[2017] FWCFB 4738


Fair Work Act 2009

s.604 - Appeal of decisions

Farstad Shipping (Indian Pacific) Pty Ltd T/A Farstad
Mr Jurgen Rust
Mr Jurgen Rust
Farstad Shipping (Indian Pacific) Pty Ltd T/A Farstad



Appeals against decision [2017] FWC 3426 of Commissioner Bissett at Melbourne on 5 July 2017 in matter number U2016/14464; in C2017/4118 permission to appeal granted; appellable error established (failing to take into account relevant considerations);appeal upheld; decision quashed; matter remitted to member to rehear; C2017/4121 appeal moot in light of outcome in C2017/4118; permission to appeal refused.

[1] Captain Jurgen Rust (Captain Rust), who is 62 years of age, was, until his dismissal on 15 November 2016 employed by Farstad Shipping (Indian Pacific) Pty Ltd (Farstad) as a Master Mariner, that is, a ship’s captain. He was dismissed on serious misconduct grounds. In the capacity of Master, Captain Rust was responsible for the overall management and safe navigation of the vessel of which he was captain. At the time of his dismissal, Captain Rust had completed more than 15 years of service with Farstad.

[2] During September 2016, Captain Rust was rostered off duty (he was working a five week on, 10 week off roster). On or about 28 September 2016, Captain Rust was contacted by a senior human resources officer of Farstad and asked whether he was willing to assist on the vessel Far Sirius and sail as a supernumerary, for the purpose, as he understood, of mentoring a new Master. Captain Rust agreed to do so.

[3] Captain Rust flew to Karratha to commence his shift as a supernumerary on the Far Sirius. The next morning, before boarding a bus which was to transport him and other crew members to the vessel, Captain Rust, along with other crew members, was subjected to a random alcohol test. Captain Rust failed the test in that his blood alcohol concentration (BAC) level exceeded that set out by Farstad’s policies and he was not permitted to board the bus. Captain Rust was subsequently provided with a show cause letter and, following an investigation, his employment was terminated on the date and grounds set out above.

[4] Captain Rust lodged an application under s.394 of the Fair Work Act 2009 (Act) in the Fair Work Commission (Commission) for an unfair dismissal remedy. The application was considered by Commissioner Bissett, who by decision issued on 5 July 2017 1 (Decision) determined that the dismissal of Captain Rust was harsh and thus unfair. As to any remedy consequent on the unfair dismissal, the Commissioner determined that an order for reinstatement was not appropriate and determined to issue further directions which would allow the parties to file material relevant to the question of the amount of compensation, if any, that should be ordered.

[5] By its amended Notice of Appeal Farstad appeals the Decision. Captain Rust has also lodged a Notice of Appeal and appeals that part of the Decision in which the Commissioner determined that an order for reinstatement was not appropriate. In both cases, permission to appeal is required and will not be given unless it is in the public interest to do so. 2

The Decision

[6] After setting out some preliminary matters, the Commissioner commences her consideration of the application by outlining that which is described as “the 2014 incident”. That incident involved a letter of complaint received by Farstad from the crew of the vessel Far Scimitar of which Captain Rust was then Master. The letter of complaint contained an allegation that at a safety committee meeting held on 22 March 2014 during which there had been a discussion about manning levels appropriate for connect and disconnect anchor handling operations, Captain Rust had said that “he would rather see an IR injured or killed rather than bump the rig”. Captain Rust was interviewed about the allegation on 11 April 2014 and denied the allegation. Nearly two months later he was provided with a copy of the investigation report into the allegations in which it had been concluded that the allegation had been substantiated but that Captain Rust had not acted in breach of the safety obligations nor behaved in a manner unbecoming a Master.

[7] The Commissioner then sets out the following matters in relation to the 2014 incident:

[8] Next, the Commissioner outlined some background circumstances leading to the administration of the random alcohol test on 6 October 2016. The test administered at 6:15am registered a BAC of 0.047. The test administered some 15 minutes later registered a BAC of 0.044. The Commissioner then considered the investigation initiated by Farstad to determine whether Captain Rust had breached relevant and applicable Farstad policies.

[9] At [43] – [59], the Commissioner discusses and summarises the relevant and applicable Farstad policies, noting that Farstad’s Drug and Alcohol Policy (Offshore) outlines the acceptable levels for drugs and alcohol; that the acceptable alcohol level is 0.02mg/100ml; that joining crew will be tested on crew change day; that the policy allows for random testing; and that a person returning a positive result will be subject to disciplinary procedures which may include dismissal. At [49], the Commissioner observes that:

[10] At [51]-[52], the Commissioner discusses Farstad’s Group - Fit for Work Policy and observes:

[11] The Commissioner then summarises the salient terms of Farstad’s Employee’s Code of Conduct (Offshore) noting that:

[12] At [55] – [59], the Commissioner discusses Farstad’s APAC Drug and Alcohol Testing and Searching Procedures noting that the procedure allows for random drug and alcohol testing; that it provides that a minimum of 50% of a crew compliment plus one will be tested per visit; that it allows for random testing on crew change days; and that it provides that the return of a non-negative result “is regarded as serious misconduct which will result in disciplinary action that may include dismissal.” The Commissioner also observes that:

[13] The Commissioner next turned to consider the medical treatment that Captain Rust received for depression. The Commissioner noted that Captain Rust had been prescribed antidepressant medication and at [63] – [67], the Commissioner set out some of the medical evidence that had been given during the proceeding as follows:

[14] Next, the Commissioner observes that Farstad’s code of conduct and policies in relation to drugs and alcohol focus on prevention and safety in the workplace; that there was no dispute that Captain Rust was required to be fit for work when he commenced work; but that there was a dispute as to when Captain Rust actually commenced work. 6 The Commissioner noted that Captain Rust was first tested for alcohol at 6.15am, before breakfast and at the hotel where the crew were accommodated; that the second test was at 6.30am; that the test was conducted on a crew changeover day; that given the time at which the transporting bus was expected to leave the hotel and travel approximately 27 kms to the location of the vessel, the time taken to pass through security, Captain Rust expected that he would finally have entered the supply base at around 7.45am to 8.00am on the day he was tested.7

[15] As to the dispute about when one commences work for the purposes of the requirement that an employee be fit for work, the Commissioner set out the competing evidence as follows:

[16] The Commissioner next made some critical findings. First, as to the question whether Captain Rust was in breach of Farstad’s policies at the time that he was tested, the Commissioner made the following findings and observations:

[17] Secondly, as to the 2014 incident, the Commissioner found that:

[18] Thirdly, as to whether there was a valid reason for the dismissal, the Commissioner concluded that Captain Rust’s conduct provided a valid reason for dismissal and in so doing, the Commissioner reasoned as follows:

[19] Fourthly, the Commissioner concluded at [102] of the Decision that Captain Rust was advised of the reason for the dismissal prior to the decision to dismiss him from employment was taken. Fifthly, at [106] – [107] of the Decision the Commissioner concluded that Captain Rust had been given an opportunity to respond to the reason for the dismissal prior to the decision to terminate his employment had been taken. Sixthly, at [108] of the Decision the Commissioner found that there was not an unreasonable denial of access to a support person by Captain Rust. Seventhly, the Commissioner concluded that the matter of any warnings about unsatisfactory performance was not relevant since the reason for the termination of Captain Rust’s employment was not for unsatisfactory performance. 12

[20] Eighthly, the Commissioner concluded at [110] of the Decision that Farstad is a large organisation with dedicated human resources staff and these matters did not adversely impact on the procedure followed in effecting the dismissal.

[21] The Commissioner then turned to consider whether there were any other matters that were relevant to take into account in deciding whether Captain Rust’s dismissal was harsh, unjust or unreasonable. It appears clear from the Commissioner’s reasoning at [111] – [117], that the Commissioner identified a number of matters to be relevant. First, amongst these was Captain Rust’s age which at the time of the Decision was 61 years. Secondly, that he was the sole income earner for his family. Thirdly, Captain Rust’s record as a Master, in that, amongst other things, he demonstrated a methodical and exemplary approach to his job and to safety. Fourthly, that the 2014 incident had never been closed off by Farstad’s management. Finally, that Captain Rust had been taking antidepressant medication for periods between June 2014 to December 2014, and for a three month period commencing July 2016, that he did not report his usage of antidepressant medication to Farstad, and that this was a breach of Farstad’s Offshore Drug and Alcohol Policy.

[22] It is apparent also that the Commissioner took into account the circumstances leading to the heavy drinking the day before Captain Rust was to commence duty and the fact that it was not apparent that any other disciplinary outcome short of dismissal was considered by Farstad. The Commissioner then set out some of her reasoning as to how these matters are to be weighed as follows:

[23] Ultimately, the Commissioner concludes that Captain Rust’s dismissal was harsh 14 and thus unfair.15 In so doing, the Commissioner said:

[24] Next, the Commissioner turned to consider the question of remedy. The Commissioner concluded that an order for reinstatement was not appropriate for the following reasons:

[25] The issue of an order for compensation as a remedy is yet to have been decided.

Permission to appeal

[26] An appeal under s.604 of the Act is an appeal by way of rehearing and the Commission’s powers on appeal are only exercisable if there is error on the part of the primary decision maker. 18 There is no right to appeal and an appeal may only be made with the permission of the Commission.

[27] Section 400 of the Act applies to this appeal. Section 400 provides:

“(1) Despite subsection 604(2), the FWC must not grant permission to appeal from a decision made by the FWC under this Part unless the FWC considers that it is in the public interest to do so.

(2) Despite subsection 604(1), an appeal from a decision made by the FWC in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact.”

[28] In Coal & Allied Mining Services Pty Ltd v Lawler and others, Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under s.400 of the Act as “a stringent one”. 19 The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.20 In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may attract the public interest:

“... the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters” 21

[29] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error. 22 However, the fact that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.23

[30] For the reasons that follow below, we are satisfied that Farstad has made out an arguable case of appellable error in relation to grounds 4 and 5 of its Notice of Appeal. Specifically, it is arguable that Captain Rust’s failure to self-report his alcohol consumption before undertaking the alcohol breath test was not taken into account by the Commissioner. It is also arguable that in determining not to draw an adverse inference from the failure of Captain Rust to report to Farstad the taking of antidepressant medication was erroneous in that, having found that Captain Rust had breached Farstad’s Offshore Drug and Alcohol Policy, that was a relevant matter which ought to have weighed against a conclusion that the dismissal was harsh.

[31] This is all the more arguable when it is apparent that this breach weighed against Captain Rust in the Commissioner’s consideration of an order for reinstatement. In combination, these matters raise an arguable case that the Commissioner failed to take into account relevant considerations and thus an arguable case of the kind of error identified in House v King 24. In the result and having regard to the apparent significance of the 2014 incident in the weighing of relevant matters, it is arguable that there is an injustice sufficient to enliven the public interest. We therefore grant permission to Farstad to appeal.

[32] As will be apparent from that which follows, we have decided to uphold Farstad’s appeal and to quash the Decision. For that reason, Captain Rust’s appeal is moot and so it is not in the public interest to grant permission. Permission to appeal in that matter is refused.

Consideration of Farstad’s appeal

Appeal grounds

[33] By its amended Notice of Appeal, Farstad identifies seven appeal grounds. We need only deal with two of the grounds identified (grounds 4 and 5), which are set out below:

[34] We now turn to consider these grounds.

Ground 4

[35] In the context of considering whether there was a valid reason for the dismissal, the Commissioner considered some of the alternatives available to Captain Rust instead of reporting for duty and thus purporting to be fit for duty on 6 October 2016. At [95] of the Decision, the Commissioner makes the following observations:

[36] We should observe at the outset that we do not agree with the Commissioner’s apparent acceptance that Captain Rust could have advised the “next day that he could not report for duty because he was unwell”. Captain Rust was not unwell on the day that he reported for duty. Indeed, Captain Rust’s evidence about how he was feeling on the morning of the test was as follows:

[37] In our view, it is not open on that evidence to suggest that Captain Rust could have not reported for duty because he was unwell. The available course for Captain Rust to have followed was to advise relevant Farstad management before reporting for duty that he had consumed 10 beers the day before and that he may not be fit for duty as required by Farstad’s policies. This he did not do. This is that which is described as self-reporting. During his oral evidence Captain Rust agreed that he could have self-reported but that he chose not to do so. 26

[38] This was a relevant consideration to be weighed in the balance in assessing whether the dismissal of Captain Rust was unfair, particularly in circumstances where Captain Rust was employed in a senior position and was responsible for ensuring Farstad’s policies, values and procedures were promoted and implemented on any vessel of which he was the Master. 27 On the face of the Decision this matter does not appear to us to have been taken into account. That a relevant consideration is not taken into account is an appellable error. In a case where, as appears clear from [127] of the Decision, the result is finely balanced, that error becomes significant. We reject Captain Rust’s submission that the contention that the Commissioner did not take into account Captain Rust’s decision not to self-report cannot be maintained in light of [95] of the Decision. The matters to which reference is made therein and which are reproduced above do not speak to Captain Rust’s consumption of alcohol as the reason that he was not fit for duty. They speak to matters which, on the evidence, would not have been a truthful explanation of the reason that Captain Rust was not fit for duty. That reason was the consumption of a large quantity of alcohol the day before he was required to report for duty. We are persuaded that appellable error, as we have described, has been made in the instant case. It follows that we are persuaded that ground 4 of the amended Notice of Appeal is made out.

Ground 5

[39] At [117] of the Decision, the Commissioner observed that Captain Rust had been on antidepressant medication from June 2014 and that he stopped taking this medication in December 2014. The Commissioner noted that in July 2016 following a mental health review, Captain Rust was placed on a three month trial of Fluoxetine. The Commissioner found that Captain Rust did not report to Farstad that he was taking these medications and that this failure was a breach of Farstad’s Offshore Drug and Alcohol Policy.

[40] Earlier at [81] and [83], the Commissioner had concluded that at the time that Captain Rust was due to board the bus arranged as transportation, he was required to comply with the Offshore Drug and Alcohol Policy and that at the time that he was tested (at both 6:15am and 6:30am) Captain Rust’s BAC was in excess of the limits prescribed and clearly set out in Farstad’s policies. The Commissioner concluded to that extent at that time, Captain Rust was in breach of policy. Again at [126], the Commissioner expressed the view that she was satisfied that Captain Rust had breached the requirements of the policy.

[41] It is thus apparent that Captain Rust was dismissed because he had breached Farstad’s Offshore Drug and Alcohol Policy on 6 October 2016 and the Commissioner so found. However, having also found, in effect, that between June 2014 and December 2014 and again from July 2016 and for a period of three months thereafter, Captain Rust did not report to Farstad his use of antidepressant medication and that this was a breach of Farstad’s policy, the Commissioner decides, in respect of the question whether the dismissal was harsh, unjust or unreasonable, to draw no adverse inference. In other words, the prior breach of policy was a neutral consideration.

[42] We consider that in so doing the Commissioner erred in failing to take into account, that is, to consider and give appropriate weight, to Captain Rust’s earlier breach of policy in not reporting to Farstad his use of antidepressant medication. It was plainly a relevant consideration. It was conduct which was of a similar kind to that which founded the reason for the dismissal, namely a breach of Farstad’s Offshore Drug and Alcohol Policy. Given the periods described above, it was likely that it was a course of continuing conduct. Viewed in this way there were two separate periods of that continuing course of conduct. The third occasion of policy breach occurred on 6 October 2016.

[43] That the earlier breaches were a relevant consideration to weigh against Captain Rust was in our view, correctly identified by the Commissioner in her consideration of whether an order for reinstatement was appropriate. It seems to us apparent at [135] that the earlier breaches of Farstad’s policies weighed against Captain Rust. Moreover, the Commissioner quite properly explains why this is so at [136] where the Commissioner noted the following:

[44] We consider that this observation applies with equal force to the consideration and assessment, in weighing whether a dismissal was harsh, unjust or unreasonable, of the fact that Captain Rust had on prior occasions failed to report his use of medication in breach of the very same policy that he breached on 6 October 2016 and which resulted in his dismissal.

[45] If the prior policy breaches are factors relevant to assessing whether there is a loss of trust and confidence, as the Commissioner apparently and we think properly, thought correct, and thus militating against the re-establishment of the employment relationship, we fail to see how those prior policy breaches can be a neutral consideration in determining whether the ending of the relationship in the first place was harsh, unjust or unreasonable. This is so regardless of the medical evidence as to the effect of the antidepressant drugs and the evident view of the Commissioner, that the reporting aspects of the policy are “observed more in the breach than otherwise.”

[46] Moreover, it seems to us that the earlier breach was a matter relevant to assessing whether there was a valid reason for the dismissal. We consider, having regard to Captain Rust’s seniority and responsibilities as Master, the prior policy breaches were themselves capable of constituting a valid reason for dismissal. The Commissioner did not give consideration to this issue in the Decision. Having concluded that the prior failure to disclose antidepressant drug use was a breach of the relevant policy, the Commissioner should have considered the significance of that finding on the assessment required by s.387(a). It is not to the point that the evidence led by Farstad at first instance did not rely on the earlier breach as a reason for the dismissal as suggested by Captain Rust in his submissions to us. The relevant question that arises when considering s.387(a) is whether “there was a valid reason for the dismissal related to a person’s capacity or conduct . . .”. The question will not be answered only by asking whether the reason relied upon by the employer was a valid reason.

[47] For these reasons, we consider that ground 5 of the amended Notice of Appeal has been made out.


[48] It follows from the above that there has been an error in the exercise of the Commissioner’s discretion by reason of the matters we have identified. In these circumstances and having regard to the significance of the errors in the exercise of the Commissioner’s discretion, 28 it would be unsafe to allow the Decision to stand and the appropriate course is to uphold the appeal, quash the Decision and to remit the matter to another member of the Commission for rehearing.


[49] For the foregoing reasons we have decided to:

Seal of the Fair Work Commission with Member's signature



Mr A Pollock, Counsel for Farstad.

Ms L Doust, Counsel for Captain Rust.

Hearing details:

September 4.
Melbourne via VC to Brisbane.

 1   [2017] FWC 3426

 2   See s.400(1) of the Act

 3   [2017] FWC 3426 at [14] – [19]

 4   ibid at [53] – [54]

 5   ibid at [55] and [59]

 6   [2017] FWC 3426 at [68] – [71]

 7   ibid at [72] – [74]

 8   ibid at [76] – [78]

 9   ibid at [80] – [86]

 10   ibid at [87]

 11   ibid at [94] – [99]

 12   ibid at [109]

 13   ibid at [118] – [124]

 14   ibid at [126]

 15   ibid at [129]

 16   ibid at [126] – [128]

 17   ibid at [132] – [136]

 18   Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; 99 IR 309 at [17] per Gleeson CJ, Gaudron and Hayne JJ

 19   (2011) 192 FCR 78; 207 IR 177 at [43]

 20   O’Sullivan v Farrer (1989) 168 CLR 210 at 216-217 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 243 CLR 506 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78; 207 IR 177 at [44] -[46]

 21   [2010] FWAFB 5343; (2010) 197 IR 266 at [27]

 22   Wan v Australian Industrial Relations Commission (2001) 116 FCR 481 at [30]

 23   GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343; (2001) 197 IR 266 at [26]-[27]; Lawrence v Coal & Allied Mining Services Pty Ltd T/A Mt Thorley Operations/Warkworth [2010] FWAFB 10089; (2010) 202 IR 388 at [28], affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78; 207 IR 177; New South Wales Bar Association v McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663; (2014) 241 IR 177 at [28]

 24   (1936) 55 CLR 499

 25   AB 40, PN 178 – PN 180

 26   AB 40; PN 182 – PN 184

 27   AB 625

 28   Minister for Aboriginal Affairs v Peko-Wallsend and Others (1985-86) 162 CLR 24 per Mason J at 40, where his Honour held that: “Not every consideration that a decision-maker is bound to take into account but fails to take into account will justify the court setting aside the impugned decision and ordering that the discretion be re-exercised according to law. A factor might be so insignificant that the failure to take it into account could not have materially affected the decision.”

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