Australia: When can you dismiss an employee for safety breaches? - a case law update

Last Updated: 17 March 2012
Most Read Contributor in Australia, September 2016

The law imposes two duties upon the employers which, at times, are at odds with each other. On one hand, employers must comply with WHS statutory obligations to keep their workplaces safe. On the other, an employer must also present a compelling and valid reason, follow a fair procedure and take into account the degree of risk involved in a contravention of safety rules, if it wishes to dismiss an employee on safety grounds.

The following recent case demonstrates Fair Work Australia's (FWA) trend in emphasising the paramount importance of the duty of employer's to keep their workers safe. But it is clear that dismissal will not always be an appropriate response, especially where the circumstances involves mitigating factors.

Chadwick v Woodside Energy Limited [2011] FWA 2890

On appeal to Fair Work Australia (FWA), Chadwick v Woodside Energy Ltd upheld the employer's position in insisting on strict adherence to 'golden rules' relating to safety in relation to an employee with 15 years of service.

The Karratha Gas Plant site conducted activities making it a potentially hazardous environment. It operated a system described as an Integrated Safe System of Work (ISSoW) to mitigate the safety risks involved. The system managed hazards by requiring permits, underpinned by risk assessments, forming part of the company's "Golden Rules". A breach of the Golden Rules could result in termination.

Chadwick, an employee of 15 years, had been issued with a 7 day permit to perform hot work. The permit contained an express condition requiring Mr Chadwick to liaise with the Control Room Panel Operation before starting work on any day to ensure the work could be performed safely.

3 hours before the permit expired, Mr Chadwick and another arrived at site without the permit. They were aware the Permit Hut (where the necessary contact person worked) did not open for a further 2 hours. They did not contact a higher level of management to ask for permission to start work and did not liaise with the Panel Operator as required by the permit. He started work that day and later obtained a further permit, after the Permit Hut opened.

His employment was terminated for breaching the Golden Rule. This action was contested by Chadwick to FWA as being "harsh, unjust and unreasonable" in all the circumstances.

Woodside's vice president told FWA that the Golden Rules were derived from standards developed in the oil and gas industry after the 1988 Piper Alpha disaster in the North Sea that killed 165 people. The disaster "involved an accumulation of management errors, including a failure of the 'permit-to-work' system that did not ensure proper communications". Woodside submitted that the rule could not be compromised regardless of the consequences of efficiency and productivity.

For the FWA, the matters to be considered when considering whether the termination was harsh, unjust or unreasonably was whether there

  1. was a valid reason;
  2. what procedures followed after the breach of the Golden Rules and before the employer's decision to terminate;
  3. the consequences for the personal and economic situation of the employee; and
  4. whether termination was disproportionate to the gravity of the misconduct.

It was decided that the employee's conduct was not a question of poor judgment in the starting and performance of work by the employee but rather a breach of an obligation to not start work. It was further accepted that the nature of Golden Rules did not lend itself for the giving of warnings when breached. It was clear that Mr Chadwick knew of the procedures but had deliberately breached the rules and that Woodside had enforced the policy consistently on previous occasions and had no other reasons for the dismissal. In the circumstances, Mr Chadwick's dismissal was warranted.

What can we learn from this case?

The significance of the breach, and the real risk of significant and immediate harm that it created, outweighed the personal impact of dismissal on the employee in question.

  1. Employers should take special care to ensure that particular systems in place for safety should be clear, taught to employees and understood by all.
  2. It became a significant factor that previous breaches of the Golden Rules had resulted in termination as well.
  3. Consistent and universal enforcement of the rules should be adhered to by employers.
  4. Finally, FWA will also look to the personal circumstances of an employee to help determine whether his or her termination would unjustly create difficult circumstances for them as result. As an employer, please review an employee's history with the company, as well as any other hardships that employee may be in before making a final decision.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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