer as part of that investigation. There is no suggestion that Mr Lewer was denied any opportunity to have a support person present in any discussions about the matters that ultimately led to his termination.

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

[81] Mr Lewer had previously been warned about his part in some inappropriate behaviour directed at another employee. However, this was not directly related to the series of incidents that ultimately led to his dismissal.

(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;

[82] No reliance was placed on this consideration. Inco Ships is evidently a relatively small employer, however, it did not suggest that this in any way impacted on the procedures followed in terminating Mr Lewer’s employment.

(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;

[83] Ms Konnecke is employed by Inco Ships in the position of Human Resources Manager. No issues were raised by either party in the context of this consideration.

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

[84] The obvious consideration in this context is the fact that Mr Lewer has a young child and a partner who is currently on maternity leave. This means that both he and his partner are currently not working at this time with all of the attendant financial consequences that follow. Mr Lewer’s partner was apparently also experiencing some difficulties with her pregnancy around the time of the incident on 22 May, although no detailed medical evidence was provided in support of this. The evidence indicates that Mr Lewer did not seek to rely on these circumstances in mitigation of his behaviour when initially questioned by Ms Konnecke about what had occurred. However, they were relied upon in the response provided by the MUA on Mr Lewer’s behalf as something that should be taken into account to assist in understanding his behaviour and the issues he was dealing with at that time.

[85] It is clearly unfortunate that Mr Lewer did not decide to go straight home when he concluded his shift at the Port of Geelong on 22 May. There does not appear to be anything that prevented him from doing so. In any case I have had regard to Mr Lewer’s personal circumstances in coming to a decision in this matter. I have also noted that he was only employed for a relatively short period of time and had, in fact, only been offered permanent employment one week prior to 22 May. In addition, he had already had an issue raised with him during his employment about inappropriate behaviour directed towards another employee.

Conclusion

[86] I am satisfied, in conclusion, after having considered all the circumstances involved in this matter, together with each of the matters in s.394(3) that I must have regard to, that Mr Lewer was not unfairly dismissed. The conclusions reached about the existence of a “valid reason” are of particular significance in coming to this decision. The application is accordingly dismissed.

al of the Fair Work Commission with member's signature

COMMISSIONER

Appearances:

K Bolwell of the Maritime Union of Australia for the Applicant.

S Zeitz for the Respondent.

Hearing details:

2017.

Melbourne:

September 27.

 1   Fair Work Act 2009 (Cth) s 387.

 2   Exhibit MUA1.

 3   Exhibit MUA1 at Attachment SL6.

 4   Exhibit MUA1 at Attachment SL12 at p 3.

 5   Exhibit MUA1 at Attachment SL12 at p 2.

 6   Exhibit MUA1 at [34].

 7   Transcript at PN 295.

 8   Print Q9292 [1998] AIRC 1592 (4 December 1998).

 9   [2012] NSWIRComm 90 (24 August 2012).

 10   [2008] QIRComm 101 (11 April 200).

 11   [2016] FWC 302.

 12   [2015] FWC 3156.

 13   [2012] FWA 5588.

 14   (2003) 126 IR 294.

 15   Exhibit IS2 at [36](a).

 16   Transcript at PN 575.

 17   Respondent’s submissions, dated 29 August 2017, at [14].

 18   Ibid at [37].

 19   Transcript at PN819.

 20   Transcript at PN838.

 21   Transcript at PN842.

 22   (1995) 185 CLR 410.

 23   Ibid at 465.

 24   [2011] FWAFB 7498.

 25   Ibid at [20].

 26   (1995) 62 IR 371.

 27   Ibid at 373.

 28   [2011] FWAFB 1166.

 29   Ibid at [24].

 30   [2013] FWCFB 6191.

 31   Ibid at [58].

 32   Rose v Telstra Print Q9292 [1998] AIRC 1592 (4 December 1998).

 33   Ibid.

 34   Ibid.

 35   Ibid.

 36   Ibid.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR598649>