1
Fair Work Act 2009
s.604 - Appeal of decisions
BHP Coal Pty Ltd T/A BMA
v
Jason Schmidt
(C2015/5209)
Jason Schmidt
v
BHP Coal Pty Ltd T/A BMA
(C2015/5237)
VICE PRESIDENT WATSON
DEPUTY PRESIDENT HAMILTON
COMMISSIONER JOHNS
MELBOURNE, 5 JANUARY 2016
Appeal against the decisions [2015] FWC 2724 and [2015] FWC 5699 and order PR570978
of Commissioner Booth at Brisbane on 7 May 2015, 18 August 2015 and 19 August 2015 in
matter number U2014/10098 – Permission to appeal – Whether termination harsh and unjust
– Consideration of criteria for considering harshness etc – Nature of factor regarding
opportunity to respond – Need for application in common sense manner – Whether
appealable error – Significant mistake of fact –– Fair Work Act 2009, ss. 387, 394, 400 and
604.
Introduction
[1] This decision concerns an application for permission to appeal and an appeal against
decisions and an order of Commissioner Booth handed down on 7 May, 18 August and 19
August 2015.The decisions of the Commissioner concerned an unfair dismissal application
made by Jason Schmidt on 17 June 2014 under s.394 of the Fair Work Act 2009 (the Act) in
relation to the termination of his employment by BHP Coal Pty Ltd T/A BMA (BHP Coal).
The Commissioner found that while there was a valid reason to dismiss Mr Schmidt, the
termination was harsh and unjust. The Commissioner went on to find that reinstatement was
not an appropriate remedy in the circumstances and made an order for compensation
amounting to $42,846.90.
[2] The appeal lodged by BHP Coal relates to both the finding that termination of Mr
Schmidt’s employment was harsh and unjust, and the quantum of compensation ordered. The
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DECISION
E AUSTRALIA FairWork Commission
[2016] FWCFB 72
2
appeal lodged by Mr Schmidt concerns the appropriateness of the remedy ordered by the
Commissioner.
[3] At the hearing of the permission to appeal application on 27 October 2015 and the
appeal on 14 December 2015, Mr B. Rauf of counsel, with Ms E. Mayr, appeared on behalf of
BHP Coal and Mr R. Reitano of counsel, with Mr J. Kennedy, appeared on behalf of Mr
Schmidt.
[4] Permission to appeal for both appeals was granted on transcript at the conclusion of
the hearing before the Full Bench held on 27 October 2015. Directions were subsequently
issued for the filing of written submissions in relation to the appeals and the matters were
listed for hearing on 14 December 2015.
Background
[5] Mr Schmidt was employed by BHP Coal at its Saraji mine in May 2001. His
employment was terminated in June 2014 following an incident at the mine which occurred
on 8 May 2014. At the time of the termination of his employment, Mr Schmidt was working
as an operator in the Pumps and Earthworks Department.
[6] Prior to the 8 May 2014 incident Mr Schmidt was on a Step 3 Final Warning which
had included advice that dismissal may result from any further act of misconduct. Mr Schmidt
was subject to two prior warnings in December 2013. The first, a Step 2 warning, occurred on
17 December 2013 and related to a failure to advise the company that he would not be
returning to work that day after he had approved leave to go home and change his clothing.
The second, a Step 3 warning, occurred on 19 December 2013 and arose from a late arrival to
work and a failure to notify the company of his late arrival. Mr Schmidt disputed the incidents
at the time but did not take any formal action in relation to the warnings.
[7] On 8 May 2014, Mr Schmidt was assigned the task of using the Track Dozer 72 to
move a skid fuel tank. Approximately half an hour after he completed this task, two other
operators working in Mr Schmidt’s crew observed leaking fuel. The operators spoke to Mr
Schmidt and enquired whether he had noticed the diesel leaking from the tank and whether he
had bumped the tank when moving it. Mr Schmidt and the operators went to examine the
damage and Mr Schmidt then concluded that the damage could have occurred when he was
towing the tank.
[8] Mr Schmidt gave evidence that he made a number of attempts to use the two-way
radio and his mobile phone to contact his supervisor about the damage. He was unable to
reach his supervisor and so sent a text message to a number stored in his mobile phone as
“Car 21” which is the call-sign onsite for the supervisor for the Pumps and Earthworks
Department. The text message stated:
“Forgot to tell got pyso [sic] appointment at 11:20 I’ll keep working if you want there a
small fuel leak around gauge on pod puppy’s [sic] will tell you about it.”
[9] The number stored by Mr Schmidt as “Car 21” was an old mobile phone number
which had not been used by his supervisor since March 2014. Mr Schmidt said that he made
further attempts to get in touch with his supervisor and the mine superintendent throughout
the day. However, when contact was finally made Mr Schmidt did not raise the fuel tank
[2016] FWCFB 72
3
incident despite discussing other work matters. As a result, Mr Schmidt’s supervisor did not
become aware of the leak until later in the day when the other operators advised him of the
situation.
[10] An investigation was commenced into the fuel tank incident. BHP Coal concluded that
Mr Schmidt’s actions on 8 May 2014 constituted misconduct, and that he acted in an unsafe
manner and failed to notify his supervisor of the damage within a reasonable time frame. It
also found specific breaches of BHP Coal’s standards and values. Mr Schmidt provided a
written response to these findings in which he accepted that it is likely that he caused damage
to the tank. He noted that the content of the text message was to confirm with his supervisor
that he would be informed of the issue later in the day by the pump crew, and not to avoid
accountability. Mr Schmidt further explained the reasons why he had concluded it was
unnecessary to secure the site and that he was willing to undertake any further necessary
training. Mr Schmidt’s employment with BHP Coal was subsequently terminated on 6 June
2014.
The decision under appeal
[11] The Commissioner’s conclusion regarding termination of employment is expressed in
the following passage from her decision:
“Conclusion as to factors
[161] While I have found there was a valid reason to dismiss Mr Schmidt, the other
factors indicate the dismissal to be harsh, unjust or unreasonable in all the
circumstances. Mr Schmidt was denied reasonable requests for a support person; the
notice on the fuel tank incident relied on material not put to him in the earlier warnings
and apparently designed to enhance BHP Coal's case that he failed to notify; and I am
not satisfied that he was given a real opportunity to respond; BHP Coal seemingly
having determined to proceed against him earlier; and dismissal was, in my view,
harsh.
[162] On balance, having regard to all the relevant factors referred to in s.387, I have
come to the conclusion that the termination of Mr Schmidt’s employment was harsh
and unjust.”
[12] Having found the reinstatement was not an appropriate remedy in the circumstances;
directions were issued for the parties to make submissions regarding the quantum of
compensation. After having considered the factors set out in s.392(2) of the Act for deciding
the amount of compensation, the Commissioner ordered that BHP Coal pay Mr Schmidt
compensation totalling 20 weeks remuneration inclusive of bonus, less earnings and less 25%
owing to Mr Schmidt’s misconduct. This amount totalled $42,846.90.
Grounds of appeal
[13] BHP Coal’s grounds of appeal allege that the Commissioner erred in making findings
of fact which did not reflect the evidence that was before her, or otherwise incorrectly
understood the evidence which was before her. In particular BHP Coal contends that the
Commissioner erred in finding that:
[2016] FWCFB 72
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BHP Coal’s reliance on the warning letter of December 2013 was mistaken or was
an attempt to re-craft the reason for disciplinary action as relating to a failure to
notify, and that this is inconsistent with the findings that the company had a proper
basis to issue the warning letter;
There was no evidence of specific remedial action taken by BHP Coal as to Mr
Schmidt’s attendance at work and failure to notify, or that Mr Schmidt had not been
warned of such conduct as it related to a failure on his part to notify;
BHP Coal had predetermined the decision to terminate Mr Schmidt’s employment
and that there was no evidence that it considered his show cause response;
Mr Schmidt was denied a support person at the meeting with BHP Coal in May
2014; and
Mr Schmidt was not the subject of formal warnings or discipline until December
2013.
[14] BHP Coal submits that the Commissioner fell into appealable error by relying on these
findings of fact to determine that the termination of Mr Schmidt’s employment was harsh and
unjust. It further contends that the Commissioner failed to provide clear reasons as to which
factors were relied on for the determination that termination was harsh as distinct from the
finding that it was also unjust.
[15] With respect to compensation, BHP Coal submits that the order was unjust and
unreasonable and that the Commissioner erred by failing to disclose reasons relating to the
order for compensation and the amount of compensation ordered. It also submits that the
Commissioner erred by failing to take into account other relevant factors, by finding that Mr
Schmidt would have likely remained in employment for another four months, and by failing
to consider whether or not it was appropriate to deduct from any order for compensation an
amount for contingencies.
[16] In his appeal, Mr Schmidt submits the Commissioner erred in finding that
reinstatement was inappropriate as she confined herself to a consideration only of whether or
not there had been a loss of trust and confidence between the parties and failed to consider a
number of other relevant factors. He also submits that the Commissioner failed to give
reasons as to why she considered that it was not appropriate or why there was a loss of trust
and confidence between the parties. In relation to the quantum of compensation, Mr Schmidt
submits that the Commissioner was mistaken in finding that he would have only remained in
employment for another four months, that his contributing conduct constituted serious
misconduct, and that she failed to give reasons for why she considered a discount of 25 per
cent should be made for his contributing conduct in circumstances where there was no basis
for such a discount.
Permission to appeal
[17] Permission to appeal was granted on transcript at the hearing of that application on 27
October 2015.
[18] An appeal in relation to an unfair dismissal matter is governed by the provisions of
sections 604 and 400 of the Act. Section 604 of the Act deals with appeals generally. These
requirements are modified with respect to unfair dismissal appeals by section 400 of the Act
which provides that the Commission must not grant permission to appeal from a decision
[2016] FWCFB 72
5
made by the Commission arising from the unfair dismissal provisions unless it considers that
it is in the public interest to do so.
[19] In Coal & Allied Mining Services Pty Ltd v Lawler and others, Buchanan J (with
whom Marshall and Cowdroy JJ agreed) characterised the test under s.400 as ‘a stringent
one’.1 The Commission must not grant permission to appeal unless it considers that it is ‘in
the public interest to do so’
[20] The test for determining the public interest has been described as follows:2
“[26] Appeals have lain on the ground that it is in the public interest that leave should
be granted in the predecessors to the Act for decades. It has not been considered useful
or appropriate to define the concept in other than the most general terms and we do not
intend to do so. The expression ‘in the public interest’, when used in a statute,
classically imports a discretionary value judgment to be made to be made by reference
to undefined factual matters, confined only by the objects of the legislation in question.
[Comalco v O’Connor (1995) 131 AR 657 at p.681 per Wilcox CJ & Keely J, citing
O’Sullivan v Farrer (1989) 168 CLR 210]
[27] Although the public interest might be attracted where a matter raises issues of
importance and general application, or where there is a diversity of decisions at first
instance so that guidance from an appellate court is required, or where the decision at
first instance manifests an injustice, or the result is counter intuitive, or that the legal
principles applied appear disharmonious when compared with other recent decisions
dealing with similar matters, it seems to us that none of those elements is present in
this case.”
[21] It is also important to note that the decision under appeal is of a discretionary nature.
Usually, such a decision can only be successfully challenged on appeal if it is shown that the
discretion was not exercised correctly.3 It is not open to an appeal bench to substitute its view
on the matters that fell for determination before the Commissioner in the absence of error of
an appealable nature in the decision at first instance. As the High Court said in House v The
King:4
“The manner in which an appeal against an exercise of discretion should be determined
is governed by established principles. 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. 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. It may not appear how the primary judge has
reached the result embodied in his order, but, if upon the facts it is unreasonable or
plainly unjust, the appellate court may infer that in some way there has been a failure
properly to exercise the discretion which the law reposes in the court of first instance.
In such a case, although the nature of the error may not be discoverable, the exercise of
the discretion is reviewed on the ground that a substantial wrong has in fact occurred.”
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[22] Because of the importance of the subject matter of the appeals and the strength of the
grounds advanced we considered that it is in the public interest to grant permission to appeal.
The finding that the dismissal was harsh and unjust
[23] We have extracted the Commissioner’s conclusions for finding that the termination of
Mr Schmidt was harsh and unjust above. We have also summarised the grounds of appeal in
relation to this aspect of the decisions. As can be expected in a contested case of this nature,
much of the attention in the evidence and submissions of the parties related to the reason for
the dismissal. Mr Schmidt submitted that there was no valid reason for the dismissal. The
Commissioner found otherwise and there was no appeal against that finding.
[24] The Commissioner found other factors led to the conclusion that the termination was
harsh and unjust. The Commissioner’s findings in relation to the other factors were
challenged in the appeal.
[25] One of the findings concerned an opportunity to respond to the allegations of
misconduct. This is a reference to the criterion in s.387(c) of the Act that the Commission
must take into account “whether the person was given an opportunity to respond to any reason
related to the capacity or conduct of the person.”
[26] It is well established that the obligation to take into account factors, as far as they are
relevant, requires findings of fact and the decision maker to have regard to those facts as
matters of significance in the overall decision-making process.5 Importantly, as the wording
of the legislation makes clear, the ultimate question is whether the dismissal was harsh, unjust
or unreasonable. As was said by McHugh and Gummow JJ in Byrne and Frew v Australian
Airlines Limited:6
“128. Clause 11 (b) is aimed at the situation where the termination of employment
brought about by the dismissal, rather than the steps leading up to the dismissal, or
lack of them, is harsh, unjust or unreasonable.
…
130. That is not to say that the steps taken, or not taken, before termination may not
in a given case be relevant to consideration of whether the state of affairs that was
produced was harsh. unjust or unreasonable. Thus, it has been said that a decision
which is the product of unfair procedures may be arbitrary, irrational or unreasonable.
But the question under cl 11 (a) is whether, in all the circumstances, the termination of
employment disobeyed the injunction that it not be harsh, unjust or unreasonable. That
is not answered by imposing a disjunction between procedure and substance. It is
important that matters not be decided simply by looking to the first issue before there
is seen to be any need to enter upon the second.”
[27] The criteria in s.387 need to be considered in this context and applied in a consistent
and common-sense manner. In Crozier v Palazzo Corporation Pty Limited t/as Noble Park
Storage and Transport a Full Bench said of the equivalent provisions to the current s.387 (b)
and (c):7
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“[70] Section 170CG(3)(b) and (c) are clearly related to the concept of ‘‘procedural
fairness’’. The relevant principle is that a person should not exercise legal power over
another, to that person’s disadvantage and for a reason personal to him or her, without
first affording the affected person an opportunity to present a case.”
[28] The general approach has been considered in various Full Bench cases. In Royal
Melbourne Institute of Technology v Asher a Full Bench said:8
“[26] The Full Bench in Osman described this obligation as requiring the employer
to take reasonable steps to investigate the allegations and give the employee a fair
chance of answering them. It adopted comments of Chief Justice Wilcox in Gibson v
Bosmac Pty Ltd,9 approved by Justice Northrop in Selvachandran, where Chief Justice
Wilcox said:10
‘Ordinarily, before being dismissed for reasons related to conduct or
performance, an employee must be made aware of the particular matters that
are putting his or her job at risk and given an adequate opportunity of defence.
However, I also pointed out that the section does not require any particularly
formality. It is intended to be applied in a practical commonsense way so as to
ensure that the affected employee is treated fairly. Where the employee is
aware of the precise nature of the employer’s concern about his or her conduct
or performance and has a full opportunity to respond to this concern, this is
enough to satisfy the requirements of the section.’”
[29] Against this background, the opportunity must be genuine, as pointed out by Justice
Moore in Wadey v YMCA Canberra - a case referred to by the Commissioner. Moore J said:11
“[T]he opportunity to defend, implies an opportunity that might result in the employer
deciding not to terminate the employment if the defence is of substance. An employer
may simply go through the motions of giving the employee an opportunity to deal with
allegations concerning conduct when, in substance, a firm decision to terminate had
already been made which would be adhered to irrespective of anything the employee
might say in his or her defence. That, in my opinion, does not constitute an opportunity
to defend.”
[30] A consideration of the genuineness of the opportunity is not to be considered in a
vacuum. The guiding principles include the other important considerations arising from the
other authorities we have mentioned.
[31] The evidence led by BHP Coal before the Commissioner included evidence from Mr
Glen Fox, the superintendent with overall responsibility for the investigation into Mr
Schmidt’s conduct. Mr Fox gave evidence about the investigation into the incidents
conducted by Steven Marshall, Mr Schmidt’s supervisor, including meetings held with Mr
Schmidt during which Mr Schmidt advanced his version of events and justifications for his
conduct. Mr Fox then said:
“87. After Mr Marshall had concluded the investigation process, I discussed the
findings with him. We discussed the following matters:
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(a) It was clear that the damage to the fuel tank had been brought to Mr
Schmidt's attention at some time before 9.00am on 8 May 2014. The
information collected in the investigation indicated that Mr Schmidt had a
number of opportunities after this notify his supervisor of the damage,
including when:
(i) He spoke to Mr Marshall on the two-way radio at the Mine at
approximately 9.40am;
(ii) He spoke to both myself and Mr Marshall at approximately
10.50am;
(iii) He was picked up by Mr Marshall in a light vehicle at 2.00pm
and taken to the crib hut; and
(iv) He was at the crib hut for approximately 30 minutes with Mr
Marshall from 2.00pm – 2.30pm.
(b) It is a responsibility of all operators at the Mine to report incidents to their
supervisors. Supervisors have a duty to ensure the safety of all operators in
their crews at the Mine and cannot discharge this duty effectively if they
are not informed of incidents as soon as practicable after they occur. The
incident which occurred on 8 May 2014 was a serious incident in that it
involved leaking fuel which had the potential to create a serious hazard for
Mr Schmidt and other operators at the Mine. In addition, it was not
appropriate for Mr Schmidt to make the decision that it was not necessary
to preserve the scene of the incident. Any decision regarding how the scene
of the incident was to be treated was that of his supervisor. Supervisors are
trained to assess safety situations and must follow certain procedures at the
Mine. For example, supervisors are required to report certain incidents
involving contact between pieces of equipment to the Mines Inspectorate.
They are also required to conduct drug and alcohol tests of anyone
involved in an incident. By failing to report the incident, Mr Schmidt was
preventing Mr Marshall for discharging his duties in respect of the Mine's
safety and health management system.
(c) I was of the view that Mr Schmidt had not made a genuine effort to contact
Mr Marshall after the incident. This was also compounded by Mr Schmidt's
previous behaviour over the last 12 months where he had received a
number of verbal warnings and a Step 3 for failing to communicate
effectively with his supervisors. I was very concerned about the pattern of
behaviour and was not confident in his ability to operate in a safe and
effective manner at the Mine.
(d) I was also concerned that Mr Schmidt was not aware of the damage to the
fuel tank. This is because Mr Schmidt would had have to have unchained
the tank after he had delivered the tank to its final position. It seemed to my
mind that an operator who was aware of their surroundings and taking due
care would have:
[2016] FWCFB 72
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(v) been aware when reversing the dozer that the dozer would have
been in close proximity to the tank; and
(vi) would have checked the tank, as a matter of course, following
the completion of such a task.
(e) In addition, as a dozer operator I was aware that Mr Schmidt was trained in
and had relevant tickets to operate a dozer and was familiar with the
Conduct Wheeled Dozer Operations Manual (Dozer Manual). When
leaving a dozer the Dozer Manual requires operators to conduct a walk
around inspection of the vehicle, report incidents and secure and preserve
incident scenes. I formed the view that Mr Schmidt had not complied with
the requirements of the Dozer Manual and had not conducted the task of
towing the tank and unchaining it with care and attention.
88. In light of these factors, I formed the view that I had no alterative other than to ask
Mr Schmidt to show cause as to why his employment should not be terminated. I can
recall that Mr Marshall informed me to the effect that he agreed with this view.
89. After my discussion with Mr Marshall, I spoke to Mr West regarding the
investigation. I brought Mr West up to date regarding the progress of the investigation
and the meetings that had occurred with Mr Schmidt. I also informed Mr West of Mr
Marshall's characterisation of Mr Schmidt's behaviour in the JCDT documents. I
advised Mr West that Mr Marshall and I had formed the view that we should proceed
to ask Mr Schmidt to show cause as to why his employment should not be terminated.
90. I recall that Mr West indicated to me that he was happy to proceed with the show
cause process, given the serious nature of Mr Schmidt's breaches of policy and
procedure at the Mine and his involvement in a number of previous incident involving
a failure to report incidents and ineffective communication with his supervisors.”
[32] As to the show cause process Mr Fox said:
“SHOW CAUSE PROCESS
91. Before I commenced the show cause process I contacted Alishya Vincent, Human
Resources – Business Partner at the Mine, and informed her of my intention to initiate
the show cause process. I can recall that Ms Vincient conducted a high level summary
of Mr Schmidt's employment history, including the five counts of disciplinary action
that had been taken against Mr Schmidt during his time at the Mine, and confirmed
that Mr Schmidt was currently on a Step 3 as a result of the two incidents which had
occurred on 17 and 19 December 2013.
Attached to my statement and marked "GF-13" is a true and correct copy of a
summary of Mr Schmidt's formal disciplinary history from the Mine's disciplinary
register.
92. On 23 May 2014, I attended a meeting with Mr Schmidt, Mr Justin Boylon and Mr
Anthony Bishop, a Superintendent in the Drill and Blast Department at the Mine
(Third Meeting). Mr Boylon attended the meeting as Mr Schmidt's representative and
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Mr Bishop attended to assist me as Mr Marshall was on shift at the Mine. The meeting
was conducted at the Mine's Dysart office as Mr Schmidt was stood down from work.
93. At the meeting, I informed Mr Schmidt that based on the findings of the
investigation, that he had damaged equipment, failed to report it and failed to secure
the scene of the incident, his conduct was in breach of:
(a) The BMA Event Management Standard (BMA-HSE-STD-307), Section 3.2
Prevent Escalation by failing to notify your supervisor immediately after the
incident occurred;
(b) The BMA Event Management Standard (BMA-HSE-STD-307), Section 3.3
Secure and Preserve the scene (for events requiring investigation) by failing to
remain and preserve the scene of the investigation;
(c) The BMA Charter Values. In particular, not displaying accountability and
integrity with regards to reporting the incident and the timely reporting of the
incident; and
(d) The Conduct Wheeled Dozer Operations Manual (RIIMP0309A), General
responsibilities of the Wheeled Dozer Operator by failing to provide enough
care and attention whilst reversing thereby not operating the Wheeled Dozer
safely and efficiently.
Attached to my statement and marked "GF-14" is a true and correct copy of the BMA
Event Management Standard (BMA-HSE-STD-307).
Attached to my statement and marked "GF-15" is a true and correct copy of the BMA
Charter Values.
Attached to my statement and marked "GF-16" is a true and correct copy of the
Conduct Wheeled Dozer Operations Manual (RIIMP0309A).
94. I then told Mr Schmidt that in light of the serious nature of the substantiated
allegations about his conduct and his breaches of the BMA Event Management
Standard, Conduct Wheeled Dozer Operations Manual and Charter Values, I had
determined that I had no alternative other than to require Mr Schmidt to show cause
why his employment should not be terminated.
95. I then provided Mr Schmidt with a letter dated 23 May 2014, which required him
to show cause why his employment should not be terminated (Show Cause Letter).
Attached to my statement and marked "GF-17" is a true and correct copy of the Show
Cause Letter dated 23 May 2014.
96. I recall that at the time of the Third Meeting, Mr Schmidt had not produced a copy
of the text message which he had alleged he had sent to Mr Marshall regarding the
incident.
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Show Cause Response
97. On Thursday, 29 May 2014, Mr Schmidt provided a written response to his show
cause letter (Show Cause Response Letter).
Attached to my statement and marked "GF-18" is a true and correct copy of Mr
Schmidt's Show Cause Response Letter dated 29 May 2014.
Thursday 29 May 2014 to Friday, 6 June 2014
98. Between Thursday, 29 May 2014 and Friday, 6 June 2014, I had a number of
discussions with Mr Marshall and Mr West to consider Mr Schmidt's Show Cause
Response Letter, together with all of the findings from the investigation and all of the
verbal responses that Mr Schmidt had provided.
99. The result of those considerations and discussions, I was satisfied of the following
matters:
(a) While I acknowledged that Mr Schmidt indicated that he had made an effort
to contact his supervisor over the two-radio and through a text message, we
could not ignore the fact that Mr Schmidt had at four opportunities to speak to
Mr Marshall regarding the incident but had still not brought it to his attention
and Mr Marshall had not received any text message from Mr Schmidt on the
day of the incident.
(b) Mr Schmidt had a poor employment record and was on a Step 3 – Final
Warning at the time of this incident. That being the case, I would have
expected Mr Schmidt to take every opportunity to comply with requirements of
the Mine particularly as they related to safety and equipment damage. I
considered the fact that Mr Schmidt had in the recent past been involved in an
incident with a grader following which reporting requirements were reiterate
with him, that he would have taken his responsibilities regarding reporting very
seriously. Mr Schmidt's conduct in this instance gave me no confidence that he
had a positive attitude to safety, respecting equipment and communication with
supervisors.
(c) Mr Schmidt had failed to identify and follow one of the most fundamental
procedures at the Mine, the Event Management Standard, in circumstances
where he had both admitted that he knew and was aware of his obligation to
report the incident to his supervisor. Mr Schmidt's actions in not reporting the
incident were within his control and were not accidental or unintentional. In
my view he had demonstrated a serious lack of judgement, which I was not
satisfied could be rehabilitated or reformed with any further training or
retraining given his history of poor communication with his supervisors at the
Mine.
(d) Even if Mr Schmidt had sent the alleged text message to his supervisor, a
text message was not an appropriate method of communicating a potentially
dangerous safety situation to his supervisor.
[2016] FWCFB 72
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(e) Even though I empathised with Mr Schmidt's personal circumstances, as
outlined in the Show Cause Response Letter, to my mind, those circumstances
did not outweigh his conduct in the workplace. Mr Schmidt's personal
circumstances were not unusual, as many employees at the Mine have difficult
situations and would undoubtedly encounter difficulty coping with termination
of employment. This was a matter that I discussed at length with both Mr
Marshall and Mr West. Despite the fact that I considered that termination of
employment would have a serious impact on Mr Schmidt, I could not get past
the fact that I had no confidence in Mr Schmidt's ability to take his obligations
as an employee seriously and to perform his duties in a safe manner without
exposing himself or other persons at the Mine to an unacceptable level of risk.
In coming to my decision I took into account my own obligations under the
Coal Mining Safety and Health Act 1999 (Qld) and those obligations that
attach personally to the Site Senior Executive. I formed the view that I could
not in good conscience continue to employ Mr Schmidt when I considered that
he was a risk to himself and others.
100. In light of all of these factors, I decided that while it was unfortunate, I had no
alternative other than to terminate Mr Schmidt's employment. Mr West agreed with
and endorsed my decision and told me to the effect that the decision to terminate Mr
Schmidt's employment was reasonable and appropriate.
101. After Mr West endorsed my decision to terminate Mr Schmidt's employment, I
informed Ms Vincent who drafted a termination letter for Mr West to sign.”
[33] The evidence of Mr Fox was not challenged. His evidence was the only evidence
dealing with consideration of Mr Schmidt’s response. In the proceedings before the
Commissioner it was not suggested to Mr Fox that the outcome of the investigation was
predetermined. Nevertheless, the Commissioner concluded as follows:
“Opportunity to respond
[149] Mr Schmidt submits that BHP Coal cannot go through the motions but he must
be given a genuine opportunity to respond.
[150] Mr Fox deposed that BHP Coal considered responses to the questions but that
no new information had been brought to light during the interview that changed BHP
Coal’s mind.12
[151] Mr Schmidt was interviewed several times, and given time to respond to the
show cause. However the evidence tends to show BHP Coal had determined that it
would dismiss Mr Schmidt and was seeking confirmation of Mr Fox's concerns rather
than being genuinely open to hearing Mr Schmidt's response. In his statement rather
than demonstrating what the response of Mr Schmidt was to the show cause letter,
BHP Coal reiterated its concerns that led to the show cause:
For example it noted that Mr Schmidt had a poor employment record. The
respondent states, “...I would have expected Mr Schmidt to take every
opportunity to comply with requirements of the Mine particularly as they
related to safety and equipment damage.” and further “I considered the fact
[2016] FWCFB 72
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that Mr Schmidt had in the recent past been involved in an incident with a
grader following which reporting requirements were reiterate with him,...”13
[152] BHP Coal’s case that Mr Schmidt should have taken his responsibilities about
reporting more seriously than he did. On the evidence before me, that view was
formed early, and there is no evidence that Mr Schmidt's responses would have moved
BHP Coal's position.
[153] There is no evidence of actual consideration of Mr Schmidt’s response and
therefore it is a reasonable conclusion that a firm decision to terminate had already
been made and would be adhered to irrespective of anything he might say. It therefore
did not constitute a proper opportunity to defend.14”
[34] With respect to the Commissioner we are unable to agree that this finding was
consistent with the evidence. When a serious safety issue is brought to the attention of an
employer it can be expected that it would be investigated fully. BHP did so. It provided an
opportunity for Mr Schmidt to have input into the investigation and had regard to Mr
Schmidt’s representations.
[35] When an investigation reveals inappropriate conduct on the part of the employee it
would be usual and proper for an employer to form a view about the significance of the
findings to possible disciplinary action against those responsible and to provide the employee
with an opportunity to respond to the allegations of misconduct. A detailed statement of
allegations demonstrating the significance of the behaviour against performance and conduct
expectations is procedurally fair and good management practice. The employer of course
needs to retain an open mind and have regard to responses made by the employee. But applied
in a common sense way, if serious misconduct is evident from the investigation, an employer
cannot be expected to have no leanings or inclinations as to the likely sanction against the
employee.
[36] In our view, in making a finding that no opportunity to respond was provided, the
Commissioner did not properly consider the opportunities given to Mr Schmidt during the
investigation process. Further, in our view, the Commissioner reached a conclusion that is
inconsistent with the evidence of Mr Fox and the totality of the relevant evidence. In addition,
the approach of the Commissioner is inconsistent with the authorities summarised above
concerning the requirements for an opportunity to respond. In our view, there was no basis for
the Commissioner’s finding and the finding is a significant error of fact. Instead of finding
that Mr Schmidt was given an opportunity to respond to the reason for dismissal related to his
conduct, the Commissioner found the opposite.
[37] The consequence of the erroneous finding by the Commissioner is that a factor which
tended towards an overall finding of fairness was considered to be a factor indicating
unfairness - to the point, combined with other considerations, of outweighing the finding as to
the existence of a valid reason for the dismissal. In our view, this error meant that the
discretion vested in the Commissioner miscarried.
[38] Because the discretion miscarried in the manner in which we have described, we are of
the view that the appeal must be allowed and the fairness of the dismissal reconsidered. We
have not found it necessary to determine any other appeal grounds, although, as we have
noted, they too are not without substance.
[2016] FWCFB 72
14
Conclusion
[39] For the above reasons we grant permission to appeal, allow the appeal and quash the
decisions and order of the Commissioner.
[40] We consider that Mr Schmidt’s application should be determined by this Full Bench
based on the evidence adduced before the Commissioner. We will list the matter for further
hearing to hear submissions from the parties on the determination of the matter. We propose
to have regard to the evidence and the detailed outlines of submissions filed by the parties
before the Commissioner.
VICE PRESIDENT
Appearances:
Mr B. Rauf of counsel, with Ms E. Mayr, on behalf of BHP Coal.
Mr R. Reitano of counsel, with Mr J. Kennedy, on behalf of Mr J. Schmidt.
Hearing details:
2015.
Sydney.
27 October and 14 December.
Final written submissions:
BHP Coal on 13 November and 7 December 2015.
Mr J. Schmidt on 25 November, 7 and 9 December 2015.
Printed by authority of the Commonwealth Government Printer
Price code C, PR575799
1 (2011) 192 FCR 78 at paragraph 43.
THE OF THE FAIR WORK C. SEN THE NOISS
[2016] FWCFB 72
15
2 GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343.
3 House v The King (1936) 55 CLR 499 at [504]-[505] per Dixon, Evatt and McTiernan JJ.
4 Ibid.
5 ALH Group Pty Ltd trading as the Royal Exchange Hotel v Mulhall (2002) 117 IR 357 [51]. See also Smith v
Moore Paragon Australia Ltd (PR915674) at [92]; Edwards v Giudice (1999) 94 FCR 561 [6]‒[7].
6 [1995] HCA 24.
7 S5897.
8 [2010] FWAFB 1200.
9 (1995) 60 IR 1.
10 (1995) 60 IR 1 at 7.
11 [1996] IRCA 568.
12 Statement of Glen Fox at paragraph 84.
13 Ibid at paragraph 99(b).
14 Wadey v YMCA Canberra [1996] IRCA 568.
http://www.fwc.gov.au/decisionssigned/html/2010fwafb5343.htm
