| [2016] FWCFB 72 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
VICE PRESIDENT WATSON |
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 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 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:
[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 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.”
[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
“[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:
(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:
(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 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.
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.
(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 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.
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.
<Price code C, PR575799>
1 (2011) 192 FCR 78 at paragraph 43.
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.
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.
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