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
Chadwick v Woodside Energy Limited  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
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
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
For the FWA, the matters to be considered when considering
whether the termination was harsh, unjust or unreasonably was
was a valid reason;
what procedures followed after the breach of the Golden Rules
and before the employer's decision to terminate;
the consequences for the personal and economic situation of the
whether termination was disproportionate to the gravity of the
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
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.
Employers should take special care to ensure that particular
systems in place for safety should be clear, taught to employees
and understood by all.
It became a significant factor that previous breaches of the
Golden Rules had resulted in termination as well.
Consistent and universal enforcement of the rules should be
adhered to by employers.
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).