Australia: Focus on unfair dismissal – harsh to dismiss, however reinstatement not appropriate due to employers loss of trust and confidence in employee

Last Updated: 24 September 2017
Article by Annie Smeaton

In the recent decision of Paul Johnson v BHP Billiton Olympic Dam Corporation Pty Ltd [2017] FWC 4097, Commissioner Hampton found that, although the employee had engaged in misconduct constituting a valid reason for dismissal, the dismissal was nevertheless harsh due to a number of mitigating factors.

However, the Commissioner did not consider reinstatement appropriate because the employer had a rational basis for its loss of trust and confidence in the employee given the importance of the need for compliance with safety policy and the maintenance of appropriate discipline in connection with workplace health and safety matters. The employee was instead awarded compensation.

THE FACTS

The employee was employed by BHPB from 24 May 2001 until his dismissal on 31 March 2017. At the time of his dismissal, the employee was a process specialist, responsible for a team of technicians looking after a flash furnace and other equipment in areas of a smelting facility at an underground mine.

On 21 March 2017, there was an explosion on the furnace floor where the employee work. The floor is considered an area of significant risk and, if a breakdown or explosion occurs, workers can be exposed to a very high safety risk due to the temperature of the molten material.

The explosion impacted the furnace and resulted in the spewing of molten metal and further explosions. The employee went to the furnace floor to check the explosions, ignoring the activated evacuation alarm. After some discussion with his supervisor about the appropriate action, the employee inspected the impacted area, which involved the employee coming into close proximity to the furnace and lifting his protective visor, exposing his face.

The employer considered the employee's actions in not evacuating the building and inspecting the furnace serious misconduct. After suspending the employee and investigating the incident, the employee was dismissed.

The employee made an application under section 394 of the Fair Work Act 2009 (Cth) seeking reinstatement of his employment for alleged unfair dismissal.

A VALID REASON

It was submitted that the employee's conduct essentially involved two related aspects:

  • the decision not to leave the furnace building when the evacuation sounded; and
  • the decision to attend the tapping floor and inspect the furnace in the circumstances evident at that time.

In relation to the evacuation, the Commissioner found that it was evident that the requirement for all personnel to immediately evacuate was not clearly understood or consistently applied by management or staff at that time. The employer's policy did not provide an 'absolute obligation to immediately evacuate', which was confirmed by the failure of the incident controller and others to intervene at the time. The Commissioner held that the employee's failure to immediately evacuate did not of itself represent misconduct or a valid reason for his dismissal.

In terms of the furnace inspection, the Commissioner found that the employee was requested by his supervisor (and someone he genuinely believed at the time to be the incident controller) to inspect the furnace by looking from behind a column as a shield and keeping a safe distance. While it was not unreasonable to follow this direction, the employee went beyond the column and approached the furnace with his safety visor up, which was not consistent with the instruction given to him or the duties placed upon him at the time, and was also operationally unnecessary.

Despite the relevant mitigating circumstances, this conduct was considered to represent a serious breach of the employee's duties. The Commissioner found that the employee knew and understood the employer's policies and procedures during evacuation, which were reasonable and appropriate given the nature of the industry, and that there was a valid reason for dismissal based on the employee inspecting the furnace.

WAS THE DISMISSAL HARSH IN THE SENSE THAT IT WAS DISPROPORTIONATE TO THE EMPLOYEE'S ACTUAL CONDUCT?

In terms of harshness in accordance with section 387(h) of the Fair Work Act, the Commissioner considered many competing considerations, including the nature of the conduct, its relative seriousness and the context in which it took place, including the following:

  1. The employee was requested by his supervisor, whom he believed to also be the incident controller, to inspect the furnace and it was not unreasonable that he stayed and complied.
  2. The employee's unsafe but not deliberate conduct in going beyond the instructions of his supervisor represented misconduct requiring significant sanction in the context of the employee exercising a (very poor) judgement call having regard to his experience in the heat of an emergency.
  3. The employee's motivation to protect the employer's operations, however, involved a significant and serious mistake in judgment, that created a further risk when it was not operationally necessary to do so.
  4. The employee was a leader in the workplace, which created a sense of responsibility but also an enhanced need to follow the policies.
  5. Some of the employee's conduct constituted a valid reason for dismissal, however not all of the alleged misconduct relied upon by the employer was found to be misconduct.
  6. The employee did not accept that any mistake had been made leading up to the dismissal.
  7. The employee had 15 years of largely good service, with 10 of those as a specialist with the employer.
  8. The employee had a single formal warning about related conduct, however responding to that warning indicated a less than ideal approach to safety requirements.
  9. The employee was paid in lieu of notice.
  10. There were economic and personal consequences in being dismissed, including that the employee lived in regional South Australia where employment opportunities for his workplace skills and qualifications were likely to be more limited than in other regions.

The Commissioner was satisfied that, on balance, after considering all the relevant circumstances, the dismissal was harsh because the mitigating and other circumstances were sufficient to mean that the decision, although based upon the valid reason, was disproportionate to the conduct.

REINSTATE OR COMPENSATE?

In terms of remedy, the Commissioner noted that section 390 of the Fair Work Act made it clear that compensation is only to be awarded as a remedy where the FWC is satisfied that reinstatement is inappropriate and that compensation is appropriate in all the circumstances.

The employee sought reinstatement to his former position. The employer was opposed to reinstatement, including because it had lost trust and confidence in the employee to perform work in the future in a safe and policy compliant manner.

The Commissioner held that there was a rational basis for the employer's loss of trust and confidence in the employee given the importance of relevant policy and the maintenance of appropriate discipline in connection with workplace health and safety matters.

The Commissioner ordered that reinstatement of employment would be inappropriate.

In determining appropriate compensation, the Commissioner considered the employee's length of service; the remuneration the employee would likely have received had he not been dismissed; his efforts to mitigate the loss suffered by him because of the dismissal and any remuneration from other employment.

The Commissioner awarded $47,676 to the employee.

LESSONS FOR EMPLOYERS

  • Even when employers have a valid reason to terminate, they should carefully consider the harshness of the dismissal in accordance with section 387 of the Fair Work Act
  • Employers can resist reinstatement if they can demonstrate a rational basis for the loss of trust and confidence in an employee.
  • Ensure workplace policies and procedures are reasonable and appropriate for the industry in which the employer operates.

© Cooper Grace Ward Lawyers

Cooper Grace Ward is a leading Australian law firm based in Brisbane.

This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please contact Cooper Grace Ward Lawyers.

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