Australia: When is it safe to dismiss employees?

Last Updated: 4 December 2011
Article by Stephanie Nicol and Meryl Remedios

A string of recent unfair dismissal cases have seen employees reinstated to their former positions following dismissal for breaches of safety regulations and practices. They have created a considerable grey area for practitioners and employers navigating the minefield of competing obligations under occupational health and safety (OHS) laws and the unfair dismissal provisions of the Fair Work Act 2009.

In each case, subjective, mitigating circumstances have rendered dismissals harsh that were otherwise procedurally fair and for a valid reason. The cases reinforce that before dismissing an employee for a valid reason, such as a serious safety breach, not only must the employer afford the employee appropriate procedural fairness, it must also have regard to all of the prevailing circumstances, particularly where they may constitute persuasive, mitigating circumstances.

Valid reason

Earlier this year, in Wililo v Parmalat Food Products Pty Ltd, Fair Work Australia (FWA) considered whether a forklift operator was unfairly dismissed for, among other things, breaching safety regulations and practices by raising the tines of a forklift when they were not properly engaged and placing part of his body underneath an unsecured forklift load. At first instance, Commissioner Cargill found that the employee's conduct caused "serious and imminent risk to his own health and safety if not that of others" and constituted serious misconduct (as defined by the Fair Work Regulations), giving rise to a valid reason to terminate the employment. Commissioner Cargill was also satisfied that the forklift operator had been afforded procedural fairness prior to the dismissal because he was notified of the reasons for dismissal, was given an opportunity to respond to them and had a support person present at both the investigation interviews and the termination meeting.

Even though the forklift driver's dismissal was for a valid reason and was considered procedurally fair, Commissioner Cargill found that, on balance, the dismissal was harsh. She held this view because, among other things, the employee had not been shown CCTV footage during the investigation process, she considered the employee's actions were not willful or negligent, but merely careless and she was conscious that while the employer had a commendable focus on safety, it did "not have anything akin to a zero tolerance policy".

The employer appealed the decision and was successful. The FWA full bench found that it was anomalous that an employee found guilty of serious misconduct for breaching safety rules and who was "dismissed for a valid reason after due process, could be considered to be harshly terminated in the absence of discernable and significant mitigating factors". The full bench did not regard the failure to show the CCTV footage and the other alleged mitigating factors as being sufficiently serious to render an otherwise fair dismissal harsh. Importantly, it held that the characterisation of the employee's actions as careless did not derogate from their seriousness and said that "clearly disciplinary action was necessary and appropriate because a failure to do so sends a message to the workplace that safety breaches can occur with impunity".

Discernable and significant mitigating factors

So what mitigating factors does FWA envisage are significant enough to render a procedurally fair dismissal for a valid reason to be unfair? The full bench recently had cause to consider the issue in a decision which split the bench 2-1.

In his decision at first instance in Lawrence v Coal & Allied Mining Services Pty Ltd t/a Mt Thorley Operations/Warkworth, Commissioner MacDonald found that there was a valid reason for dismissing a mining production employee whose conduct amounted to a serious breach of safety policy. The employee deliberately breached the company's isolation procedure by removing personal locks which contractors had applied to isolate a water pump during maintenance.

The employee had 28 years of service and was aware of the safety requirements. However, at the time the employee removed the contractors' locks, the employee was aware that the contractors had finished their task and knew that no one was working on that section of pipeline, having driven the length of it immediately before removing the locks.

The employer argued that the employee had deliberately breached a safety procedure which risked possible injury to other workers, and the likelihood of the risk was irrelevant. The employer also submitted that safety and a safe working environment were an overriding priority. The Commissioner accepted these submissions and noted that the mining industry has a working environment that "requires workers to be safety conscious all of the time – because their lives depend on being safety conscious".

While the Commissioner had regard to, among other things, the employee's 28 years of unblemished service primarily in a safety-critical role, his age, his hardworking attitude, his financial and personal circumstances, his remorse and the fact the employee had checked the length of the pipe before removing the locks, he formed the view that there was a valid reason for the dismissal and it was fair.

The employee appealed to the full bench. The majority held that the dismissal was manifestly harsh in light of the length of the employee's service, his exemplary record and his personal circumstances. The employee was 55 and was likely to have difficulty securing alternative employment, particularly in the coal industry having been dismissed for a safety breach, let alone at the same level of remuneration. In ordering the employee's reinstatement, the majority said the employee was the primary breadwinner, the dismissal would cause his family serious hardship and his superannuation would be substantially adversely affected.

The employer's sanction of dismissal was found to be manifestly harsh in the circumstances, although it was conceded that the conduct warranted disciplinary action given the employer's statutory OHS obligations. While the majority made an order to restore lost pay, the equivalent of three months' pay was deducted to vindicate the importance of the employer's policies.

So what should we take away from these cases?

When determining appropriate disciplinary action, the terms of the safety policy breached and consequences envisaged by the policy should be considered. Breaches of safety policies and procedures should be assessed in light of any relevant subjective, mitigating factors. As a guide, the mitigating circumstances which FWA has had regard to in assessing whether a dismissal for a safety breach was fair include:

  • the personal and economic situation of the employee, including age, education, employment prospects, possible financial hardship and adverse impact on the employee's marriage and children;
  • the employee's unblemished record, practice by other staff and the length of time since training was last provided; and
  • genuine remorse and contrition shown by the employee over past conduct and an undertaking to improve in the future.
  • A version of this article first appeared in the Law Society Journal (Volume 49, October 2011)

For more information, please contact:

Sydney



Mark Sant

t (02) 9931 4744

e msant@nsw.gadens.com.au

Stephanie Nicol

t (02) 9931 4855

e snicol@nsw.gadens.com.au

Melbourne



Ian Dixon

t (03) 9252 2553

e idixon@vic.gadens.com.au

Steven Troeth

t (03) 9612 8421

e stroeth@vic.gadens.com.au

Brisbane



John-Anthony Hodgens

t (07) 3231 1568

e jhodgens@qld.gadens.com.au

Adelaide



Nicholas Linke

t (08) 8233 0628

e nlinke@sa.gadens.com.au

This report does not comprise legal advice and neither Gadens Lawyers nor the authors accept any responsibility for it.

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