[2019] FWC 8412 [Note: a correction has been issued to this document] [Note: An appeal pursuant to s.604 (C2019/7774) was lodged against this decision - refer to Full Bench decision dated 13 March 2020 [[2020] FWCFB 1373] for result of appeal.]


Fair Work Act 2009

s.394 - Application for unfair dismissal remedy

Mr Gary Hilder
Sydney Trains



Application for an unfair dismissal remedy – Customer Service Attendant for Sydney Trains – employee dismissed for failing a random drug detection test for cannabis – serious misconduct alleged – investigation of various breaches of Sydney Trains’ policies and procedures – whether valid reason for dismissal – applicant’s responses demonstrate genuine contrition, remorse and deep regret – single incident of smoking one ‘joint’ – not habitual drug user – otherwise unblemished service of six years – ‘zero tolerance’ approach to drugs and alcohol in the workplace – policy not ‘zero tolerance’ – disciplinary policy inconsistent with ‘zero tolerance’ approach – no consideration of personal or mitigating circumstances – harshness not considered – selective consistency of policy – failure to inform employees that any level of detected illicit substance will result in dismissal – policies confusing, misleading and inconsistent – no valid reason for dismissal in all the circumstances – even if there was a valid reason, dismissal still ‘harsh’ – personal and financial circumstances considered – evidence of loss of trust and confidence not persuasive – reinstatement appropriate remedy – ancillary orders for continuity of service and payment of 50% of lost remuneration, less remuneration earnt – orders to be made in the event of any disagreement as to final orders.

[1] On 5 October 2018, Mr Gary Hilder, a 64-year-old Customer Service Attendant (‘CSA’) employed by Sydney Trains and located at Clarendon Station, was subject to a random urine drug test. He initially returned a positive reading (above 50ug/L) for cannabis metabolites. A secondary test confirmed a THCCOOH level of 78 ug/L in circumstances where the cut-off is 15 ug/L. On 9 October 2018, Mr Hilder was suspended on pay pending an investigation of his conduct.

[2] On 6 November 2018, Mr Hilder was notified of a formal investigation of his possible breaches of Sydney Trains’ Code of Conduct and Drugs and Alcohol Policy (the ‘Policy’). The letter, essentially a ‘Show Cause’, reads as follows:

‘Dear Mr Hilder

Notification of Misconduct Allegation and Request to Respond in Writing

I am writing to inform you that the Workplace Conduct and Investigations Unit (WCIU) is conducting a formal investigation into the possibility that you have breached the Transport Code of Conduct (Our Code of Conduct) and the Sydney Trains Drugs and Alcohol Policy.

Ms Barbara Iordanidis, Human Resources Consultant is conducting the investigation.

The allegation is as follows:

On Friday 5 October 2018, while on duty as a Customer Service Attendant for Sydney Trains, you returned a positive drug test reading for THCCOOH 78ug/L (confirmation cut off 15ug/L).


  On Friday 5 October 2018, you were randomly selected for a drug and alcohol test at Clarendon Station.

  An initial drug test returned a positive reading for Cannabis Metabolites.

  A second test was then undertaken. This test result confirmed the finding of THCCOOH 78ug/L (confirmation cut off 15ug/L).

If proven, this conduct may represent a breach of the Sydney Trains Drugs and Alcohol Policy and the following sections of Our Code of Conduct

  Section 3 – Staff Responsibilities

  Section 9 – Workplace Health and Safety

  Section 10 – Drugs and Alcohol

I have enclosed copies of the above documents for your reference in addition to a copy of the Sydney Trains Discipline Procedure.

The purpose of this letter is to provide you with an opportunity to respond to the allegation in writing. You are requested to provide your written response within fourteen (14) calendar days from receipt of this letter.

Please email your written response to:

Ms Barbara Iordanidis

[email address provided]

Your written response may include your version of events, provide an explanation and/or outline any mitigating circumstances with regard to the matter under investigation. If you do not respond in writing to the alleged breach by the due date, the investigation will continue in absence of any response made by you.

Your written response may include your version of events, provide an explanation and/or outline any mitigating circumstances with regard to the matter under investigation. If you do not respond in writing to the alleged breach by the due date, the investigation will continue in absence of any response made by you.

You may bring a support person to the interview. A support person may be a union or legal representative. It is not appropriate to have a support person who has been involved in the matter, or whose availability may lead to a delay in the investigation. Your support person cannot take an active part in the interview and you will be required to answer the questions yourself.

Possible Outcomes

After conducting any relevant interviews and considering all available information, an Investigation Report will be prepared. If a breach, or breaches, of Our Code of Conduct or any Sydney Trains Policy has occurred, the Investigation Report may be sent to the Disciplinary Review Panel (DRP).

The DRP will make a preliminary recommendation regarding any appropriate disciplinary action in response to the breach/s. Disciplinary action may include one or more of the following:

  caution or reprimand

  fine of an amount not exceeding $100

  reduction in position, rank or grade and pay

  suspension from duty without pay

  dismissal (with or without notice)

Independent of any disciplinary action, Sydney Trains may take appropriate management action including transfer, secondment, training, removal from particular duties (including acting in higher grades or secondments), counselling (sic), mentoring or other measures in the interests of Sydney Trains.


Given the sensitive nature of the allegation, and to protect you and others who may become involved, you must not discuss the investigation with anyone other than your nominated support person(s), representative, personal advisors or immediate family members.

You are required to keep the details of the matters raised in this correspondence, and your response, confidential. This requirement also applies to your personal advisors and immediate family members.

Any Sydney Trains staff member found to have breached confidentiality requirements may have disciplinary action taken against them. If you believe confidentiality has been breached, please advise me immediately.

Integrity of Information

Where allegations are made, TfNSW expects staff members to raise allegations in good faith and that information provided in the investigation is not false or misleading. Disciplinary action may be taken against those found to have provided false or misleading information or made malicious allegations.


Victimising or retaliating against a person who has assisted with, or is involved in an investigation will not be tolerated. Any finding of victimisation or retaliation against anyone who is involved in the investigation may result in disciplinary action being taken.

All participants of the investigation process have been advised of this. You should immediately contact me if you experience any difficulties in this regard.

If you or your family need assistance at any time during the investigation, you are encouraged to contact the Employee Assistance Program (EAP) on [phone number provided]. The EAP provides confidential and professional assistance to employees and their family members.

If you have any questions in relation to this matter, please contact Barbara Iordanidis on [phone number provided].

Yours sincerely

Amanda Sharwood’

With the assistance of his Union, the Australian Rail, Tram and Bus Industry Union (‘RTBU’ or the ‘Union’), Mr Hilder responded to the investigation on 20 November 2018.

[3] On 15 January 2019, Mr Hilder received the investigation’s preliminary outcome of a finding of dismissal. The Union submitted a response to Sydney Trains’ Disciplinary Review Panel (‘DRP’) on 28 January 2019. On 13 February 2019, Mr Hilder received notification of the review which was unsuccessful. A further review submission was made to Transport for NSW (‘TfNSW’) on 25 February 2019 and on 26 April 2019, this review confirmed Mr Hilder’s dismissal.

[4] On 6 May 2019, the Union filed an application on Mr Hilder’s behalf, pursuant to s 394 of the Fair Work Act 2009 (the ‘Act’) in which he seeks reinstatement and associated orders for his alleged unfair dismissal. Mr Hilder had worked for Sydney Trains for six years and has an otherwise unblemished employment record. In the Form F2, the Union put that:

‘8. Mr. Hilder acknowledges he has failed a drug and alcohol test.

9. Mr. Hilder has been completely honest through the entire investigation and openly admitted he made a human error.

10. A decision of dismissal is disproportionately harsh for Mr. Hilder because:

  Mr. Hilder’s Age this being sixty-three (63) years old

  Mr. Hilder’s ability to gain new employment are significantly limited

  Cause great instability by placing Mr. Hilder and his family into a precarious financial position. Unable to maintain the family’s mortgage and provide financial support for his family.

  Mr. Hilder has very limited superannuation.

Sydney Trains are not taking into consideration of their Just Culture Policy (Attachment 4d) – Where it’s a culture that recognises normal human error does occur and it’s about It is about moving from a disciplinary system that prohibits human error to one that supports learning from mistakes while maintaining accountability for one’s behavioural choices.

11. Mr. Hilder has been extremely remorseful and would be willing to accept any alternative sanction to dismissal.’

[5] In its reply Form F3, Sydney Trains maintained Mr Hilder’s dismissal was not unfair. Sydney Trains has a ‘zero tolerance’ approach to drugs and alcohol in the workplace. Mr Hilder was aware of the relevant policies through training in 2012, 2014 and 2015. As a Category 3 Rail Safety Employee, he was required to hold a rail safety card. This was immediately removed when he was found to have tested positive to an illicit substance on 5 October 2018. Mr Hilder was offered procedural fairness and the Union had submitted a number of responses on his behalf. Mitigating factors such as his age, performance and length of service were taken into account, but they did not outweigh the seriousness of his misconduct and the grounds for his dismissal.

[6] In accordance with my usual procedure, I convened a conference of the parties on 27 June 2019, to explore whether settlement of the application could be reached. This was unsuccessful and the matter proceeded to hearing on 8 August 2019. Mr T Warnes represented the Union and Mr Hilder. Ms M Gaven of Counsel appeared with Ms S Moten, Solicitor, Lander and Rodgers, on behalf of the respondent, with permission being granted for Sydney Trains to be represented by a lawyer. I note the Union did not object to this course. At the commencement of proceedings, further attempts were made to settle the matter, but ultimately this was not achieved, and the hearing proceeded.


Relevant policies and other documents

[7] I set out below a number of extracts from documents tendered in this case.

[8] Mr Hilder’s letter of appointment of 28 September 2012 from Sydney Trains’ predecessor entity Railcorp states, inter alia, the following:

‘Railcorp is committed to protecting the health and safety of all employees, customers and members of the public by minimising accidents, incidents or injuries arising from the misuse of drugs and alcohol. This commitment involves maintaining an alcohol and drug free workforce whilst on duty.

All employees must be drug and alcohol free whilst at work. There is legislation policy in place which allows Railcorp to undertake random drug and alcohol testing, on its employees. You will therefore be required to undertake random drug and alcohol testing in accordance with our policies.’

[9] Sydney Trains’ Code of Conduct sets out the following:

‘You are responsible for complying with your agency’s drug and alcohol policy and/or relevant legislation. This includes prescribed, over-the-counter and alternative medication which may negatively affect your ability to perform your duties, or pose a risk to your safety or that of others. Returning a positive drug or alcohol test, or tampering with or refusing a test, may be an offence or contravene agency policies/ procedures and may result in disciplinary action. You should inform your manager where you have reason to suspect anyone working for a transport agency may be abusing or under the influence of drugs or alcohol. You are encouraged to disclose if you have a drug or alcohol dependency, so appropriate action can be taken to provide relevant support and maintain a safe workplace. Refer to your agency’s drug and alcohol policy for disclosure advice. No alcohol or prohibited drugs are permitted to be consumed on agency premises at any time. You may only store alcohol in the workplace or sell alcohol to customers when required to do so as part of your official duties. For instance, NSW Trains staff members may be expected to sell alcohol as part of their duties.’

[10] The specific Drugs and Alcohol Policy provides as follows:

‘Policy Statement

To achieve this vision, we:

  Have a random drug and alcohol testing program.

  Have a test rating showing zero concentration of alcohol in the blood.

  Have a test rating less than the cut off level stipulated in Australia / New Zealand standard 4398 (AS/NZS 4308) for tolerances of drugs.

  Are not permitted to have or sell alcohol or prohibited drugs in the workplace

  Must not be in possession of any item or piece of equipment for the use or administration of a prohibited drug at any Sydney Trains’ workplace.

The Sydney Trains drug and alcohol program is consistent with our corporate values and behaviours. Provide support for workers to remain drug and alcohol free while at work.

Measures to reduce safety risk, absenteeism and other affects in the workplace, do the consumption of drugs and alcohol, will include the opportunity to self-identify and seek help, rehabilitation programmes in education on drug and alcohol related issues.’

[11] TfNSW has a Managing Conduct and Discipline Policy covering Sydney Trains and other transport agencies, which at page four provides examples of inappropriate conduct as follows:

‘Examples of Inappropriate Conduct may include, but are not limited to:

  wilful refusal to carry out a lawful and reasonable instruction;

  conduct that causes a risk to a person’s health and safety, organisational reputation and/or


  victimisation and/or reprisal action against another person, including interfering with

  Disciplinary Proceedings;

  corrupt conduct;

  unauthorised release of confidential information;

  criminal conduct, theft, fraud and/or assault;

  being convicted of a Serious Criminal Offence; and/or

  any other breach of the Transport Code of Conduct or the Code of Ethics and Conduct for NSW government sector employees.’

[12] It also provides for remedial and disciplinary action such as:

‘Remedial action may include one or more of the following:

  counseling (sic);


  monitoring the Staff member’s conduct and/or performance;

  implementing a performance improvement plan;

  issuing a warning (notification) to the Staff member that certain conduct is unacceptable or

  that the Staff member’s performance is not considered satisfactory;

  transferring the Staff member to another role that does not involve a reduction of salary or

  demotion to a lower role; and/or

  any other action of a similar nature.’

[13] Sydney Trains’ Disciplinary Procedures sets out the following definitions:

‘For the purpose of this Procedure:

At-risk behaviour - Unintentional risk-taking is when a person does something intentionally, but doesn’t appreciate the risk involved in their actions. Examples include:

  Taking shortcuts around rules and procedures

  Not wearing safety gear (PPE) the correct way.

Reckless behaviour - Intentional risk-taking is when a person acts in a way that purposely disregards the risk associated with their behaviour. Examples include:

  reporting to work under the influence of drugs or alcohol

  tampering with safety equipment

  falsely claiming extra hours than those worked

  covering up or not reporting a safety incident.

Unintentional error - When a person does something other than what they intended to do.’

[14] The Just Culture Framework Policy at para 5 says:

‘Under a Just Culture disciplinary action is ordinarily not the first response to an incident involving employees - a manager’s/supervisor’s first response is to openly and fairly assess the circumstances involved.

The Just Culture Framework describes the process that managers/supervisors should follow when conducting this assessment.

Unintentional error will usually not attract disciplinary action, as remedial action (such as coaching or performance development) may address the situation. For more information on remedial action refer to the Performance and Conduct Improvement Procedure.

However, for reckless behaviour, and in some circumstances, for at-risk behaviour, disciplinary action may be taken.

This Discipline Procedure describes the process to be followed when it has been determined, as a result of an initial assessment, that reckless and/or at-risk behaviour may have occurred and disciplinary action may be the most appropriate response.’

[15] Under ‘Principles’ the following appears:

‘Each case decided on its own merit: While the disciplinary process will be applied in a consistent manner, the same misconduct or serious offence conviction will not always lead to the same outcome or disciplinary action. The circumstances of each case may be different and the relevance of the matter to the employee’s position may differ. Previous warnings or remedial action and an employee’s previous employment and service record may also be relevant to decisions about disciplinary process outcomes.’

[16] Information material distributed by Sydney Trains in the August 2016 Sydney Trains Weekly, contained the following:

‘More than a staff member: making the right decision when it comes to drugs and alcohol

Over the coming weeks you'll start to see posters going up in your area as a part of the new drug and alcohol campaign. These posters as a reminder to staff and controllers on the reasons why it's important that we stay safe.

One of the key drivers of this campaign is to highlight why it's important that Sydney Trains a drug and alcohol-free environment. You're one of the 9500 staff who is completed the target 0 program, you're the reasons why you personally stay safe - perhaps is to take the dog for a walk, footy at the park with your mates or simply spending time with your family. So it's not just about making the right decisions when it comes to drugs and alcohol - being able to work safely in a space where work mates are doing the same.

Keep an eye for the new posters, which are also available for download from the intranet. Let us Know what you think of the posters, as well as the main reason why you stay safe, and email [email address provided] to go into the draw to win one of six movie passes.’

Evidentiary case for Mr Hilder

[17] Mr Hilder said that over his period of employment with Sydney Trains prior to the incident, no issues had ever been raised regarding his performance or conduct. He had been drug and alcohol tested on several occasions and had always tested negative.

[18] Mr Hilder described the circumstances leading to the positive drug test on 5 October 2018. The day before, after bumping into an old friend he had not seen for years, his friend invited him to his house for a few beers and a yarn. His friend offered him a single marijuana cigarette (‘joint’). He believed it would not be a problem. Later that evening, he went home feeling no ill effects. He had dinner with his family and had an early night, as he had a 6:00am start at Clarendon Station. When he woke up the next morning, he did not feel any ill effects and was confident he could perform his duties.

[19] Mr Hilder said he was randomly urine tested at around 7:00am. He continued his customer service and cleaning duties that day and worked on the following two days at Schofields Station, without feeling impaired or unwell. He was rostered off for five days from 8 October 2018. On 10 October 2018, he was advised of the positive result of 78 ug/L and was directed to return his safety pass and mobile phone and was stood down. Later that day, Mr Hilder attended a local doctor and requested a urine test for cannabis which was tested by Austech Medical Laboratories. The pathology report was negative, with no drugs detected, including cocaine, amphetamines, benzodiazepines and cannabinoids. Mr Hilder then set out the investigation process and his submissions to Sydney Trains’ Disciplinary Review Panel and the TfNSW appeal. Mr Hilder stated that this was the only occasion that he had smoked any marijuana in 30 years. It was a ‘one off’ incident, which he deeply regrets.

[20] Mr Hilder met with his doctor on 25 July 2019, and received a letter from him which said:

‘Mr Gary Hilder has been a patient of mine for over 6 years and has never shown any signs of habitual drug use.

Further the negative results of the pathology test, urinary drug screen was negative after the positive test supports Mr Hilder’s assertion that he was not a habitual user of cannabis.. (sic)

Yours sincerely

Dr S Lagaida’

[21] Mr Hilder described his personal circumstances and how much he values his job with Sydney Trains. He is 64 years old, paying off a mortgage and with one dependent child living at home with him and his wife. He has very little in anticipated superannuation after previously working as a taxi driver for seven years and paying his own superannuation. Mr Hilder is finding it difficult to find alternative employment, despite numerous applications, with little or no response. These job applications were annexed to his statement.

[22] Mr Hilder acknowledged his mistake and said he had been open and honest throughout the process. He claimed he was not impaired and was not performing safe working duties at the time. He was willing to participate in any retraining or coaching and would accept alternative punitive measures in response to his conduct. He truly values his employment with Sydney Trains, holds no animosity toward the organisation and respects his managers. He referred to his clean work record and comments when he received a Customer Excellence Award in 2016. At the time, in the Sydney Trains Platform newsletter, it was said:

‘Gary is in customers but by his colleagues across Sydney Trains for customer centric approach and willingness to help stop Gary was nominated by Alan Watson, station manager (SCM), play strong work ethic and for driving the behaviours we want to see from our staff in line with the Customer Service Model. Alan delivers glowing endorsement, saying ‘Gary is a machine for customer service, always going out of his way to provide customers an exceptional service’. Gary has received several compliments for his work at a variety of stations across the North West region. one customer so impressed that he called the one three one 500 to show his appreciation – ‘Caller compliment staff member on platform 1/2 at Penrith station who helped him at to Earlwood. He advised to him to take the Blue Mountains Line train to get to Strathfield in time for his bus, as he was running late. Cola states he went out of his way to help. Another customer called 131 500 and said “The gentleman to Penrith station is very kind very helpful and he is absolutely wonderful”’

[23] In response to Mr Walsh’s statement dealing with his duties and responsibilities as a Customer Service Attendant, it was Mr Hilder’s belief that he was not impaired at any time on 5 October 2018 and was able to competently perform his duties, including responding to emergency situations. He continued to be able to perform his duties, without incident, after he was randomly tested. Further, he said that if any issue had arisen with the level crossing and the boom gate at Clarendon Station, his responsibility was only to contact the Station Duty Manager and advise of the issue. He was not qualified to operate the level crossing.

[24] In cross examination, Mr Hilder agreed he was familiar with Sydney Trains’ Drugs and Alcohol Policy and had undergone random testing on about five separate occasions, without an issue. He accepted the Policy was intended to serve as a deterrent to employees being under the influence of drugs or alcohol at work. Mr Hilder acknowledged having attended number of relevant training sessions, but at no time had it been said by the employer that a positive test finding would result in an automatic dismissal.

[25] As he was the only employee at Clarendon Station on 5 October 2018, Mr Hilder agreed he had a responsibility for communicating information about moving trains, and any safety concerns of passengers. This was a core part of his training. However, he reiterated that he did not consider himself to be impaired in any way on the day. Mr Hilder said that he had reviewed Mr Walsh’s evidence as to the uniform outcome for employees who tested positive to drugs or alcohol (dismissal), accepted he had not been ‘singled out’ and agreed that the Policy had been consistently applied. Nevertheless, he believed each case depends on its own circumstances.

[26] Mr Hilder acknowledged that Sydney Trains has a ‘zero tolerance’ approach to drugs and alcohol, but nowhere does it state that dismissal is the automatic outcome. Mr Hilder was asked why he did not mention having smoked marijuana before he was tested. He said that as he did not believe he was impaired in any way, he did not expect such a small amount of marijuana would influence the test. However, he agreed he was asked if he was taking any prescribed medication. Mr Hilder acknowledged his confirmatory test recorded five times (78ug/L) the acceptable cut off level of 15ug/L. He conceded that Sydney Trains has no way of testing a person’s impairment levels.

Ms Helen Bellette

[27] Ms Bellette has been a union organiser for 15 years; the last 8 years with the RTBU. Ms Bellette’s evidence went to Sydney Trains’ submission as to the claimed consistency of outcomes for employees who test positive for drugs or alcohol. Ms Bellette was not required for cross examination.

[28] Ms Bellette provided two examples of Union members who had not been dismissed for breaches of Sydney Trains’ Drugs and Alcohol Policy. For privacy reasons, I shall not identify them. Both of these employees were dismissed after having previously failed a drug test and an alcohol test respectively. In the first case, the employee had tested positive to cannabis on 6 October 2013 and for a second time on 9 July 2015. In the second case, the employee had previously tested positive to alcohol but was not dismissed, and then failed another alcohol test in 2019 and was dismissed.

Evidentiary case for Sydney Trains

Mr Christopher Walsh

[29] Mr Walsh is the acting Deputy Executive Director of Train Crewing (Sector 1) for Sydney Trains. He provided three witness statements in the proceeding, which I summarise below.

[30] Mr Walsh stated that Sydney Trains takes a ‘zero tolerance’ approach to prohibited drugs and alcohol in the workplace. He annexed to his first statement copies of the relevant policies and Code of Conduct relevant to this matter which I have set out earlier and which I will not repeat here. Mr Walsh also annexed Mr Hilder’s letter of appointment (28 September 2012) referring to the relevant policies and a requirement that employees undertake random drug and alcohol testing; Mr Hilder’s training history; copies of posters and other materials of the ‘Target Zero’ program and Mr Hilder’s position description (‘PD’). Mr Walsh described Mr Hilder’s responsibilities as including:

‘(a) providing information to customers about train services;

(b) giving right of ways to trains to dispatch in a prompt and safe manner;

(c) implementing evacuation procedures in the case of an emergency; and

(d) maintaining the effective operation of station premises and surrounds where applicable.’

[31] Mr Walsh identified Clarendon Station as a single person CSA location. As the only person rostered on at the time, Mr Hilder was required to respond to any safety issues involving sick or injured customers and emergencies. As Clarendon Station has a level crossing and boom gate, this could have involved Mr Hilder communicating any difficulties with the boom gate or flashing lights to the Rail Operations Centre and the Signal Box and may involve contacting Police or arranging alternative transport for customers.

[32] Mr Walsh attended the DRP meeting on 19 December 2018 which considered Mr Hilder’s conduct and any disciplinary action to be taken. After considering the drug test results and the Union’s responses on Mr Hilder’s behalf, Mr Walsh concluded that the appropriate disciplinary outcome should be dismissal. He claimed to have based his decision on the following important matters:

‘(a) it was established that Mr Hilder had returned a positive drug test reading to THCCOOH above the stipulated cut-off level for tolerance of THCCOOH while he was on duty on Friday, 5 October 2018. The Code of Conduct and the Drugs and Alcohol Policy prohibit test readings above cut-off levels for tolerances of drugs as stipulated by AS/NZS 4308 (which for THCCOOH is15ug/L);

(b) Mr Hilder was a rail safety worker and at the time that he returned the positive test reading and he was working in a high-risk environment, with risks such as moving Trains, sick or injured passengers, objects falling on the tracks and a level crossing’.

[33] Mr Walsh referred to the following response from Mr Hilder to the meeting he had with him, Mr Osikoya (Customer Area Manager) and Mr Hunter from the Union on 15 January 2018:

‘The meeting on 15 January 2019, as you know, was also attended by my C.A.M Saheed Osikoya and Union Representative, Trent Hunter. In that meeting I asked Mr Walsh if my previous managers' opinion of my work was taken into consideration and you said "No." I further asked what was involved in the investigation and you explained that it only looked at the results of the drug test. You also stated that over the last 4 years the returning of a positive reading by anyone, meant dismissal. This is without consideration to other options as identified in Section 10 Discipline Penalties and does not look at the circumstances of each individual case."’

[34] Mr Walsh recorded his version of the above conversation as follows:

‘Mr Hilder: Did you take into consideration my previous manager's opinion of my work?

Mr Walsh: No because this is a misconduct matter involving a positive drug test.

Mr Hilder: What was involved in the investigation?

Mr Walsh: The investigator's role is to determine if the allegation is substantiated or not. This meant looking at the results of the drug test and whether your conduct or positive reading to Cannabis was a breach of the drugs and alcohol policy. At the end of the day, you tested positive to drugs and you admitted to using the drugs. History has shown us that people who test positive tend to have had dismissal as an outcome but you do now have additional time to make any further submissions that you would like to have taken onto account as to why dismissal ought not be the final outcome.’

[35] Mr Walsh said he had not told Mr Hilder that he did not take his personal circumstances into account when deciding the disciplinary outcomes. As Mr Hilder had not raised any different matters in his response to the preliminary decision on 13 February 2019, he confirmed the final disciplinary decision.

[36] Mr Walsh said he had ‘strong concerns’ about Mr Hilder being reinstated or re-employed because:

‘(a) Mr Hilder admitted to using an illicit drug the day before he was rostered to work and was subsequently tested;

(b) Mr Hilder was aware that his actions would be a breach of the Code of Conduct and the Drugs and Alcohol Policy;

(c) Mr HiIder's conduct breached an essential condition of his employment, namely that he attend work without alcohol or prohibited drugs in his system above the prescribed cut-off levels;

(d) Mr HiIder's risk-taking behaviour placed himself and our customers at an increased and unnecessary risk of harm;

(e) I lack the necessary trust that Mr Hilder will abide by Sydney Trains' policies and procedures and work safely;

(f) Mr Hilder's penalty was necessary and appropriate given his conduct; and

(g) the penalty will act as a deterrent to other employees and reinforce the message that Sydney Trains has a strong safety culture and will not tolerate employees attending work with drugs or alcohol above the prescribed cut-off levels in their system.’

[37] In a reply statement, Mr Walsh rejected Mr Hilder’s self-diagnosis of not being impaired and fully capable of performing his role as a CSA. This was because in circumstances where he had consumed an illicit drug, contrary to Sydney Trains’ ‘zero tolerance’ approach, it was both a subjective and unqualified opinion, which was proven to be wrong. Sydney Trains could not allow employees to make their own decisions about acceptable impairment. This would create unnecessary risk of harm to their own safety and the safety of others, contrary to the standard acceptable levels and contrary to the Rail National Safety Law.

[38] Mr Walsh disputed Mr Hilder’s evidence as to his continuing work after 5 October 2018. The first time Sydney Trains was aware of confirmation of a positive reading to drugs was at 11:26 am on 8 October 2018. Mr Hilder was informed of the result on 8 October 2018 (not 9 October 2018) and arrangements were made to meet him the next day to obtain his security pass. On 9 October 2018 (not 10 October 2018), Mr Hilder met Mr Osikoya, who gave him the letter of suspension.

[39] Mr Walsh responded to Mr Hilder’s evidence of his duties and responsibilities by adding that as a CSA3 Rail Safety Worker, he could have been called on, at any time, to perform such duties as:

‘a) Management or monitoring of passenger safety;

b) Assisting passengers boarding or alighting trains;

c) relaying information or communications capable of controlling or effecting the movement of trains, for example affect a stop hand signal in the event an emergency such as a person falling on the tracks; and

d) Requesting a standing train protection to access the railway tracks and retrieve an item. Standing trains protection is a method of retrieving items from track using train as a form of protection behind where the item has fallen on the track so that the CSA can retrieve the item using long tongs or by going onto the tack when permitted.’

[40] Mr Walsh stated that by engaging in such reckless and risk-taking behaviour, by having consumed an illicit drug which was still present in his system, Mr Hilder demonstrated an incompatibility with ongoing employment with Sydney Trains. As to the boom gate issue, Mr Walsh said that Mr Hilder may not have responded, or communicated effectively with the appropriate authorities, if he had illicit drugs in his system. In reference to the Just Culture Policy, Mr Walsh claimed that Mr Hilder could not claim ‘human error’ in circumstances where:

‘[he] consciously, deliberately and intentionally ingested an illicit substance the night before he was rostered to work with full knowledge and understanding that Sydney Trains has no tolerance for drugs and alcohol in the workplace. This was not a ‘normal human error’, it was reckless behaviour;

Engagement in such reckless behaviour is unacceptable under the Just Culture Policy;

[his] conduct is demonstrative of his lack of safety awareness and undermines Sydney Trains’ faith in Mr Hilder’s trustworthiness and his ability to comply with its policies and procedures. Mr Hilder’s reckless behaviour is not compatible with ongoing employment at Sydney Trains where safety is of paramount importance; and

[he] did not voluntarily disclose his consumption of cannabis at any time before he was advised of his drug test result, despite having opportunity to do so.’

Mr Walsh observed that an employee who self-identified a drug and alcohol problem, was unlikely to face disciplinary action.

[41] Mr Walsh criticised Ms Bellette’s evidence as to the two employees who had been given a second chance following breaches of the Drugs and Alcohol Policy. He noted that both incidents were some time ago - 2012 and 2015. Further, it was Mr Walsh’s understanding that in recent years, Sydney Trains has enforced a ‘zero tolerance’ approach. From at least 2017, all employees who returned a positive result to either drugs or alcohol, have been dismissed or allowed to resign, in some isolated cases. He provided a document which set out every outcome for an employee (24 names redacted) who tested positive to drugs or alcohol (or who refused to be tested or there was evidence of ‘tampering’). In every case, dismissal was the result ‘save for five examples of resignation; notwithstanding consideration of an employee's circumstances and response to the allegations …’ (my emphasis). It was Mr Walsh's understanding that this more stringent approach was consistent with Sydney Trains’ widely published and distributed campaigns, such as ‘Target Zero’. In fact, Mr Hilder had attended a ‘Target Zero’ Workshop on 9 October 2014. In answer to a question from me as to a low number of dismissals (two) in 2017, Mr Walsh produced a further statement and explained that due to the information being collected from different databases, the original information did not record all of the 2017 examples. The correct outcome for 2017 was eight, all of whom were dismissed.

[42] In cross examination, Mr Walsh said that he did not prepare the investigation report and did not speak to Mr Hilder until he received the report. Mr Walsh acknowledged and accepted, that Mr Hilder had been honest throughout the investigation and he had taken this into account.

[43] Mr Walsh again described Mr Hilder’s conduct as reckless. He conceded that Mr Hilder could have smoked marijuana and turned up for work, but not test above the prescribed cut-off. However, before starting work, he could have declared there may have been an issue with his previous night’s marijuana smoking. He did not do so. However, Mr Walsh accepted that Mr Hilder was not a habitual marijuana user, with a problem. Mr Walsh agreed that the Policy does not include a capacity to admit smoking marijuana and wanting to ensure fitness, by requesting a test. He also agreed that Sydney Trains’ training does not include education about how long marijuana might stay in one’s system. However, he did not see this as Sydney Trains’ responsibility. He believed that if a person suspected they were unfit for work, they would call in sick.

[44] Mr Walsh did not accept Mr Hilder’s contrition or his acknowledgement of being ‘stupid’. It was not an honest mistake. He believed that if someone ingested drugs the night before commencing work, they might suspect being tested as positive. Nevertheless, Mr Walsh accepted that in the absence of education, Mr Hilder might have assumed there was no impediment to him commencing work.

[45] Mr Walsh accepted Ms Bellette's evidence of two employees who had been given a second chance after having tested positive to drugs or alcohol. However, these examples were some years ago. He reaffirmed that Sydney Trains now has a ‘zero tolerance’ approach. He agreed that Sydney Trains’ policies do not mention this approach and he could not recall if employees were ever told that from some point in 2017, if an employee tested positive to drugs, their employment would be terminated. However, programs such as ‘Target Zero’, the employees’ letters of appointment and ongoing training makes it abundantly clear that coming to work under the influence of alcohol or drugs is incompatible with working for Sydney Trains.

[46] Mr Walsh offered his understanding of the testing process. He believed that the urine sample is not tested on site, and in this case, the test was not conducted at Laverty Pathology, until 8 October 2018. He agreed Mr Hilder continue to work from 5 October 2018 until 8 October 2018. However, Sydney Trains was not informed of the result until 8 October 2018. He conceded this was not an ideal process. The Policy is intended to act as both a deterrent and to ensure the safety of employees and customers.

[47] Mr Walsh conceded that Mr Hilder was held in very high regard and had received several awards for good customer service. He took this, and other factors, such as his age, difficulty in finding alternative employment and his financial circumstances, into account. Mr Walsh could not recall if any employee had been given a second chance in the last two years.

[48] In answer to questions from me, Mr Walsh accepted that an employee may still face disciplinary action if they had announced before knowing they were to be tested, that there may be a problem. However, if they had self-declared to a manager before a tester turned up, the matter would be treated differently. The employee would be sent home and offered support and rehabilitation if appropriate. At the end of Mr Walsh’s cross examination, I had this exchange with him:

‘Alright.  A more broader topic which may be beyond your remit, I must say I have difficulty reconciling a proposition of zero tolerance when there is clearly zero tolerance for alcohol, but it's not for drugs.  There's a 15 ug limit.  It can't be zero tolerance, can it?  It's a contradiction? ---I agree, your Honour, and throughout this process it is something that I also questioned as to the meaning within the organisation as to the term zero tolerance.  Was that referring to zero being zero concentration of drugs and alcohol in your system, or zero tolerance meaning that if you test above what's prescribed it's dealt with in that zero tolerance.

Yes.  If you have a query about it and I have a query about it wouldn't you think the employees might be a little unsure? I'd have to agree, your Honour.

I might say something about that in the judgment eventually, because it is not a zero tolerance policy, and I have had other employers that argue they have zero tolerance policies and one which was quoted as one of the authorities here where not only it wasn't zero tolerance, but if you tested over no matter how over you were you were sent home for three weeks to see if you could get rid of it, and that was in the mining industry.  The person in question of course couldn't get rid of it in that time, but other people obviously would.  It's not zero tolerance.  Anyway I won't have a debate with you about that.  Perhaps you might consider that proposition, Ms Gaven.’

[49] The relevance of this exchange will become apparent shortly.

Further evidence

[50] At the conclusion of the hearing, I granted leave for Sydney Trains to put further evidence on the testing procedures and for the Union to be given an opportunity to respond. Sydney Trains filed an expert report from Professor Edward Ogden and further submissions as to the application of the law. The Union submitted that the materials sought to be admitted by Sydney Trains went much further than the leave granted by the Commission. It effectively meant that Sydney Trains was re-running its case, because it was unhappy with the way it was run after closing its evidentiary case. Accordingly, paras 4 to 17 of Sydney Trains’ closing submissions and paras 24 to 29 of Professor Ogden’s report were the only matters falling within the Commission’s grant of leave. I shall leave the submission question until later. However, I agree with the Union that Professor Ogden’s observations about alcohol testing are not relevant in this case. Nevertheless, his other evidence concerning cannabis use and testing is helpful and otherwise uncontroversial. I propose to annex the extracts from Professor Ogden’s report evidence to this decision as Annexure ‘A’.

Submissions for Sydney Trains

[51] After setting out the background to the application (which is otherwise recorded earlier) and referring to the relevant statutory provisions, Solicitors for Sydney Trains argued why the applicant's dismissal was not unfair, according to s 387 of the Act. Further, it was submitted that it could not be disputed that Mr Hilder’s dismissal was for a valid reason; see: Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 (‘Selvachandran’) given that:

(a) his conduct breached an essential condition of his employment and was inconsistent with Sydney Trains’ ‘zero tolerance’ approach to drugs and alcohol in the workplace;

(b) his conduct demonstrated a lack of judgement and a willingness to engage in risk taking behaviour, without regard to the safety of himself and others and in an environment of a single person location; and

(c) he was aware his conduct was in breach of the respondent’s Code of Conduct and Drugs and Alcohol Policy.

[52] It was said that while the real issue in this case is whether the applicant's dismissal was ‘harsh’ in all the circumstances, the seriousness of Mr Hilder’s conduct could not be outweighed by any considerations of ‘harshness’. It was pointed out that Mr Hilder had a THCCOOH result of 78 ug/L where the cut-off level was 15 ug/L. However, Mr Hilder sought to set his own standard, in disregard for Sydney Trains’ ‘zero tolerance’ approach. He had acknowledged he had ‘no defence to the facts of the allegations’ and had admitted he smoked cannabis the night before commencing work. His deliberate and intentional breach constituted a valid reason for dismissal.

[53] Sydney Trains’ submission then dealt with each of the matters the Commission must take into account under s 387 of the Act. Mr Hilder was notified of the allegations in clear terms (s 387(b)), was provided an opportunity to respond and his Union did so (s 387(c)). Subsections 387(d)-(g) are not relevant in this matter. As to other matters (s 387 (h)), the submission dealt with Mr Hilder knowingly and intentionally breaching policies and the Code of Conduct. He had exercised poor judgment that put himself and others at risk. He took a ‘gamble’ that he would not be randomly drug tested and failed to inform his manager there was a potential for a positive finding to a drug test. His conduct also put at risk the respondent’s reputation; see: Regulation 1.07 of the Fair Work Regulations 2009.

[54] It was submitted that it is not relevant whether Mr Hilder was not impaired or that no safety incidents occurred. The relevant factor was that Mr Hilder breached the Policy by attending work, as a rail safety worker, with prohibited drugs in his system. It is not a question of the degree of impairment, but strict compliance with Sydney Trains’ ‘zero tolerance’ approach; see: Harbour City Ferries Pty Ltd v Toms [2014] FWCFB 6249 (‘Toms’). While Sydney Trains is criticised for an alleged failure to take into account personal mitigating circumstances, Mr Walsh’s evidence makes clear that he did so and concluded that they did not outweigh Mr Hilder’s misconduct.

[55] Notwithstanding its primary position that Mr Hilder’s dismissal was not unfair, Sydney Trains put that if the Commission was to find otherwise, reinstatement would be impractical; see: Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186 (‘Perkins’), for the following reasons:

(a) Mr Hilder demonstrated an attitude that is inconsistent with the safety critical rail operations of Sydney Trains. He failed to comply with the respondent’s policies and procedures.

(b) Mr Hilder’s disregard of the unacceptable risk his actions posed to the health and safety of himself and other employees demonstrates that the applicant would be unlikely to change his behaviour to act in accordance with the Sydney Trains’ policies or procedures.

(c) Sydney Trains operates in a highly regulated environment. In addition to its obligations under the Work Health and Safety Act, it also has requirements under the Rail Safety (Adoption of National Law) Act 2012 (NSW), Rail Safety National Law (NSW) and the Passenger Transport Act 1990 (NSW). Mr Hilder’s lack of regard for process and procedures is not only a risk for the safety and comfort of passengers and employees, it is also at odds with Sydney Trains’ duty to ensure that its Customer Service Attendants conduct themselves in accordance with those safety standards.

[56] However, if compensation was to be ordered, the Sprigg Formula should be applied; see: Sprigg v Paul's Licensed Festival Supermarket Print R0235.

For the Union and Mr Hilder

[57] The Union set out the factual background to Mr Hilder’s dismissal, which is not in contest. Next it identified each of the criteria in s 387 of the Act as follows.

[58] Having traces of cannabis in Mr Hilder’s system, in circumstances where he was not impaired, was not a ‘sound, defensible or well-founded’ basis for a finding of valid reason; see: Selvachandran, or that his conduct constituted serious misconduct. There is no evidence that he was impaired at work and was not able to safely perform his duties, or that he was a risk to the public, fellow workers or Sydney Trains. Mere assertions do not establish him as a safety risk.

[59] The Union relied on de Leon v Spice Temple Pty Ltd [2010] FWA 3497 as authority for the proposition that mere negligence, or mistake may not reach the standard of misconduct. Further, Sydney Trains did not take into account its own Just Culture Policy, which describes sensible and measured responses to particular conduct. The Union took no issue with matters to be taken into account under sub-s 387(b)-(g). Its primary focus was on matters which are commonly referred to as ‘harshness’ factors, under s 387(h). The Union submitted that given the low cannabis reading and that Mr Hilder was not impaired and could perform his duties safely (which he did for a further two days after the random test), meant that Sydney Trains should have decided on a less severe disciplinary penalty. This was particularly so given Ms Bellette’s evidence of at least two employees who had been given a second chance after earlier failing a drug or alcohol test. The Union emphasised Mr Hilder’s unblemished six-year employment record; see: Streeter v Telstra Corporation Limited (2008) 170 IR 1 and the serious personal and economic consequences of his dismissal; see: Byrne and Frew v Australian Airlines Ltd (1995) 185 CLR 410 (‘Byrne and Frew’).

[60] Reinstatement of Mr Hilder was sought based on the principles set out in Holcim (Australia) Pty Ltd v Serafini (2011) 216 IR 1 and Perkins. The Union submitted that there was evidence that Mr Hilder was not a habitual drug user. It was accepted he had been honest and contrite. There was no reason why the employment relationship could not be restored. In the alternative, if the Commission decided against reinstatement, compensation at the upper end would be appropriate.

[61] In reply, Sydney Trains rejected Ms Bellette’s two isolated examples of employees given second chances some years earlier. These are not relevant to these proceedings, as Mr Walsh’s evidence demonstrated that since the beginning of 2017, any breach of the Drugs and Alcohol Policy has resulted in dismissal, or resignation, including employees with lower recordings than Mr Hilder. Thus, the Policy is, and has been consistently applied; see: Clayton v Coles Group Supply Chain Pty Ltd [2016] FWC 4724.

[62] Sydney Trains submitted that there was no inconsistency between Mr Hilder’s dismissal and the Just Culture Policy. That Policy has three primary focuses:

1. A culture that recognises normal human error does occur.

2. A culture that recognises reckless behaviour as unacceptable.

3. A culture that has high levels of trust and safety awareness.

[63] It was put that Mr Hilder’s conduct was not ‘human error’. He consciously, deliberately and intentionally ingested an illicit substance, knowing the employer’s policies. It was reckless behaviour in which he had failed to discuss his consumption of cannabis as contemplated by the Just Culture Policy; see: Sheldon-Collins v Broadspectrum (Australia) Pty Ltd [formerly Transfield Services (Australia) Pty Ltd] t/a Broadspectrum [2018] FWCFB 5764.

[64] Sydney Trains submitted that whilst mitigating factors are acknowledged, they did not address the seriousness of Mr Hilder’s conduct; see: Toms.

Further submissions

[65] Consistent with leave being granted for further brief submissions on the law and the current state and quality of the testing regime adopted by Sydney Trains (see: PN375-378), Ms Gaven’s closing submission was 25 pages (almost three times its reply submission) and, for the most part was repetitive and more detailed than its reply submissions. I agree with Mr Warnes that this submission went well beyond the leave granted and, on one view, was intended to improve its case to the one which was earlier put. Accordingly, I will accept only those parts of the submission dealing with the relevant law (other than the Act) applying to Sydney Trains, about which I sought further information. This is found at paras 4-14 of the closing submissions (together with my earlier acceptance of parts of Professor Ogden’s report which I consider to be relevant; see [50] above and repeated in paras 14-17 of the closing submissions.

[66] Sydney Trains is bound by a national legislative regime, introduced in 2012, to ensure national consistency in relation to rail safety regulation and to set standards for rail safety workers. This includes the following:

‘The national regulation and enforcement regime is contained in the Rail Safety National Law No 82a (the National Law) pursuant to the Rail Safety (Adoption of National Law) Act 2012 No 82 (NSW) and in the Rail Safety National Regulation 2012 (National Regulation) pursuant to the Rail Safety (Adoption of National Law) Regulation 2018, which includes further details on drug and alcohol testing. Sydney Trains has further obligations under the Work Health and Safety Act 2011 (NSW) and the Passenger Transport Act 1990 (NSW).’ (emphasis in original)

[67] Division Nine of the National Law imposes drug and alcohol testing by Sydney Trains and:

(a) includes a regime for drug screening tests, urine screening test, oral fluid analysis or blood test;

(b) makes it an offence for a rail safety worker to carry out rail safety work while a prescribed drug is present and imposes a maximum penalty $10,000: section 128(1)(b); and

(c) defines delta-9-tetrahydrocannabinol (‘THC’) as a prescribed drug for the purposes of the National Law: section 128(5)(a)(i).

[68] The National regime does not impose any requirement for the testing of impairment. Sydney Trains relies on urine testing for the presence of proscribed substances. Regulation 28(1)(a) of the National Law requires Sydney Trains to have a drugs and alcohol management system (policy). Sydney Trains’ Drugs and Alcohol Policy states its objective as a ‘vision’ of a ‘drug and alcohol free workplace’ with the purpose of ‘providing a safe environment for all workers and customers through reducing the risks created by the use of drugs and alcohol in the workplace’.

[69] The National Law authorises Sydney Trains to use the results of drug and alcohol testing for the purpose of control and management of safe working operations, and for disciplinary purposes. In addition, drug testing is permitted by the terms of the Agreement (Cl 134). Sydney Trains relied on the safety reasons for the strict application of the Drugs and Alcohol Policy as set out in Mr Walsh’s oral testimony:

‘Under the Rail Safety National Law I believe we have to have a program in place for random testing, and it certainly is done to try and have a workplace that’s free of unacceptable risk and people presenting themselves in situations where they place themselves and others at risk.’ (PN232)

‘The testing regime is … something we’re obligated to do and something that we do to ensure the safety and wellbeing of all employees and our customers.’ (PN244)

‘… [I]f we weren’t doing it … potentially we would have other people coming to work with drugs or alcohol in their system and we would have all sorts of potential safety implications as a result of that. So I daresay it does certainly act as a deterrent against people coming to work with those things in their system, because they know they will get caught and they know the likely outcome is not a good one for them.’ (PN246)

For the Union and Mr Hilder

[70] In its final response submission, the Union pointed out that Sydney Trains cannot have a ‘zero tolerance’ approach to drugs and alcohol where a person may have 49 ug/L in their system when randomly tested, but can still present for work, even though the ‘cut-off’ level is 15 ug/L. The Union accepted the importance of drug and alcohol testing in the workplace, but the Policy must be applied transparently, fairly and consistently. Further, the Policy must be applied on a ‘case-by-case’ basis, taking into account all of the circumstances. Unfairness will arise if the consistent outcome is strictly applied no matter what the circumstances, particularly when this changed approach had never been communicated to employees.

Oral submissions

[71] In oral submissions, Mr Warnes said that all times Mr Hilder had been honest, forthcoming and contrite. There could be no criticism of his conduct during the investigation. He believed he was fit to attend work on 5 October 2018 and the evidence was that he was not a habitual drug user – as Mr Walsh properly conceded. Further, Mr Walsh accepted that Mr Hilder could not have known what the cannabis level in his system was after smoking one ‘joint’.

[72] Mr Warnes acknowledged that Mr Hilder breached Sydney Trains’ Policy, but it was a mistake. It was neither deliberate, nor intentional. He did not disclose the smoking of the ‘joint’ the night before, because he believed it was not in his system and he was completely unaffected.

[73] Mr Warnes referred to the inconsistency in the Policy where persons were given a second chance. However, a blanket ‘zero tolerance’ policy, no matter what the circumstances, cannot be fair and in Mr Hilder’s case, was harsh. Even accepting the Policy was changed in 2017, Mr Walsh conceded the change had not been communicated to employees. Further, it was Mr Hilder’s uncontested evidence that he had never been told of a ‘zero tolerance’/dismissal policy. Mr Warnes speculated that had such a policy change been known, Mr Hilder might have acted differently the night before the random drug test.

[74] Mr Warnes noted Mr Walsh’s evidence that Mr Hilder was an otherwise exemplary employee, had won awards and was held in high esteem by his colleagues. There could be no barrier (i.e. loss of trust and confidence) to Mr Hilder’s reinstatement. He had provided evidence of the difficulty and he has had in finding alternative employment at his age (64 years). He has a mortgage and a dependent child at home.

[75] Finally, Mr Warnes said Mr Hilder had only begun driving with Uber last week (first week of August 2019) and has had limited income since his dismissal.

[76] In oral submissions, Ms Gaven said that Sydney Trains has a strict obligation under the National Rail Safety Laws and since 2012 had adopted a ‘zero tolerance’ approach to drugs and alcohol in the workplace. Ms Gaven noted that Mr Hilder had accepted his conduct was ‘stupid’. However, inviting the Commission to consider his alleged lack of impairment, was not something the Commission could do, and was contrary to the authorities. Ms Gaven submitted that an admitted breach of Policy must constitute a valid reason for dismissal. However, this case really focused on harshness factors. Mr Hilder accepted he was aware of the Policy that one cannot turn up for work with drugs in their system; he had been randomly tested in his six years of employment and he had undergone the relevant training.

[77] Ms Gaven said that it was not seriously put that the disciplinary process was not proper and appropriate, and it could not be said that Mr Hilder was treated differently to any other employee who was found to have drugs in their system in the last few years. It was not an error or mistake, but a deliberate and reckless act.

In reply

[78] Mr Warnes observed that the THC level in other employees who were dismissed since 2017 were very high – up to 3000 ug/L. In circumstances where Mr Hilder tested zero to the presence of drugs five days later, Mr Hilder’s claim of an honest mistake and his contrition, would be accepted as mitigating circumstances.


Statutory provisions and relevant authorities

[79] Before determining the merits of an unfair dismissal application, s 396 of the Act, requires the Commission to determine a number of preliminary matters; namely:

(a) whether Mr Hilder’s unfair dismissal application was made within the period required in subsection 394(2);

(b) whether he was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code; and

(d) whether the dismissal was a case of genuine redundancy.

[80] Accordingly, I make the following findings:

(a) the application was made within the 21-day statutory time period set out in s 394(2);

(b) Mr Hilder was a person protected from unfair dismissal in that:

(i) he had completed the minimum employment period, set out in ss 382 and 383 of the Act;

(ii) his remuneration was below the high income threshold (s 382(b)(iii)); and

(iii) he was employed under the terms and conditions of the Sydney Trains Enterprise Agreement 2014;

(c) his dismissal was not a case of genuine redundancy (s 385(d)); and

(d) his dismissal was not a case involving the Small Business Fair Dismissal Code, as Sydney Trains employs approximately ten thousand employees.

[81] Section 385 of the Act defines an unfair dismissal based on four criteria which must be satisfied if the person, seeking a remedy for unfair dismissal, is to succeed. The section reads:

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

(a) the person has been dismissed; and

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

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

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

[82] Mr Hilder was dismissed by Sydney Trains on 26 April 2019 (sub-s (a)). Subsections (c) and (d) of s 385 do not apply, leaving only the question of whether Mr Hilder’s dismissal was ‘harsh, unjust or unreasonable’ and consequentially, an unfair dismissal. This leads to s 387, which requires the Commission to take into account the following matters:

(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;

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

(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;

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

(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.

[83] I shall come back to these matters in due course. However, I add at this juncture that the meaning of the expression ‘harsh, unjust or unreasonable’ in the context of a dismissal, was explained in the oft-quoted extract from Byrne and Frew of McHugh and Gummow JJ, as follows:

‘128. Clause 11(b) is aimed at the situation where the termination of employment brought about by the dismissal, rather than the steps leading up to the dismissal, or lack of them, is harsh, unjust or unreasonable. A dismissal with notice may be harsh, unjust or unreasonable because it is based on a ground defined as such by cl 11(b). This refers to such matters as termination "on the ground of" race, colour, sex and marital status. 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.’ (my emphasis)

The allegations

[84] In [2] above I set out the allegations against the applicant from the ‘Show Cause’ letter which ultimately led to his dismissal for serious misconduct. I note that the reason was not consistently expressed to be serious misconduct, although it seems plain enough from Sydney Trains’ submissions that this was in fact how his conduct was characterised.

[85] Serious misconduct is defined in the Act’s Regulations. Regulation 1.07 sets out a non-exhaustive definition as follows:

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

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

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

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

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

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

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

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

(i) theft; or

(ii) fraud; or

(iii) assault;

(b) the employee being intoxicated at work;

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

[86] It may be reasonably accepted that the misconduct identified at 3(b) above, ‘being intoxicated at work’, applies with equal force – if not more so – if the misconduct is ‘being under the influence of a prohibited drug’. That being said, Sydney Trains’ submissions used various words and expressions such as ‘deliberate’ (behaviour), conduct ‘inconsistent with Sydney Trains’ ‘zero tolerance’ approach to drugs and alcohol in the workplace’, serious risk to the health and safety of others and conduct which put the employer’s reputation ‘at risk’. In fact, it referred to the Regulation in its written submissions. Thus, it seems unassailable that Sydney Trains relies on sr (2)(a), 2(b)(i) and (ii) and impliedly s (3) of the Regulation. However, reliance on the Regulation is not necessarily determinative. The Regulation and the non-exhaustive examples of serious misconduct, do no more than provide a guide. Consistency with one, or more of the examples in the Regulation, does not displace the statutory instruction that a valid reason (such as a finding of serious misconduct), is but one of the relevant matters the Commission is required to take into account under s 387, as to whether a dismissal is ‘harsh, unjust or unreasonable’. To demonstrate this proposition, I refer to what the Full Bench said in Sharp v BCS Infrastructure Support Pty Limited [2015] FWCFB 1033 at [33]-[34]:

‘[33] The relevance of the definition of “serious misconduct” in reg. 1.07 to the matter is also, with respect, obscure. Section 12 of the Act contains a definition of “serious misconduct” for the purposes of the Act which simply cross-refers to reg. 1.07. Apart from s.12 itself, the expression “serious misconduct” is used in only three places in the Act. In s.123(1)(b), a dismissal for serious misconduct is a circumstance in which the notice and redundancy entitlement provisions of Pt 2-2 Div 11 are not applicable; in s.534(1)(b) a dismissal for serious misconduct is one in relation to which the requirements established by Pt 6-4 Div for notification and consultation do not apply. The expression “serious misconduct” is not used anywhere in Pt 3-2, Unfair Dismissal, of the Act. Section 392(3) requires the Commission, in relation to the award of compensation for an unfair dismissal, to reduce the amount that it would otherwise order by an appropriate amount where it is “satisfied that the misconduct of a person contributed to the employer’s decision to dismiss the person”. However, it is clear that conduct may constitute “misconduct” for the purpose of s.392(3) without necessarily being “serious misconduct”. The expression is used in the Small Business Fair Dismissal Code, but that had no application in this case (and it is at least highly doubtful in any event whether the reg. 1.07 definition applies to the Small Business Fair Dismissal Code). Reg. 1.07 therefore had no work to do in the application of the provisions of Pt 3-2 to the circumstances of this case.

[34] It may be accepted that an assessment of the degree of seriousness of misconduct which has been found to constitute a valid reason for dismissal for the purposes of s.387(a) is a relevant matter to be taken into account under s.387(h). In that context, a conclusion that the misconduct was of such a nature as to have justified summary dismissal may also be relevant. Even so, it is unclear that this requires a consideration of whether an employee’s conduct met a postulated standard of “serious misconduct”. In Rankin v Marine Power International Pty Ltd Gillard J stated that “There is no rule of law that defines the degree of misconduct which would justify dismissal without notice” and identified the touchstone as being whether the conduct was of such a grave nature as to be repugnant of the employment relationship. “Serious misconduct” is sometimes used as a rubric for conduct of this nature, but to adopt it as a fixed standard for the consideration of misconduct for the purpose of s.387(h) may be confusing or misleading because the expression, and other expressions of a similar nature, have been considered and applied in a variety of contexts in ways which are influenced by those contexts. In McDonald v Parnell Laboratories (Aust) Pty Ltd, Buchanan J said:

“[48] The terms ‘misconduct’, ‘serious misconduct’ and ‘serious and wilful misconduct’ are often the subject of judicial and administrative attention as applied to the facts of particular cases but there is relatively little judicial discussion about their content and meaning. Naturally enough, when the term ‘serious misconduct’ is under consideration an evaluation of what conduct represents ‘serious misconduct’ is influenced by the (usually statutory) setting in which the phrase must be given meaning and applied. Frequently, for example, the question at issue is whether an employee is disentitled by reason of his or her conduct to a statutory entitlement (eg. In New South Wales, where Ms McDonald was employed, see Long Service Leave Act 1995 (NSW) s 4(2)(a)(iii); Workers Compensation Act 1987 (NSW) s 14(2).”’ (footnotes omitted).

[87] In cases of summary dismissal, the onus rests on the employer to prove, to the Commission’s satisfaction, that the misconduct, had in fact occurred. In this case, there can be little doubt that Mr Hilder’s conduct has been proven; see: Briginshaw v Briginshaw (1938) 60 CLR 336 (‘Briginshaw’); Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449 and King v Freshmore (Vic) Pty Ltd (2000) Print S4213.

[88] Even accepting that a finding of serious misconduct or misconduct was open to Sydney Trains, such a finding must not be conflated with the statutory language. The statute still requires the Commission to find that there was a valid reason for dismissal (s 387(a)). In Royal Melbourne Institute of Technology v Asher [2010] FWAFB 1200, a Full Bench of Fair Work Australia (FWA, as the Commission then was) held at [16]:

‘[16] In the circumstances of this matter the University purported to terminate Dr Asher’s employment for serious misconduct within the meaning of that term in the University’s enterprise agreement. If it successfully established that Dr Asher had engaged in serious misconduct it would necessarily follow that there was a valid reason for the dismissal. However, the converse is not true. As established by Annetta, the question that needed to be considered was whether there was a “valid reason” in the Selvachandran sense – whether the reason was sound, defensible or well founded. Whether it also amounted to serious misconduct may well be a factor relating to the overall characterisation of the termination but it was not an essential requirement in the determination of whether a valid reason exists.’

[89] I am satisfied that Sydney Trains has proven the conduct of the applicant as alleged, but for the reasons I will shortly set out, I doubt it constituted serious misconduct, or a valid reason for Mr Hilder’s dismissal.

Was Mr Hilder’s conduct ‘serious misconduct’?

[90] The notion of wilful or deliberate behaviour which strikes at the heart of the employment relationship, has been considered in a number of well-known authorities. In North v Television Corporation Ltd (1976) 11 ALR 599, Franki J said at p 616:

‘It is clear that a single act of disobedience may be sufficient to justify dismissal on the ground of misconduct but it was held in Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285, that to justify summary dismissal a single act must be such as to show that the employee was repudiating the contract of service or one of its essential conditions.’

[91] Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285 (referred to in the citation above) makes it plain that an act of disobedience or misconduct (justifying dismissal) requires also that the disobedience must be ‘wilful’:

‘... I do, however, think (following the passages which I have already cited) that one act of disobedience or misconduct can justify dismissal only if it is of a nature which goes to show (in effect) that the servant is repudiating the contract, or one of its essential conditions; and for that reason, therefore, I think that one finds in the passages which I have read that the disobedience must at least have the quality that it is “wilful”: it does (in other words) connote a deliberate flouting of the essential contractual conditions (P288).’

[92] In Concut Pty Ltd v Worrell (2000) 103 IR 160, His Honour, Kirby J, dealt with the ordinary relationship of the employer and employee at common law and said at [51]:

‘The ordinary relationship of employer and employee at common law is one importing implied duties of loyalty, honesty, confidentiality and mutual trust. At common law:

“conduct which in respect of important matters is incompatible with the fulfilment of an employee’s duty, or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee, is a ground of dismissal. ...[T]he conduct of the employee must itself involve the incompatibility, conflict, or impediment, or be destructive of confidence. An actual repugnance between his acts and his relationship must be found. It is not enough that ground for uneasiness as to its future conduct arises.”

In the present case, the findings at trial went beyond mere uneasiness as to the future. They necessitated, or at least warranted, a conclusion that the “confidence” essential to the relationship of employer and employee had been destroyed. Instead of pursuing the interests of the company and its shareholders, the employee had pursued his own private interests. Not only was the employee in breach of his duty of fidelity and trust owed to the employer, he had remained in breach of that duty to the date of the trial. Until that time he had not accounted for the benefits wrongly appropriated by him. Indeed, he had denied any wrongful appropriation. The issue so tendered at the trial was determined against the employee. He was then subject to the employer’s counter-claim for an order to make a refund. Such order was duly made at trial. It was not contested on appeal. Given his senior status in the company’s service and the nature and extent of the misconduct disclosed in the evidence and accepted by the primary judge, it was open to him to find that the employee had undermined the confidence essential to the ongoing relationship of employment. Prima facie, this had afforded a legal justification for the employee’s summary dismissal.

It is, however, only the exceptional circumstances that an ordinary employer is entitled at common law to dismiss an employee summarily. Whatever the position may be in relation to ‘isolated’ acts of negligence, incompetence or unsuitability, it cannot be disputed (statute or express contractual provision aside) that acts of dishonesty or similar conduct destructive of the mutual trust between the employer and employee, once discovered, ordinarily fall within the class of conduct which, without more, authorises summary dismissal. Exceptions to this general position may exist for trivial breaches of the express or implied terms of the contract of employment. Other exceptions may arise where the breaches are ancient in time and where they may have been waived in the past, although known to the employer. Some breaches may be judged irrelevant to the duties of the particular employee and an ongoing relationship with the employer. But these exceptional cases apart, the establishment of important, relevant instances of misconduct, such as dishonesty on the part of an employee like Mr Wells, will normally afford legal justification for summary dismissal. Such a case will be classified as amounting to a relevant repudiation or renunciation by the employee of the employment contract, thus warranting summary dismissal.’

[93] In O'Connor v Palmer (No 1) (1959) 1 FLR 397, the Commonwealth Industrial Court (per Spicer CJ and Dunphy J) held at 401:

‘Without attempting to define exhaustively the word “misconduct” it involves something more than mere negligence, error of judgment or innocent mistake.’

[94] A more expansive definition can be found in Pillai v Messiter (No 2) (1989) 16 NSWLR 197, where the New South Wales Court of Appeal, under the heading ‘Misconduct’ means more than mere negligence’, said:

‘The words used in the statutory test (“misconduct in a professional respect”) plainly go beyond that negligence which would found a claim against a medial practitioner for damages: Re Anderson, (at 575). On the other hand gross negligence might amount to relevant misconduct, particularly if accompanied by indifference to, or lack of concern for, the welfare of the patient: cf Re Anderson (at 575). Departures from elementary and generally accepted standards, of which a medial practitioner could scarcely be heard to say that he or she was ignorant could amount to such professional misconduct: ibid. But the statutory test is not met by mere professional incompetence or by deficiencies in the practice of the profession. Something more is required. It includes a deliberate departure from accepted standards or such serious negligence as, although not deliberate, to portray indifference and an abuse of the privileges which accompany registration as a medical practitioner: cf Allison (at 760 – 761). These are the approaches which have been taken in our courts. They have been taken in the courts of England where such misconduct is alleged. And they have similarly been taken in the courts of the United states. The entry in Corpus Juris Secundum, vol 58, (1948) at 818, reads:

“Both in law and in ordinary speech the term ‘misconduct’ usually implies an act done wilfully with a wrong intention, and conveys the idea of intentional wrongdoing. The term implies fault beyond the error of judgment; a wrongful intention, and not a mere error of judgment; but it does not necessarily imply corruption or criminal intention, and, in the legal idea of misconduct, an evil intention is not a necessary ingredient. The word is sufficiently comprehensive to include misfeasance as well as malfeasance, and as applied to professional people it includes unprofessional acts even though such acts are not inherently wrongful. Whether a particular course of conduct will be regarded as misconduct is to be determined from the nature of the conduct and not from its consequences.”

Reference to much United States authority is provided to support this passage. In the 1988 supplement to the Corpus, reference is made to Beaunit Mills Inc v Board of Review, Division of Employment security, Department of Labor and Industry 128 A 2d 20 (1956). In that case, the New Jersey Superior Court held that “misconduct” does not mean mere mistakes, errors in judgment or in the exercise of discretion or minor but casual or intentional, carelessness or negligence. It did not mean mere inefficiency, unsatisfactory conduct, failure of performance as a result of inability or incapacity inadvertent in isolated instances or errors of judgment which were not made in bad faith or some other ingredient. Numerous other recent cases are cited to support the proposition that, in the United States, “misconduct” generally means wrongful, improper or unlawful conduct, motivated by premeditated or intentional purpose or by obstinate indifference to the consequences of one’s acts. Similar approaches to the meaning of the word “misconduct” have been taken in Australia, outside the context of professional discipline: see, eg, O’Connor v Palmer (No 1) (1959) 1 FLR 397. The primary dictionary meanings confirm that this is also the way “misconduct” is used in everyday speech.

[95] In Police Association of New South Wales (on behalf of Kim Gilmour) and Commissioner of Police [2009] NSWIRComm 51, I made some obiter observations based on the above principles when I said at [300]:

[300] Mr Howell submitted that the definition of misconduct, in the disciplinary context, cannot mean mere mistakes, errors in judgement, errors in discretion, carelessness, negligence, inefficiency or poor performance. He put that misconduct means 'wrongful, improper or unlawful conduct motivated by premeditated or intentional purpose or by obstinate indifference to the consequences of one's acts'. He submitted that none of the allegations against SC Gilmour fell into the definition of misconduct. Strictly speaking, it is unnecessary for the Commission to make findings on these submissions, as I have found that the evidence advanced in these proceedings, on the balance of probabilities, does not permit a finding that any of the allegations have been proven to the requisite standard. The question of whether the conduct was misconduct does not, therefore arise. That said, I consider Mr Howell's submissions are thoughtfully made and soundly based.

[96] It may be immediately observed that the above passages might appear to be at odds with my more recent comments and citations in Singh v Sydney Trains [2019] FWC 182 where, after referring to Her Honour Deputy President Asbury’s comments in Macklyn v G&S Engineering Services Pty Ltd [2013] FWC 5303, at [327] I said:

‘[327] In my view, the conduct in question need not necessarily be wilful, deliberate or reckless to constitute a valid reason for dismissal. Conduct which is negligent, accidental, inadvertent or careless, particularly in the rail industry, can have disastrous, life-threatening consequences. Adherence to safe working policies and practices, particularly where persons are specifically trained to be aware of ever present dangers, is a cardinal principle for any workplace, but even more so in the rail industry where the risk to the safety of employees and the public is obviously so much more acute. It involves fast moving trains and potentially dangerous infrastructure. Employees are commonly working in high risk track environments as a daily feature of the working environment. Such conduct need not be repeated behaviour, but may involve a single instance of conduct which threatens the safety of employees or others. I also agree with Asbury DP that the Commission would not lightly interfere in the decision of an employer to dismiss an employee in such circumstances.’ (my emphasis)

[97] The operative word in the above passage is ‘may’, not ‘will’. This merely demonstrates the trite proposition that each case will turn on its own facts and circumstances. The use of the word ‘may’ does not connote compulsion or discretion. It is a word of discretion. Further, the reference to the Commission ‘not lightly’ interfering in the employer’s decision to dismiss, does not mean the Commission would never interfere. In my assessment, this is one of those rare cases. That said, in my view, Mr Hilder’s conduct on 4 and 5 October 2018 could not be objectively characterised as ‘serious misconduct’ and, at worst, might be said to be a serious error of judgment. However, I accept, and Sydney Trains does not demur, that Mr Hilder’s smoking of one cannabis ‘joint’ on 4 October 2019, was a one-off incident, which later medical evidence confirmed that Mr Hilder was not a habitual cannabis user. Accordingly, I accept Mr Hilder’s evidence that he had not smoked cannabis for some 30 years and the incident on 4 October 2018 was not reckless, deliberate or intentional.

[98] Sydney Trains sought to paint Mr Hilder as wilfully, recklessly and intentionally attending for work, knowing he may have had traces of the drug in his system. I do not accept this characterisation, nor do I accept that Mr Hilder deliberately failed to inform the random drug tester, or Sydney Trains’ management, that he had smoked cannabis the night before. Mr Hilder (and I think Mr Walsh grudgingly agreed), did not expect the smoking of one ‘joint’ many hours before commencing work, would result in any impairment in his capacity to perform his job safely. Given the current state of technological advancement, I accept it is not possible to identify or quantify impairment, and it is not up to an individual to judge their own impairment (self-assess). However, there was no evidence that the random drug tester, Sydney Trains’ management or any other employee suspected any impairment of Mr Hilder, either on the day, or on the following two days when he continued to work normally, without incident. I consider it somewhat of an exaggeration to submit that Mr Hilder had responsibility for any fault in the boom gates or lights at Clarendon Station. The evidence was that he was to do no more than to report to management of any fault. Further, there was no evidence as to how it could be sensibly suggested that Mr Hilder was incapable or incoherent on 5, 6 or 7 October 2018.

[99] Further, given the inconsistency between the relevant policies which I discuss shortly, Mr Hilder might reasonably have believed that even if he had some residual trace of cannabis, it would not be greater than 50 ug/L. I accept his evidence that had he known the employer’s Policy meant dismissal for any trace of cannabis in an employee’s system, he may have made a different choice when socialising with his friend the night before.

[100] Accordingly, I find that Mr Hilder’s conduct was not serious misconduct and, at worst, was a serious error of judgement which was both explicable and understandable.

Was the applicant’s dismissal ‘harsh, unjust or unreasonable’?

[101] I turn now to consider whether the conduct was a valid reason for dismissal - a significant matter under s 387 of the Act.

[102] The meaning of ‘valid reason’ in s 387(a) is drawn from the judgement of North J in Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 (‘Selvachandran’). This meaning has been considered and applied by members of the Commission and its predecessors for many years. For example, in Rode v Burwood Mitsubishi Print R4471, a Full Bench of the then Australian Industrial Relations Commission (‘AIRC’) discussed the meaning of valid reason in the context of the relevant provisions of the Workplace Relations Act 1996, and by citing Selvachandran. The following is an extract from the Full Bench’s decision at [17]-[19]:

‘[17] In relation to the meaning of “valid reason” the following remarks of Northrop J in Selvachandran v [Peterson] Plastics Pty Ltd are relevant:

“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 wellfounded; a valid reason’.

In its context in s 170DE(1), the adjective ‘valid’ should be given the meaning of sound, defensible or wellfounded. 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, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd, when considering the construction and application of a s 170DC.”

[18] While Selvachandran was decided under the former statutory scheme the above observations remain relevant in the context of s.170CG(3)(a). A valid reason is one which is sound, defensible or well founded. A reason for termination which is capricious, fanciful, spiteful or prejudiced is not a valid reason for the purpose of s.170CG(3)(a).

[19] We agree with the appellant’s submission that in order to constitute a valid reason within the meaning of s.170CG(3)(a) the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason.’

See also: Nettleford v Kym Smoker Pty Ltd (1996) 69 IR 370.

[103] In B, C and D v Australian Postal Corporation t/a Australia Post [2013] FWCFB 6191, a majority of the Full Bench (Lawler VP and Cribb C) dealt with breaches by a number of employees of Australia Post’s IT policies, in respect to the sending, receiving and sharing of pornographic material. The majority said at [34]-[36]:

‘[34] In considering whether there was a valid reason for a dismissal under s.387(a), the reason(s) being considered are the employer’s reason(s). In a misconduct case, the Commission is concerned with whether the misconduct in fact occurred, not with whether the employer has reasonable grounds to believe that it occurred (eg. Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201, Sherman v Peabody Coal Ltd (1998) 88 IR 408; Australian Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1).

[35] Subject to that, as indicated by Northrop J in Selvachandran, “valid reason” is assessed from the perspective of the employer and by reference to the acts or omissions that constitute the alleged misconduct on which the employer relied, considered in isolation from the broader context in which they occurred. It is the reason of the employer, assessed from the perspective of the employer, that must be a “valid reason” where “valid” has its ordinary meaning of “sound, defensible or well founded”. As Northrop J noted, the requirement for a valid reason “should not impose a severe barrier to the right of an employer to dismiss an employee”.

[36] A failure to comply with a lawful and reasonable policy is a breach of the fundamental term of the contract of employment that obliges employees to comply with the lawful and reasonable directions of the employer. In this way, a substantial and wilful breach of a policy will often, if not usually, constitute a “valid reason” for dismissal.’

[104] The above authorities, and many more, make clear that a ‘valid’ reason means the reason must be ‘sound, defensible or well founded’ and not ‘capricious, fanciful, spiteful or prejudiced.’

[105] Further, the Full Bench of the Australian Industrial Relations Commission said in Container Terminals Australia Limited v Toby [2000] Print S8434 at [15]:

‘[15] In our view, the consideration of whether there was a valid reason for termination is a separate issue from the determination of whether a termination was harsh, unjust or unreasonable: see generally Department of Justice Hepburn (1999) 93 FCR 508, at 512-513 and cases cited therein. The focus of the consideration is upon the employer and the basis for his decision to terminate rather than upon its consequences for the employee. "What has to be examined is the validity of the reason, and its connection with the employee's capacity or conduct or its basis in operational requirements of the employer": see Qantas Airways Ltd v Cornwall (1998) 83 IR 102, at 106. In making such an examination "it is not the court's function to stand in the shoes of the employer and determine whether or not the decision made by the employer was a decision that would be made by the court but rather it is for the court to assess whether the employer had a valid reason connected with the employee's capacity or conduct..."; see: Walton v Mermaid (1996) 142 ALR 681, at 685.’

[106] In my view, Sydney Trains’ ‘valid’ reason submissions suffer from two fundamental and self-evident flaws. The first concerns its said ‘zero tolerance’ approach to drugs and alcohol in the workplace and the second, concerns the inconsistency of this approach to Sydney Trains’ disciplinary policies and procedures, which purportedly recognise personal or mitigating circumstances when a decision is made to dismiss an employee for breach/breaches of the Drugs and Alcohol Policy. Let me explain.

‘Zero tolerance’ approach

[107] While Sydney Trains’ Drugs and Alcohol Policy is said to be underpinned by a ‘zero tolerance’ approach to drugs and alcohol in the workplace, the reality is that there is no such thing. This is so because initial urine screening will only record a positive THC result over 50 ug/L. An employee who receives such result will subsequently be in breach of the Policy if a confirmatory test is above 15 ug/L; in Mr Hilder’s case, 78 ug/L. In other words, an employee may have a non-detected level of 49 ug/L from an initial screening test - three times above the 15 ug/L cut off – and escape from detection altogether. While I accept this is a consequence of the present screening technology accuracy, it could hardly be said to be consistent with a ‘zero tolerance’ approach.

Personal and/or mitigating circumstances

[108] Sydney Trains submitted that a breach of the Drugs and Alcohol Policy (‘zero tolerance’) does not mean automatic dismissal and personal and mitigating circumstances are (and were) taken into account in this case. This is logically inconsistent with the ‘zero tolerance’ approach. Further, the evidence makes it abundantly clear that such considerations can never sway the decision maker from a decision to dismiss. This evidence not only demonstrates internal inconsistencies and is difficult to reconcile with the relevant provisions of the Act, but Sydney Trains’ submissions are meaningless, misleading and lack logic.

[109] In his own evidence, Mr Walsh said:

‘In more recent years it is my experience that Sydney Trains has strictly enforced a zero tolerance approach. From at least 2017, all employees who returned a positive reading to either drugs or alcohol have had their employment terminated or have been allowed to resign (in some isolated incidents). Upon dismissal or resignation, it is Sydney Trains’ practice to place a notation on their file that they are not suitable for rehire. Annexed at pages 45 to 46 of Exhibit CW-2 is a document that outlines the disciplinary outcomes for every matter involving an employee who returned a positive reading to an illicit drug, were deemed to have failed to provide a sample or there was evidence of tampering since the beginning of 2017. This document is consistent with my understanding that, notwithstanding consideration of an employee’s circumstances and response to the allegations, employees who:

(a) knowingly and deliberately ingest illicit drugs; and

(b) attend work with drugs in their system above the stipulated levels outlined in the Sydney Trains Drugs and Alcohol Policy and the Rail Safety National Law,

have demonstrated a serious disregard for their own and other’s (sic) safety and a zero tolerance approach will be taken.’ (my emphasis)

This was confirmed in a document showing employees (numbering 31) who failed to supply evidence of tampering, refused a random test or recorded a positive reading to an illicit drug, were dismissed or resigned.

[110] In my opinion, you cannot have a strict ‘zero tolerance’ approach at the same time as you profess to take into account personal and mitigating circumstances or an or employees’ show cause response. Both cannot apply in parallel. They are logically inconsistent. This is not meant to be critical of Sydney Trains’ increasing focus on the importance of safety, or its targeted campaigns and publicity around ‘Target Zero’. These are all laudable and desirable objectives. However, the notion of ‘Target Zero’ is, in and of itself, not ‘zero tolerance’. Target is a hope; a goal; a most desired outcome. It is not a realistic practical reality.

[111] As Sydney Trains has a ‘zero tolerance’ approach to drugs and alcohol, it would not matter one jot what personal or mitigating circumstances were considered, or whether the employee responded or not. The outcome would still be the same. The problem here is that no one would expressly acknowledge the obvious. It is little wonder that employees are left confused and bewildered, as I am sure Mr Hilder was. Indeed, a cynic might say that Sydney Trains need not bother with the charade of an investigation, if the outcome is already pre-ordained.

[112] In respect to Mr Walsh’s alleged regard to Mr Hilder’s personal and mitigating circumstances, Sydney Trains put the following extraordinary submission:

‘The respondent submits that the seriousness of the applicant’s misconduct is such that it cannot outweigh the applicant’s mitigatory circumstances. Were it to be otherwise, this would lead to a result where an employee with mitigatory factors such as age or extensive service, would be permitted to follow a different standard in respect of drugs and alcohol in the workplace than other employees. Such an approach would be inconsistent with the respondent’s ‘zero tolerance’ for drugs and alcohol.

[113] In other words, on its own admission, taking into account mitigating factors ‘would be inconsistent with the respondent’s approach to ‘zero tolerance’ for drugs and alcohol.’ If this was the approach, Mr Walsh embarked on a barren and pointless exercise of balancing personal and mitigating circumstances, when it was obvious they would make not a skerrick of difference to the outcome.

[114] Further, in Sydney Trains’ reply (5 August 2019) it was said ‘[w]hilst mitigating factors are acknowledged, the respondent submits that such factors do not address the seriousness of misconduct …’ (my emphasis). It hardly needs to be said that a mere ‘acknowledgement’ of mitigating factors, does not meet the requisite test under the Act. Mitigating factors must be considered, weighed up and balanced against the conduct. On Sydney Trains’ own case, no such consideration or balancing was undertaken.

[115] Perhaps more significantly, to adopt a ‘one size fits all’ dismissal policy, where harshness factors are ignored, or worse still, are said to be taken into account, when in truth they are not, is a very risky proposition for an employer to defend as a legitimate basis for dismissal. Inadvertently, it will mean that the statutory definition of an unfair dismissal at s 385 being, inter alia, one which is ‘harsh, unjust or unreasonable’, would not be given the full scope of that expression. On one view, Sydney Trains’ submission invites the Commission to ignore harshness considerations (as it plainly did). Such an outcome would be to defeat the statutory purpose and result in the Commission not taking into account a material consideration – a likely appealable error. It is not a course I intend to follow.

[116] Lest it be asserted that Sydney Trains had been denied procedural fairness because it may not have been provided with an opportunity to address my criticism and findings of its policies, or were unaware such findings would be made, I would reject both assertions. Firstly, the parties were on notice that I had doubts about the ‘zero tolerance’ approach and the inconsistency with the disciplinary policy, when there was an admitted (indeed relied on) automatic dismissal outcome for any employee who has any level of cannabis detected in their system. Indeed, Ms Gaven commented that if I was minded to say something about the drug testing regime at Sydney Trains, she wished to put further submissions and did so, by also including a report from Professor Ogden. There is reference about these matters at [48] in my exchange with Mr Walsh on 8 August 2019.

Consistency of approach

[117] One of Sydney Trains’ main arguments is that its Drugs and Alcohol Policy has been applied consistently, at least since 2017, and Mr Hilder was treated no differently to all the other employees who were dismissed or resigned since that time involving similar incidents. In my opinion, Sydney Trains’ professed consistency is somewhat selective. If Sydney Trains believes it is appropriate to have a Drugs and Alcohol Policy which makes clear that any detected level of alcohol or illicit drugs will (not may) result in dismissal, then that is a matter for Sydney Trains’ management. What it cannot do is have two policies inconsistent with each other and in circumstances where employees are not even told the less draconian policy will never be applied. This must be so because the evidence was that:

(a) Sydney Trains had not communicated to its employees the true effect of its ‘zero tolerance’ policy since 2017.

(b) Sydney Trains had not advised employees that anyone who is found to return a positive test for drugs or alcohol, will be dismissed.

(c) Employees had been unaware that personal and mitigating circumstances would not be considered, if any trace of illicit drug use was detected in their systems.

[118] It is difficult to establish that an employee is in breach of an employer’s policy which is inconsistent with related disciplinary policies, and the said policy has not been disseminated and advised to all employees. In these circumstances, I am unable to conclude that there was a valid reason for Mr Hilder’s dismissal. Mr Hilder’s dismissal was ‘unreasonable’ and therefore unfair.

[119] Even if I am wrong about this finding, I am otherwise satisfied, in all the circumstances of this case, that Mr Hilder’s dismissal was ‘harsh’ and therefore unfair. I shall come back to ‘harshness’ considerations shortly.

Other matters under s 387 of the Act

[120] The Commission is required to take account the other matters set out in ss 387(b)-(h) of the Act. Subsections (b)-(e) of s 387 are generally accepted as matters going to procedural fairness, or in other words, natural justice. I set out below each of my findings on these subsections.

Whether the person was notified of that reason (s 387(b))

[121] It is not in contest that Mr Hilder was notified of the reasons for his dismissal in both the Show Cause letter of 6 November 2018 and in the dismissal letter of 13 February 2019 alleging various breaches of Sydney Trains’ policies. This is a neutral factor in this case.

Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person (s 387(c))

[122] Similarly, this factor is not in issue. Mr Hilder’s Union represented him and responded on his behalf on 20 November 2018 in respect to the Show Cause letter and appealed the dismissal decision to TfNSW on 25 February 2019. This is a neutral factor in this case.

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

[123] At all times, Mr Hilder was assisted and supported by his Union. This is a neutral factor in this case.

s 387(e) - If the dismissal related to unsatisfactory performance by the person – whether the person had been warned about that unsatisfactory performance before the dismissal

[124] As Mr Hilder’s dismissal did not relate to unsatisfactory performance, but a single incident that was deemed to be serious misconduct, this factor is irrelevant to this case.

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 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 (ss 387(f) and (g))

[125] Sydney Trains is obviously a large and well-resourced employer in terms of human resources and employment relations advice. Notwithstanding Sydney Trains’ comprehensive and detailed suite of safety policies and procedures, in view of my earlier comments, it may be appropriate to clarify the interaction of the Drugs and Alcohol Policy with the Disciplinary Policy, and advise and retrain all employees accordingly.

Any other matters the Commission considers relevant (s 387(h))

[126] Given the facts and circumstances of this case, in my opinion, there could hardly be a more meritorious and justified example of the ‘harshness’ component of the expression ‘harsh, unjust and unreasonable’, than the dismissal of Mr Hilder. Of particular significance for me in this case, unlike many other cases I have decided, was Mr Hilder’s openness, honesty, remorse and contrition, which I accept was genuine, well-intended and expressed from the outset of the investigation of his conduct. In this respect, I refer to a recent Full Bench decision of the Commission in Hatnell v Esso Hatwell v Esso Australia Pty Ltd t/a Esso [2019] FWCFB 2895 which granted permission to appeal on two public interest grounds; one being:

‘(1) the appeal raises a significant issue of general application concerning the relevance to the evaluation of the appropriateness of reinstatement of a failure on the part of an unfair dismissal remedy applicant to apologise or acknowledge wrongdoing, in circumstances where there has been found to be a valid reason for dismissal based on the applicant’s misconduct’.

Later in the decision, the Full Bench said at [28]-[29]:

‘[28] Mr Hatwell’s first ground of appeal concerns the Deputy President’s conclusion that Mr Hatwell’s failure to apologise or acknowledge wrongdoing in respect of the misconduct which the Full Bench found constituted a valid reason for his dismissal was a matter which weighed determinatively against a finding that reinstatement was appropriate. It cannot in our view be reasonably contended that this was not a material consideration. In circumstances where Mr Hatwell had been found to engage in misconduct constituting a valid reason for his dismissal, but that there were mitigating factors which rendered the dismissal harsh, a critical issue was necessarily whether there were grounds for confidence that Mr Hatwell would, if reinstated, not engage in the same or similar conduct again having regard to the continuing presence of Mr Flens and other employees of the maintenance contractor at the Longford site. The role of an apology or an acknowledgment of wrongdoing in that context was explained in the Full Bench majority decision in Mt Arthur Coal Pty Ltd v Jodie Goodall as follows:

“[78] The primary issue which arose for consideration before the Commissioner in respect of remedy was whether there were proper grounds for confidence that Mr Goodall would, if reinstated, never again engage in conduct of the type which occurred on the night shift of 10-11 November 2015. That confidence was what was necessary to make the employment relationship workable. As we have already stated, the Commissioner with the advantage of having seen and heard Mr Goodall give his evidence was persuaded that he had a sufficient understanding that his conduct was inappropriate, unacceptable and not to be repeated. Nothing which has been put to us by Mt Arthur Coal has articulated a proper basis for the Commissioner’s findings in this respect to be disturbed on appeal. That being the case, there was a reasonable and rational basis for the Commissioner to conclude that Mr Goodall would be able to regain the trust of his colleagues and thereby re-establish a viable working relationship.”

[29] The circumstances of the proceedings here meant that once the question of remedy was remitted by the Full Bench to the Deputy President for determination, Mr Hatwell had the opportunity to give evidence, or make a statement via his counsel, to demonstrate that he understood that the conduct which was found to constitute a valid reason for his dismissal was “inappropriate, unacceptable and not to be repeated” such as to form a basis for confidence that a viable working relationship could be re-established. This might have taken the form of an apology to Mr Flens, an acknowledgment that the conduct he was found to have engaged in was wrong, or a commitment to never engage in such conduct in the future and to treat fellow workers with respect. However Mr Hatwell declined to take advantage of this opportunity, and as a result we consider that it was reasonably open to the Deputy President to conclude, as he did, that this meant there was a risk of a recurrence of the behaviour if reinstatement was granted, and to treat this as a matter of determinative weight.’

[127] In addition, the other matters I have taken into account include:

(a) Mr Hilder’s age and difficulty in obtaining alternative employment, as demonstrated by the evidence of his job-seeking efforts;

(b) Mr Hilder’s family and financial circumstances;

(c) Mr Hilder’s 6 years of exemplary service, including awards for customer service;

(d) the inconsistency between Sydney Train’s policies relied on to dismiss Mr Hilder;

(e) the failure of Sydney Trains to inform employees of the true effect of a ‘zero tolerance’ approach to drugs and alcohol in the workplace; and

(f) the fact that prior to 2017 there was evidence of at least two employees who tested positive for drugs and alcohol who were given a second chance.

[128] Secondly, Mr Warnes addressed the inconsistency of the ‘zero tolerance’ approach in the Union’s submissions of 5 September 2019; see: [73] above.

[129] For all of the above reasons, I am satisfied that Mr Hilder’s dismissal on 26 April 2019 was ‘harsh and unreasonable’, or at the very least ‘harsh’, within the meaning of s 387 of the Act and therefore unfair.

Appropriate remedy

[130] The remedies for an unfair dismissal are set out at ss 390 and 391 of the Act as follows:

390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.

391 Remedy—reinstatement etc.


(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:

(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or

(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

(1A) If:

(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and

(b) that position, or an equivalent position, is a position with an associated entity of the employer;

the order under subsection (1) may be an order to the associated entity to:

(c) appoint the person to the position in which the person was employed immediately before the dismissal; or

(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

Order to maintain continuity

(2) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:

(a) the continuity of the person’s employment;

(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.

Order to restore lost pay

(3) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.

(4) In determining an amount for the purposes of an order under subsection (3), the FWC must take into account:

(a) 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 reinstatement; and

(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.’

[131] From a plain reading of s 381(c) – Object of this Part - the legislature intended to give primacy to reinstatement in circumstances where an employee has been unfairly dismissed and the Commission is required to exercise a discretion as to any orders in respect to remedy. One of the objects of Part 3-2 of Ch 3, dealing with unfair dismissal, states:

‘(c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.’ (my emphasis)

[132] I also refer to what was said by the Full Bench of the Commission in Colson v Barwon Health [2014] FWCFB 1949, where at [29], it was said:

‘[29] The passages from which the sentences relied on by the Appellant are extracted clearly indicate that the Deputy President understood and applied the statutory requirements in respect of reinstatement, as does the broader context of his decision. The Deputy President noted the primacy of reinstatement as a remedy for an unfair dismissal. His observations about primacy did no more than state that consideration of reinstatement against the test of whether it is inappropriate was required (and a finding that it is inappropriate is required) before compensation in lieu could be ordered and does not provide licence to search for a reason to order an employee’s reinstatement when that is not appropriate. The requirement to find that reinstatement is inappropriate before considering compensation in s.390 of the Act gives effect to the emphasis on reinstatement in s.390(1)(c) of the Act’. (footnote omitted)

[133] In Nguyen and Le v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter [2014] FWCFB 7198, the Full Bench of the Commission discussed the meaning of ‘inappropriate’ in the context of s 390 and helpfully summarised the relevant case law as to a loss of trust and confidence telling against an unfairly dismissed employee’s reinstatement. At [20]-[21], the Full Bench said:

‘[20] The most common argument advanced in support of the proposition that reinstatement is inappropriate is the proposition, variously expressed, that there has been a loss of trust and confidence such that it would not be feasible to re-establish the employment relationship.

[21] In Perkins v Grace Worldwide (Aust) Pty Ltd the Full Court of the Industrial Relations Court considered the effect of a loss of trust and confidence on the question of the “practicability” of a reinstatement remedy and said:

“Trust and confidence is a necessary ingredient in any employment relationship... So we accept that the question whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is impracticable, provided that such loss of trust and confidence is soundly and rationally based.

At the same time, it must be recognised that, where an employer, or a senior officer of an employer, accuses an employee of wrongdoing justifying the summary termination of the employee’s employment, the accuser will often be reluctant to shift from the view that such wrongdoing has occurred, irrespective of the Court’s finding on that question in the resolution of an application under Division 3 of Part VIA of the Act.

If the Court were to adopt a general attitude that such a reluctance destroyed the relationship of trust and confidence between employer and employee, and so made reinstatement impracticable, an employee who was terminated after an accusation of wrongdoing but later succeeded in an application under the Division would be denied access to the primary remedy provided by the legislation. Compensation, which is subject to a statutory limit, would be the only available remedy. Consequently, it is important that the Court carefully scrutinise any claim by an employer that reinstatement is impracticable because of a loss of confidence in the employee.

Each case must be decided on its own merits. There may be cases where any ripple on the surface of the employment relationship will destroy its viability. For example the life of the employer, or some other person or persons, might depend on the reliability of the terminated employee, and the employer has a reasonable doubt about that reliability. There may be a case where there is a question about the discretion of an employee who is required to handle highly confidential information. But those are relatively uncommon situations. In most cases, the employment relationship is capable of withstanding some friction and doubts. Trust and confidence are concepts of degree. It is rare for any human being to have total trust in another. What is important in the employment relationship is that there be sufficient trust to make the relationship viable and productive. Whether that standard is reached in any particular case must depend upon the circumstances of the particular case. And in assessing that question, it is appropriate to consider the rationality of any attitude taken by a party.

It may be difficult or embarrassing for an employer to be required to re-employ a person the employer believed to have been guilty of wrongdoing. The requirement may cause inconvenience to the employer. But if there is such a requirement, it will be because the employee’s employment was earlier terminated without a valid reason or without extending procedural fairness to the employee. The problems will be of the employer’s own making. If the employer is of even average fair-mindedness, they are likely to prove short-lived. Problems such as this do not necessarily indicate such a loss of confidence as to make the restoration of the employment relationship impracticable.”’

[134] The Full Bench continued at [27]:

‘[27] The following propositions concerning the impact of a loss of trust and confidence on the question of whether reinstatement is appropriate may be distilled from the decided cases:

  Whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is appropriate but while it will often be an important consideration it is not the sole criterion or even a necessary one in determining whether or not to order reinstatement.

  Each case must be decided on its own facts, including the nature of the employment concerned. There may be a limited number of circumstances in which any ripple on the surface of the employment relationship will destroy its viability but in most cases the employment relationship is capable of withstanding some friction and doubts.

  An allegation that there has been a loss of trust and confidence must be soundly and rationally based and it is important to carefully scrutinise a claim that reinstatement is inappropriate because of a loss of confidence in the employee. The onus of establishing a loss of trust and confidence rests on the party making the assertion.

  The reluctance of an employer to shift from a view, despite a tribunal’s assessment that the employee was not guilty of serious wrongdoing or misconduct, does not provide a sound basis to conclude that the relationship of trust and confidence is irreparably damaged or destroyed.

  The fact that it may be difficult or embarrassing for an employer to be required to re-employ an employee whom the employer believed to have been guilty of serious wrongdoing or misconduct are not necessarily indicative of a loss of trust and confidence so as to make restoring the employment relationship inappropriate.

[28] Ultimately, the question is whether there can be a sufficient level of trust and confidence restored to make the relationship viable and productive. In making this assessment, it is appropriate to consider the rationality of any attitude taken by a party’ (footnotes omitted)

[135] In Regional Express Holdings Limited t/a REX Airlines v Richards [2010] FWAFB 8753 (‘Regional Express’), the Full Bench made the following observations regarding loss of trust and confidence at [26]:

‘Whenever an employer dismisses an employee for misconduct, assuming the employer is acting honestly, there is an implied loss of trust and confidence in the employee. If it is subsequently found that the termination was harsh, unjust or unreasonable it is appropriate to consider whether the relationship can be restored if the employee is reinstated. That question cannot be answered solely by reference to the views of management witnesses. All of the circumstances should be taken into account.’ (my emphasis)

[136] Despite Sydney Trains’ submissions going to a loss of trust and confidence, given my earlier conclusions and Mr Hilder’s six years of exemplary service, I am not satisfied that the working relationship between him and Sydney Trains is irretrievably broken, or so untenable as to serve as a barrier to Mr Hilder being reinstated. Sydney Trains’ evidence went no further than the ‘view of management witnesses’. This evidence was not persuasive. Further, there was no evidence that Mr Hilder’s reinstatement would damage, or adversely impact on Sydney Trains’ reputation, or on its other employees.

[137] Section 391(2) of the Act provides that, if the Commission makes an order for reinstatement and considers it appropriate to do so, the Commission may also make any order that it considers appropriate to maintain:

‘(a) the continuity of the person’s employment; [and]

(b) the period of the person’s continuous service with the employer...’

[138] In all the circumstances, I consider it appropriate to make an order to maintain Mr Hilder’s continuity of employment and the period of his continuous service with Sydney Trains; see: Kenley v JB Hi Fi Print S7235.

[139] Section 391(3) of the Act provides that if the Commission makes an order for reinstatement and considers it appropriate to do so, the Commission may also make any order to cause the employer to pay to the applicant an amount for the remuneration lost, or likely to have been lost, by the applicant because of the dismissal.

[140] Section 391(4) of the Act provides that, in determining an amount for the purposes of such an order, the Commission must take into account:

‘(a) 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 reinstatement; and

(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.’

[141] An order to restore lost pay does not necessarily follow an order for reinstatement. The Commission ‘may make any order that it considers appropriate’ (my emphasis); thus, it is a discretionary exercise to be undertaken by the Commission. However, where an employee has engaged in misconduct, the Commission may refuse to make any order to restore lost pay or make an order for part payment of lost remuneration.

[142] In the circumstances of this matter, I have concluded that restoration of full lost remuneration would not be appropriate. I determine that Mr Hilder should receive 50% of the amount of lost remuneration he would have otherwise received had he not been dismissed, less any income earnt by him since his dismissal. While Mr Hilder’s dismissal was unfair, his conduct was nevertheless a serious lapse of judgment, which he readily acknowledged was a mistake. It will also serve as a timely reminder of the seriousness this Commission regards the health and safety of employees and the public in this inherently dangerous industry, and the obligations on employees to ensure they always conduct themselves consistent with this objective.

[143] Finally, s 381 of the Act is a significant and overarching object of Part 3-2. It is expressed in these terms:

381 Object of this Part

(1) The object of this Part is:

(a) to establish a framework for dealing with unfair dismissal that balances:

(i) the needs of business (including small business); and

(ii) the needs of employees; and

(b) to establish procedures for dealing with unfair dismissal that:

(i) are quick, flexible and informal; and

(ii) address the needs of employers and employees; and

(c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.

(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a “fair go all round” is accorded to both the employer and employee concerned.

Note: The expression “fair go all round” was used by Sheldon J in in re Loty and Holloway v Australian Workers’ Union [1971] AR (NSW) 95.’

[144] I am satisfied that the outcome and orders I make in this matter ensure a ‘fair go all round’ is accorded to both Mr Hilder and Sydney Trains.


1. Mr Hilder shall be reinstated to his former position as Customer Service Attendant within 21 days of today.

2. Mr Hilder’s continuity of service shall not be taken to have been broken by his dismissal.

3. Sydney Trains shall pay to Mr Hilder an amount of lost remuneration equivalent to 50% of the average remuneration he would have otherwise received from the date of dismissal to reinstatement less any remuneration earnt during this period.

4. Lost remuneration shall be calculated by reference to Mr Hilder’s average earnings, including overtime and other penalties, in the six months prior to his suspension on 9 October 2018.

5. The parties are directed to confer with one another about the implementation of the above orders and if formal detailed orders are required, the Commission will do so upon request.

6. Any disagreement about the implementation of the above orders may be referred to the Commission for determination.

7. These proceedings are otherwise concluded.



Mr T Warnes, Director of Organising, and Mr R Hunter, RTBU Organiser, for the applicant.

Ms M Gaven of Counsel, Ms S Moten, Partner and Ms A Redfern, Lawyer, Lander & Rogers, for the respondent.

Hearing details:



8 August.

Printed by authority of the Commonwealth Government Printer


Annexure ‘A’