[2017] FWC 3426
The attached document replaces the document previously issued with the above code on
5 July 2017.
Crew member’s name given in evidence removed from paragraphs 9, 21, 23, 36, 40,
62, 95, 96, 120.
The year “2104” in paragraph 127 has been amended to “2014”.
Lisa Powell
Associate to Commissioner Bissett
Dated: 24 July 2017
1
Fair Work Act 2009
s.394—Unfair dismissal
Jurgen Rust
v
Farstad Shipping (Indian Pacific) Pty Ltd T/A Farstad
(U2016/14464)
COMMISSIONER BISSETT MELBOURNE, 5 JULY 2017
Application for relief from unfair dismissal – applicant unfairly dismissed – remedy –
compensation ordered.
[1] Captain Jurgen Rust is a Master Mariner and was employed by Farstad Shipping
(Indian Pacific) Pty Ltd T/A Farstad (Farstad) as such. A Master Mariner is the captain of any
ship. As the ship’s Master Captain Rust was responsible for the overall management and safe
navigation of the relevant vessel.
[2] In September 2016 Captain Rust was rostered off (he was working a five week on,
10 week off roster). He was contacted by the human resources area of Farstad and asked if he
was willing to assist on the Far Sirius as a supernumerary to mentor the new Master. Captain
Rust agreed to do so.
[3] Captain Rust flew to Karratha to commence his shift as mentor on the Far Sirius. The
next morning, before being bussed to the Far Sirius Captain Rust, along with other crew
members, was subject to a random alcohol test. Captain Rust failed the test in that his blood
alcohol levels exceeded those mandated by the relevant Farstad policies and he was not
allowed to board the bus to travel to the vessel. Captain Rust was subsequently provided with
a show cause letter and, following an investigation, his employment was terminated on
15 November 2016 for serious misconduct.
[4] Captain Rust says that he has been unfairly dismissed.
The 2014 incident
[5] In 2014 Captain Rust was Master of the Far Scimitar. The Far Scimitar was normally
crewed by a Master, three Deck Officers, three Engineering Officers and five Ratings,
including a Cook. For anchor handling (AH) operations it normally had an additional
Engineer and Deck Rating to provide adequate manning for AH operations. In February 2014
the Far Scimitar was engaged in a charter with respect to AH operations.
[2017] FWC 3426 [Note: This decision has been quashed - refer to Full
Bench decision dated 10 October 2017 [[2017] FWCFB 4738]
DECISION
E AUSTRALIA FairWork Commission
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb4738.htm
[2017] FWC 3426
2
[6] Captain Rust says that, in preparing for the charter, he had some difficulties with the
crew in relation to skill levels, willingness to engage in trials to streamline operations and test
safety compliance or to alter work practices.
[7] Captain Rust introduced a system known as “2 x 2 manning”. He considered that such
a system improved health and safety, facilitated a quicker execution of a particular operation
and ensured the better arrangement of crew.
[8] On 22 March 2014 a Safety Committee Meeting was held on the vessel. The last topic
at that meeting involved a prolonged discussion on the 2 x 2 manning arrangement with
Tim Ribergaard, with the backing of other Ratings, seeking to reverse the decision to
implement the arrangement. Captain Rust opposed the proposal and a heated discussion
followed during which Mr Ribergaard apparently said to Captain Rust “you were a cunt when
you first came here and you still are”. Mr Rust eventually agreed to a reversal to the working
arrangement.
[9] Captain Rust says that during the evening’s watch on the bridge Mr X (who had been
at the meeting referred to above) approached him and apologised personally for what Mr
Ribergaard had called him.
[10] On 26 March 2014, following the birthing of the Far Scimitar at the Port of Dampier
Captain Rust was informed that a letter of complaint had been received from the crew of the
Far Scimitar. The following morning Captain Rust was relieved of his command and flew to
Melbourne to meet with Captain Butt and other senior management of Farstad. He was
advised at this meeting that Farstad would engage an external HR firm to investigate the
incident. He was suspended during his period.
[11] On 9 April 2014 Captain Rust received an email from United HR Solutions. The email
said:
Dear Mr Rust
I would like to confirm your interview 11th April 2014 @ 1.00pm.
I hereby provide you with “The Allegation”:
It is alleged that Mr. Jurgen Rust (Master Far Scimitar), during the Safety Committee
Meeting (22/3/2014), whilst debating the appropriateness of a two “I.R” and three
“I.R” connect and disconnect anchor handling operation, and who should be in control
of the tuggers during this operation, stated that “he would rather see an IR injured or
killed rather than bump the rig”.
Details pertaining to this allegation will be investigated during the interview.
In the meantime if you have any queries, please feel free to contact me at any time.1
[12] Captain Rust attended the interview and denied the allegation.
[2017] FWC 3426
3
[13] On 4 June 2014 Captain Rust was provided with a copy of the investigation report of
United HR Solutions. It found the allegation to be substantiated although also found that it
was not substantiated that Captain Rust “acted in breach of his safety obligations…and
behaved in a manner unbecoming of a Master…”
[14] On 13 June 2014 Captain Rust consulted his doctor and was diagnosed with
depression. He was prescribed Pristiq, an anti-depressant medication.
[15] Following the investigation Captain Rust was directed, against his wishes, to re-join
the Far Scimitar with the same crew on 30 July 2014. He did so and worked with
Mr Ribergaard on a daily basis. Captain Rust says that this was difficult as Mr Ribergaard
continued to be obstructive and intolerant of him.
[16] Captain Rust took the next swing off to deal with the “psychological consequences
and stress experienced as a result of the suspension and the investigation.” He says that his
treatment for depression continued until about November 2014 and in December 2014 he
ceased taking medication for it.
[17] Captain Rust returned to the Far Scimitar in December 2014 and completed his duty
on 19 January 2015 in Geraldton. He says that it was then, whilst waiting for flights home at a
local hotel that Mr Ribergaard verbally abused him and lunged at him. Captain Rust says that
Mr Ribergaard had to be physically restrained by others.
[18] Captain Rust was subsequently asked for, and provided, a report on the conduct of
Mr Ribergaard with respect to this incident.
[19] In October 2015, at the invitation of Captain Hall, the General Manager Operations,
Captain Rust put in writing his concerns about the absence of an effective resolution of his
suspension and the investigation and report in relation to the March 2014 incident. He did not
receive any response to his correspondence.
The 2016 incident
[20] As outlined above in 2016 Captain Rust was asked to be a supernumerary on the
Far Sirius to mentor a new Master who had not undertaken the operation for which the
Far Sirius had been engaged.
[21] On 5 October 2016 Captain Rust travelled from Brisbane to Perth to join the
Far Sirius. On the flight he saw Mr X. He says on seeing Mr X he began to reflect on the
events on the Far Scimitar of 2014. He was feeling anxious and noticed his heart rate
“palpitating.” On arrival in Perth he spoke to Mr X and suggested they go to the Qantas Club
and talk about the events on the Far Scimitar. During that conversation Mr X indicated that
that there were no issues between the two of them and that Captain Rust had been “unfairly
treated by the crew and company.”
[22] Captain Rust says he consumed two full strength beers during this discussion.
[2017] FWC 3426
4
[23] On the flight to Karratha Captain Rust says he “continued to reflect on the events on
the Far Scimitar and [how he] had been treated by Farstad.” He said that this made him feel
restless and stressed and that he felt “alone and angry”. The flight arrived at Karratha at
approximately 3.00 pm where Captain Rust transferred to his hotel. He says that he
“continued to feel anxious and depressed while thinking about the conversation with Mr X
and the surrounding events in 2014” and that his “levels of trepidation had escalated.”
[24] On checking into his room Captain Rust selected a beer to drink from the bar fridge in
his room, thinking it might calm him down. Over the next four hours he consumed seven full
strength bottles of beer. At 8.00 pm he met a colleague for dinner and had a full strength
schooner of beer.
[25] Captain Rust says he went to bed at 9.00 pm because he was conscious of the
possibility of being tested for alcohol the next morning.
[26] On 6 October 2016 at around 6.00 am Captain Rust arrived at the hotel restaurant for
breakfast and was met by a contractor who advised that he had been selected for a random
drug and alcohol screening. He had a quick coffee and then had a blood alcohol concentration
(BAC) test.
[27] The test was performed at 6.15 am. Captain Rust registered a BAC of 0.047.
[28] A further test was carried out 15 minutes later and Captain Rust registered a BAC of
0.044.
[29] In the evening of 6 October 2016 Mr Christopher Homsey, Human Resources Director
– Offshore for Farstad, had a discussion with Captain Rust where he says Captain Rust did
not deny the readings from his two tests. Mr Homsey said that he asked Captain Rust what
had happened and Captain Rust said that he had seen an Integrated Rating (IR). Mr Homsey
asked if it was Mr Ribergaard (who had made the 2014 complaint) to which Captain Rust said
no, it was another one. Mr Homsey asked Captain Rust if there had been an altercation to
which Captain Rust said no, they had just clarified a few things.
[30] Whilst Captain Rust disagrees with Mr Homsey’s account of their conversation not
much turns on this and I have not had regard to this conversation in making my findings.
[31] Captain Rust was advised that Farstad would repatriate him home.
Investigation
[32] On 6 October 2016 Mr Stuart Scott, Vice President Operations APAC for Farstad
received advice that Captain Rust had exceeded the BAC level. Mr Scott asked Mr Homsey to
investigate and confirm whether the applicable policies of Farstad had been breached by
Captain Rust.
[2017] FWC 3426
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[33] On 11 October 2016 Captain Rust was advised in writing by Farstad (the show cause
letter) that:
On 6th October 2016 you were required to undertake a breathalyser test by a third party
contractor to determine your breath alcohol content (BAC).
As you are aware, Farstad’s policy is that your result must be 0.00 [sic] (being zero
grams per 100 millilitres of blood) under this test.
I am advised that your initial test, conducted by accredited contractor J&K Nominees,
was 0.047 (being 47 grams per 100 millilitres of blood) your confirmatory test was
0.044 (being 44 grams per 100 millilitres of blood).
I have been provided with the official test results that I consider conclusively
demonstrates that you have breached Farstad’s Policies.
Consistent with Farstad’s values, policies and commitment to health and safety in the
workplace and Client’s requirements, this conduct is considered serious misconduct
that justifies the summary termination of your employment.
I invite you, within 7 days, to provide Farstad with any reason that you consider
should be taken into account for the purposes of deciding whether to terminate your
employment for serious misconduct. Farstad will provide you with confirmation of its
decision as soon as possible.
[34] The letter was signed by Mr Scott on behalf of Mr Homsey.
[35] On 12 October 2016 Captain Rust provide Farstad with a medical certificate certifying
him as unfit for work until 23 October 2016. Following further correspondence between them,
Farstad extended Captain Rust’s period to reply until 27 October 2016.
[36] On 27 October 2017 the Australian Maritime Officers’ Union (AMOU) responded to
Farstad on Captain Rust’s behalf. In that response the AMOU acknowledged that
Captain Rust’s reading was above the cut off BAC level but set out a range of
mitigating factors including:
The 2014 incident on the Far Scimitar;
Captain Rust’s conversation with Mr X and that the incident with Mr Ribergaard
was “alight and in the forefront of his mind”;
The stress, anxiety and on-going effect of the 2014 incident.
[37] The AMOU argued that there was no justification for disciplinary action as
Captain Rust did not intend to breach the policy and that the mitigating issues justified
leniency. Further, it said that Captain Rust had served Farstad “in an exemplary and
professional fashion for more than 16 years with no history of serious crew injuries or any
other costly incidents on his watch.” It outlined the contribution of Captain Rust to
improvements in safety performance, his willingness to take on additional duties, his
[2017] FWC 3426
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contribution to improved administrative procedures and his willingness to train and assist
other employees.
[38] The letter was forwarded to Mr Scott and it was agreed between him and Mr Homsey
that Mr Homsey should meet with Captain Rust to provide him with an opportunity to say
why his employment should not be terminated.
[39] On 9 November 2016 Captain Rust attended a meeting with Mr Homsey. Captain Rust
was accompanied by his AMOU representative. The AMOU sent further correspondence to
Farstad on 10 November 2016 in which it again pleaded that termination of employment was
not appropriate.
[40] On 15 November Mr Scott met with Mr Homsey where they discussed:
Captain Rust admitted the breach of policy and submitted mitigating
circumstances.
There was no verbal altercation between Captain Rust and Mr X while in transit to
the vessel.
Captain Rust presented for the drug and alcohol test on the basis that he was fit for
duty when he was not.
Captain Rust was appointed to the Far Sirius in the capacity of Mentor due to his
experience and standing as a Master.
The significant reputational and commercial risk to Farstad and Farstad’s clients’
expectations of its management of drugs and alcohol policies.
Captain Rust’s rank as Master and the fact that he had implemented and trained
crews on Farstad’s policies.
[41] Following from this discussion Mr Scott took the decision to terminate Captain Rust’s
employment.
[42] On 15 November 2016 Captain Rust received a letter of termination signed by
Mr Homsey which stated:
In our letter dated 11 October 2016, Farstad advised you that it considered your
conduct constituted serious misconduct and asked you to provide Farstad with any
reasons that should be taken into account in determining whether to terminate your
employment. We have considered the letter dated 27 October 2016 sent on your behalf
and the matters you raised at our meeting, in reaching the decision outlined below.
Farstad remains of the view that your admitted breach of policy constitutes serious
misconduct. In particular, your knowledge and understanding of; the Group-Fit for
Work Policy and associated policies and procedures related to drugs and alcohol;
Farstad’s safety values; the reasons for Farstad’s implementation and strong
enforcement of random drug and alcohol testing; Farstad’s clients’ expectations of its
management of drugs and alcohol; have been considered. Further, as person holding a
[2017] FWC 3426
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senior position in Farstad’s seagoing workforce, your failure to abide by the policies
has meant that Farstad has concluded your employment cannot continue.
Accordingly, I am advising you that Farstad is today terminating your employment for
serious misconduct with immediate effect.
Farstad’s relevant policies
[43] The evidence of Mr Scott is that, as Master, Captain Rust had a statutory responsibility
for the safety of the vessel, her crew and the marine environment. Whilst the Master may
delegate responsibilities he remains accountable for the safety of the vessel and crew at all
times.
Drug and Alcohol Policy (Offshore)2
[44] Farstad’s Drug and Alcohol Policy (Offshore) (the Offshore policy) states that its
objective is “to comply with the legal requirements and duty of care responsibilities, meet
contractual needs, and most importantly protect Employees.” The Offshore policy is directed
at creating a safe and healthy workplace; providing education, training and awareness,
ensuring rehabilitation, amongst others.
[45] Strategies to minimise risk include:
(a) Prohibition on the consumption, soliciting or possession of alcohol and non-
prescribed drugs on all Vessels and any base.
(b) Drug and alcohol testing during pre-employment, periodical medical, pre-
contract, pre-swing, post incident, for cause and random/unannounced tests.
(c) Preventative and rehabilitation programs for Employees where no Employee
will be discriminated against for undertaking such a program.
(d) Disciplinary action as outlined in this policy for any violation of this Policy.
[46] The policy outlines the acceptable levels for drugs and alcohol. The acceptable alcohol
level is 0.02mg/100ml.
[47] The Offshore policy says, of pre-swing testing that:
The joining crew will be tested on crew change day.
[48] The Offshore policy also allows for random testing.
[49] With respect to prescription and over the counter drugs, the Offshore policy requires
that:
38. Employees using prescribed drugs should ask their doctor or chemist what
affects a drug or medication may have, and if there is a risk of it causing
impairment. A doctor’s letter regarding the effect of a drug must be obtained
[2017] FWC 3426
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outlining any limitation on normal duties and presented to Farstad. Farstad will
maintain confidentiality. However, the Master of the Vessel must be informed.
39. All prescribed drugs brought on board a Vessel are required to be declared to
the Master before signing on. In the case of a Master, they will need to declare
this to the Ship Manager or equivalent before joining.
[50] The Offshore policy provides that a person returning a positive result “will be subject
to disciplinary procedures which may include dismissal.”
Group - Fit for Work Policy3
[51] The Group - Fit for Work Policy defines “[f]it for work” as meaning “a person is in a
state to perform their assigned tasks competently and in a safe manner without impartment
due to drug and/or alcohol use, physical injury or functional fitness.”
[52] The policy acknowledges that Farstad has a responsibility to “take reasonable steps to
protect employees…in the workplace should they, or others, be under the influence of drugs
and/or alcohol.” It achieves this by a “[z]ero tolerance to non-prescribed drugs and alcohol in
the work site, meaning the Company will not accept any content of alcohol or drugs in breath,
urine or blood” and through “[a] process for disciplinary action for violation of this Policy”.
Employee’s Code of Conduct (Offshore)4
[53] The Code of Conduct requires seafarers to remain “capable at all times of performing
any duty” required of him/her. It states that “there is a zero blood alcohol level requirement
which means not exceeding a blood alcohol concentration of 0.02 grams per 100 millilitres at
all times.”
[54] The Code provides that a breach, depending on the seriousness, may result in a
warning, a reprimand or dismissal.
APAC Drug and Alcohol Testing and Searching Procedures5
[55] The Preamble to the APAC Drug and Alcohol Testing and Searching Procedures states
that:
Farstad Shipping APAC is committed to providing a safe and healthy work
environment. As part of providing a safe and healthy work environment, Farstad aims
to ensure that its employees and contractors (third party included) are fit for work, and
that visitors to its worksites are safe and do not pose a threat to the safety of others.
Fit for work means a state of physical, mental and/or emotional health, which enables
a person to perform their duties in a manner that does not carry a risk of endangering
the health and safety of themselves or others… For the purpose of this Procedure, a
person will not be fit for work where the prescribed drugs and alcohol limits referred
to in this documents [sic] have been exceeded by that individual, unless otherwise
described.
[2017] FWC 3426
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[56] The testing Procedure allows for random drug and alcohol testing. It provides that a
minimum of 50% of a crew compliment plus one will be tested per visit.
[57] The testing procedure also allows for random testing on crew change days.
[58] The testing procedure provides that the return of a non-negative result “is regarded as
serious misconduct which will result in disciplinary action that may include dismissal.”
[59] The testing procedure requires that employees ensure prescription or over the counter
drugs is taken safely and is required to:
Ascertain from their medical practitioner or pharmacist possible side effects of the
medication that may impact on the performance of work;
Take the medication as directed by a medical practitioner or as advised by the
manufacturer;
Notify the vessel Master of any medication which is suspected could affect safety
or performance;
Report any side effects of the medication to the Master and prescribing medical
practitioner where possible;
Advise the master, HR Officer or Employee Health Manager of the specific
medications as they may show a positive drug test result.
Captain Rust’s medical treatment
[60] During the 2014 incident Captain Rust was treated for depression. He was prescribed
Pristiq. He said that he recovered and ceased taking the medication in December 2014.
[61] In July 2016 Captain Rust says he had a mental health review and Dr Ledbury placed
him on a three month trial of an anti-depressant (Fluoxetine). He said the medication made
him feel calmer and he did not require any other treatment from July 2016 to October 2016.
[62] In October 2016 Dr Chatfield wrote to Farstad and said that Captain Rust seeing
(presumably) Mr X had caused Captain Rust anxiety and that he had since sought
psychological support for depression and he required on-going treatment and antidepressants.
[63] Dr Chatfield gave evidence that:
Captain Rust was prescribed Pristiq in June 2014. The prescription was repeated
between June 2014 and December 2015;
The patient notes indicate that Captain Rust advised his doctor in December 2015
that he was no longer taking Pristiq;
The manufacturer’s notes for Pristiq advise doctors to advise their patients to
avoid alcohol whilst taking Pristiq;
[2017] FWC 3426
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In July 2016 Captain Rust saw Dr Ledbury who placed him on a three month trial
of Fluoxetine, an anti-depressant;
The manufacturer’s notes for Fluoxetine indicate that its possible side effects
include insomnia and fatigue and that common side effects include sleep
problems, restlessness and poor concentration and could affect judgement and
coordination and that alcohol should be avoided;
Excessive drinking could make side effects worse although she did not agree that
there was multiplier effect.
[64] Dr James Wright is a Consultant Psychiatrist. He examined Captain Rust on
20 February 2017.
[65] Dr Wright agreed that the most common adverse reaction to the drug Pristiq include
nausea, sometimes dizziness but not necessarily insomnia. He agreed that, as a general
principle a person being treated with anti-depressants should be monitored and observed for
any clinical worsening, suicidality and unusual changes in behaviour. He agreed that drinking
could possibly cause a worsening of side effects of Pristiq.
[66] Dr Wright said he would be concerned if a patient on anti-depressants drank 10 full
strength beers of an evening but more so because of the impairment it would have on the
effectiveness of the treatment.
[67] Dr Wright says that Captain Rust had what appeared to be an adjustment disorder
arising out of what Captain Rust considered to be unfair allegations in 2014. Whilst he had
returned to work a “lingering bitterness” remained and a chance encounter with one of
the parties to the 2014 incident caused a recurrence of his symptoms. This, he said, led
Captain Rust to consume too much alcohol.
The workplace
[68] The code of conduct and policies in relation to drug and alcohol outlined above place
the focus on prevention and safety in the workplace.
[69] There is no dispute that Captain Rust was required to be fit for work when he
commenced work.
[70] I accept that “fit for work” implies compliance with the Drug and Alcohol Policy –
that is, at what point in time was he required to be fit for work.
[71] There was disagreement as to when Captain Rust actually commenced work.
[72] Captain Rust was first tested for alcohol at 6.15 am, before breakfast and at the hotel
where the crew were accommodated. His second test was at 6.30 am.
[73] The day the test was conducted was a crew changeover day.
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[74] The uncontested evidence of Captain Rust is that the bus transporting the crew to the
vessel would have left the hotel at about 7.00 am to go to the supply base (King Bay Supply
Base at Dampier) which is approximately 27 kilometres and a 30 minute drive from the hotel.
He says it takes approximately 15 to 30 minutes to get through security at the base. On this
basis he says that he would expect to have finally entered the supply base at around 7.45 am
to 8.00 am on the day he was tested.6
[75] The evidence of Mr Homsey is that, whilst there is a policy with respect to testing
procedures on board a vessel you cannot undertake crew change day testing on board the
vessel as the idea is to prevent drugs and alcohol entering the workplace. In addition he said
that Farstad has an obligation to ensure there are measures in place to stop drugs and alcohol
entering the supply base. These obligations could not be met if the testing was conducted on
board the vessel or after entering the supply base but before boarding the vessel.
[76] Mr Homsey also gave evidence that the relevant workplace (for the purposes of drug
and alcohol testing) is the supply base and the vessel but also includes crew change activities
because this is “not a non-company activity”. An employee must be fit to undertake his duties
and this occurs when he first engages with his crew.
[77] Mr Scott’s evidence is that an employee must be fit for work when they are “embarked
to go to join the vessel”. Mr Scott explained that embarking was the stage where the
individual board the crew-change bus that would take them to the supply base where they
would then board the vessel.
[78] Mr Scott also gave evidence that, as a salaried employee, the day of joining the vessel
is a work day, from that day an employee is accruing leave (which declines when they are not
rostered on to work) and it is expected that an employee is fit for work at this point.
Consideration
[79] At 6.15am when first tested Captain Rust had a BAC of 0.047. Fifteen minutes later
the reading was 0.044. I have no evidence before me as to the rate at which alcohol may be
metabolised by Captain Rust so that I could possibly know when he might have achieved a
reading within the boundaries of the Drug and Alcohol Policy and other relevant polices.
[80] Although some refinement might need to be made to Farstad’s testing procedures and
the time at which testing is carried out, I am satisfied that Captain Rust was tested in
accordance with the policies of Farstad. Those policies allow for testing on crew change days.
The day Captain Rust was tested was a crew change day.
[81] At the time Captain Rust was tested (at both 6.15 am and 6.30 am) he had a blood
alcohol concentration in excess of the limits prescribed by Farstad and clearly set out in its
policies. To this extent he was, at that time, in breach of policy.
[82] The policies require that Captain Rust be fit to undertake his assigned duties. Certainly
Captain Rust could not have done so at the time of testing and there is a real question as to
whether he would have been fit at the time he boarded the crew change bus (30 minutes after
a 0.044 reading), arrived at the supply base or boarded the vessel.
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[83] Whilst I am satisfied that, at least at the time of boarding the crew change bus,
Captain Rust had commenced duties and, at this time at least, was required to comply with
the drug and alcohol policy, I am also satisfied that Farstad was operating within its policy
to test Captain Rust (and others) when they presented for breakfast on the crew change day.
[84] That Captain Rust was present on crew as a supernumerary is irrelevant to whether he
was on duty or not or required to comply with policies or not. He was part of the crew of the
Far Sirius. He was a Captain, he had responsibilities. I accept that I cannot know what
Captain Rust’s BAC reading may have been at 7.00 am at the time of boarding the bus but
this does not change that he was tested on crew change day and he failed to meet the policy
requirements.
[85] Having found this I would observe (with no criticism) that it would appear the policies
of Farstad require some clarity with respect to when duty does commence and the appropriate
time for testing on crew change days (for example pre or post a meal) to ensure that testing
occurs close to the commencement time as possible.
[86] This however does not help Captain Rust. His problems did not start because he was
tested at 6.15am, they started the day and night before.
[87] On a broader level it would appear that Farstad failed to properly close off the
2014 incident. It did not properly convey any final decision to Captain Rust in 2014 or in
2015 when it sought further information from him. This is a failing on behalf of Farstad. It is
not reasonable that an employee have such a matter not closed off and, in this case, it has had
consequences.
Was captain Rust unfairly dismissed?
[88] I am satisfied that Captain Rust is protected from unfair dismissal. He has completed
the minimum employment period and an enterprise agreement applies.
[89] Further, I am satisfied that his application was made within the statutory time period,
the Small Business Fair Dismissal Code is not relevant and his dismissal was not a
redundancy.
[90] The matter to determine, in deciding if he was unfairly dismissed, therefore is if his
dismissal was harsh, unjust or unreasonable.
[91] Section 387 of the FW Act states:
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
[2017] FWC 3426
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(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.
[92] I have considered each of these matters.
Section 387(a) - a valid reason for dismissal
[93] A reason for dismissal will be a valid reason if it is “sound, defensible or well-
founded”.7
[94] Captain Rust provided BAC readings which were in excess of the levels prescribed by
Farstad and conveyed to employees in the various policies of Farstad.
[95] I am satisfied that the conduct of Captain Rust must be considered in context. The
context with respect to this conduct of Captain Rust is that he was felling anxious and stressed
because of his encounter with Mr X. It is not clear, however, why Mr X generated these
feeling (he was, after all, the person who apologised for the language at least of
Mr Ribergaard in the 2014 incident) but no evidence was adduced on this matter. I therefore
accept Captain Rust’s evidence of the effect of the encounter. However, in having had this
reaction there were a number of courses of action open to Captain Rust. He could have
refrained from drinking, he could have contacted the relevant manager and advised he was not
able to work due to ill health because of the anxiety or he could have advised the next day that
he could not report for duty because he was unwell. He did none of these. Instead, on arrival
in Karratha, he consumed another eight beers (taking his total for the day to 10) in
circumstances where he knew he was required to report for work the next day, he was aware
of the policy requirements of Farstad and knew he may be tested for drugs and alcohol.
[96] Captain Rust had a number of opportunities and plenty of time to decide what he
would do. He was not in the circumstance where there was no time between seeing Mr X and
attending for work.
[97] It must be decided whether, in these circumstances, Captain Rust’s conduct in having
breached the policies of Farstad, presents a valid reason for dismissal.
[2017] FWC 3426
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[98] The policies do not mandate dismissal for a breach and do allow for some lesser
penalty and for education and rehabilitation. That the policies allow for such is a relevant
consideration although do not, on their own, abrogate from the seriousness of Captain Rust’s
conduct.
[99] Captain Rust worked in a safety critical industry. He was about to embark on a sea-
going vessel where he had duties to perform and could have been called on to perform all
duties as Master if directed to. In such circumstances the gravity of his conduct cannot be
ignored.
[100] Whilst it may be the case that a breach of a company policy does not provide a valid
reason for dismissal, in this industry and in circumstances where Captain Rust was to board
the vessel as a mentor that it was merely a breach of policy does not mean it does not provide
a valid reason. To this extent I do not accept that the range of mitigating factors put to me by
Captain Rust balance the seriousness of the policy breach.
[101] In these circumstances I am satisfied that Captain Rust’s conduct provides a valid
reason for dismissal.
Section 387(b) - whether the person was notified of the reason
[102] I am satisfied that Captain Rust was provided with advice as to the reason for
dismissal prior to the decision being taken to dismiss him from his employment.
[103] Whilst Mr Scott gave evidence that the default position for breach of policy is
termination of employment I am satisfied that, in saying this, his intention was to convey that
any request to an employee to “show cause” for a breach of policy will specify that the
employee should show cause as to why their employment should not be terminated.
[104] Any response from the employee concerned is then considered prior to a final decision
being made.
[105] In any event, in this case, Captain Rust was advised of the reason prior to a decision
being taken to terminate his employment.
Section 387(c) - whether the person was given an opportunity to respond
[106] I am satisfied that Captain Rust was given an opportunity to respond to the reason
prior to the decision being taken to terminate his employment. Captain Rust was invited to
provide reasons as to why his employment should not be terminated. He took this opportunity
(with a response being provided by his union representative). Further, he met with
Mr Homsey prior to the decision being taken to dismiss him.
[107] I am satisfied that Mr Scott was the decision-maker in that he made the decision,
following discussions with Mr Homsey, to terminate Captain Rust’s employment. I am
satisfied that he made the decision to terminate Captain Rust’s employment after he saw the
written reply from the AMOU on Captain Rust’s behalf and after he had a further discussion
with Mr Homsey following the further meeting with Captain Rust.
[2017] FWC 3426
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Section 387(d) - unreasonable refusal by the employer to allow the person to have a support
person present to assist at any discussions relating to dismissal
[108] I am satisfied that Captain Rust was not unreasonably denied access to a support
person.
Section 387(e) - warnings of unsatisfactory performance
[109] Captain Rust’s employment was not terminated for unsatisfactory performance. This
criterion is therefore not relevant.
Sections 387 (f) & (g) - the degree to which the size of the employer’s enterprise or access to
human resources specialist staff may impact on the procedures followed in effecting the
dismissal
[110] Farstad is a large organisation which has dedicated human resources staff. These are
no matters that would adversely impact on the procedures followed in effecting the dismissal.
Section 387 (h) - any other matters
[111] A number of additional matters were put to me for consideration.
[112] Captain Rust is 61 years old. He is the sole income earner for his family (his wife and
himself).
[113] Support was expressed for Captain Rust in his capacity as a Master, in his methodical
and exemplary approach to his job and his commitment to safety.
[114] Captain Rust has an exemplary record with Farstad. He has contributed to improved
anchor handling procedures including installation and upgrade of safety management systems
on a number of vessels, involved in the setup of the R-Folder system, and facilitated the
development of the Anchor Handling Training Video which gained a Farstad safety award as
well as a national Seacare’s award. Captain Rust has also served on the Farstad Senior
Officers Steering Committee for a year. He has made himself available for additional duties
and sought to provide assistance and training to subordinate officers.
[115] The 2014 incident was never fully resolved in Captain Rust’s mind. He was stood
down (suspended) on 23 March 2014. He was made aware of the allegation against him on
9 April 2014. He received a copy of the final investigative report on 4 June 2014, some
10 weeks after the incident.
[116] It is apparent that the 2014 incident has never been closed off by Farstad management.
Captain Rust has not been advised if further action is to be taken or the status of the
investigation. He wrote to Captain Hall (at Hall’s invitation) in October 2015 about the stand
down and investigation but again received no reply.
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[117] Captain Rust was on anti-depressants from June 2014 (arising in part from the 2014
incident). He stopped taking these in December 2014. In July 2016, following a mental health
review, he was placed on a three month trial of Fluoxetine. Captain Rust did not report to
Farstad that he was taking these medications. This was a breach of the Offshore Drug and
Alcohol Policy.
Was the dismissal harsh, unjust or unreasonable?
[118] There is an unfortunate chain of events that ended when Captain Rust consumed too
much alcohol on 5 October 2016. It started with the failure of Farstad to properly close off the
2014 incident resulting in stress and anxiety for Captain Rust. At the same time as not
providing Captain Rust with a decision as to what actions it intended to take in response to the
report of the 2014 incident it placed him back into the same workplace in which the incident
had occurred with the same crew, including Mr Ribergaard with who he continued to have
conflict.
[119] Farstad again failed to close the matter off when Captain Rust wrote to Captain Hall
about the matter in 2015. It is not clear what the intention of Captain Hall was in requesting
the correspondence from Captain Rust but it does seem to have built up his hopes that the
matter would be closed out only to again find that it was not.
[120] The trail ends with a chance encounter between Captain Rust and Mr X in Perth, the
resultant increase in anxiety in Captain Rust and his decision to consume alcohol that day.
[121] In addition to these matters I have taken into account that Captain Rust was tested the
second time at least 30 minutes before he was required to present to board the crew change
bus. Whilst I accept that Captain Rust was aware he could be tested that morning it is not
clear to me why he was tested at a time when he was not presenting for work (he was going to
have breakfast) which surely occurred when he presented to board the crew-change bus. If it
is that an employee can be tested at any time on a crew change day this does create the absurd
situation where a person could be tested many hours before presenting to board the bus at
7.00 am.
[122] It is not apparent that any other disciplinary outcome was considered for Captain Rust.
Whilst I accepted above that Mr Scott considered Captain Rust’s response prior to making the
decision to dismiss him I am not convinced that he considered if rehabilitation (as is allowed
under the Offshore Drug and Alcohol Policy) or any other penalty was a possibility. It appears
that the consideration of penalty was binary – dismissal or not dismissal. In this respect the
consideration was, in the circumstances, too narrow.
[123] I have also had regard to Captain Rust’s record and the references provided for him.
[124] I have considered Captain Rust’s apparent failure to advise Farstad of the medications
he was taking. Whilst it is clear such medications should be reported, the limited evidence on
this aspect of Farstad policies suggests it is observed more in the breach than otherwise. I
accept the evidence of the doctors who appeared in the matter that the consumption of alcohol
whilst on the medications is more likely to affect the effectiveness of the medication rather
than have an adverse impact on Captain Rust’s ability to do his job. Having said this it would
appear that education on the effect of medications at work and the purpose of reporting is
required. Ultimately, I draw no adverse inferences from this matter.
[2017] FWC 3426
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[125] In Byrne v Australian Airlines Ltd8 it was held that:
lt may be that the termination is harsh but not unjust or unreasonable unjust but not
harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the
concepts will overlap. Thus, the one termination of employment may be unjust
because the employee was not guilty of the misconduct on which the employer acted,
may be unreasonable because it was decided upon inferences which could not
reasonably have been drawn from the material before the employer, and may be harsh
in its consequences for the personal and economic situation of the employee or
because it is disproportionate to the gravity of the misconduct in respect of which the
employer acted.
[126] Whilst I am satisfied that Captain Rust did engage in the conduct alleged – that is, he
breached the requirements of the drug and alcohol policy, I am satisfied, on balance, that the
decision to dismiss him was, in the circumstances harsh.
[127] My finding that the decision to dismiss Captain Rust was harsh should not be seen as
any vindication of Captain Rust’s conduct. He is a very experienced Master. He has worked
for Farstad for 16 years. Were it not for the failure of Farstad to close off the 2014 incident
my findings may well have been different.
[128] Aside from some need to clarify when on crew change day testing may be done I have
no criticism of Farstad or its policies or its commitment to ensuring compliance with those
policies.
Conclusion
[129] I am therefore satisfied that Captain Rust has been unfairly dismissed.
Remedy
[130] Captain Rust seeks reinstatement.
[131] Farstad opposes reinstatement and says that it has lost trust and confidence in
Captain Rust.
[132] It is the case that a loss of trust and confidence must be objectively assessed. It is also
the case that loss of trust and confidence is a common reprise amongst employers when an
employee is found to have been unfairly dismissed by the Commission and reinstatement is
sought.
[133] In this case I am satisfied that Farstad has grounds to claim that it has lost trust and
confidence in Captain Rust.
[134] Captain Rust breached a series of Farstad’s policy in relation to his blood alcohol
concentration on 6 October 2016.
[135] It is apparent that Captain Rust has also, over time, failed to report to Farstad that he
has been on medications reportable pursuant to Farstad’s policies.
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[136] Captain Rust held a senior position within Farstad. He is a Master and Captain of a
sea-going vessel that can be away for weeks at a time. He is responsible for the safety of the
vessel and crew, pollution prevention and overall operation of the vessel. He works in a safety
critical industry. In circumstances where Farstad must have confidence in its Masters I am
satisfied, in these circumstances, that there are objective grounds on which Farstad has lost
confidence in Captain Rust.
[137] In such circumstances I am satisfied that reinstatement is not appropriate.
Compensation
[138] Having found that reinstatement is not appropriate in the circumstances (s.390 of the
FW Act) it is necessary to consider compensation.
[139] Section 392 of the FW Act details the determination of compensation. It states:
392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that
the person’s employer at the time of the dismissal pay compensation to the
person in lieu of reinstatement.
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.
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Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the
employer’s decision to dismiss the person, the FWC must reduce the amount it
would otherwise order under subsection (1) by an appropriate amount on
account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1)
must not include a component by way of compensation for shock, distress or
humiliation, or other analogous hurt, caused to the person by the manner of the
person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1)
must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the
dismissal.
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer
during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so
employed during any part of that period—the amount of remuneration
taken to have been received by the employee for the period of leave in
accordance with the regulations.
[140] I accept that the parties have not had the opportunity to address me on compensation. I
shall therefore issue directions for the filing of material relevant to those matters set out in
s.392 of the FW Act.
COMMISSIONER
THE FAIR WORK MMISSION THE SEAL
[2017] FWC 3426
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Appearances:
J. Kennedy for Mr Rust.
A Pollock of counsel for Farstad Shipping (Indian Pacific) Pty Ltd T/A Farstad.
Hearing details:
2017.
Melbourne:
March, 27, 28.
Brisbane:
May 19.
Printed by authority of the Commonwealth Government Printer
Price code C, PR594100
Endnotes:
1 Exhibit A4, attachment JR-7.
2 Ibid, attachment JR5.
3Ibid, attachment JR4.
4 Exhibit R2, attachment CH-2.
5 Ibid, attachment CH-5.
6 Exhibit A5, paragraph 4.
7 Selvachandran v Peteron Plastics Pty Ltd, (1995) 62 IR 371.
8 (1995) 185 CLR 410.
