1
Fair Work Act 2009
s.604—Appeal of decision
BlueScope Steel Limited
v
Peco Sirijovski
(C2014/2644)
Peco Sirijovski
v
BlueScope Steel Limited
(C2014/2658)
JUSTICE BOULTON, SENIOR DEPUTY PRESIDENT
DEPUTY PRESIDENT LAWRENCE
COMMISSIONER DEEGAN SYDNEY, 23 APRIL 2014
Appeal against decision [2013] FWC 9080 and orders in U2013/1841 - reason for dismissal -
whether action was deliberate or negligent - whether first and final warning could be taken
into account - whether employee denied procedural fairness during investigation -
application of “fair go all round” principles - relevance of missed opportunity for
redundancy package - criteria for calculating compensation - permission to appeal granted
and appeal allowed - decision and order quashed - matter determined by Full Bench -
dismissal found to be harsh, unjust and unreasonable - reinstatement found inappropriate -
compensation awarded.
[1] This decision relates to two appeals lodged against a decision1 of Commissioner
Riordan given on 24 November 2013. In the decision, the Commissioner found that Mr Peco
Sirijovski (the applicant) had been unfairly dismissed by his employer, BlueScope Steel Ltd
(the Company), and ordered that the Company pay compensation in the amount of 26 weeks’
pay.
[2] On 14 January 2014, the Company filed an application for permission to appeal and an
appeal against the decision of Commissioner Riordan. Later on the same day, the applicant
also filed an appeal.
1 Sirijovski v BlueScope Steel Limited [2013] FWC 9080.
[2014] FWCFB 2593
DECISION
E AUSTRALIA FairWork Commission
[2014] FWCFB 2593
2
Background
[3] The background to the appeals may be set out briefly as follows.
[4] The applicant was, at the time of his dismissal, a Level 4 Plate Processing and
Dispatch Operator in the Plate Mill at the Port Kembla Steelworks. He had been employed for
35 years at the Steelworks and had worked in the Plate Mill for the last 27 years.
[5] On 19 December 2012, the Company issued the applicant with a “first and final
warning and 5 shift unpaid suspension” for a safety breach. The warning related to an
incident which occurred on 14 December in which the applicant had failed to comply with a
Company Safety Critical Procedure by entering the rail exclusion zone in the Normaliser
Building while a shunt was occurring. The warning was issued following an investigation of
the incident by the Company and was in the following terms:
“FIRST AND FINAL WRITTEN WARNING
This is to inform you that the Company has investigated an incident involving yourself
that occurred on Friday 14th December 2012 when you enter the rail exclusion zone in
the Normaliser Building (Road 1A) while a shunt was occurring.
The findings of the investigation have shown that the incident occurred as a result of
your gross misconduct in the form of not following a Company Safety Critical
Procedure. The incident could have been avoided should you have chosen to follow
the safety critical operating procedure.
The Company has considered all the factors relating to this incident including your
employment history and your training record. On this basis you will be issued with a
first and final written warning and 5 shift unpaid suspension for unacceptable
behaviour in the form of gross misconduct by not following a Company Safety Critical
Procedure.
The Company requires this unacceptable safety performance be addressed urgently,
and reminds you that working safely is a condition of employment.
Peco, please be aware this is a first and final warning, any future breach of critical
operating procedures, operational negligence, wilful misconduct, or behaviour of a
similar kind may lead to further disciplinary action, which may include termination of
your employment.
Prior to you resuming your normal duties the Company will arrange to have you
complete refresher training in:
BlueScope Steel Life Preserving Principles (Cardinal Rules)
Rail Line Restricted Access - Critical Procedure
The Company would also like to take this opportunity to remind you that a Company
sponsored Employee Assistance Programme (EAP) is available to all employees.
Peco, I encourage you to take advantage of this Employee Assistance Programme
(EAP). Through this confidential, no-cost, service you may also be referred to
[2014] FWCFB 2593
3
community based support services where appropriate. Please call the Employee
Assistance Programme (EAP) on (02) 4226 1099 if you wish to take advantage of this
offer.”
[6] On 20 May 2013, the applicant was assigned to the role of Trim Shear Operator on the
night shift. He was required to remain in the control room during the shift and to trim the steel
plates to the appropriate dimensions as required per individual order. The Trim Shear
Operator is also required to check computer monitors in the control room on a regular basis.
The monitors display six camera feeds, one of which is of a trim shear syntron conveyor.
[7] At approximately 5:30am on 21 May, a significant scrap jam occurred on the
conveyor. The applicant claimed that he was checking the monitors on a regular basis, but that
he did not see the scrap jam. The scrap jam resulted in the need for the manual removal of the
scrap and was said to have caused more than two hours delay in production and cost the
Company approximately $138,000.
[8] The Company investigated the incident. This included interviews and discussions with
various employees, the review of video footage and two meetings with the applicant. After the
investigation, and having regard to the warning issued in December 2012, it was decided that
the applicant’s employment would be terminated. The letter of termination dated 28 May
2013 was in the following terms:
“Notification of Termination of Employment
This is to advise you of the termination of your employment from BlueScope Steel
(AIS) Pty Ltd effective immediately from Tuesday 28 May 2013 for continued poor
performance. This has resulted in operational negligence and failure to follow
Company policies and procedures. The Company has determined that you are
incapable of performing the role of an operator, and your ongoing employment with
the Company constitutes an unacceptable risk to the business.
After carefully considering all the relevant information the Company concludes that
your continuing employment is no longer tenable.
The Company will pay you 5 weeks ordinary pay in lieu of notice in accordance with
your entitlements.
HR Assist, Adelaide, will be in contact with you to finalise any payroll,
superannuation and other administrative arrangements.”
[9] On 4 June 2013 the applicant lodged an application for an unfair dismissal remedy
pursuant to section 394 of the Fair Work Act (the Act). A conciliation conference was held on
18 July 2013 but was unable to resolve the matter. The application was then referred to the
Commissioner for hearing and determination.
Decision of the Commissioner
[10] In deciding whether the dismissal was harsh, unjust or unreasonable, the
Commissioner took into account ss.381 and 387 of the Act and, in particular, considered the
various criteria referred to in paragraphs (a) to (h) in s.387. Section 387 provides as follows:
[2014] FWCFB 2593
4
“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or
unreasonable, the FWC must take into account:
(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; and
(c) whether the person was given an opportunity to respond to any reason
related to the capacity or conduct of the person; and
(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; and
(e) if the dismissal related to unsatisfactory performance by the person—
whether the person had been warned about that unsatisfactory performance
before the dismissal; and
(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; and
(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.”
[11] The Commissioner found that there was a valid reason for the dismissal (s.387(a)). In
this regard the Commissioner did not accept the applicant’s evidence that the monitors were
frozen and came to the conclusion that the applicant was guilty of “performance failure” and
“operational negligence” by not noticing the scrap jam on the monitors.2 However the
Commissioner noted that Mr Otsyula, the Company’s Plate Processing and Despatch Manager
and the person who made the decision on the dismissal, had attested during cross examination
that the applicant was dismissed because “(he) deliberately ignored the scrap jam.”3
[12] After referring to several authorities,4 the Commissioner said:
“[23] Mr Sirijovski should have seen the scrap jam. I do not accept his suggestion
that the monitor may have been frozen. If this was the case, then Mr Sirijovski should
have noticed that the other 5 sections of the plant were stationary. I acknowledge that
the monitor displaying the scrap conveyor operation is not very clear, but a cursory
glance in the last hour of the shift should have raised Mr Sirijovski’s concerns. I have
concluded that his failure to observe the scrap jam was a performance failure.
However, there is no supporting evidence or credible motivation to support a
suggestion that Mr Sirijovski’s actions were deliberate in actually ignoring the scrap
jam.
[24] I find that Mr Sirijovski was guilty of operational negligence and that
BlueScope had a valid reason to terminate Mr Sirijovski’s employment.”
2 [2013] FWC 9080 at [22] and [23].
3 Ibid [19].
4 Qantas Airways Ltd v Cornwall [1998] FCA 865, Edwards v Guidice [1999] FCA 1836, and Byrne v Australian Airlines
(1995) 185 CLR 410.
[2014] FWCFB 2593
5
[13] The Commissioner found that the applicant was notified of the operational negligence
issue (s.387(b)) and was given an opportunity to respond to the allegation of operational
negligence (s.387(c)).5 However the Commissioner noted that the issue of deliberate and
wilful misconduct in ignoring the scrap jam was not notified to the applicant and that he was
not given an opportunity to respond to this allegation.6
[14] In regard to s.387(e), the Commissioner found that the applicant was not appropriately
warned in relation to the issue of operational negligence or poor performance before he was
dismissed.7 This was because the Commissioner took the view that the final nature of the
warning given in December 2012 was inappropriate and that the warning could not be relied
upon to justify termination of employment for other than a safety breach.8 The Commissioner
considered that it was not fair, taking into account his unblemished record over 35 years, for
the applicant to be subject to a “stringent and onerous” final warning that covered all aspects
of his employment. It was said that the warning failed the “fair go” test of s.381 of the Act
and the “practical and commonsense approach” enunciated in Fastidia Pty Ltd v J B
Goodwin.9
[15] The Commissioner took into account several “other matters” (s.387(h)) in considering
whether the dismissal was harsh, unjust or unreasonable.10 These included the following
findings and conclusions:
the investigation conducted by the Company was incomplete and disjointed, and did
not provide the fundamental elements of procedural fairness to the applicant;11
the applicant had not been disciplined in 35 years of employment for any issue in
relation to operational performance and it was unfair for a single incident of
operational negligence to now be the cause of his dismissal;12
it was accepted by Mr Otsyula and others involved in the investigation that the actions
of the applicant did not warrant dismissal except for the final warning;13 and
the effect of the dismissal was to deny the applicant the opportunity to apply for
redundancy in the restructuring which was being undertaken by the Company at the
Plate Mill.14
[16] The Commissioner concluded that the dismissal of the applicant was harsh, unjust or
unreasonable. The conclusions of the Commissioner are set out in his decision as follows:
5 [2013] FWC 9080 at [24] - [26].
6 Ibid.
7 Ibid [32].
8 Ibid [29].
9 S9280 [2000] AIRC 233 at [43] and [44].
10 [2013] FWC 9080 at [35] - [43].
11 Ibid [35] - [38].
12 Ibid [39].
13 Ibid [40].
14 Ibid [41].
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“[44] I have already found that BlueScope had a valid reason to dismiss Mr
Sirijovski.
[45] He has been a difficult and belligerent employee who had difficulty with his
Team Leader and would continually challenge his authority and instructions. This type
of behaviour should not have been tolerated in the workplace. Bluescope has allowed
this behaviour to continue and by failing to discipline Mr Sirijovski and restrain his
conduct has, to some extent, condoned it. I have taken this into account.
[46] The warning process is a vital component of BlueScope’s disciplinary policy.
A final warning should be the penultimate step in the policy process before dismissal.
A final warning should not be lightly imposed and should never be imposed to make
termination of employment more accessible or easier in the future. Warnings must be
used to advise an employee of their shortcomings - where BlueScope require
improvement from the employee in order to continue the employment relationship. In
this regard, warnings by their very nature need to be precise so that employees can
focus on the areas of their performance that need improving. This did not happen for
Mr Sirijovski. His final warning letter of 19 December 2012 covered issues such as
critical operating procedures, operational negligence, wilful misconduct, etc and not
the critical safety procedures for which he was being disciplined.
[47] As a result, when Mr Sirijovski was operationally negligent on the morning of
21 May 2013 his employment was unfairly in jeopardy. Such an outcome does not
pass the “fair go” test.
[48] For the reasons stated above, I find that the dismissal of Mr Sirijovski to be
harsh, unjust or unreasonable.”
[17] In considering the appropriate remedy, the Commissioner noted that reinstatement is
the primary remedy for an employee who has been unfairly dismissed. However the
Commissioner took the view that the employment relationship in this matter could not be
restored to an appropriate level to allow for reinstatement. In this regard, the Commissioner
referred to: the possibility that the applicant would be so bitter and disappointed at not being
given redundancy that re-employment could be hazardous;15 and the applicant was a difficult
employee who regularly questioned the authority of his team leader, complained and refused
to undertake reasonable tasks and displayed a reckless and dismissive attitude towards
safety.16
[18] The Commissioner was satisfied that compensation was the appropriate remedy. The
Commissioner found, after taking into account the various matters referred to in s.392 of the
Act, that the appropriate amount of compensation would be significantly higher than the
statutory cap of 26 weeks.17 Reference was also made to the unfairness of the situation
whereby as a result of the dismissal the Company would not have to pay the applicant the
previously available redundancy package.18 The Commissioner ordered that the applicant be
15 Ibid [49].
16 Ibid [50] - [52].
17 See s. 392(5) and (6) of the Act. Also see [2013] FWC 9080 at [56].
18 [2013] FWC 9080 at [57].
[2014] FWCFB 2593
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paid 26 weeks’ pay, including any shift loadings, penalties or overtime pay received in the 26
weeks prior to the dismissal.
The appeals
[19] Both the Company and the applicant lodged appeals against the decision of the
Commissioner.
[20] In its appeal, the Company sought to challenge the Commissioner’s findings that the
dismissal was unfair and the order made in relation to compensation. It was said that the
decision contains significant errors of law and fact which require correction in the interests of
justice. It was also said that the decision raises important questions of principle regarding the
relevance and scope of previous warnings given to an employee and the nature of the “fair
go” test under s.382(2) of the Act and its application to previous warnings.
[21] In particular, the Company alleged that the Commissioner had erred in finding that the
Company had two reasons for the dismissal, namely the applicant’s operational negligence
and his deliberate failure to deal with the scrap jam; and in not giving due weight in the
determination of whether the dismissal was unfair to the first and final warning given to the
applicant in December 2012. It was also alleged that the Commissioner erred in the criteria
taken into account in assessing compensation and that he inappropriately took into account the
claim that the applicant had been denied the receipt of a redundancy payment.
[22] The applicant in his appeal challenged the finding of the Commissioner that
reinstatement was inappropriate in all the circumstances. In this regard, it was alleged that the
Commissioner had denied the applicant procedural fairness in relation to the finding that he
would be “so bitter and disappointed at not being given redundancy that re-employment could
be hazardous”. It was also alleged that the Commissioner failed to take into account several
relevant considerations when determining the appropriate remedy.
Relevant appeal principles
[23] An appeal under s.604 of the Act involves an appeal by way of rehearing, with the
powers of the Full Bench being exercisable only if there is error on the part of the primary
decision-maker: see Coal and Allied Operations Pty Ltd v Australian Industrial Relations
Commission.19 The majority of the High Court in that case explained in the following passage
how error may be identified where a discretionary decision is involved:
“Because a decision-maker charged with the making of a discretionary decision has
some latitude as to the decision to be made, the correctness of the decision can only be
challenged by showing error in the decision-making process (See Norbis v Norbis
(1986) 161 CLR 513 at 518-519). And unless the relevant statute directs otherwise, it
is only if there is error in that process that a discretionary decision can be set aside by
an appellate tribunal.”20
[24] The errors that might be made in the decision-making process were identified, in
relation to judicial discretions, in House v The King21 in these terms:
19 (2000) 203 CLR 194.
20 Ibid 205.
21 (1936) 55 CLR 499.
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“If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters
to guide or affect him, if he mistakes the facts, if he does not take into account some
material consideration, then his determination should be reviewed and the appellate
court may exercise its own discretion in substitution for his if it has the materials for
doing so”;22and
“It is not enough that the judges composing the appellate court consider that, if they had
been in the position of the primary judge, they would have taken a different course. It
must appear that some error has been made in exercising the discretion...”23
[25] An appeal under s.604 of the Act may only be pursued with the permission of the
Commission. Section 604(2) requires the Commission to grant permission to appeal if it is
satisfied that it is in the public interest to do so. However, there is a note following the
subsection to the effect that this does not apply in relation to an application to appeal from an
unfair dismissal decision (see s.400).
[26] The effect of s.400 is twofold. Firstly, the Commission may only grant permission to
appeal from an unfair dismissal decision where it considers it is in the public interest to do so
(s.400(1)).24 Secondly, an appeal of an unfair dismissal decision, to the extent that it is an
appeal on a question of fact, may only be made on the ground that the decision involved a
significant error of fact (s.400(2)).
The appeal by the Company
[27] The main submissions of the Company in its appeal relate to the following five
matters:
(a) the finding by the Commissioner that there was an “additional” reason for the
dismissal of the applicant, namely that the failure to deal with the scrap jam was
deliberate;
(b) the finding that the Company did not have the right to take into account the first
and final warning given to the applicant in December 2012 in making the decision to
dismiss him;
(c) the finding that the investigation by the Company of the incident involving the
scrap jam did not provide “the fundamental elements of procedural fairness” to the
applicant;
(d) the reliance by the Commissioner on the “fair go all round” test and the missed
opportunity for retrenchment in assessing whether the dismissal was harsh, unjust or
unreasonable; and
22 Ibid 505.
23 Ibid 504-505.
24 The meaning to be given to “public interest” in s.400(1) of the Act was considered in GlaxoSmithKline Australia Pty Ltd v
Makin [2010] FWAFB 5343 at [26]-[27].
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(e) the criteria taken into account by the Commissioner in determining the amount of
compensation to be awarded.
[28] We now turn to consider these matters.
Reasons for dismissal
[29] The Company submitted that the Commissioner erred in finding that there were two
separate and discrete reasons for the applicant’s dismissal. It was said that the applicant’s
deliberate failure to deal with the scrap jam formed part of the reasoning of the Company in
concluding that he had been engaged in operational negligence and was not a separate reason
for the dismissal.
[30] We have considered the evidence and material before the Commissioner. The
termination letter refers to the applicant’s “continued poor performance” which resulted in
“operational negligence and failure to follow Company policies and procedures”. The
suggestion that there had been “deliberate” action by the applicant in ignoring the scrap jam
arose out of the cross-examination of Mr Otsyula. The Commissioner took the view that Mr
Otsyula’s conclusion that the failure to deal with the scrap jam was deliberate was an
additional reason for the applicant’s dismissal. However, on our reading of the transcript of
the cross-examination of Mr Otsyula, and having regard to the other material before the
Commission, it cannot be concluded that the Company had altered or expanded the reasons
for the applicant’s dismissal.
[31] It is clear from the testimony of Mr Otsyula that the grounds for termination were the
operational negligence of the applicant and the fact that he was on a first and final written
warning.25 The question of whether the scrap jam had deliberately been allowed to build up
arose because of the applicant’s testimony that he had regularly checked the monitors. During
the investigation Mr Otsyula put to the applicant that he had either not been observing the
monitors or that he had observed them but had not reacted to the scrap jam.26 The testimony
that Mr Otsyula gave during his cross-examination can be understood having regard to his
acceptance of the applicant’s claim that he had been observing the monitors and therefore the
only explanation for the build up of the scrap jam was that the applicant had made a conscious
decision not to react to what he saw.27
[32] It is clear from the testimony and the other material before the Commission that the
reason for the dismissal was the applicant’s “operational negligence” together with the final
warning. The operational negligence was the failure of the applicant to exercise due care and
diligence in performing his duties on the night shift. This was because the applicant had either
failed to observe the scrap jam on the monitors or had deliberately not reacted to the
observations on the monitor that a scrap jam had built up.
[33] It follows that the Commissioner erred in finding that there was an “additional” reason
for the dismissal, apart from the reason of “operational negligence”. This was a significant
error of fact which affected the Commissioner’s consideration of several of the factors
referred to in s.387 of the Act, in particular whether the applicant was notified of the reason
25 Transcript PN2526-2527.
26 Transcript PN2538-2539.
27 Transcript PN2539-2542.
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for dismissal (s.387(b)) and was given an opportunity to respond to any reason related to his
capacity or conduct (s.387(c)).
[34] In so deciding, we note the submission of the applicant in the appeal proceedings that
the Commissioner’s decision does not reflect a conclusion that there were two separate
reasons for the dismissal, but rather, a conclusion that the applicant was never notified of the
real reason for the dismissal and never given an opportunity to respond to the real reason for
the dismissal. However this is not how we read the relevant passages in the decision.28
First and final warning
[35] The Company submitted that the Commissioner erred in finding that it did not have
the right to take into account the first and final warning given to the applicant on 19
December 2012 in deciding to dismiss him. It was said that the Commissioner had an
obligation to take into account the final warning as a relevant factor weighing against a
finding that the dismissal was harsh, unjust or unreasonable and that the Commissioner erred
in not according the final warning such weight.
[36] Section 387(e) requires the Commission in considering whether it is satisfied that a
dismissal was harsh, unjust or unreasonable to take into account
“(e) if the dismissal related to unsatisfactory performance by the person – whether the
person had been warned about that unsatisfactory performance before the dismissal”.
[37] The purpose of a warning contemplated by s.387(e) of the Act is to demonstrate the
seriousness with which an employer regards an employee’s performance and/or conduct and
to provide an opportunity for the employee to address those concerns and thereby avoid or
reduce the risk of dismissal.29 A warning should identify the relevant aspects of the
employee’s performance which is of concern to the employer and should make it clear that the
employee’s employment is at risk unless the performance is improved.30 In James McCarron
v Commercial Facilities Management Pty Ltd T/A CFM Air Conditioning Pty Ltd31 the nature
and purpose of a warning about unsatisfactory performance is described as follows:
“[32] The purpose of a warning about unsatisfactory performance must be to identify
the performance that is of concern and must make it clear that a failure to heed the
warning places the Applicant’s employment at risk. Such a warning gives an employee
an opportunity to improve in those areas identified as requiring improvement. An
integral part of such a warning must be to clearly identify the areas of deficiency, the
assistance or training that might be provided, the standards required and a reasonable
timeframe within which the employee is required to meet such standards.”
[38] In considering s.387(e), the Commissioner found that the applicant had not been
“appropriately warned in relation to the issue of operational negligence or poor performance”
before he was dismissed.32 This was because the final nature of the December 2012 warning
28 [2013] FWC 9080 at [24] - [26].
29 See, e.g., Dissanayake v Busways Blacktown Pty Ltd [2011] FWA 3549 at [121].
30 See, Fastidia v Goodwin, above n9, at [43] and [44].
31 [2013] FWC 3034 PR536660.
32 [2013] FWC 9080 at [32].
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was considered to be inappropriate. It was said that any warning must be appropriately and
deliberately particularised and that the final warning given to the applicant should have only
applied to the issue of occupational health and safety and critical safety procedures.33
[39] The first and final warning given to the applicant on 19 December 2012 states that
“any future breach of critical operating procedures, operational negligence, wilful misconduct,
or behaviour of similar kind may lead to further disciplinary action, which may include
termination of your employment.” It is clear that the warning on its face relates to the kind of
unsatisfactory performance which led to the applicant’s dismissal, namely operational
negligence.
[40] In some respects it may be said that the final warning given to the applicant satisfied
the above-mentioned characteristics of a warning for the purposes of s.387(e). It identified the
specific area of deficiency, namely the breach by the applicant of the Company’s safety
critical operating procedure on 14 December 2012. It also states the specific kind of conduct
and behaviour in future that could lead to disciplinary action, including dismissal, and the
standard required to be met, namely no further breach of “critical operating procedures,
operational negligence, wilful misconduct, or behaviour of a similar kind”. The Company also
arranged for the applicant to complete further training.
[41] In other respects, however, it might be considered that the warning was deficient. It is
noted that the warning does not identify any area of the applicant’s work performance, as
opposed to misconduct, that was considered unsatisfactory. It does not identify any assistance
or training that might be provided to meet any such performance concern, or identify the work
performance standards required, or any reasonable timeframe within which the employee is
required to meet such standards. Indeed it might be concluded that the warning highlighted a
concern with misconduct about a safety incident and only concerned unsatisfactory
performance in that it includes reference to “operational negligence”. The warning was issued
because of the applicant’s “unacceptable behaviour in the form of gross misconduct by not
following a Company Safety Critical Procedure” and states that the Company requires that
“this unacceptable safety performance be addressed urgently”.
[42] In our view s. 387(e) does not refer only to warnings which relate to the specific kind
of performance failure or conduct which has given rise to a dismissal. It is sufficient that both
the warning and the dismissal relate to an employee’s “unsatisfactory performance”. In this
regard we note that there might be some overlap between the concept of unsatisfactory
performance and the concept of misconduct, for example in relation to neglect of duty or poor
timekeeping.34 The warning in the present matter refers to the applicant’s “gross misconduct”
but puts him on notice that any future breach of “critical operating procedures, operational
negligence, wilful misconduct, or behaviour of a similar kind” may lead to termination of
employment. It was a relevant factor to be taken into account in determining whether the
dismissal was unfair. However it was for the Commissioner to decide on the appropriate
weight to be given to the warning in reaching an overall decision regarding the fairness of the
dismissal.
33 Ibid [29] - [31].
34 See Annetta v Ansett Australia (2000) 98 IR 233 at 237.
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[43] In certain respects it might be said that the final warning was “stringent and onerous”,
which is how the Commissioner characterised it.35 However the warning should be viewed
having regard to the circumstances and employment context in which it was issued. This
context was explained by Mr Otsyula in the proceedings before the Commissioner.36 It
included the advice to the applicant that the Company was considering terminating his
employment, a request by the applicant to be given one last opportunity to prove that he could
improve his performance at work, and a written commitment that he would abide by the
Company’s procedures and policies in the future.37 After considering the facts and
circumstances of the investigation and taking into account the commitment of the applicant, it
was decided not to terminate his employment but to issue the first and final warning and
suspension. It was explained to the applicant that if there were any further lapses in
performance or wilful misconduct, his continued employment would be reviewed.38 Having
regard to the circumstances in which the final warning was issued and its terms, the Company
was entitled in making its decision about the dismissal to take into account the warning which
had been given to the applicant.
[44] In the present matter, the Commissioner was obliged to take the final warning into
account in considering whether the applicant’s dismissal was harsh, unjust or reasonable. The
Commissioner did take the warning into account although he clearly did not give it the same
weight that the Company considered appropriate. Even though we as an appeal bench might
take a different view as to the appropriate weight to be given to such a warning, it cannot be
viewed of itself as an error on the part of the Commissioner in reaching his conclusions about
the fairness of the dismissal to discount the relevance and weight of the warning having
regard to other considerations.39
Procedural fairness
[45] In considering whether there were any other relevant matters to be taken into account
in determining whether the dismissal was unfair (s.387(h)), the Commissioner identified
various deficiencies in the Company’s investigation of the May 2013 incident. The
Commissioner made a number of specific criticisms of the investigation process and found
that the investigation did not provide the fundamental elements of procedural fairness to the
applicant.40
[46] In the appeal proceedings, the Company submitted that none of the criticisms are valid
and that, even if they were valid, the matters could have not made any difference to the
outcome of the investigation or have resulted in a denial of procedural fairness to the
applicant.
[47] The particular criticisms made by the Commissioner of the investigation process were
as follows: that it was “incomplete and disjointed” as the trim shear operator who took over
35 [2013] FWC 9080 at [29].
36 Exhibit B3 (statement of David Otsyula dated 5 September 2013).
37 Ibid [18] - [19].
38 Ibid [20] - [21].
39 See Gronow v Gronow (1979) 144 CLR 513 at 519 per Stephen J, 534-535, 537 per Aickin J; Lovell v Lovell (1950) 81
CLR 513 at 533 per Kitto J as discussed in Lambley v DP World Sydney Limited [2013] FCA 4 at [22] - [26].
40 [2013] FWC 9080 at [35] - [38].
[2014] FWCFB 2593
13
from the applicant on the day shift was not interviewed;41 that parts of the investigation were
“outsourced” to other employees, namely the night shift supervisor and the shift team leader
and that these employees were not asked for their input in relation to the ultimate decision;42
that the person conducting the investigation, Mr Otsyula, had never been formally trained in
investigative techniques or practices;43 and that the applicant was only interviewed by Mr
Otsyula for a short time.44
[48] It is not clear from reading the decision of the Commissioner what weight was placed
on the particular aspects of the investigation process which were considered to be deficient.
There is no exposition as to how these matters might have influenced the outcome of the
investigation or have prejudiced the applicant. However on the basis of these matters the
Commissioner concluded that the investigation did not provide the fundamental elements of
procedural fairness that the applicant was entitled to receive.45 This was a significant finding
for which there was little evidence in support or reasoning provided.
[49] In the appeal proceedings we were taken to the evidence relating to the investigation
process, including the involvement of the shift supervisor and team leader. The investigation
included interviews with other operators to ascertain whether they had experienced similar
issues to those claimed by the applicant and the review of video footage of the scrap jam. The
investigation also included the collection of photographs and observations from the shift
supervisor and discussions between the team leader and the applicant about whether there was
any evidence of equipment faults. The photographs and observations were reviewed by Mr
Otysula who then interviewed the applicant regarding the incident. There were two interviews
with the applicant in which he was given an opportunity to present his account of the incident.
In the second interview, the applicant had a union official present to support him.
[50] There are practical limitations on the extent to which investigations can be conducted
into workplace incidents. The essential requirement is that a proper investigation is
conducted, and that the employee concerned is informed about the results of the investigations
and is given a fair opportunity to respond. The failure to interview all persons in a particular
workplace or performing similar functions does not necessarily warrant a conclusion that the
conduct of the investigation was deficient. Further, there is nothing inherently improper or
unfair in an investigator seeking the cooperation of others in conducting parts of the
investigation process, especially where this might involve relevant supervisory staff. Further
it is not per se a deficiency that an investigator has not been formally trained in investigative
techniques or practices or that the interviews conducted with the employee concerned are
relatively short.
[51] In our view the conclusion reached by the Commissioner regarding the investigation
process was not warranted or open on the evidence and material before him. We have
therefore decided that there was error in relation to the findings that the applicant was not
accorded procedural fairness in the investigation conducted by the Company.
41 Ibid [35].
42 Ibid [36].
43 Ibid [37].
44 Ibid.
45 Ibid [38].
[2014] FWCFB 2593
14
Determination that the dismissal was harsh, unjust or unreasonable
[52] In finding that the dismissal of the applicant was harsh, unjust or unreasonable, the
Commissioner noted that the Company had a valid reason to dismiss the applicant and
recognised that he had been a “difficult and belligerent employee”.46 However the
Commissioner took the view that there were other factors which made the dismissal unfair.
These were:
the applicant had not been disciplined in 35 years of employment for any issue relating
to operational performance and it did not accord with the “fair go all around” test for a
single incident of operational negligence to now be the cause of his dismissal;47
the conduct of the applicant in relation to the scrap jam did not of itself justify
dismissal and dismissal was not justified by the final warning which was
inappropriately and unfairly worded to cover more than the critical safety procedures
for which the applicant was disciplined in December 2012;48 and
the fact that the applicant missed out on the opportunity to apply for redundancy as
part of the restructuring announced by the Company in May 2013.49
[53] In the appeal proceedings, the Company submitted that the Commissioner had
undermined the finding that a valid reason existed for dismissal by applying an additional test
of a “fair go all around”. It was also submitted that the Commissioner erred in finding that the
fact that the applicant had missed out on the opportunity to receive a redundancy package was
a factor relevant in considering harshness. It was said that at the time of dismissal no decision
had been made by the Company on retrenchments and there was no evidence that the
applicant would have been selected for retrenchment and received a redundancy package.
[54] Whether there was a valid reason for dismissal is one of the matters which the
Commission is required to take into account in considering whether a dismissal was harsh,
unjust or unreasonable. Although this is only one of the matters that s.387 of the Act requires
be taken into account, it may be considered to be an important consideration in relation to the
fairness of a dismissal.50 However all the factors in section 387 must be given due weight by
the Commission in deciding whether a dismissal was harsh, unjust or unreasonable.51
[55] The Commissioner found that there was a valid reason for dismissal and took this into
account in reaching his conclusions. However the Commissioner considered that there were
other matters which led him to the conclusion that the dismissal was unfair. There is no
tension, as submitted by the Company, between a finding that there was a valid reason for
dismissal and a determination that in all the circumstances the dismissal was harsh, unjust or
unreasonable. Indeed s.387 by its terms requires that consideration be given to a range of
factors in making such a determination. It has not been shown that there was any error in this
regard in the Commissioner’s approach to the determination of the matter before him.
[56] It was also submitted by the Company that the Commissioner erred in taking into
account the fact that the applicant had missed out on the opportunity to receive a redundancy
46 Ibid [44] - [45].
47 Ibid [39].
48 Ibid [40]; [46] - [47].
49 Ibid [41] - [43].
50 See Parmalat Food Products Pty Ltd v Wililo (2011) 207 IR 243 at 249 [24].
51 See Lambley v DP World, above n39 at [33].
[2014] FWCFB 2593
15
package. It was said that the possibility of the applicant being selected for retrenchment and
receiving a redundancy package at some unidentified future point in time was not relevant in
assessing harshness. However given the evidence relating to the discussions on retrenchments
around the time of the dismissal and the subsequent redundancies which took place at the
Plate Mill, it cannot be concluded that the Commissioner was in error in taking into account
the fact that the applicant missed out on “the opportunity to apply for redundancy” in
considering whether the dismissal was harsh, unjust or unreasonable.
Conclusions regarding the Company’s appeal
[57] As set out above, we have identified a number of significant errors in relation to the
decision and findings made by the Commissioner. These errors occurred in the consideration
of several matters referred to in s.387 of the Act which must be taken into account in
determining whether the dismissal of an employee was harsh, unjust or unreasonable. In this
regard, we refer in particular to: the error in identifying the additional reason for dismissal and
in the consequent findings that the applicant had not been notified of the reason for dismissal
or given an opportunity to respond; and the error in concluding that the applicant was not
accorded procedural fairness in the investigation conducted by the Company.
[58] As a result of the errors, the Commissioner failed to take into account and balance all
the relevant factors referred to in s.387 in reaching his conclusion.
[59] Having regard to the errors in the decision-making process, we have decided to grant
permission for the Company’s appeal, to quash the decision and order52 made by the
Commissioner and to determine the matter on the basis of the evidence and material before
the Commission.
[60] In these circumstances, we do not need to determine the appeal by the applicant and
therefore dismiss that appeal. However we have taken into account the submissions made by
the parties in relation to that appeal in our determination of the unfair dismissal application.
Consideration of application by the Full Bench
Whether the dismissal was unfair
[61] In considering whether the dismissal of the applicant was harsh, unjust or
unreasonable we have had regard to the evidence and material presented in the proceedings
before the Commissioner and to the various factors referred to in s. 387 of the Act. We do not
repeat in this part of our decision all that we have previously recorded relating to the facts and
circumstances surrounding the dismissal.
[62] For reasons similar as those given by the Commissioner, we consider that there was a
valid reason for the dismissal of the applicant (s.387(a)). The reason related to the operational
negligence of the applicant in relation to the scrap jam which occurred on 21 May 2013. The
performance failure by the applicant on this occasion, whether considered alone or together
with the misconduct of the applicant in December 2012 in not following safety procedures,
provided a valid reason for the Company to terminate his employment. The poor performance
of the applicant on the night shift was of a serious nature and resulted in significant loss to the
52 PR546602.
[2014] FWCFB 2593
16
Company. The failure of the applicant to observe safety procedures had occurred less than six
months earlier and was considered by the Company to be gross misconduct warranting the
issue of a final warning.
[63] We also consider that the applicant was notified of the reason for dismissal (s.387(b))
and was given an opportunity to respond (s.387(c)). The investigation and interviews
conducted by Mr Otsyula were such as to ensure that the applicant was aware of the reason
that the Company was considering the termination of his employment and had an opportunity
to respond. We note that the applicant was accompanied by a union official at his second
interview (s.387(d)). The applicant did not provide any satisfactory explanation for his poor
performance on the night shift.
[64] The first and final warning given to the applicant is also a relevant factor to be taken
into account in this matter, either under s.387(e) or (h) or both. In so doing, several
considerations relating to the warning must be borne in mind. The warning was issued in
December 2012 and in circumstances where the Company was considering the dismissal of
the applicant because of the failure to follow critical safety procedures. The decision of the
Company not to dismiss the applicant on that occasion followed consideration of a range of
factors including his employment history and training record, the request to be given a further
opportunity to improve his performance and commitments given in relation to abiding by
such procedures in the future. The final warning refers to “any future breach of critical
operating procedures, operational negligence, wilful misconduct, or behaviour of a similar
kind” and therefore on its face covers the type of performance failure which occurred on 21
May 2013.
[65] Apart from those considerations regarding the final warning, it needs to be taken into
account that the warning was issued as a result of the “unacceptable safety performance” of
the applicant. The warning required the applicant to address such performance urgently and
indicated that refresher training would be arranged in relation to such matters. The warning
was not issued as a result of any unsatisfactory work performance on the part of the applicant
albeit that it is expressed to cover any future “operational negligence”. The warning therefore
may not be considered to have put the applicant on notice as to any specific concerns about
his general work performance or, in particular, any such performance failures as occurred on
the night shift on 20 May.
[66] In relation to the matters referred to in s.387 (f) and (g), we note that the Company is a
large employer and has a dedicated and experienced human resource department which was
involved in the disciplinary process.
[67] There are a range of “other matters” which we consider to be relevant in the
consideration of whether the dismissal of the applicant was harsh, unjust or unreasonable
(s.387(h)). In many respects these are similar to the matters which are identified in the
decision of the Commissioner and which led him to conclude that the dismissal was unfair.
We have referred to these matters earlier in our decision. Essentially they are:
the very long period of service of the applicant with the Company;
his satisfactory employment record, apart from the incidents which took place
in December 2012 and May 2013; and
[2014] FWCFB 2593
17
the possibility that the applicant, if not for the dismissal, may have been
selected for retrenchment and received a redundancy package from the
Company.
[68] In all the circumstances, we recognise that the Company had good and adequate
reasons to terminate the employment of the applicant. The incident on 21 May 2013 amounted
to a serious performance failure on the part of the applicant which resulted in significant loss
to the Company. The incident was the subject of a full investigation by the Company and no
satisfactory explanation was provided for the applicant’s poor performance. The incident
occurred within six months of the applicant being given a first and final warning by the
Company in relation to a serious safety breach.
[69] However we also recognise that, having regard in particular to the applicant’s long and
satisfactory period of service and the impact of the dismissal upon him, the dismissal might be
considered to be harsh. The applicant had been employed by the Company or its predecessors
for 35 years with no prior warnings in relation to his operational competency. He was 53
years old and had spent his entire working life at the Steelworks. The impact of the
termination on the applicant and his family has been severe and there may be few prospects
for him to find alternative employment in the Wollongong area. It is also relevant that as a
result of the dismissal the applicant missed the opportunity to be selected for retrenchment
and receive a redundancy package from the Company. In this regard we note and adopt the
Commissioner’s finding that the dismissal was not motivated by any purpose on the part of
the Company to avoid redundancy obligations or payments. We also note that there is no
certainty that the applicant would have been retrenched and provided with a redundancy
package by the Company.
[70] On balance, and having regard to all the relevant factors referred to in s.387, we have
come to the conclusion that the termination of the applicant’s employment was harsh, unjust
or unreasonable.
[71] We now turn to consider the appropriate remedy in this matter. The applicant has
sought reinstatement. This is opposed by the Company.
The appropriate remedy
[72] The remedies for unfair dismissal are referred to in s.390 of the Act. Section 390(3)
provides that the Commission may order compensation only if it is satisfied that reinstatement
is inappropriate and that compensation is appropriate in all the circumstances of the case. The
subsection is in the following terms:
“(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.”
[73] In considering an appropriate remedy in a case of unfair dismissal, regard must also be
had to the legislative object set out in s.381 of the Act. This includes an emphasis on the
remedy of reinstatement (s.381(1)(c)) and on ensuring that a “fair go all round” is accorded to
both the employer and employee concerned (s.381(2)).
[2014] FWCFB 2593
18
[74] We have had regard to the evidence and submissions before the Commissioner and to
the submissions presented in the two appeals in reaching our conclusions as to the appropriate
remedy in this matter. We have also taken into consideration the decision of the
Commissioner in relation to remedy. We do not repeat here all which we have previously
referred to regarding the circumstances of the termination of the applicant’s employment or
the reasoning process which led the Commissioner to make an award of compensation.
[75] In all the circumstances of the present matter, we have decided that reinstatement is
not the appropriate remedy. This is because of the conduct and performance of the applicant.
The applicant was issued with a first and final warning in December 2012 as a result of a
serious incident where he failed to follow safety critical procedures. The Company considered
the failure to constitute gross misconduct. In May 2013 as a result of the operational
negligence of the applicant, a significant loss was incurred by the Company because of a
scrap jam which occurred on his shift and was not attended to promptly. This poor
performance led the Company to conclude that the continued employment of the applicant
constituted an unacceptable risk to its business and was no longer tenable. The conduct and
performance of the applicant in relation to these two incidents provided the basis for our
finding that the Company had a valid reason to dismiss him. It is also the basis for our
conclusion that reinstatement is not appropriate in this case.
[76] In reaching this conclusion we have also had regard to a number of matters arising
from the evidence before the Commissioner and which are referred to in his decision. These
include the finding that the applicant was a “difficult employee”53 and concerns about his
attitude towards safety.54 We have also given consideration to that part of the Commissioner’s
reasoning regarding the applicant’s possible response to not being given redundancy such that
his re-employment “could be hazardous”.55 That part of the decision was the subject of
detailed submissions by the parties in the appeal proceedings. We are not persuaded that there
was a sufficient evidential base for the conclusion reached by the Commissioner in that part of
his decision and have therefore not taken it into account in reaching our conclusion.
[77] We note that the issue of redundancy was a factor in the circumstances surrounding
the termination of the applicant’s employment. It was common knowledge in the workforce
that there was to be a restructuring of the Company’s operations and that retrenchments were
possible. At one stage in the investigation process the applicant had suggested that he should
be terminated with a redundancy package56 and there was later evidence that the applicant had
concerns that his employment had been terminated in order to avoid making redundancy
payments to him.57 The Commissioner found that the Company had not acted with any
improper purpose of avoiding redundancy entitlements in terminating the applicant’s
employment. In so finding, the Commissioner had the advantage of hearing the testimony of
the Company witnesses and assessing all the evidence before him. On our assessment of the
evidence we have come to a similar conclusion to that of the Commissioner. We recognise
that there was a possibility, and perhaps a likelihood, of the applicant being chosen for
retrenchment as part of the restructuring. We also note that in some cases unfairly dismissed
53 [2013] FWC 9080 at [45].
54 Ibid [51] - [52].
55 Ibid [49].
56 Transcript PN2163. See also Exhibit B3, above n35, [31].
57 See statement of Peco Sirijovski at [103] (Appeal Book 355 to 356).
[2014] FWCFB 2593
19
workers have been reinstated by industrial tribunals to allow them to receive redundancy
payments.58 However we do not consider that this is the appropriate approach in the present
matter.
[78] Given the past conduct and performance of the applicant, we accept the submission of
the Company that it cannot trust the applicant to follow critical safety and operational
procedures and to work to its standards. It is not appropriate to reinstate an employee in
circumstances where the employer has justifiably come to such a conclusion. This is despite
the evidence given by the applicant regarding the impact of the loss of his job on him and his
family and his willingness to give commitments regarding his future work and safety
performance.
[79] In all the circumstances of this matter, we are satisfied that reinstatement of the
applicant is inappropriate.
[80] We now turn to the question of compensation.
[81] Section 392(2) provides that the Commission must take into account all the
circumstances of the case, including the factors set out in the subsection, in determining the
amount of compensation to be ordered in lieu of reinstatement. The subsection provides:
“Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under
subsection (1), the FWC must take into account all the circumstances of the
case including:
(a) the effect of the order on the viability of the employer’s
enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would
have been likely to receive, if the person had not been
dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by
the person because of the dismissal; and
(e) 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 compensation; and
(f) the amount of any income reasonably likely to be so earned by
the person during the period between the making of the order
for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.”
[82] In determining the amount of compensation in the present matter, we have considered
the evidence and submissions presented by the parties in the proceedings before the
Commissioner together with the submissions presented in the appeals.
58 See e.g. cases involving companies in liquidation where the dismissed employees were seeking access to the
Commonwealth General Employee Entitlements & Redundancy Scheme: Graves v South Burnett Beef Trading Pty Ltd
(In Receivership) [2007] AIRC 688; John Sadfar v Domino River Pty Ltd (2002) PR911247; Sepe v Ezygas Conversions
Aust Pty Ltd T/A Ezgas [2010] FWA 8891.
[2014] FWCFB 2593
20
[83] We note that the applicant was employed for 35 years with the Company (or its
predecessors) (s.392(2)(b)) and that, as the Company is a large enterprise, its viability is
unlikely to be affected by any award of compensation in this matter (s.392(2)(a)). We have
also considered the remuneration of the applicant would have received if he had not been
dismissed (s.392(2)(c)). We accept the evidence that the applicant wanted to continue in the
service of the Company as he had spent his entire working life in that service and considered
that he had limited opportunities of finding other employment. However we also recognise
that there were issues in relation to his work performance and conduct and that a final
warning had been given to him. We therefore do not accept that the employment of the
applicant would have been likely to continue well into the future. There was also the
possibility that the applicant might have been retrenched by the Company (and have received
redundancy payments).
[84] In relation to mitigation, the evidence suggests that the applicant has made little effort
to mitigate the loss suffered as a result of his dismissal (s.392(2)(d)). It is clear from the
evidence that the applicant considered that there were limited opportunities for him to obtain
other work and that he made few efforts to do so apart from enquiring from family and friends
as to available casual employment in the local community. It does not seem that the applicant
has earned any money since he was dismissed59 (s.392(2)(e)) or that it is likely that he will
earn any income in the period between the making of a compensation order and the actual
compensation (s.392(2)(f)).
[85] There are several other matters which we consider to be relevant in determining the
amount of compensation in this case (s.392(2)(g)). These include the possibility that the
applicant as a long serving employee might have been entitled to significant redundancy
entitlements if he was retrenched rather than dismissed by the Company. However, as noted
above, it has not been shown that the Company’s decision to dismiss the applicant was made
in order to avoid any redundancy payments. We also note that the applicant received payment
in lieu of notice of termination.
[86] Section 392(3) requires the Commission to reduce the amount of compensation by an
appropriate amount if it is satisfied that the misconduct of a person contributed to the
employer’s decision to dismiss the person. In the present matter we consider that the
misconduct of the applicant, either in relation to the scrap jam or in the earlier failure to
observe critical safety procedures, should be a factor in reducing the amount of compensation
otherwise to be awarded.
[87] We have considered all the above matters in reaching a conclusion as to the amount of
compensation to be ordered in the present case in lieu of reinstatement. In particular we have
noted the long service of the applicant and the poor prospects of future employment. We have
also taken into account the various incidents and performance issues which raised questions
regarding the prospects of his continued employment with the Company. We consider that the
misconduct of the applicant and the failure to make reasonable efforts to mitigate his loss
following the dismissal are also factors to be taken into account in reducing the amount of
compensation.
[88] Having regard to all the circumstances of the case, and taking into account the matters
referred to in s.392 of the Act, we have determined that the amount of compensation should
59 [2013] FWC 9080 at [55].
[2014] FWCFB 2593
21
be sixteen weeks’ pay. We note that this does not exceed the compensation cap in s.392(5).
The sixteen weeks’ pay should be calculated in accordance with s. 392(6).
Conclusions and order
[89] For all the reasons given, we have decided that the dismissal of the applicant by the
Company was harsh, unjust or unreasonable and that the appropriate remedy is that an order
should be made for the payment of compensation to the applicant in the amount of sixteen
weeks’ pay. An order to this effect will be made.
SENIOR DEPUTY PRESIDENT
Appearances:
A Howell of counsel for Peco Sirijovski.
M Seck of counsel for BlueScope Steel Limited.
Hearing details:
2014.
Sydney:
March 20.
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